Blind Squirrel and Acorns

[Michigander]

In the past, I've spent - wasted - a lot of time critiquing appraisals for which I thought the reports sloppily done, the research superficial, the analysis ridiculous, the comments canned, the grammar atrocious, and after all that effort, wound up at essentially the same value conclusion.

The lenders concern was the value conclusion, not the USPAP compliance or the neatness of the report.

Your question is in the same vein as those that began other threads. I'll go back and repeat: if you're not happy with the quality of the reports the AMCs your firm is using are delivering, you need to have a prayer meeting with them (if that is, in fact, your area of responsibility) and start ramping up the qualifications of the appraisers that doing your work. It's also an opportunity for you to be an immediate agent for positive change in your new position: take your concerns to upper management and offer a plan - tactical if not strategic - to improve the quality of the appraisals your firm is relying on to make lending decisions.

It may be a fee issue between the AMCs and the appraisers they have in their rotation. But, at the end of the day, your firm is the one with the gold and the one that ought to be making the rules. To passively continue to accept appraisals you think are defective is not, IMO, a way to property serve your employer or your long term prospects with it.

Good advice

 

[Lee Lansford]

I have seen a few appraisals come across my desk where the appraisal development is sorely lacking, but I have a difficult time contesting the value conclusion. This leaves me in a quandary. Is there anything gained by going through the review process, request changes from the appraiser, when there is no change in value? As a fee appraiser, are you as accepting of an appraisal review where there is no value change, or do you just think the reviewer is justifying their own pay?

...and a broken clock is correct twice each and every day.

I don't know what constraints (requirements and the like) that you are working under, but, to some degree at least, is the extra effort justified by the return?

On the other hand, there is the question as to whether or not the appraisal report conforms with minimum professional standards (and, I mean, above and beyond the mere surface appearance of conforming). Here again I lack certainty as to the emphasis that various lending entities place on these standards (as I've heard more than once "Good enough!").

 

[hastalavista]

I noticed you abandoned your other two topics already. How long before you lose interest in this one when you don't like the responses?

I'm beginning to ask that question myself. :mellow:

 

[JRS at OBX]

Was this for a purchase? If so, maybe the appraiser hit the target.

 

[NLCApprMgr]

The OP responds

Is the OP reviewing appraisals , or wondering about reviews that identify problems in a report yet agree with the value opinion?

I manage the appraisal process for a national lender. I read over the appraisals and forward requested changes or additional clarification to our AMC partners who then forward those requests on to the appraiser. Nothing we do constitutes the level of review as specified in USPAP under Section 3; that is, we do not provide alternative values. The fee appraiser is free to accept or reject anything we request. My only concern is that we only receive and accept appraisal reports that have a supportable conclusion; in the event a loan goes bad, we have the documentation to show we did as much due diligence as possible with regard to sizing the loan properly. And sometimes that means accepting an appraisal that does not meet the needs of our prospective borrower. That happens, and I move on. Our loan officers are finding out that I will defend a well prepared appraisal as strongly as I will question appraisals where the value conclusion is not well supported.

 

[NLCApprMgr]

The OP responds to more

Denis/Tim - It's not my intention to play thrust-and-parry with every comment on the board. My intention is to throw out issues or questions that will help me better do my job and let the volume of commentary give a temperature of the appraiser as to what kind of reaction I should expect if so implemented. Maybe some of the other forum members have the same or similar questions and never thought or had the time to ask. I read everything, and my lack of commentary should not be construed as ignoring anyone. I hope this answer suffices; it's the best I can do.

 

[NLCApprMgr]

Nicely put

In the past, I've spent - wasted - a lot of time critiquing appraisals for which I thought the reports sloppily done, the research superficial, the analysis ridiculous, the comments canned, the grammar atrocious, and after all that effort, wound up at essentially the same value conclusion.

The lenders concern was the value conclusion, not the USPAP compliance or the neatness of the report.

Your question is in the same vein as those that began other threads. I'll go back and repeat: if you're not happy with the quality of the reports the AMCs your firm is using are delivering, you need to have a prayer meeting with them (if that is, in fact, your area of responsibility) and start ramping up the qualifications of the appraisers that doing your work. It's also an opportunity for you to be an immediate agent for positive change in your new position: take your concerns to upper management and offer a plan - tactical if not strategic - to improve the quality of the appraisals your firm is relying on to make lending decisions.

It may be a fee issue between the AMCs and the appraisers they have in their rotation. But, at the end of the day, your firm is the one with the gold and the one that ought to be making the rules. To passively continue to accept appraisals you think are defective is not, IMO, a way to property serve your employer or your long term prospects with it.

I concur with everything you say. I have been here three weeks, so right now I am just gathering enough of a sample to make sure that I have a full grasp of what we are getting and what to expect. I have spoken with our AMC partners, and will be establishing appraiser requirements and appraisal guidelines.

One reality I must face in my position is the business issue of my employer. We compete with a variety of lenders for the same borrower. Borrower fees are a sensitive part of the business. So while it would be great to increase fees to the fee appraiser anticipating that I will get a better report and a better grade of appraiser, I have to fight the battle with the Sales side of our business. I have to prove that spending extra money of the borrower's will actually decrease our time to close and provide them the best customer service.

 

[ctapraser]

I have seen a few appraisals come across my desk where the appraisal development is sorely lacking, but I have a difficult time contesting the value conclusion. This leaves me in a quandary. Is there anything gained by going through the review process, request changes from the appraiser, when there is no change in value? As a fee appraiser, are you as accepting of an appraisal review where there is no value change, or do you just think the reviewer is justifying their own pay?

Depending on the form you are using you can answer "no" to each question..then give details. You can then answer "yes" to the last question,,do you agree with the value.

As you said, even a blind squirrel finds a nut...I am sure you client is going to want to know they are using blind squirrels as eventually they will not find that nut!!

 

[Randolph Kinney]

I concur with everything you say. I have been here three weeks, so right now I am just gathering enough of a sample to make sure that I have a full grasp of what we are getting and what to expect. I have spoken with our AMC partners, and will be establishing appraiser requirements and appraisal guidelines.

One reality I must face in my position is the business issue of my employer. We compete with a variety of lenders for the same borrower. Borrower fees are a sensitive part of the business. So while it would be great to increase fees to the fee appraiser anticipating that I will get a better report and a better grade of appraiser, I have to fight the battle with the Sales side of our business. I have to prove that spending extra money of the borrower's will actually decrease our time to close and provide them the best customer service.

Excuse me for butting in. The whole idea of appraisals is to be independent of the sales side of the mortgage business. Your concern should be quality and accuracy; a credible well supported opinion of value.

 

[Lee Lansford]

There is always that tension between the QC-side of things and the production-side.

Some folks erroneously believe that a "chief appraiser" can snap his or her fingers and implement what he (or, she) believes appropriate to obtain the absolute best quality appraisal. Well, it ain't necessarily so.