Blind Squirrel and Acorns

[Terrel L. Shields]

I doubt it is his call to

order a second appraisal

Banks do not intend to comply with Dodd-Frank. They intend to appear to comply with Dodd-Frank.

 

[George Hatch]

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.

This is a tangent to your question, but one that bears a little attention nonetheless.

I fear you may be a little underinformed as to how SR3 works. Having the alternative opinion is not the defining factor at all.

You seem to have an opinion of how these appraisals should be developed and reported and well an an opinion of what would be a reasonable value conclusion. Your scrutiny of these reports seems to be oriented toward deciding what to with the report itself rather than what to do about the property. Meaning, the subject or your decision process is the report, not the property.

If so, and if I read between the lines here and *assume* that you were chosen for this job based in part on your expertise with appraisals then that would indicate to an expectation by your employer for you to act with some appraisal competency. If your employer also expects you to act impartially and objectively - which your concern for not crossing any boundaries implies - then those are the two identifying markers of someone acting in the role of an appraiser and performing assignments that would fall under the category of appraisal practice as well as an appraisal review assignment.

Whether or not you hold an appraisal license or call yourself an appraiser or call this an appraisal review doesn't figure into the applicability of our professional standards to an individual's actions in such an assignment. That's why most appraisers don't lose sight of the need to comply with USPAP even when performing "evaluations" - its common knowledge by now that nomenclature and semantics are not the dividing line - it's the actions of the individual and the expectations for that role that separate what a user does with a report as opposed to an appraiser or reviewer.

You may not be obligated by law or contract to comply with USPAP but that doesn't square you with what we expect of someone acting in the role of a reviewer. Even an underwriter or an appraisal coordinator or whatever the AMCs call their unlicensed reviewers may find themselves engaged in appraisal practice in the role of an appraiser as those terms are defined in USPAP.

Just sayin'.

 

[George Hatch]

With respect to your original question, an appraisal assignment can be broken down into two activities - appraisal development and appraisal report. Although appraisers usually perform both activities concurrently they are separate functions with separate requirements.

As a reader what you have in hand is an appraisal report - that's what you can see of the appraiser's work in the assignment. A hole in a report is just that - a hole in a report; it doesn't necessarily prove what the appraiser did or didn't do, only what they reported.

So it's possible - and quite common in appraisal reports - for a value conclusion to be reasonable even when there are deficiencies in the report. A lot of people lose sight of that because the Fannie review forms don't address development and reporting separately - they commingle the two functions as if they were one.

So as I read your question, you apparently think the value conclusion might be reasonable but you're unhappy with report content. That's a really common problem, and to whatever extent you're willing to let such problems slide you can be sure they'll continue to be repeated.

The client in this assignment engaged an appraisal assignment with the expectation that the results (all of them) would be reasonable as well as suitable for their use. Your employer may be selling these loans to secondary market investors and be making some assertions about these loans being supported by adequate appraisals. Or, your employer's ownership or investors may be operating under those expectations.

As an employee you are operating under certain expectations for your own work, regardless of your job title. Your employer might be amenable to letting such deficiencies slide without remediation but unless you are empowered to actually have the last say in that decision then you don't really have the latitude to ignore "unacceptable"; you're basically obligated to report what you see and let the decision makers assume the responsibility for making their own decisions.

In my opinion if your company contracted for an appraisal and are paying the fee then it's well within their rights to demand satisfaction of those requirements. There's no better way to force an errant appraiser into line than making them fix their own problems on their own dime. If it really is a problem then it's worth fixing, of for no other reason than to teach the appraiser not to do it again in future assignments.

And if this appraisal report went through an AMC then their under-performance in the matter is causing you problems as well, and deserve some commentary. They contracted with your company to provide a reasonable appraisal. "Reasonable" being a much more readily obtainable result than "perfect" which is not what you need and not what you're attempting to get.

If you let the AMC get away with sending you a lot of problems that your company has to spend their own time and money to correct then they'll continue to do it and you'll get what you get.

Just as an exqample, if you end up spending a total of 2 hours extra of your own time chasing these problems down and re-reading to ensure compliance with your company's written appraisal policies then that's costing your company some extra cash. That's how a $100 savings on an appraisal fee can turn out to be a net loss instead of a net gain.

Good appraisals don't cost money, they save money. That cliche is true on more than one level.

 

[Elliott]

djd09 said, this guy is a shill.

I think we're all hoping he has a come to Jesus moment, but he might be a reincarnation of Doc Manhattan and does like to push our buttons. Maybe Doc finally got a new review job in Ohio and is forced to read the reports that AMCs spit out.

 

[djd09]

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?

he/she is a shill. on his/her other post "appraisal guidelines" he/she states at one point in the past he/she was a fee appraiser. These posts lead me to believe the op was not an appraiser. Let me ask this question why does it matter as a review appraiser if one concludes that no errors were commited you have to justify your pay. Your pay is justified by reviewing the appraisal with or without changes.
the other shill keeps "faulting" the appraisers while she is not even one.

 

[CANative]

Conspiracy nuts!

The OP on the other thread wants to develop a specific overlay for their appraisal policy.

On this thread the OP is discussing the problem about "when the report sucks but the value is okay." We've had this discussion on the forum for years.

 

[Michigan CG]

he/she is a shill...............These posts lead me to believe the op was not an appraiser...........

Everything about his posts lead me to believe that he is/was an appraiser. Look at his very first post and the references he makes are all about standards 1 and 2.

djd, from your posts I have the opinion you wouldn't know a well supported and explained appraisal if it bit you in the backside. But that is just my opinion based on your posts.

 

[ctapraser]

i did not want to say this but. this guy is a shill. crying about the appraisals. boo hoo. so is joan. there both jokes and not even appraisers. if I was loaning $100,000 ++++ and thought the appraisal may be lacking, I would pull the money out and order a second appraisal you cheap @@@@.

This would have been a good point to stop:icon_mrgreen:

Tell us what you really think, please don't "beat around the bush".

 

[Tim Hicks (Texas)]

The OP is learning there is a difference between casual reviewing as the checklister for the AMC of the QC department for the lender, than an actual Standard 3 review.

The one thing I do agree with is that the fee will not bring a better appraisal if they continue to use the same appraisers. They will just continue to pay the poor appraisers better.

 

[Michigan CG]

.....The one thing I do agree with is that the fee will not bring a better appraisal if they continue to use the same appraisers. They will just continue to pay the poor appraisers better.

I think you are completely correct. Maybe it is time to "cleanse" the approved appraiser list or maybe the approved AMC list.