Blind Squirrel and Acorns

[timd354]

It's not the format, it's the research ( assuming it's an assignment that involves research). An appraiser can deliver a one sentence oral summation or opinion of value, or write it on a napkin, assuming the research and analysis was done and is credible and market supported and in a workfile.

What intended appraisal uses are out there that require no research or cursory research? I'd like to sign up for that!

One intended use that would require what you undoubtedly would call only cursory research would be portfolio analysis. I work for a company that insures mortgage loans with total principal balances in the tens of billions of dollars ... do you think that we obtain so-called "full appraisals" of every property every time that we update the estimated of the value of the collateral securing the loans in our portfolio of insured loans? You are completely clueless.

 

[J Grant]

Were did I ever say anything about intended users needing or wanting poor assignment results or relieving the appraiser of "responsibility"? The fact is that some intended uses do not require an SOW that is as extensive as other intended uses in order for the assignment results to be meaningful or credible. Your inane post proves my earlier point about some appraisers simply do not understand that whether the SOW is adequate and the assignment results are meaningful is measured in the context of the intended use.

You are obviously one of those appraisers

Corporate buzz speak., I get it, the SOW is not as extensive....and why is that? What the heck is their intended use? You never say what it is. What is the intended use of a client pushing reviewers to work as fast as possible and deliver volume per quotas? At what point does a SOW not become credible, when it is time directed? i suppose you never ask that,...which is fine, but don't' disparage those that do ask.

I never wrote that YOU said intended users needed/wanted poor assignment results, That was my observation, had nothing to do with you, and it came from years in the business and hundreds of reviews (field reviews, with in depth looks at the kind of appraisals accepted, not cursory scan with a checklist) Maybe instead of phrasing it they want poor assignment results, it should be they are willing to accept them, because it is profitable. Does imposing quotas on reviewers and expecting 30 a day beget good assignment results? Seems less likely than allowing more time or....this is radical...letting the reports be reviewed by local, area experienced appraisers, not by rote from afar.

Call me whatever kind of appraiser you want, I can assume the same of you ...that kind of name calling is just silly .

IT is a hard sell to swallow that the lenders that needed bailouts because they had such poor judgment in granting reckless loans suddenly became careful, ethically responsible folk who put safety of the collateral ahead of profit. Why would the intended use of certain lenders , some with criminal history, who left behind a trail of defaulted loans and toxic assets that crashed the markets, why would one assume their intended use be beyond question?

 

[timd354]

If the intended user is a for profit AMC or lender who is pushing for volume and is doing the most cursory of reviews, what is the intended use and user? Is the specific low rent client the intended user?

Last time I checked, making profits and increasing business volume is not a crime and is actually the point of doing business in a capitalist system- I am guessing that you are in the appraisal business as a for profit business. One very legitimate intended use of doing a cursory review is to identify those appraisals that are most likely to present higher collateral risk to identify those appraisals that require a more in-depth (and expensive) review with a larger SOW.

Lenders and other secondary market participants don't just order appraisals and do reviews just for the heck of it...they are trying to asses collateral risk and they are trying to utilize their resources (and resources are always limited in every business) in the most efficient manner to identify and mitigate collateral related risk. One manner of doing that may be to do what you call cursory reviews on all appraisals in order to identify those appraisals that are likely to be of higher risk and should be the ones that receive a higher level of review (you can't just simply order a field review on every appraisal)

It is amazing how little the typical residential appraiser (who is usually almost 100% dependent on mortgage related appraisals) actually know about how entities in the secondary market evaluate and mitigate collateral related risk.

 

[J Grant]

Last time I checked, making profits and increasing business volume is not a crime and is actually the point of doing business in a capitalist system-

No, of course making profits and increasing volume is not a crime, but when business is done in a reckless manner , especially a business that relies on backing of taxpayers, and can cause great economic harm to people, then it can become criminal...who was behind the bundling of toxic assets that were mis represented? Granting loans to straw buyers?

I am guessing that you are in the appraisal business as a for profit business.

Yes, as you are as well. I make a profit, but wont do reckless things to make it.

One very legitimate intended use of doing a cursory review is to identify those appraisals that are most likely to present higher collateral risk to identify those appraisals that require a more in-depth (and expensive) review with a larger SOW

I understand that. It is a question though of how good these cursory reviews can possibly be, if they are done by afar by appraisers or staff who are not local to area of appraisals, or done under such quick time quotas .

Lenders and other secondary market participants don't just order appraisals and do reviews just for the heck of it...they are trying to asses collateral risk and they are trying to utilize their resources (and resources are always limited in every business) in the most efficient manner to identify and mitigate collateral related risk. One manner of doing that may be to do what you call cursory reviews on all appraisals in order to identify those appraisals that are likely to be of higher risk and should be the ones that receive a higher level of review (you can't just simply order a field review on every appraisal)

It is amazing how little the typical residential appraiser (who is usually almost 100% dependent on mortgage related appraisals) actually know about how entities in the secondary market evaluate and mitigate collateral related risk.

Please stop assuming nobody knows anything . I interviewed for several jobs over the years which did these types of cursory reviews, they were not for me so I did not take the positions offered. I am questioning certain intended uses and whether unreasonable (in my view ) time quotas or reviewing from afar yields good results.

Some clients are more careful and order more comprehensive local reviews ( I do work for some of them). They may not field review every appraisal, but they engage local appraisers and allow them a bit of time to complete a desk review.

Interesting to hear your perspective, even if we have different viewpoints obviously at times.

 

[Elliott]

Too bad we don't have a fight room.

 

[J Grant]

One intended use that would require what you undoubtedly would call only cursory research would be portfolio analysis. I work for a company that insures mortgage loans with total principal balances in the tens of billions of dollars ... do you think that we obtain so-called "full appraisals" of every property every time that we update the estimated of the value of the collateral securing the loans in our portfolio of insured loans? You are completely clueless.

Honestly, I don't know enough about your company to answer that.

Your company has a certain perspective, risk analysis. And they view appraisals in that light. Their use of appraisals for risk analysis of portfolios of loans is specific to them.

However, the origination appraisal, when first ordered, has an identified purpose, to derive a point value for an LTV, as well as to provide information about a property and relevant market conditions so the client can make decisions based on the information.

The original use of appraisal was to develop a value opinion and deliver credible and accurate analysis and information that is reliable to the user for that purpose..

 

[Renee Healion]

Too bad we don't have a fight room.

Oh please, they both edit each other's posts in colored ink instead of using the quote function, so it is like 3 Faces of Eve fighting Sybil.

 

[J Grant]

That was funny! Getting silly, too late to post more..maybe TMD will have the final say...

 

[J Grant]

One intended use that would require what you undoubtedly would call only cursory research would be portfolio analysis. I work for a company that insures mortgage loans with total principal balances in the tens of billions of dollars ... do you think that we obtain so-called "full appraisals" of every property every time that we update the estimated of the value of the collateral securing the loans in our portfolio of insured loans? You are completely clueless.

If the intended use is to "update" a portfolio, then at each point further out point in time, the value of a property would have changed. Are the original appraisals relied on to update the value of loans ? OR, in order to update the update the estimated value of collateral is the company getting new current date appraisals, or evaluations or AVM's of the properties?

If, as you sarcastically write, your company chooses not to order full appraisals each time you update the value of portfolio, what do you order to update the portfolio? As they are individual properties comprising the portfolio, each would have to valued individually. I don't see why intended use ( insuring tens of billions of $ in loans) is so casual as to merit a much lower SOW in an appraisal...if your company chooses to use AVM's or evaluations or some other product to update loan portfolios they are not appraisals so I can't comment on them.

 

[J Grant]

Originally Posted by J Grant
NOBODY has answered my question!

__________________
I asked a legitimate question, instead of answering it, you claim I lack understanding of the rule...which leaves us with the fact that you did not answer the question. ( I'll accept you chose not to answer it)