First encounter with Desktop Underwriter......you want me to what?

[DWiley]

Dodd-Frank specifically states that a lender may ask an appraiser to consider alternative sales data. Given that, responding to requests like the one described in the OP is probably something that is here to stay for appraisers.

While it may be tempting to respond with a generic statement, responding with specific commentary is preferable for at least two reasons. First, a generic response is very likley to result in a follow up request to provide more detail, and that will just result in even more time spent on the assignment. Second, citing of additional sales data is common in repurchase letters. It is far easier to respond in detail at the time a request is made than it is to try to create such a response several years later in reply to a repurchase letter.

Also, a common issue that I see is that an alternative comp is suggested, and the reason cited for not using it would also apply to the sales that were used. For example, just last week I saw a report where the appraiser stated that an alternative sale was not used because it had a three-car garage, but two of the comps used in the original report had three-car garages.

 

[CANative]

One of the problems is that lenders and AMCs haven't completely figured out that they can't just bounce CU output back to the appraiser. There must be human intervention.

 

[EddieB]

"Dear Desktop Underwriter. Please explain why the sales you have provided are superior to the ones utilized within the original report. I look forward to your response."

I had a similar request before the official start of CU with 8 add'l sales to analyze. Pulling the tax card, MLS (if available) and writing details of why each was not considered or was considered but not included took me over two hours. I no longer accept work from them.

I too follow LordofTexas' advise and include a very detailed explanation of how the parameters were set, the rational and the results. CAN has a good suggestion, to include that printout in the report. and will add that to my SOP.

 

[J Grant]

Doesnt' Dodd Frank reference appropriate sales?

While I agree in theory about a detailed response, the problem is that certain AMC's/lenders abuse this process and thus appraisers respond with generic comments. There is a clear differene between being sent a list of sales that make sense to comment on, vs a list generated by a computer that make little to no sense. We can tell when it is auto computer generated because the sales show up literally within seconds of report submission. Why do generically picked sales that are not appropriate deserve anything more than a brief comment....if a lender tries to defend a buy back purchase based on those kinds of sales data they would not get far. If they were in a buy back scenario the appraisal would get a field review (one expects?) and the data of other sales would one assumes be human selected and possibly better than the OA , otherwise what case would a lender have.

I also refuse to work for or limit to accepting a very few exception case orders for any client that auto spits computer generated sales at report submission ( this is not CU,)

 

[DWiley]

One of the problems is that lenders and AMCs haven't completely figured out that they can't just bounce CU output back to the appraiser. There must be human intervention.

Agreed. The bigger players know the rules and are staffed to hande this, but smaller entities are struggling because they just don't have the staff and/or expertise.

 

[DWiley]

Doesnt' Dodd Frank reference appropriate sales?

It does, but no definition is provided for "appropriate" - and we all know that it can be a challenge to filter through what is appropriate and what is not. For example, if the subject is a lake home, then any sale on the same lake might be relevant (appropriate), even if the home is significantly dissimilar.

Why do generically picked sales that are not appropriate deserve anything more than a brief comment....

A brief comment is all that is needed in most cases. But "brief" and "generic" are not the same thing.

 

[Eli]

It seems to me that anybody deciding what is a better comp, when it comes to influencing appraisers, should be a licensed appraiser. I guess everything is comparable from the east coast to the west, but when those decisions start being made by a computer, then I wonder if law is not being broken relative to the govt definition of an appraisal and those who are licensed to perform such.

 

[J Grant]

I agree, brief and generic are not the same, but in order to provide even a brief comment, appraiser must research the sale, and when those sales are mindless garbage generated by a computer some of us at least just drop the client, it is beyond demeaning and absurd they expect us to research sales that they themselves did not bother to research before sending to us.....not all clients operate this way , the ones that do also tend to be the worst paying for some reason , yet extremely demanding so it's a curious combination.

 

[Eli]

I understand it from realtors, homeowners, buyers, etc.,etc., but from a client, who is so heavily regulated, I don't exactly get it when it comes to public trust. FNMA may have a hidden agenda, that is not in the favor of AMC's or anybody, except them. They are not the govt. Keep that in mind. But the govt is breathing down their neck heavily, so this may be just doing it to please the govt, period. I don't like a licensed appraiser not sending the request with a signature. It stinks. It is appraisal practice without a license in my book.

 

[Eli]

I agree, brief and generic are not the same, but in order to provide even a brief comment, appraiser must research the sale, and when those sales are mindless garbage generated by a computer some of us at least just drop the client, it is beyond demeaning and absurd they expect us to research sales that they themselves did not bother to research before sending to us.....not all clients operate this way , the ones that do also tend to be the worst paying for some reason , yet extremely demanding so it's a curious combination.

It's that unlicensed aspect of appraisal practice that appears to be happening that worries me the most. Time is already an appraiser's worst nightmare due to the change in market structure to an oligopsony. Here, won't these 20 comps make a difference that are not even comparable? Skippy says, heck yeah, you sent them to me, I'll use them. NO problem, I love you. If it was a licensed appraiser signing the request, it would be different, because they would spend due diligence before sending the request.

That is exactly the way the banks who needed no bailout do it.