Appraisal With No Inspection By Appraiser?

[Mr Rex]

I still don't understand the impetus behind this move to hybrids. Most seem to assume it will result in a lower fee, at least to the appraiser/inspector, but I see the possibility that the fee the borrower pays could be close to that of a full 1004.

i fixed it for you.

 

[J Grant]

I still don't understand the impetus behind this move to hybrids. Most seem to assume it will result in a lower fee, at least to the appraiser/inspector, but I see the possibility that the fee the lender pays could be close to that of a full 1004.

That may be true or fee panel work , but for staff appraisers, the replacement of traditional appraisals in any volume with bifurcated or hybrids is highly profitable to an AMC or lender nationwide using staff. A staff appraiser who has to inspect each subject might produce 8 a week. If they mainly do hybrids now, they can output 30 a week , which means half the staff appraisers can be fired, saving money .If the company can contract or employ low pay inspectors and increase volume from staff appraisers it becomes highly profitable

Why would a smaller lender or AMC bother with having to hire both an inspector and an appraiser ? They may not, but hybrids/bifurcated replacing traditional appraisals benefit national scale AMC's or lenders who use staff appraisers. ( and have the volume to squeeze down fees of their panel)

Re the CoreLogic partnership with an education provider for their new appraiser trainee program...recruit newbies to sit at a desk and crank out high volume at speed. No time for an independent opinion with a 6 hour turn time,,,

How can an appraiser stand up to a challenge about an independent value opinion for a 1004 when appraiser has not even seen the property? Not well. These companies want people with shortened training hours and little field experience cranking out speed reports from analyzing data..I don't know how that equates to being an appraiser except as a label.

 

[DWiley]

... but for staff appraisers, the replacement of traditional appraisals in any volume with bifurcated or hybrids is highly profitable to an AMC or lender nationwide using staff.

Hmmm. So, we don't know the costs, and we don't know the fees that the market will set, but you can already conclude that they will be "high;y profitable."

Can you share the data that you used to come to that conclusion? As one who actually works for a large AMC, I would be very interested in how you are projecting what fees and associated costs there will be for a service that has (1) an unknown scope of work, and (2) unknown report content, at this point.

Yes, some already have a significant number of staff appraisers who have been doing "hybrid" work for over a decade, but the scope of work and report content for the work that has been done is almost certainly different from what Fannie will develop. Will Fannie require interior inspection or just exterior? Will someone have to measure the home and/or provide a sketch? How will data collected be formatted and provided to the appraiser? There are LOTS of unknowns right now, even for companies that have been doing some variation of this for year. Looking at current fees and costs and assuming that they will apply to the potential future Fannie work - when it could end up being VERY different from current work - would be very poor business in my view.

 

[Terrel L. Shields]

Looking at current fees and costs and assuming that they will apply to the potential future Fannie work - when it could end up being VERY different from current work - would be very poor business in my view.

Can we assume, at least, that compensation certainly isn't going to be increased? And I really wish someone can explain how you can hire a professional to inspect, then seamlessly provide that data to another professional without glitch, and make the process more "efficient". How does that work? The only way it works is much like @J Grant describes, finding a starving agent or the village idiot to measure et al and then centralized Cubesville full of desk bound appraisers in some larger city doing a dozen of these a day over the entire 50 states.

 

[TJSum]

What is the real reason they are looking to switch away from the current process? Is it to improve the quality of appraisal inspections, or is it to save money? Of course they will promote it as both, but that is just not realistic in the real world. If the goal is to save money, then the people who end up doing the inspections will be less qualified than appraisers. If the goal is to increase the quality of inspections, then the costs will rise, given the direction the industry is heading, the real intent is of course to save money (or to be able to pocket a larger percentage of the borrowers appraisal fee collected).

 

[Evincere]

I still don't understand the impetus behind this move to hybrids. Most seem to assume it will result in a lower fee, at least to the appraiser/inspector, but I see the possibility that the fee the lender pays could be close to that of a full 1004.

Modernization would be a welcomed Advancement IF it meant more $ for less work. In our particular industry this doesn’t appear applicable when considering it’s been many years that fees have not increased commensurate with a product (1004) that would require more work than an abbreviated hybrid product.

 

[DWiley]

What is the real reason they are looking to switch away from the current process?

There are two driving forces. By far, the biggest factor is turn time. To an appraiser, saving a day or two is no big deal. Applied to a mortgage portfolio, a day or two is very significant money.

Also, there is a big desire to change the overall borrower experience to be more similar with what consumers experience in other areas. Sitting around for a couple of days waiting on someone to call and schedule an inspection is just "old fashioned," or at least it feels that way in today's world. Dedicated inspectors tend to get inspections done much faster, and some are even using modern scheduling technology that many/most appraisers do not use or even have access to. In some cases, appraisers have even fought using such technologies.

 

[Meandering]

There are two driving forces. By far, the biggest factor is turn time.

Appraisal Delays Study

VaCAP did a sample study this past winter to determine the number of days from contact ratification to appraiser acceptance from both AMCs and lenders. The results were a 9 day difference with AMC’s taking 18 days and lenders only 9 days to assign the appraisal.

We have just asked our sister coalitions to complete this survey as well. for a larger data pool and are asking every appraiser to once again participate to help our industry. This information will be used to counter the narrative the appraisal is taking too long.

We did this in Virginia in the winter (November, December, and January). Granted, a slow time of year, but we felt we might get more participation now.
VaCap’s study indicated a 9 day time lapse from direct lenders as opposed to an 18 day lapse utilizing AMCs AND so-called “portals”.

Here are the parameters to a fair report.

1. Determine the date the contract was fully ratified (finalized).
2. For your (our) information record the name of the lender.
3. Record the AMC by name.
4. Record the date of final contract ratification.
5. Record the date appraisal was ACCEPTED.
6. Record the passage of time in days.

Let’s agree to distribute to our members ASAP and ask for results ending September 30. This will give us time to compile and fully report to the AARO conference and other publicly interested entities.

This is an important undertaking, and can go far in support of insuring the safety and soundness of our financial systems, especially under current and pending issues!
Please pledge support and get this done.


Apparently removing the AMC saves 9 days in time, as opposed to a couple of 3 hours.




Appraisers should participate in similar such studies.


.

 

[chad hampton]

The next big push for appraisal groups will be to write legislation to not permit AMC to have staff appraisers. Reviewers only.

 

[chad hampton]

A hybrid is a desktop although not all desktops are hybrids. Both take money out of the pockets of appraisers. Hopefully one day you will see this,

I view a hybrid as a full URAR for a desktop price, with a full URAR liability, for a URAR purpose. A hybrid won't replace a desktop for loan servicing, pre-foreclosure, or minor lines of credit. There is a huge difference in purpose.

But I'd be fine if all products were replaced with only a URAR. If that's a fight we think we can win, I'm on your side.