Freddie Mac vs Appraiser Bias

[Sadie]

And if a Trainee or an another Appraiser does the Inspection but is not signing the report it is considered NOT Significant Appraisal Assistance.

So the workaround is this: If an Appraiser or a Trainee is doing property inspections for Ground-Works. What Now? Easy, Neither the appraiser or a trainee is NOT required to tell Ground-Works they are licensed. They can just act like the rest of the other dummies inspecting for Chump Change.

What does this mean to the Appraiser Doing the Desktop - Nothing except that he or she has reason to believe the data is reliable? Well we match up/compare that source with other Sources. From it all we can come up with a value. How Reliable or accurate is the Value compared to when I complete a 1004 by myself?
Well I don't know for sure, but I can guarantee this.... It won't be as good or reliable as my 1004. Here is a key example:

The Borrower has no mortgage on his SFR. Its an relatively expensive property: $500,000 Tax Value. The owner wants to buy a Rundown house that has good bones to Fix N Flip. He Needs 100K total to buy Fix and Sell That's 20% of his primary house Value. His Credit Score is 800. Risk to lender? ZIP , 0,

So the lender has a decision to make. Make the loan just require a signature. and or maybe have a Desktop appraisal for the primary home Something like that.

Oh that credit score lending scenario is what got a lot of banks in trouble in the lead up to 2007-08. The bank needs to protect its investment. They need something on the books to indicate there is sufficient collateral for a loan. Maybe doesn't need the belt and suspenders approach of a full appraisal, but there needs to be something is case it all goes south, because, well life happens.

 

[George Hatch]

"It’s like extra extra extra ordinary assumptions"​

An assumption is an assumption whether it's one of the standard assumptions we always cite or is specific to this assignment (aka extraordinary). There is no such thing as an assumption-free appraisal and appraisal report. There never has been. There is only more assumptions vs fewer assumptions.

Even if it was an EA the appraiser is not required to call it an Extraordinary Assumption. They're just required to disclose the assumption and comment that if there's an error it would have an effect on the appraisers opinions and conclusions. Same with HCs. You're not required to use the label, you're just required to summarize what you're doing.

 

[Tiffany Gibbons]

You think testing something and looking at the resulting data is wrong? What alternative approach would you suggest?

I like VA's AAPP where the person doing the inspection is my trainee or another appraiser I trust, not some unknown chosen by those that stand to make some $ off the deal.

 

[Tiffany Gibbons]

Oh that credit score lending scenario is what got a lot of banks in trouble in the lead up to 2007-08. The bank needs to protect its investment. They need something on the books to indicate there is sufficient collateral for a loan. Maybe doesn't need the belt and suspenders approach of a full appraisal, but there needs to be something is case it all goes south, because, well life happens.

Yes, and don't forget F & F are allowing only "positive" rental history to be considered? Not negative. Where were these folks when I was 21?

 

[Dale Floyd]

Inspector's liability is literally not the appraiser's problem. And no, we do not certify to any of the information being reliable, from any source. What we certify to is "to the best of our knowledge and belief". The assertion is that on our end we are operating in good faith.

Equally,
"...may not fly well in court..." can't happen unless the court or the state board forgets how to read the disclosures as what the appraiser did/didn't do in their SOW. If you're afraid of your board's competency then that's an issue between you and your board.

You've never been sued for any errors of fact in your 3rd party data that occurred in a 2005 - when all you did "in addition to a desktop" was to drive by the front of the property. You didn't measure, you didn't walk through, and you don't know. What you did do was proceed with the data at hand per "to the best of my knowledge and belief". How does a desktop SOW suddenly become more of a threat to your liability than a 2055 SOW? For which you've never been hassled?

What is being considered is an inspector with no liability, unless you are suggesting they be licensed and insured. Then we are probably more in sync than you might believe.

Are you seriously attempting to compare the 2055 driveby report to the 1004 URAR? Are you suggesting the certifications will be the same as a driveby? I haven't read that. Those two reports and assignments are completely different in scope and parameters. Come on GH...

 

[TerryRohrer]

Yes, and don't forget F & F are allowing only "positive" rental history to be considered? Not negative. Where were these folks when I was 21?

When you are risking the livelihoods and assets of others while profiting yourselves, you gain certain flexibilities in logic that those earning their compensation don't have the benefit of.

 

[DWiley]

Are you suggesting the certifications will be the same as a driveby? I haven't read that.

The hybrid form has been out for a long time. No one needs to guess as to the content of the form and the certs. Just look in your forms software.

 

[glenn walker]

What is being considered is an inspector with no liability, unless you are suggesting they be licensed and insured. Then we are probably more in sync than you might believe.

Are you seriously attempting to compare the 2055 driveby report to the 1004 URAR? Are you suggesting the certifications will be the same as a driveby? I haven't read that. Those two reports and assignments are completely different in scope and parameters. Come on GH...

A hybrid is not a 1004 URAR and last time I checked it had its own certification . I think some are confusing it with a 1004 Exterior where no inspection is done by the appraiser except from the street, like the ones that were being done during Covid-19.

 

[George Hatch]

The 2055 uses a different certification WRT personal inspections, right?

What is being considered is an inspector with no liability, unless you are suggesting they be licensed and insured. Then we are probably more in sync than you might believe.

Are you seriously attempting to compare the 2055 driveby report to the 1004 URAR? Are you suggesting the certifications will be the same as a driveby? I haven't read that. Those two reports and assignments are completely different in scope and parameters. Come on GH...

I'm not suggesting it, I'm saying it directly - the APPRAISER is required to disclose what they did and didn't do whether the form's defaults are set to do so correctly or not.

You are not a form-monkey and you don't work for the form. The form works for you. I must confess to being shocked at the assumption that the GSEs would use a form that contradicts the SOW they're using for this type of assignment. But even if that assumption was correct the appraiser still wouldn't find themself in an untenable position where they're being held to account for issues that are 100% outside of their knowledge or control. The appraiser can still add the clarification so as to inform the reader what they did/didn't do.

If you're worried about the form and disclosures involved then why don't you ask DW the question instead of running wyld with the speculation?

(edit: never mind - I see that DW just answered that question)

 

[George Hatch]

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