AMC hires Convicted Felon as Property Data Collector

[George Hatch]

It’s ok to admit you’re wrong. Some consider it an admirable trait. I don’t think there’s any appraiser who takes his job seriously and values their license that would think the work done at an appraisal inspection is insignificant.

I realize you and others are told what to say

That ad-hominem is call the argument to motive (your argument sux because of your motivations) as opposed to being an argument to reason which is what we do in our day job. Argument to motive is characterized as a fallacy, so your argument is based on a fallacy. Not to mention being factually untrue.

I also never said or implied that what appraisers do with their inspections is insignificant. Less is always less. If/when that's actually the case.

What I am pointing out is that as far as the entirety of the appraisal profession - including but not limited to the GSE niche - we have always used different SOWs for different assignment types. Even in FannieWorld. And even in FannieWorld we have previously acknowledged that appraiser-developed subject data isn't always and forever the only acceptable source of subject data for one of their appraisals.

Exhibit A


Note the disclosure of the data source. That demonstrates your "they were misled" assertion as being factually incorrect. An untruth. Even if Fannie didn't have that field on the form you could still make the disclosure; they're not stopping you.

Yes, for many of the assignments which use the Fannie forms the appraisers certify to personal interior/exterior or exterior-only inspection. But even "inspection" doesn't always mean they measured the building and did their own GLA calculations. I've seen MANY conventional 1004s where the appraiser didn't measure or diagram the building.

 

[gregb]

I've seen MANY conventional 1004s where the appraiser didn't measure or diagram the building.

In 33 years working with 1004s never completed a report where I didn't measure the building or use an architect's set of plans that I scaled and then drew into apex.

Lemme look at the title of this thread to see how many posters are defending an AMC for hiring an inspector with a felony?

 

[Mike Ault]

That ad-hominem is call the argument to motive (your argument sux because of your motivations) as opposed to being an argument to reason which is what we do in our day job.

I never said or implied that what appraisers do with their inspections is insignificant.

What I am pointing out is that as far as the entirety of the appraisal profession - including but not limited to the GSE niche - we have always used different SOWs for different assignment types. Even in FannieWorld. And even in FannieWorld we have previously acknowledged that appraiser-developed subject data isn't always and forever the only acceptable source for one of their appraisals.

Exhibit A
View attachment 75450

Note the disclosure of the data source. That demonstrates your "they were misled" assertion as being factually incorrect. An untruth. Even if Fannie didn't have that field on the form you could still make the disclosure; they're not stopping you.

Yes, for many of the assignments which use the Fannie forms the appraisers certify to personal interior/exterior or exterior-only inspection. But even "inspection" doesn't always mean they measured the building and did their own GLA calculations. I've seen MANY conventional 1004s where the appraiser didn't measure or diagram the building.

In lieu of appraiser developed data, public records have always been considered an acceptable data source amongst the appraisal profession. They are considered to be "unbiased". Data sourced from the homeowner or Elmo, the unsupervised Craigslist inspector, have never been considered acceptable data sources amongst our peers. How many appraisal opinions have you developed using homeowners measurements? My bet would be (none). The GSE's are imposing new standards upon the appraisal profession, and that is not their place. We are required to reject assignments which constrain our scope of work to such a degree that the appraisal would not be considered credible. Replacing personal on-site appraiser inspections with "team players", (engaged by the client) who might do it faster & cheaper, is precisely such a situation, and it poses systemic risk to the safety and soundness of our financial system. For absolutely no legitimate reason other than the desire for top-down control over the entire process. The appraiser's contribution is derived from our "independence", not our "teamwork" mentality.

 

[George Hatch]

If you want to talk about my motivations then try this one on for size:

I want you to win. I want you to survive and to thrive as best you can under the IRL conditions which exist and which we can reasonably anticipate will exist in the future.

If it comes to pass that changes in technology and user requirements result in 70% of appraisers getting starved out of the profession over the next 10 years then I want everyone here to be among the 30% who survive. That is, if they want to survive in the profession as it exists at that point.

OTOH if some people see that future coming and decide they don't want to adapt to it then the sooner they figure that out and make alternative arrangements the better they'll be able to do for themselves in the long run. 2030 may end up being a way worse point in time than 2023 for someone to be trying to break into a different occupation. Nobody here is getting any younger.

IMO (and you may disagree) nobody here has time to waste by lying to themselves about what is vs what isn't. Or with engaging in the fantasy that the market for appraisal services in 2030 is going to resemble what it looked like in 2019, let alone 2004.

Those are my motivations.

 

[George Hatch]

In 33 years working with 1004s never completed a report where I didn't measure the building or use an architect's set of plans that I scaled and then drew into apex.

Lemme look at the title of this thread to see how many posters are defending an AMC for hiring an inspector with a felony?

Great. Me neither insofar as SFRs and most other property types I appraise.

OTOH I've seen lots of appraisal reports where the appraiser lifted the diagram off a property assessor tax card or MLS listing or builder brochure. Or off another appraisal report completed by a different appraiser.

 

[Mike Ault]

If you want to talk about my motivations then try this one on for size:

I want you to win. I want you to survive and to thrive as best you can under the IRL conditions which exist and which we can reasonably anticipate will exist in the future.

If it comes to pass that changes in technology and user requirements result in 70% of appraisers getting starved out of the profession over the next 10 years then I want everyone here to be among the 30% who survive. That is, if they want to survive in the profession as it exists at that point.

OTOH if some people see that future coming and decide they don't want to adapt to it then the sooner they figure that out and make alternative arrangements the better they'll be able to do for themselves in the long run. 2030 may end up being a way worse point in time than 2023 for someone to be trying to break into a different occupation. Nobody here is getting any younger.

IMO (and you may disagree) nobody here has time to waste by lying to themselves about what is vs what isn't. Or with engaging in the fantasy that the market for appraisal services in 2030 is going to resemble what it looked like in 2019, let alone 2004.

Those are my motivations.

I, for one, have never questioned your motivations. I believe you to be a "ride or die" independent appraiser, who has selflessly volunteered your time and expertise towards the betterment of the profession over the many years that I have been fortunate enough to be the beneficiary of the same. I simply tagged your post because I'm disappointed that you are not "cursing the gods hard enough" over what is suddenly considered to be "acceptable data sources". Simple disagreement, nothing personal!

 

[George Hatch]

In lieu of appraiser developed data, public records have always been considered an acceptable data source amongst the appraisal profession. They are considered to be "unbiased". Data sourced from the homeowner or Elmo, the unsupervised Craigslist inspector, have never been considered acceptable data sources amongst our peers. How many appraisal opinions have you developed using homeowners measurements? My bet would be (none). The GSE's are imposing new standards upon the appraisal profession, and that is not their place. We are required to reject assignments which constrain our scope of work to such a degree that the appraisal would not be considered credible. Replacing personal on-site appraiser inspections with "team players", (engaged by the client) who might do it faster & cheaper, is precisely such a situation, and it poses systemic risk to the safety and soundness of our financial system. For absolutely no legitimate reason other than the desire for top-down control over the entire process. The appraiser's contribution is derived from our "independence", not our "teamwork" mentality.

It's more factually accurate to say the GSEs and other lenders are changing their own internal expectations. Which they have always been doing on a more/less constant basis since I started appraising. What's different now vs 30 years ago is that only some of these changes involve "more". Some of these other more recent changes now involve "less".

And sure, they're making some of these changes for the money. And sure, they're making some of these changes to reduce their dependence on appraisers or having to interact with appraisers. And sure, some of these changes involve more risk to their own bottom line and to the general economy as a whole. I don't disagree with any of those or a dozen other criticisms appraisers have with these lenders.

But don't conflate the issue of "appraiser independence" - which term in the federal banking regs refers to keeping the loan salesmen away from the appraisal engagement - with "protecting the fee appraisal business model".

Regardless of what anyone here thinks, the fee appraisal business only represents a subset of the appraisal profession as a whole; and the ratio of fee appraisers to employees will always be subject to change per user preferences and their legal alternatives. Fee appraising isn't the only legitimate form of appraisal practice; not now and not ever.

 

[Mike Ault]

It's more factually accurate to say the GSEs and other lenders are changing their own internal expectations. Which they have always been doing on a more/less constant basis since I started appraising. What's different now vs 30 years ago is that only some of these changes involve "more". Some of these other more recent changes now involve "less".

And sure, they're making some of these changes for the money. And sure, they're making some of these changes to reduce their dependence on appraisers or having to interact with appraisers. And sure, some of these changes involve more risk to their own bottom line and to the general economy as a whole. I don't disagree with any of those or a dozen other criticisms appraisers have with these lenders.

But don't conflate the issue of "appraiser independence" - which term in the federal banking regs refers to keeping the loan salesmen away from the appraisal engagement - with "protecting the fee appraisal business model".

Regardless of what anyone here thinks, the fee appraisal business only represents a subset of the appraisal profession as a whole; and the ratio of fee appraisers to employees will always be subject to change per user preferences and their legal alternatives. Fee appraising isn't the only legitimate form of appraisal practice; not now and not ever.

As long as those "due diligence limitations" are prominently disclosed on the securities that they issue onto the bond market, then they are entitled to do just that. Until it poses systemic risk to our entire financial system. I keep hearing about "low risk, low LTV loans" where they are happy with an appraiser just signing off on some limited scope "evaluation". An appraiser is not supposed to issue poorly supported opinions of value, no matter what level of "risk" they present to the client. In that respect, appraisers should never be "team players", and should insist upon the time, space & compensation required to do their job in a credible manner. Client "desires" be damned. Neither doctors nor patients should be satisfied with less doctors, & more "physicians assistants". That's exactly what the GSE's are doing to our profession.

This process works for all concerned as everyone does what they're supposed to do. That is, the bank keeps to reasonable standards for granting mortgages; the homeowner keeps paying on time, and the credit rating agencies that review MBS perform due diligence.

In order to be sold on the markets today, an MBS must be issued by a government-sponsored enterprise (GSE) or a private financial company. The mortgages must have originated from a regulated and authorized financial institution. And the MBS must have received one of the top two ratings issued by an accredited credit rating agency.

Mortgage-backed securities loaded up with subprime loans played a central role in the financial crisis that began in 2007 and wiped out trillions of dollars in wealth.

https://www.investopedia.com/terms/m/mbs.asp

 

[George Hatch]

That can all be true on the 110% basis, and still be almost completely irrelevant to the question of "what is/isn't an appraisal?"

IRL we cannot push on a string. We can't impose more SR1/SR2 on these users than they're willing to buy. We can unilaterally choose to do more but they're not going to pay more for it. Whatever the investors or govt regulators or the state regulators allow or prohibit, all of those decisions will be made without any concern whatsoever for what fee appraisers want.

As for the minimum amount of personal inspection it takes to make an appraisal marketable to it's users, I'll point out that an appraiser performing an exterior-only 2055 can't see anymore from the curb than they can see from a Google Streets image. And in terms of info an appraiser can use, their 2005 "inspection" will not generate anywhere near the amount of information or imagery that one of these PDCs will contain.

 

[Tiffany Gibbons]

That can all be true on the 110% basis, and still be almost completely irrelevant to the question of "what is/isn't an appraisal?"

IRL we cannot push on a string. We can't impose more SR1/SR2 on these users than they're willing to buy. We can unilaterally choose to do more but they're not going to pay more for it. Whatever the investors or govt regulators or the state regulators allow or prohibit, all of those decisions will be made without any concern whatsoever for what fee appraisers want.

As for the minimum amount of personal inspection it takes to make an appraisal marketable to it's users, I'll point out that an appraiser performing an exterior-only 2055 can't see anymore from the curb than they can see from a Google Streets image. And in terms of info an appraiser can use, their 2005 "inspection" will not generate anywhere near the amount of information or imagery that one of these PDCs will contain.

I had no idea you had achieved total omniscience, but it certainly sounds that way. Hats off to your knowledge of the universe!