Unintended consequence of reviews

[J Grant]

How could it be poorly supported if, as you assert, it "has to" follow standards?

If it is poorly supported, then it does not follow standards well. Do you agree that some values are better supported than others regarding compensation, adjustments, and analysis?

 

[John Hassler]

I completely get that there is a cost associated with borrowing money - and am ok with that. I just see a ton of deals go sideways because appraisers don't know how to employ appropriate valuation tools.

That’s a due diligence failure on the lender for contracting with those appraisers, or for contracting with those AMCs who contract those appraisers.

 

[J Grant]

If it is poorly supported, then it does not follow standards well. Do you agree that some values are better supported than others regarding comp sale selection, adjustments, and analysis?

My post 271 was supposed to say this. Some weird AI spell check is changing the verbiage in some of my posts

 

[John Hassler]

The borrower has a right to know if that appraiser is from 50 miles away, not familiar with the market area, and was only paid $200 for the assignment. That second opinion is on the lender and shouldn't be on the borrower as they're responsible for hiring the right Appraiser for the job initially..... even if it's through an AMC.

And before y'all jump all over me.... yes, I know that appraisers can be familiar with Market areas 100 miles away. Again, that's up to the lender, whom hires the AMC, to stipulate they want appraisers with geographical competency for their loans.....not the cheapest / fastest appraiser who causes the buyers to fork out another $500-$600 to get someone to do it right.

I disagree with this. When the purpose of the appraisal is to assist the lender with a mortgage finance transaction, unintended users should have no input. That includes borrowers, agents, whomever.

If the borrower has an issue/question about the lender’s process about appraiser engagement, that should take place before the borrower signs with the lender.

 

[DWiley]

That’s a due diligence failure on the lender for contracting with those appraisers, or for contracting with those AMCs who contract those appraisers.

So, like JG, no blame for the appraiser?

 

[J Grant]

So, like JG, no blame for the appraiser?

Yes the appraiser is to blame

Again, the question is, why are they hired? In your opinion, are the lenders and AMCs that choose to engage a number hitter over and over blameless?

Why is the system still enabling lending shopping after all the safeguards?

 

[John Hassler]

So, like JG, no blame for the appraiser?

Sure, turn in those appraisers, but the true rot is at the top. Don’t hire donkey appraisers and you won’t get donkey appraisals.

So, no blame for the lenders and AMCs?

 

[Surf Cat]

I disagree with this. When the purpose of the appraisal is to assist the lender with a mortgage finance transaction, unintended users should have no input. That includes borrowers, agents, whomever.

If the borrower has an issue/question about the lender’s process about appraiser engagement, that should take place before the borrower signs with the lender.

But what if the agent who has expertise in the market area and a fiduciary responsibility to their clients clearly see that the appraiser utilized sales that were not representative of the subject property due to not being in geographically competent John? No repercussions? The borrowers have to Fork out another appraisal fee?

Yes, the borrower signed with the lender and the lender has a responsibility especially if they are hiring an AMC. The borrower doesn't know that the lender's AMC's are hunting for the bottom of the barrel skippy's.

If you hire a contractor and they do a slipshod job on your property, do you still pay them or do you have them do it right?

It's so aggravating that the appraiser is the scapegoat in the whole process.

 

[Surf Cat]

So, like JG, no blame for the appraiser?

I know everyone's tired of hearing this from me but.... back in the mortgage broker days.... I had to send in three sample reports to be allowed to appraise for certain lenders and be accepted on their panel.

AMC's need a license, your E&O insurance, super low fees you're up and running. They just stip to death the skippy to get the report that meets the bare minimum of the lender's requirements.

As John said above, hire donkey appraisers, get donky appraisals. There's no repercussions for those appraisals that everybody here has seen come across their desk.

 

[John Hassler]

But what if the agent who has expertise in the market area and a fiduciary responsibility to their clients clearly see that the appraiser utilized sales that were not representative of the subject property due to not being in geographically competent John? No repercussions? The borrowers have to Fork out another appraisal fee?

Yes, the borrower signed with the lender and the lender has a responsibility especially if they are hiring an AMC. The borrower doesn't know that the lender's AMC's are hunting for the bottom of the barrel skippy's.

If you hire a contractor and they do a slipshod job on your property, do you still pay them or do you have them do it right?

It's so aggravating that the appraiser is the scapegoat in the whole process.

I understand and respect your position. I just don’t agree with it. I’m not advocating for slipshod appraisals, quite the opposite. I want the lenders, and their AMCs if used, to be held accountable for the third-parties they hire. If the first appraiser was incompetent, the borrower should pressure the lender to pay for a second appraisal plus something for the inconvenience.

As for fiduciary responsibility by the agent, I would argue that is torturous interference - no different than an appraiser telling the borrower that their agent is incompetent and they shouldn’t do business with them.

Yes, it is aggravating to watch appraiser be scapegoats for the unprofessional and shortcut practices of others.