I am not doing the 3.6 FORM deal

[Non Sequitur]

Look - I've no issue with bemoaning the fact that this industry - the only one I've ever been in - is going away. But the reason it's going away is not because lenders are trying to push us out, or because the GSE's are taking on increased risk. It's a natural progression due to extremely rapid advances in technology. Just like any other industry that has been (or is being) absorbed by technology. I guess what I'm saying is that (IMO) we're not special.

I agree, but it's still painful. And to your point, this [below] popped up in my feed a few minutes ago. The days of a decades long career are all but gone.

https://www.yahoo.com/finance/news/why-one-nation-most-prosperous-145622287.html


Silicon Valley is in the midst of an unprecedented artificial intelligence boom, pouring billions of dollars into developing the technology. Revenue is surging, with Big Tech companies beating Wall Street’s expectations in their latest quarter. They’ve announced plans to invest up to $375 billion in AI infrastructure this year, as they expand the footprint of data centers that power their software.

But despite soaring revenue and record AI investments, companies continue to slash jobs. Technology firms have announced more than 141,000 job cuts so far this year, according to outplacement firm Challenger, Gray & Christmas, a 17 percent increase from the same period last year. In the last two years, the tech workforce has shrunk nationwide by about 3 percent a year, with California posting a much steeper 19 percent drop, according to data from the U.S. Bureau of Labor Statistics.

 

[Airstream]

I agree, but it's still painful. And to your point, this [below] popped up in my feed a few minutes ago. The days of a decades long career are all but gone.

https://www.yahoo.com/finance/news/why-one-nation-most-prosperous-145622287.html


Silicon Valley is in the midst of an unprecedented artificial intelligence boom, pouring billions of dollars into developing the technology. Revenue is surging, with Big Tech companies beating Wall Street’s expectations in their latest quarter. They’ve announced plans to invest up to $375 billion in AI infrastructure this year, as they expand the footprint of data centers that power their software.

But despite soaring revenue and record AI investments, companies continue to slash jobs. Technology firms have announced more than 141,000 job cuts so far this year, according to outplacement firm Challenger, Gray & Christmas, a 17 percent increase from the same period last year. In the last two years, the tech workforce has shrunk nationwide by about 3 percent a year, with California posting a much steeper 19 percent drop, according to data from the U.S. Bureau of Labor Statistics.

Exactly. Jobs once thought secure are no longer. And the ability to adapt to a changing labor market is going to accelerate. It use to be that changes occurred slowly over maybe a decade or two. Now changes can occur in just a few years. If there is anything I would say to a young person today is be flexible and have the ability to adapt and learn new things. Don't EVER get stuck into this idea that I am going to make a career out of say computer programing.

Today a person simply needs a solid foundation in verbal, english, and math skills (probably computer skills would be included; basically the 3 Rs. After that have the mentality you can learn anything. And don't be afraid to do new things.

When I was 39 I decided to make a change. But I didn't know what to do. So I decided to get vocational counseling. I took a bunch of tests and talked to a counselor. What came out were a number of fields that I could possibly do and do well. One of them was real estate appraising. Something I had never thought of before. When I read up on it, I went for it. Was it a change? Definitely. But it was a good change. Not easy to do, there were a number of obstacles, but it could be done. And I did it.

Now, thankfully I am at a point I don't have to do that anymore. At 70, my days for changing careers are done. But I feel badly for guys say in their early 60's and are appraisers. This will be a hard pill to swallow. Either learn the new technology, or find another occupation.

 

[Larry Phillips]

Maybe other posts on this topic...haven't posted in a long time. After reviewing and watching Alamode video's, I have decided I am not doing the new 3.6 form that they don't want to call a "form". The software is terrible, is going to take so much more time and remove all of the analysis. My eye's physically can't take it nor am I gonna make my secretary transcribe my field notes and check boxes for hours on end. The kids can have it...they are gonna take it from us older appraisers anyway...what choice do they have but comply and turn from appraisers into check boxer people?

Will focus on private work and just slow down. I think it is ironic that there is gonna be a mass exodus of appraisers willing to do GSE work (I bet 40%) in the next 18 months which will completely antielite the industry. Gone almost overnight. But, there will also be a massive drop in need for all the people that created this software, (which is terrible to use) and their GOVT friends. I guess the people at the GSE's think they are all gonna get to keep their jobs somehow even though all of us are gone?

Why didn't the software companies get together and just tell the GSE's no? Alamode and ACI are gonna lose 40%-50% of their subscribers before this is over. No one is going to do this unless they are 20 years old with young eyes and want to sit in front of the computer checking boxes all day. Such an obvious problem with the new form. Guess we haven't been property appraisers for a long time if a software company or bank can obliterate our industry. The people doing this to us will have consequences from the mass exodus coming too though...so there is joy in that. We are all gonna be in the unemployment line together.

Before you check out altogether, you might check: https://www.sfrep.com/
A representative attended our NCPAC conference in October. They are offering a free six month trial and the software is reported to be more user friendly.
Best wishes.

 

[shrubberyvaluation]

Fair enough, but is it illegal? I mean - again - I hate it too, but people have been *&$(!@# over other people for about 6,000 years now. How are we special?


My point wasn't really about introducing more risk into the equation. My opinion of appraisals in general is that they're completely useless - unless the loan goes sideways. If the loan is paid off according to the terms agreed, there is zero need for an appraisal (at least from a risk perspective).

I'm not talking about legality, if it were legal to give me an app to diagnose patients in a hospital with no experience its about whether that is good or bad, risky or not risky. And is it good for the doctor who gets set with all of the liability?

As far as risk goes it means more to me what hard money lenders think and do than what those do backed up the GSEs or the taxpayers.

I would agree with you insofar as the incentives are for the cheapest form filler just to check a box. Would you lend someone 6 or 7 figures for a property without any knowledge of what that property is worth? After all it only matters if they default. I can tell you default goes up with higher LTVs.

 

[Fernando]

Exactly. Jobs once thought secure are no longer. And the ability to adapt to a changing labor market is going to accelerate. It use to be that changes occurred slowly over maybe a decade or two. Now changes can occur in just a few years. If there is anything I would say to a young person today is be flexible and have the ability to adapt and learn new things. Don't EVER get stuck into this idea that I am going to make a career out of say computer programing.

Today a person simply needs a solid foundation in verbal, english, and math skills (probably computer skills would be included; basically the 3 Rs. After that have the mentality you can learn anything. And don't be afraid to do new things.

When I was 39 I decided to make a change. But I didn't know what to do. So I decided to get vocational counseling. I took a bunch of tests and talked to a counselor. What came out were a number of fields that I could possibly do and do well. One of them was real estate appraising. Something I had never thought of before. When I read up on it, I went for it. Was it a change? Definitely. But it was a good change. Not easy to do, there were a number of obstacles, but it could be done. And I did it.

Now, thankfully I am at a point I don't have to do that anymore. At 70, my days for changing careers are done. But I feel badly for guys say in their early 60's and are appraisers. This will be a hard pill to swallow. Either learn the new technology, or find another occupation.

Yes, young people today needs to be flexible and adapt. And while still young, they have opportunities to jump to another better paying job. The old days of staying in same company are over. Never know when you may be fired and staying in same company for long time has less chance of getting major income increases.
I'm proud of my daughter moving up to better paying jobs almost every other year. Before she's about to start her new job, she bought a new car yesterday. So happy for her.

 

[shrubberyvaluation]

But the reason it's going away is not because lenders are trying to push us out, or because the GSE's are taking on increased risk. It's a natural progression due to extremely rapid advances in technology.

Well they are taking on increased risk, no credit scores. They are trying to turn it into a social welfare program. This is not a technological thing, it is a political thing, much like the bias nonsense.

 

[alebrewer]

m not talking about legality, if it were legal to give me an app to diagnose patients in a hospital with no experience its about whether that is good or bad, risky or not risky. And is it good for the doctor who gets set with all of the liability?

I don't know that this is a good analogy, man. I mean - even if you do believe appraisals are REALLY important, they're still not life and death.

As far as risk goes it means more to me what hard money lenders think and do than what those do backed up the GSEs or the taxpayers.

This should, IMO, be the bellwether. Regardless of the technology used, if Brewer were in charge, the GSE's would procure appraisal services that are in line with what hard money lenders would require. Maybe that's 'old school appraisals' and maybe that's AVM's. Either way - I think hard money guidelines should be the standard.

I would agree with you insofar as the incentives are for the cheapest form filler just to check a box. Would you lend someone 6 or 7 figures for a property without any knowledge of what that property is worth? After all it only matters if they default. I can tell you default goes up with higher LTVs.

1. Just because an appraisal isn't performed doesn't mean no one knows what the house is worth. In fact - pull your place up on Zillow and let me know how far off you think Zillow is.
2. Default rates are correlated to higher LTV's for a fact. You missed my point, though. I said that, from a risk perspective, there is no need for an appraisal IF the terms of the loan are satisfied (i.e. if there is no default).

I think we're pretty much in agreement - we're just looking at opposite sides of the same coin.

FTR: I pulled up my place on Zillow and Redfin. I believe my place to be ~ $400k. Zillow has it at $402k and Redfin has it at $385k. And I live in a non-disclosure state.

 

[Fernando]

Well they are taking on increased risk, no credit scores. They are trying to turn it into a social welfare program. This is not a technological thing, it is a political thing, much like the bias nonsense.

FICO scores are flawed. If anyone, I should get perfect 850 but never did. Thus, other methods in assessing risk/benefit are being tried out.

 

[TerryRohrer]

My opinion of appraisals in general is that they're completely useless - unless the loan goes sideways. If the loan is paid off according to the terms agreed, there is zero need for an appraisal (at least from a risk perspective).

The same is true of any governmental/taxpayer backing of loans. That should go away, too.

 

[alebrewer]

hey are trying to turn it into a social welfare program.

BS - it's ALWAYS been a social welfare program. If the GSE's and FHA weren't subsidizing the industry with my (and your) money, there would be no 30 year amortizations, there would be no LTVs over 80%, there would be no loans made to folks with credit scores under 700 (and so on).