I am not doing the 3.6 FORM deal

[alebrewer]

When it comes to conventional mortgage lenders, they have very low standards for appraisals regardless of what their PR Department says, and reflected in the results you’re seeing.

Meh - I've seen it in the whole loan space, I've seen it in the hard money space, and I've seen it in the origination space. I've also seen it in the commercial lending space. The lack of consistency as regards appraisal valuations has less to do with your accusation of 'very low standards' than it does with the following: (1) ours is an industry of opinions; as such, it is difficult to assert 'right' or 'wrong' - a crutch we've leaned on for several decades now, and (2) the fact that appraisers have - for the most part - refused to hone their craft, and have been comfortable providing said un-honed services. Now, one might counter with the observation that, 'if the users of our services demanded more, we'd rise to the occasion' (or similar). And I'd agree insofar as, were more required, more would probably be delivered. That does not, IMO, assuage the fact that the onus for becoming better does not lie with our users, but with ourselves.

 

[alebrewer]

Sorry but you do not speak for all lenders and your posts have been less than reliable in the past. If your panel of whatever mystery company you work for has such lousy people on it that they are coming in 15-20% apart on regular properties - oh stop, wait, another rabbit hole . WHY are they ordering two appraisals done on the same property??????

Care to explain? It is not normal for a company to order two appraisals on a property (Which is how you are comparing, right? ) unless it is a high-value jumbo loan/complex or a red flag/review/other situation.

Now you're being condescending. There's no reason to stoop that low, J. It is quite possible to have an adult conversation. Wait - for some, it's not.

 

[alebrewer]

Like any other profession you have those that are better, or care more, or do a more thorough job (and vice versa). My position is that it can vary which is better. If an educated user like a lender is using an appraiser doing $10/foot for GLA adjustments for all appraisals that is their fault too.

I can see 15-20% for oddball properties, higher end properties, or with limited market data, (at least for residential), but for most there is probably one that is more supported. The trend is wanting that guy with a book of adjustments who will slap something together in 30 minutes who will do it for pennies and then complain that its not worth the paper its printed on.

Point is that 15-20% serves zero usefulness to ANY user - regardless of the complexity of the assignment. Wanna guess how most appraisers respond when notified that their appraisal differs from another 'professional' by 15%? Wanna know what typically happens when an appraiser is notified that their services fail to meet the lender's standards, and are being removed from the panel for said incompetence?

 

[Sadie]

Let me know if it is an actual time saver! thanks

I will actually have to turn it on!. I thought I would do inspections of my house, my kids houses, etc first so I don't look like a dodo in the field.

 

[Justinjla]

Can I ask again, what exactly does this mean? Does it mean that Fannie will buy back/repurchase a loan if there are valuation issues in the Value Acceptance program?

It sounds above like you are offering R & W for the lender. Which means they, the lender, do not have to buy back/ repurchase. But what about Fannie itself?

When we offer R&W relief on Value Acceptance, that means we would not have a lender repurchase the loan for any collateral related issues. We own that risk. Am I answering your question?

 

[shrubberyvaluation]

Meh - I've seen it in the whole loan space, I've seen it in the hard money space, and I've seen it in the origination space. I've also seen it in the commercial lending space. The lack of consistency as regards appraisal valuations has less to do with your accusation of 'very low standards' than it does with the following: (1) ours is an industry of opinions; as such, it is difficult to assert 'right' or 'wrong' - a crutch we've leaned on for several decades now, and (2) the fact that appraisers have - for the most part - refused to hone their craft, and have been comfortable providing said un-honed services. Now, one might counter with the observation that, 'if the users of our services demanded more, we'd rise to the occasion' (or similar). And I'd agree insofar as, were more required, more would probably be delivered. That does not, IMO, assuage the fact that the onus for becoming better does not lie with our users, but with ourselves.

I would add its harder to see which opinions are more accurate as its for a point in time and if clients prefer an appraiser to slap together a report in 30 minutes that lives on the other side of the country, those appraisers will be elevated while the more thorough will be pushed down or leave the industry. If lenders won't use an appraiser that will market declining when the market is declining you are putting in incentives against reporting accurately.

As an appraiser I can normally see red flags pretty quick when I see another report. The properties with more GLA having a higher adjusted price, or older sales having a lower adjusted price (with no adjustments for market conditions), given the other adjustments do not seem out of line. Of course I can see these red flags easier when I'm familiar with the market, and they may be false red flags sometimes or may be something different, but I have a good sense of what is most likely.

 

[John Hassler]

Meh - I've seen it in the whole loan space, I've seen it in the hard money space, and I've seen it in the origination space. I've also seen it in the commercial lending space. The lack of consistency as regards appraisal valuations has less to do with your accusation of 'very low standards' than it does with the following: (1) ours is an industry of opinions; as such, it is difficult to assert 'right' or 'wrong' - a crutch we've leaned on for several decades now, and (2) the fact that appraisers have - for the most part - refused to hone their craft, and have been comfortable providing said un-honed services. Now, one might counter with the observation that, 'if the users of our services demanded more, we'd rise to the occasion' (or similar). And I'd agree insofar as, were more required, more would probably be delivered. That does not, IMO, assuage the fact that the onus for becoming better does not lie with our users, but with ourselves.

Okay. Sure. Somewhat agree.

There are a lot of great appraisers out there but power users of appraisals, based on their own comments about poor appraisals, don’t appear to know or care to know how to seek them out.

 

[alebrewer]

I would add its harder to see which opinions are more accurate as its for a point in time and if clients prefer an appraiser to slap together a report in 30 minutes that lives on the other side of the country, those appraisers will be elevated while the more thorough will be pushed down or leave the industry. If lenders won't use an appraiser that will market declining when the market is declining you are putting in incentives against reporting accurately.

I most definitely would agree that an AVM is probably more credible than an appraisal 'slapped together in 30 minutes from an appraiser that lives on the other side of the country'. Wouldn't you?

 

[alebrewer]

Okay. Sure. Somewhat agree.

There are a lot of great appraisers out there but power users of appraisals, based on their own comments about poor appraisals, don’t appear to know or care to know how to seek them out.

There ARE a lot of great appraisers out there - and to your point about mediocre being sufficient for many origination users, I'd suspect that - much as cream rises to the top - the 'good and great' appraisers probably don't do origination work for the most part. They have sought out those users who truly value quality - litigation, ROW, roles as state investigators, etc. I don't have much experience in those spaces (with the exception of investigator, that is), so it's little more than an educated guess as to where they go, but I do believe there are really good appraisals and I seldom see a really good appraisal in my line of work - so there's a disconnect somewhere...

 

[Mike Ault]

There ARE a lot of great appraisers out there - and to your point about mediocre being sufficient for many origination users, I'd suspect that - much as cream rises to the top - the 'good and great' appraisers probably don't do origination work for the most part. They have sought out those users who truly value quality - litigation, ROW, roles as state investigators, etc. I don't have much experience in those spaces (with the exception of investigator, that is), so it's little more than an educated guess as to where they go, but I do believe there are really good appraisals and I seldom see a really good appraisal in my line of work - so there's a disconnect somewhere...

Relocation appraisers are held to higher standards as well. A 15-20% variance from our peers is unacceptable in that space.