The New Appraisal Industry

[djd09]

Benefits of exercising a value acceptance + property data offer​

• Reduces origination cycle time and borrower costs.
• Promotes safety/soundness by obtaining current observation of the subject property.
• Provides operational simplicity and value certainty at application.

NOTE: Fannie Mae estimates that value acceptance and value acceptance + property data on loans sold to us saved mortgage borrowers over $2.8 billion since 2018.

 

[Surf Cat]

Provides operational simplicity and value certainty at application.

Based on one of my mentors doing these hybrid assignments, both of the above claims couldn't be further from the truth. They were the very reason why he stopped doing them.

The operation wasn't simpler. The PDC's measurements or descriptions did not match public records or past MLS listings/sales thus, he found himself trying to verify accuracy with the AMC. Who of course stated "go with what the PDC provided". This is where my mentor had to come up with his own CYA commentary about non-inspecting. He felt what was stated in the form did not cover him.

Wrestling with the above, he was definitely "uncertain" about the target value required due to not inspecting, as well as conflicting data provided by the PDC. Additionally, not driving the comparables and viewing curbside took away knowing neighborhood context, curb appeal, and verifying condition stated in the MLS.....how they compare to the subject property.

The flowery statements provided by the users of hybrids want to bamboozle everyone of "how much better this is" for the licensed appraiser's signature to fast track the loan.

Want to take a guess on what would happen if things start to unravel and who gets the blame?

 

[djd09]

Benefits of value acceptance and value acceptance + property data​

• Increased operational efficiencies can shorten the loan origination process by eliminating the need to obtain and review an appraisal.
• Day 1 Certainty^® provides lenders relief from certain representations and warranties.
• Cost savings for the consumer as they don’t have to pay for the appraisal.

 

[George Hatch]

Based on one of my mentors doing these hybrid assignments, both of the above claims couldn't be further from the truth. They were the very reason why he stopped doing them.

The operation wasn't simpler. The PDC's measurements or descriptions did not match public records or past MLS listings/sales thus, he found himself trying to verify accuracy with the AMC. Who of course stated "go with what the PDC provided". This is where my mentor had to come up with his own CYA commentary about non-inspecting. He felt what was stated in the form did not cover him.

Wrestling with the above, he was definitely "uncertain" about the target value required due to not inspecting, as well as conflicting data provided by the PDC. Additionally, not driving the comparables and viewing curbside took away knowing neighborhood context, curb appeal, and verifying condition stated in the MLS.....how they compare to the subject property.

The flowery statements provided by the users of hybrids want to bamboozle everyone of "how much better this is" for the licensed appraiser's signature to fast track the loan.

Want to take a guess on what would happen if things start to unravel and who gets the blame?

"Trying to verify" is what he's supposed to do. Check what they have vs his other data sources and decide which - if either - he thinks is sufficient to use. Same as if the data sources said it was 900sf but he could see on a 2055 that it's clearly larger.

Nor is he supposed to be trying to use disclaimers to get out from under the obligation to reconcile for his choice to believe one over the other. There are conditions that apply to the use of an assumption:



If he can't articulate why he thinks one is usable and the other isn't then he shouldn't be making an assumption that it is. The term "to the best of my knowledge and belief" has a distinct meaning that he either actually means or doesn't mean.
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Nobody thinks (or cares) that the no-look is somehow better for the appraiser. That was never the question and never the motivation. The question is what the user who is accepting these thinks is nominally sufficient for their usage.

 

[Surf Cat]

Benefits of value acceptance and value acceptance + property data​

• Increased operational efficiencies can shorten the loan origination process by eliminating the need to obtain and review an appraisal.
• Day 1 Certainty^® provides lenders relief from certain representations and warranties.
• Cost savings for the consumer as they don’t have to pay for the appraisal.

WooHoo! Who cares about sloping floors, sagging roofs, DIY remodels, or the property wafting of cat pi*s.

Fast loan Train! Choo Choo!

 

[djd09]

WooHoo! Who cares about sloping floors, sagging roofs, DIY remodels, or the property wafting of cat pi*s.

Fast loan Train! Choo Choo!

how do you compete when the users offer free appraisals...

 

[Fernando]

WooHoo! Who cares about sloping floors, sagging roofs, DIY remodels, or the property wafting of cat pi*s.

Fast loan Train! Choo Choo!

Appraisers care. They will be the ones to blame when things go wrong.
Expect backlash on appraisers when UAD 3.6 Abomination fails. We're too slow and asked too high appraisal fees.

 

[Surf Cat]

"Trying to verify" is what he's supposed to do. Check what they have vs his other data sources and decide which - if either - he thinks is sufficient to use. Same as if the data sources said it was 900sf but he could see on a 2055 that it's clearly larger.

Nor is he supposed to be trying to use disclaimers to get out from under the obligation to reconcile for his choice to believe one over the other. There are conditions that apply to the use of an assumption:

View attachment 107092

If he can't articulate why he thinks one is usable and the other isn't then he shouldn't be making an assumption that it is. The term "to the best of my knowledge and belief" has a distinct meaning that he either actually means or doesn't mean.
--------------------

Nobody thinks (or cares) that the no-look is somehow better for the appraiser. That was never the question and never the motivation. The question is what the user who is accepting these thinks is nominally sufficient for their usage.

Sigh.... you are under the assumption that the lender led AMC's have to abide by or even care about USPAP. As Walker always states, "that ship has sailed". You do what the AMC instructs you to do or you are off the panel for assignments... end of story.

For most appraisers (I did not say all) AMCs are far worse then the mortgage broker days. I felt far more protected with USPAP under mortgage brokers then with AMC's. AMCs (lenders) DGAF about USPAP.

Isn't it curious that TAF has never released a statement backing the appraisers plight working for AMCs? Oh, that's right, that's not their role.

 

[George Hatch]

I don't even think it's a matter of discretion. It would actually be unethical for them to weigh in on the commerce aspects pertaining to any given segment of the appraisal profession, including the fee appraisers.

The financial interests their members is the role of the appraisal orgs. Which to at least a certain extent they seem to be responding to although I don't think most of their members are happy about what they're doing.

 

[chad hampton]

The appraisal inspection and measuring of the subject property is most definitely considered significant appraisal assistance.

Don’t confuse no enforcement or no oversight with laws not existing.

I do agree with you that if you take your assistant along, and he writes down the measurements you tell them to, then it’s not significant.

The reason the inspection is considered significant is because a lot of opinions are determined during the inspection.