Why are appraisers punished for the property they are assigned?

[bnmappraisal]

I just got this rejection. The subject is a new 100% completed home in a pud development. It has a bonus room, a bed and a bath on the second floor. Typical 1.5 story cottage home. Normal home. No functional issues. Tract home. I also included the permit in the original report.


Revision Request:

Lender Request:

Appraiser to please confirm if the bonus room is permitted and that there is no safety issue.


All revision changes in the report should be listed in a dated addendum. Please upload the revised report as soon as possible. Please update the date of the report before re-submitting since, per USPAP, the signature date of the report should be the date the report is completed and transmitted to the client.

Ridiculous request, but one that should be able to be answered quickly. Hopefully via phone (Hey it's already stated on page XX) but if not via a couple stupid, redundant sentences, in the report. Total stupidity, IMO, and I get your frustration, but hopefully answered quickly

 

[Mile High Trout]

You should see the AMC and lender platforms from the other side. I have. They click appraisers away without a thought, all day, all night. Your star and other score ratings are not self contained to only one client like presumed. When working with AMC's, the blacklist effect is exponentialized across a broad spectrum of lenders whom also work with that AMC. A review of AMC networking with wholesale lenders reveals there is near total integration, how most lenders are currently or were in the past, networked with most AMC's out there. Additionally the tech tools are all coded in the lenders favor, they have every possible metric to consider you can imagine, including the most basic offenses such as always assign to the lowest fee appraiser. Meanwhile they purposefully do not allow appraisers any meaningful metrics such as how many other appraisers a request may have been sent to, what the borrowers fee was, if appraisers have availability, fair balance of over all order volume, the same old routine.

Not very much to worry about with old reports due to this historical low rate rush which captured the industry several years ago. You can safely presume that the vast majority of everything from the past was nullified by refinancing or sale efforts in the past five or six years. It's the volume based appraisers whom worked hard during the rush whom have the most to worry about now. They have no idea how much blowback might just come at them in the next few years.

What should get you worried is the incredible nature of ongoing predatory activity by lenders whom on one hand knowingly stack out risk with extremely delinquent borrowers, refinancing them without appraisers, without mb's, and without updated qualifications, at 115% LTV's with a maximum 1% rate cape increase, either writing down or tacking everything on the back end and resetting the loan term (customers for life!). This is how they keep the default and REO to absurdly low levels of less than one percent, despite the serious delinquency rate at 11% or higher. While on the other hand continuing to push fresh loans out there knowing that there is no legitimate price discovery and if honest market principals were to once again take hold, we'd all quickly learn the entire nations housing supply is overvalued at least a tenth, if not a fifth or more of the total 'current value'. The entire housing market is propped up as first purchase opportunities go to the investor class at pennies on the dollar, whom are not subjected to similar market conditions as regular buying/refinancing/renting citizens. Everything from rental to condo to average sf's, to jumbo, and especially manufactured, overvaluation across the board. This ties into the appraiser racism argument, as they needed someone to blame for this purposful with holding of 'generational wealth'. The policies which deny people affordable housing and keep people locked into upside down positions, while concealing their honest price discovery from them, those policies come right from the top. FHFA is now the new ring leader of this fraud.

Is a Horde of Deadbeat Borrowers Again Walking Among Us? - Appraisers Blogs

Government complicity enables deadbeat borrowers, burdening housing market disconnect & artificially inflating home prices.

appraisersblogs.com

The real reason you get these stipulations is because of the unknowable (to you) nature of borrower qualification. When they're poorly qualified, the lending package is shored up with additional appraisal scrutiny. Because in those scenarios automatic underwriting approval is not permissible and is always sent for manual review. Then the UW is challenged on a quota based system to find something, anything, regardless if it's valid or not. This creates the situation where if liability occurs, there is a paper trail leading to the appraisers inadequate performance to dump that on your insurance. The grading system confirms this alleged fact regarding both your competency and performance. Where as with better qualified borrowers, they pass through without much ado. Not to fear, with the updated expansion of the waiver program that's all you be seeing if you're dealing with origination work; poorly qualified high risk borrowers with maximum loan leverage. As if the current situation of everything under 80% LTV being waved through was not bad enough. You ain't seen nothing yet.

If you're going to keep working, in this age of extra ordinary data cancer brought about by waivers, you should at least have read the FRB's final rule on AVM's.

Federal Register :: Request Access

Some of the comments were really something else, to say the least. Sadly this one went under the radar and very few did anything to stop this. I don't recall seeing any of your guys's or gal's name on those comment boards. And only a rare few of you participated in the comments about the algorythm.

Regulations.gov

www.regulations.gov

Insights from CFPB's Public Comment Period - Appraisers Blogs

The comment period also provided a platform for individual appraisers to share their perspectives regarding appraisal fees & the role of AMCs

appraisersblogs.com

You know the difference between this site and the appraisers blogs? Regulators and policy makers actually read and subscribe to that website. There is so much noise here which is why if you want to make a difference, to need to take the time to chime in over there as well. The lady whom runs that used to spend over $700 a month out of her own pocket for many years to keep that site going and secure, constantly subjected to many technical issues as she refused to capitulate to censorship from industry interests. This site is fun and has value but when it comes to making a real difference, there is no comparison between the forum and the blogs. There is a clear winner in terms of driving policy and bringing the issues with the appraisal industry to the publics attention. Sadly the AF lost it's primary ability to be a voice for the appraiser community at the exact same time the GBU thread was placed behind a login wall. I'm not faulting the admin/owner, because certainly those were trying times and tough choices had to be made. But I am calling on the regulars here with a question; If you honestly believe in saving this industry, why don't you post there more, and write articles for that website to make a real difference? You can write articles anonymously, or attribute directly. You don't need FB accounts to participate, although the site is linked in to both FB and LnkdIn. Admin does at time pay for article advertisements to get some of them out there with a much broader reach. The view counts per article are really tremendous lately, although you would not know that just by open posting volumes, as most just lurk and read, but do not post. This is the final hours of this industry, so you know, if you actually cared about those of us whom are left here with not many other options except to right this ship or go down with it.

 

[Mile High Trout]

Per the above image attachments. What you're seeing is the tech platforms data on individual lender and/or AMC clients, alongside license active and inactive tracking, as well as total approved appraisers and total disabled (blacklisted) appraisers. Total active is likely higher due to multi state licensing, and the myriad of upgrade down grade events although I never really figured that out.

What is obvious is the ratio of blacklisted appraisers vs ratio of currently approved appraisers. Simply divide the 'appraiser' number, by the 'disabled' number. And this is only two lenders which I luckily acquired data for through round about process. Can you imagine what an actual honest audit of the entirety of scope, mercury, ap, the others, and AMC's proprietary systems would reveal?

Getting the picture yet? The distribution platforms facilitated the fraud by integrating what used to be illegal process into every day activity. Remember the HVCC rule that if an appraiser was removed from panel, they had to be notified in writing? Remember the online blacklists appraisers would discover which would put lenders in hot water whenever they had a tech slip up or those lists landed in an appraisers hand? Did you read the article from a few years back where an appraiser successfully sued an AMC and a lender for being removed from their approval lists after ten years of service?

You've got to understand that just because we're isolated in this bubble inside the lending world, that constitutional rights and other labor rights issues do still apply to us. How the industry treats appraisers is criminal, and they can be held liable if these abhorent processes which are tolerated nowhere else, are brought to light in this industry to a broader public arena.

Or do nothing and watch it all slip away. You might think twice about that decision though if you ever need to roll through mortgage lending systems again, or your kids, or your grandkids, or their children, and their children... When you lose certain liberties they may be impossible to get back. Checks and balances is a cornerstone of American home ownership. Financial fairness is a cornerstone of a capitalistic model. Stakeholder capitalism is socialism by another name. These equitable modernization programs are criminal. Hamp nailed it with his latest video, share that. Get with the program people and do better before this precious time left runs out. Write articles for the Appraisers blogs website immediately. Scrape content and data from this site if you need to. Everything you need to make a real difference is right in front of you. Make them count. Expect tens of thousands of people to read them, including regulators, legal teams, and general opposition whom continues to purposefully destroy this industry.

Post your links on Bagotts twitter feed. Network better. Ignore the appraisers websites whom are just self serving their own clients interests, those are a dime a dozen. There is Cummings, S Miller, WorkingRE, Bagott and the Blogs. O'Rourke fell off. CRN network and Trice are on the side of REVAA. The rest of us are on our own. Forgive me if I missed a few. There are a lot but for the most part, they're self serving or not doing anything important. If you want to make a difference, use your pen in places people outside of this industry will actually read the content. Your voices matter but if you spend all your time at this website and nowhere else, nobody else is listening. I just calculated the 'top 10 posters' total posts tally for this month alone. The total amount of posts was 4,953. Despite those perhaps being shorter, there was enough human energy expended to have accomplished much more than just continuing on with this site alone. Prove that you guys and gals are really as good as you say you are. Let me see your articles posted on the appraisers blogs website. Focus on the issues to save the appraisal industry. If you need any assistance with the admin just pm me, we're all friends.

 

[NC Appraising]

Dang. How do you know all of this?

I told Solodifi to f off 8 years ago...maybe that's why I do not get any AMC work? LOL.

 

[NC Appraising]

Then the UW is challenged on a quota based system to find something, anything, regardless if it's valid or not.

You bring up a very interesting post.

I see my competition appraisals every once and awhile for the same lender. I go through it and see so many areas that my Report gets rejected for. I always thought to myself, how do they get away with it and not get rejections?

My theory was that I come in low....they are number hitters.

I had a review appraiser at a large regional bank tell me that basically if it meets value without looking like fraud, it passes with little to no rejections. She even said that the appraisals were terrible and I asked why they still used them....take a wild guess as to why?


This is the same bank that got busted by the feds in 2008.



One of the things about waivers is the potential fraud that can take place and it removes us from knowing about the ins and out of a transaction. Sad.

We are the cops. There's a speed limit posted and a cop maybe around the corner with a radar. This keeps the speeders and law abiding citizens in check.

If you remove the cops and just keep up the speed limit sign what is going to happen? Drivers are going to speed. That is the issue the GSEs are missing (don't care).

Avms are the speed limit sign, with no cops.

 

[NC Appraising]

On one of the other forums, a nexa mortgage broker stated "just order another appraisal, easy peasy".

I always assumed the uw or lo would find something wrong with the low appraisal to justify a new appraisal? How easy is it for lenders to appraisal shop til one comes in at value?

 

[TerryRohrer]

On one of the other forums, a nexa mortgage broker stated "just order another appraisal, easy peasy".

I always assumed the uw or lo would find something wrong with the low appraisal to justify a new appraisal? How easy is it for lenders to appraisal shop til one comes in at value?

Must be easy. Several times, I have received requests for quotes to appraise the same property I had just delivered an appraisal on. Same day.

 

[residentialguy]

I was never a VA appraiser. I was just talking to a buyer that is going through VA and the appraiser called out a tiny crack on a window that the inspector didn't even catch. Is that kind of inspection typical of VA appraisers???

 

[Mile High Trout]

Dang. How do you know all of this?

I told Solodifi to f off 8 years ago...maybe that's why I do not get any AMC work? LOL.

NC, two posts, went a little long.

Reverse engineering complex processes just comes natural to me. That and I actually take the time to be inquisitive with just about everyone I work with. Especially with AMC's, you can learn a lot by talking to the regular workers, calling in, that sort of thing. Always dig into the details. I churned through the entire TAVMA list and never once found an honest ethical fair and reliable AMC all around. Quantrix was the best one back in the day, but they were bought out by corelogic and overnight, the staff was changed out.

Lenders and AMC's alike parse approved appraiser panels based on many different priorities of their choosing. They'll pick you for one lender, but not another. They'll block you for one branch, but not another. They'll assign in a ranked choice type of system where big firms and volume producers get literally 100% of all the easy low risk easy qualified buyer work, and all you'll see from these clients is the complex work, the orphan bounced around orders, or the high risk high ltv stuff. Technology allowed for a complete abandonment of the principal of fair distribution of work orders and lenders immediately took advantage of this.

When you're talking automated review, UW's are often tasked, if this information is accurate, with more than forty reviews a day. Basically everything which can get a low risk assessment score. Behind the scenes what appraisers do not see is how well qualified borrowers may be subjected to more lenient application review than others. That includes the situational awareness and tolerance level the auto review tools apply to appraisals. On the UW side they have checkbox lists they have to complete for all appraisals which are not insta pass throughs. Every alert you'd see on the Alamode EO reviewer is similar and then extra, to what the reviewers see after they run an XML through the program. I think it's called day one certainty or something. If you want to know just approach FNMA docs like you're an underwriter in training, you can review the exact same things they use when approving or requesting stips of appraisers. It's just checkbox review down the line.

The UW can provide a tolerance exception with a click of the button. So yeah, they will just go down the line for the best qualified people, and the volume appraisal firms will get far less kickback even for faulty work. If there is higher risk, they have to actually work, and actually find and retain the appraisal content to justify passing the exception, or demand an alteration to the appraisal. If one was looking at this system from the outside they'd likely refer to this as incredible mis management of resources and outright unfair abusive practice towards vendors. The volume aspect of AMC's working with multiple lenders allowed for an accelerated abuse of the system of doling out appraisal orders. The only workable corrective solution in this system is to mandate round robin distribution. Or as I like to say; Missing the IVPI proposal yet?

 

[Mile High Trout]

Dang. How do you know all of this?

I told Solodifi to f off 8 years ago...maybe that's why I do not get any AMC work? LOL.

The bright side of the waiver expansion program is that the volume appraisers are likely to shift to the work which otherwise flowed to the end of the line. They'll have a grand time actually dealing with live underwriters whom are not allowed to click through their work. And so will the lenders whom will watch their panels thin out even more and they will not be able to either retain or attract appraisers. Sadly most of the panels out there of any decent value are either managed by incompetent non appraisers, or are subjected to every form of pressure from the lending departments.

Separation from loan production is a pure myth. There is not a single lender in the entire country, those whom assign direct to appraisers, or those whom assign through AMC's, which are actually independent and respect the rules. They share lists of do not use, share lists of appraisers they want to use. They specifically pick from mini panels with a click of the button. There are tech tools they use that allow complete appraiser panel onboarding all at once. No matter where you go there is a constant management fee of the process, inescapable in mortgage lending now. The technology allows for complex identification of appraisers whom bid and game the system too. All it can take is one time and you're out of the primary loop.

The end result more than a decade later of the separation from loan production rule is that appraisers lost every single ounce of independence and the mortgage departments do what they want with no push back or accountability. Two way accountability between two licensed persons was clearly a better way of maintaining system stability and better general ethic. Realty agents are now well aware of how to game this system as well. They complain to the mb, the mb complains to the appraisal manager, the appraiser is cut off. No defense. No recourse. And they will lie through their teeth to get there and even if the manager likes you, nothing they or you can do about it. We have a lot of realty agents like that here in Colorado. We have a lot of brokers on the lending side whom behave that way too. It's all a private club just like before the breakdown in the early 2000's once more. If you want to actually win, you have to be friends with a mortgage broker somewhere and they'll funnel you all the work, everyone else will get nothing. You can't even compete on merit anymore, quality workfile submission to get on panels is basically meaningless now. I've had so many borrowers call me asking why I could not complete their repeat order. Have to break the news to them that I am available, but for these reasons, the lenders won't use me.

Everything tracks back towards the complex technology the fintechs, bankers, investment firms, and other corporations have developed and implemented behind the scenes. They're automating everyone out for complete control in order to run housing like the stock market. They'll pump it and dump it at their leisure. Currently there are over 10% default rates for severely delinquent borrowers on a national average. On the back end they're refinancing everyone up to 115% LTV and resetting their loan terms, with a maximum 1% rate cap increase limitation to boot. You can read about that in FNMA and FHFA updates and policy changes and that sort of thing. FHFA conditions the GSE's executive compensation on their ability to use appraisers less, which has been an ongoing demand for about three or four years now. Every report card, every cycle, they have to use human appraisers less or their compensation and bonuses get diminished. Mr Bagotts recent article; horde of deadbeat zombies walking among us, that article contained a link to the FNMA wholesale lending program. Everything which does default is handed for extreme discounts to a very limited set of ultra wealthy corporations whom hold the houses as rentals or if they sell, get an instant 100% profit. The first purchase opportunity allowances for regular citizens is all but non existent. In the entire country right now there is only one single Good Neighbor discount offering for an American citizen according ot the HUDHomestore website. One. Single. Offering. For the entire country. The FNMA REO department pushes no volume anymore. They handed everything to big corporations.

That's why you don't see many fix and flipper mom pop organizations anymore. They only way they can get discounted offerings is flyes and mailers because the lenders are no longer funneling defaulted property through traditional MLS avenues and such. This keeps the licensed people like ourselves from observing and knowing what is happening. Couple with the avm rules just implemented earlier this year, the lenders can now successfully prescribe any value they need to make deals work. The American housing markets are over valued according to some analysis by 10%-15% range nationwide. I personally feel this is much higher in the 30%+ ranges. Nothing makes sense, all this economic pressure, inflation, job issues, migration issues, and prices never come down except rarely in rural areas. Mr Bagott referrs to this as a clandestine welfare program and that's exactly what's happening; corporate welfare for predatory interests, and individual borrower welfare as they are now customers for life and can restructure loans to infinity regardless of poor payment or home management performance. Keyword; disparit impact and effecting better housing equity. That is fancy talk for artificially inflating peoples house values if they're not white. Debt traps for everyone.

Appraisers pondering this policy or that single thing are missing the big picture. From the very top they're handing the entire system of housing, lending, inspection, purchasing, loan management, everything. They're handing all of that on a silver platter to the big corporate interests. That's where the generational wealth is going. PAVE task force was a front to keep everyone distracted while they retooled the entire system. Appraisers went first. Then realty people took a substantial hit. Next will be title and mortgage people. They want a completely maluable central system with automation. Central planning never works and they're going to crash the entire system or need incredible bail ins and outs again soon before you know it. There is no such thing as a safe mortgage anymore. Everyone with more than a 70% ltv is up side down, they just don't know it yet. Why bother with traditional economic free market theory when you can centrally manipulate and control these things instead. Higher taxes for everyone. Higher home payments for everyone. Customers for life. No effective oversight. All backed by the taxpayer. Welcome to the extremely dysfunctional state of mortgage lending in 2024. The GSE's no longer follow their charter and mantras which justified their existence. FHFA is now an effective branch of predatory corporate and international investor interests. Down the line there is co opted and conflicts of interests which are now more common than not. Amazing reflections of utilizing the power of governement to take disproportionate advantage. They call it the American dream because you'd have to be asleep to believe it. You'll need to upgrade your cop on the beat analogy to something bigger. Have you ever heard the phrase; You'll own nothing and be happy? Socialism in the USA is not just creeping in, we're full on drowning in this right now.