2065 VS 2055

[Mountain Man]

Got a request for a 2065 (second one lately) from one of my best clients. I hate the 2065 form!! No true market grid, just a block for a +, - or =. The fee schedule from the lender is $200 for a 2065 and $225 for a 2055. :? I don't understand the $$ difference, same amount of work.
Since they are my best lender, I think I will just do the 2055 for the same fee. The last one I did, I scratched out some quick adjustments on a market grid to get a real feel of the final reconciled value (I should have just done it on the 2055 to start). I just don't like giving a +, -, or = to estimate the value. Do anyone else get many request for the 2065? If so, how do you reconcile the value. I guess one of my main problems is I am in a rural area. There are NO cookie cutter houses here, gotta just do the math.

Mell.

 

[George Hatch]

The reasoning behind the 2065 is that the qualitative analysis is more similar to the manner in which buyers and sellers determine value. These market participants don't make dollar adjustments (quantify) for differences the way that appraisers do, they simply rank the subject (qualify) in comparison with the sales comparables. In order to properly use the 2065, the intention is for the appraiser to either come up with the 3 model matches in the last 90 days (yeah, right), or else bracket the subject and rank it among the spectrum. The pilot version of this form actually had a comparsion grid for 5 sales, with a minimum requirement of 3 sales.

I am of the opinion that the appraiser should make the final call as to the applicability of a specific appraisal method or format. This, not to be obnoxious or demanding, but to protect the appraiser, the client and the borrower, in that order. If you don't feel the 2065 or 2055 forms or a limited appraisal process adequately address the appraisal problem in a particular case, you should be able to say so as long as you can explain the why.

I'm not sure of the sure of the reasoning behind the different price schedules for the 2065 vs. the 2055, but I have heard that it's because Fannie thinks it takes more time to quantify the adjustments for the 2055 than it does to merely rank the comparable without specific adjustments. The reduced time requirements theoretically lead to the reduced fee.

It's all part of Fannie's program to streamline the appraisal process and reduce the costs to the borrower. They apparently think it takes an appraiser significantly longer to do a 2065 than a 2055, which in turn is much less work than a full URAR. They must not realize the difference between the low and high ends on this is probably less than 30 minutes in most cases.

George Hatch

 

[Ray Ohler]

Once again, whether it is a 2055, 2065, whatever just wait until they get into the "8000" series. It seems the higher the numbers go the less the client wants to pay for it. However, the FORM is not the appraisal. + - =, you still have to "do the math", just not on the form. Bottom line is the APPRAISAL is the APPRAISAL. :lol:

 

[Joe Birrell (NY)]

Just another example of how they have reduced us to form fillers. It's like telling (not asking), the baker that you want your donuts and bagels thinner and will therefore pay him less. I think he would show you the door real quick.

What really bugs me out is their interest in saving the borrowers money.
Who else in the chain takes cuts and gives discounts ? A local lenders closing attorney just DOUBLED his closing cost fees from $350 to $700 !!!!!! Was anybody in the bank worried about the cost to their borrower ? A simple extension/modification of an existing loan with the lender will cost you $700 in legal fees. We THE APPRAISERS are enabling these people to make millions of dollars ! Property owners are same.
Sitting on a million dollars worth of a sub-division and he's trying to get me to reduce my fee by $25, because he can get somebody else to do it cheaper - go ahead, hire the cheap guy, I don't give a damn !

Excuse the rant, but it really irks me.

 

[Ben Vukicevich SRA]

Ranting Joe,

Nice to see you around again.

Hey, we all know the the local attorney could double his fees because he probably was on the bank's board of directors and has an "in." Well, that's the way it was when I worked at an S&L.... One attorney and you must close at his office and pay for the room, in addition to all his other services.

And for the rest of you guys and FNMA/FHLMC , there are no discount appraisal fees to the consumer.

Here's how it works: the LO takes the deal. Now, not knowing what form DU or LP will come back with, they collect a full appraisal fee from the borrower at application. Once the all-knowing computer comes back with the appropriate form, they order it from us at the "FNMA/FHLMC suggested reduced fee" because of the reduced work theory. Guess who keeps the difference??? Hmm. It sure doesn't go back to the borrower. It's excess profit for the lender. So FNMA/FHLMC has helped no one with the short forms, except the lender.

I had to sit through a crazed lady borrower who ranted and raved at me because I had "appraised" her house a short time ago when she bought it. Now, she was refinancing with the SAME lender and she wanted an update. She stated that she paid the full appraisal fee (whoops) when she bought the home and couldn't understand why I had to do it all over again. Why couldn't I update the appraisal. Her friend just refinanced and her lender updated the appraisal. Well, I'm tap dancing on the phone with her maintaining client confidentiality. I know that the first time they ordered a 2075 and obviously kept the difference. Now they were probably charging her another full appraisal fee and paying for a 2055 exterior because that's what DU ordered.

Yep, some collect one fee, pay us for the "chosen" form and pocket the difference..........

Got to love that racket.......

Ben

 

[NC Old Guy]

So you're ready to reduce your 2055 fee to the 2065 level. Will you do the URAR for the same fee? Why not? I'll bet if you honestly evaluate the difference in your time required between the URAR & 2055, you won't find many, if any, minutes. At least not if you do ANY due dilegence in checking secondary sources for info on the property. So, if now your 2055 is the same is 2065, what next?

I heard a Freddie Mac main appraiser laugh at fee appraisers because we were all so willing to fall on our own swords, all in the name of competition. :twisted:

 

[Ross (CO)]

In last month I have had two homeowner's (never met) call me up and ask me about "the appraisal I did on their house" and I tell them that I did not do an appraisal of their house, but instead did a different type of "report" as directly requested by the person who assigned the order to me.....they were 2075's ! I explained the simplicity of this abbreviated from and could only say then that my client was not as concerned about knowing the most-probable market value for their property. Their response was, of course, that "I paid for an appraisal ! ". I suggested they call that person and pose the question to them. I wonder what kind of fee they dished out for their "appraisal" ! Be they as short and simple as they are, my 2075's and 2070's are charged at same fee as 2055 drive-by, but then at least that report gets some market data analysis of local comps and its appropriate disclaimers about not seeing interior. 2055 In. & Ex. costs a little more. If the main report form starts with a "2", there is a minimum fee !

 

[Mountain Man]

Wonder what is on their HUD-1? I got a similar call after doing a 2070. The customer wanted to transfer the "appraisal" to another company for an equity line. I explained that I did not do an appraisal, I did a property condition and marketability inspection. Not sure what they were billed, but they did not sound happy either. I do more 2055's than anything, but I just can not do a 2065 and feel comfortable, my market area is wayyy too non-conforming for a + or -.

In reguards to the present request, I found out that it is a new house (no public records yet) so I can not do a drive by 2065. I told the lender that I have to do a 2055 with inspection. No problem, they just changed the request and fee since we now have to inspect and take comp photos. They are the best client, the agree with me 99% of the time!