3.6 Crunch Time

[George Hatch]

...
I am aware of the fact that Fannie or Freddie performs data analytics before saying ok, lenders, we green light a WAIVER, so go forth and target hit the value. IDK how large a value range results from their data analytics; do you? Does anybody? It is not made available. Perhaps you can ask and find out.

If there was a 500k loan submitted by a lender for a WAIVER, and the sale price is 550, how large a range around that sale price is allowed by the data analytics before green-lighting a waiver?
A data analytics value range of 540-570k is a different set of potential than a range of 500-600 k.

I'm assuming you understand the distinction between them seeking

(a) a "more precise" opinion of MV before deciding how much loan to offer​

vs​

(b) a "less-precise" go/no-go conclusion indexed on the pre-selected loan amount. Change the loan amount (higher or lower) and the answer to that question also changes.​

These two processes are not the same and neither is the degree of precision required.

 

[ilsindaco2628]

I don't believe the nobody cares what happens to fee appraisers line. Nearly every RE agent I see at inspections complains about an AMC appraiser sent from 3 counties away who does not know the area and is happy when I tell them I am local and know the area well.

The better lenders and others in the RE field care. Even Fannie and Freddie, despite their many moves to award work to AMCs and use waivers, etc care to the extent that they know they need appraisers for the difficult orders and for a % of regular orders to have MV on some kind of established standard course.

In the public realm, people are leery of AI and hate the data centers and job losses that might accrue to it. The anger and resentment of the public, as evidenced in the consumer lawsuits in the courts wrt the AMCs where the lawyers refer to the amount of the appraisal fee the AMC keeps as "unjust enrichment," is an example.

None of it might affect decisions in the near future that affect our industry. Will see... I am not, of course, recommending anyone enter the res side of the profession, and wish any newbies brave enough to try it the best. Maybe the new generation can effect change. IDK. They have a social media awareness that our generation lacks.

It's an interesting thing to navigate. I would say 9 out of 10 realtors I encounter have no idea what an AMC is and never heard of it.

I think geographic competency is easier to obtain in New Jersey... I've appraised properties in all 21 counties.

Also I'm pretty cynical... when a realtor starts talking about geographic competency that just tells me the house is overpriced and they didn't bother to look up comps.

 

[ilsindaco2628]

I see some talking about appraisal waivers.

I started doing property data collection on the side... and a lot of lenders are still requiring PDC inspections even with an appraisal waiver. That gets them a floor plan and a 360 view of every room in the house... I have been doing this for 6 months and am learning slowly what they do with these inspections.

They are using the 360 photography to find the smallest issue ... molding that needs paint, a light switch without a plate/cover, discoloration on a wall/ceiling... and forcing owners/sellers to make a number of repairs before approving a loan.

 

[George Hatch]

I don't believe the nobody cares what happens to fee appraisers line. Nearly every RE agent I see at inspections complains about an AMC appraiser sent from 3 counties away who does not know the area and is happy when I tell them I am local and know the area well.

The better lenders and others in the RE field care. Even Fannie and Freddie, despite their many moves to award work to AMCs and use waivers, etc care to the extent that they know they need appraisers for the difficult orders and for a % of regular orders to have MV on some kind of established standard course.

In the public realm, people are leery of AI and hate the data centers and job losses that might accrue to it. The anger and resentment of the public, as evidenced in the consumer lawsuits in the courts wrt the AMCs where the lawyers refer to the amount of the appraisal fee the AMC keeps as "unjust enrichment," is an example.

None of it might affect decisions in the near future that affect our industry. Will see... I am not, of course, recommending anyone enter the res side of the profession, and wish any newbies brave enough to try it the best. Maybe the new generation can effect change. IDK. They have a social media awareness that our generation lacks.

Re-read the comment for content instead of just reading to respond.

You commented on appraisers losing their livelihoods (a factual observation) and then went on to explain why people care. I responded that nobody else cares what happens to appraisers. That's not the same thing as nobody caring what the outcome is of an appraisal when they're working on obtaining a loan.

Let's say you withdraw from the market - for whatever reason. Do you think any of your clients will miss a beat when you don't pick up their call the next day? Or will they just move on to the next name on their list? That's my point - you have client relationships but none of those clients care if you're struggling financially. Just like you don't actually care about their employment or their financial struggles at home.

It's not personal. It's literally just business.

 

[Surf Cat]

All I hear from my AMC contacts is that appraisers are not ready, many haven't completed any 3.6 orders and say they will "figure it out when it launches" which I have tried to use to my advantage.

That's because the providers of the software are not ready. They're kind of, sort of have it ready but it's glitchy, crashes, or doesn't work as intended. The software is a new wrench set forged to the wrong specs....rounding off every bolt you try to use them on.

-I just had an AMC ask me if I would do a 3.6 single family purchase with rental comparables (previously 1004 w 1007) for $325.
I told them $650 and never heard back.

Here you are being first out of the gates to get ahead of the competition. You should be commended, rewarded for being the tip of the sword to solve a problem for the lenders/AMCs. But you're insulted with a fee that's not even customary and reasonable for a 2.6.

You're being a beta tester for free. SMH

I'm not bagging on you.... you had the right idea. You're just not being rewarded for it. Which shows the scum we're dealing with.

 

[Bobby Bucks]

My latest thoughts regarding 3.6

-I just had an AMC ask me if I would do a 3.6 single family purchase with rental comparables (previously 1004 w 1007) for $325.
I told them $650 and never heard back.

- I use TOTAL. It IS getting better... mixed with me having done more 3.6 work I have cut down on reporting time however I have only completed single family and condo reports. No exterior, no 2/4 unit (TERRIFIED OF THIS) and no supplemental forms (rental comps, operating income statement). Having a functioning mobile app will certainly cut down on time back at the computer but I haven't tried it yet for 3.6.


-All I hear from my AMC contacts is that appraisers are not ready, many haven't completed any 3.6 orders and say they will "figure it out when it launches" which I have tried to use to my advantage. I am trying to be opportunistic and have enough experience where AMCs would rather auto assign me the work knowing it will get done in a timely fashion versus give to to another appraiser who is going to try to figure it out on the fly. HOWEVER the AMC model of sending out quote requests to find the fastest and cheapest appraiser is going to further complicate things. We're all going to have to learn how to describe the 3.6 debacle to realtors who will have no idea why their purchase appraisal is going to take 2 weeks to turn around after inspection.

I am still holding out hope this will get delayed again.

Almost everyone I’ve talked to which includes other appraisers, bank contacts, mortgage brokers, loan officers all say that 3.6 will take a great deal more time than 2.6. It would be great if it’s delayed, in fact I would not be surprised if it is. I’m on hold after completing a practice 3.6 for a SFR. I read a recent post on FB where the person claimed to have finished a 3.6 and boasted about it being easier than a 2.6, but failed to reply to any questions about it. It was highly suspicious. The same group has the infamous former owner of the Buzz gang being a 3.6 cheerleader. There is so much information out there on 3.6, but even more disinformation. You may want to start a new thread here to get more answers, this thread has been hijacked which has happened with practically all threads on 3.6

 

[ilsindaco2628]

That's because the providers of the software are not ready. They're kind of, sort of have it ready but it's glitchy, crashes, or doesn't work as intended. The software is a new wrench set forged to the wrong specs....rounding off every bolt you try to use them on.

Here you are being first out of the gates to get ahead of the competition. You should be commended, rewarded for being the tip of the sword to solve a problem for the lenders/AMCs. But you're insulted with a fee that's not even customary and reasonable for a 2.6.

You're being a beta tester for free. SMH

I'm not bagging on you.... you had the right idea. You're just not being rewarded for it. Which shows the scum we're dealing with.

No offense taken of course.... I know exactly what you mean.

The issue is not only am I fee quoting the AMC, the AMC is fee quoting the lender...

I have quoted orders that I don't get... then an hour later I get asked for a quote on the same property from a different AMC but same lender.

I thought fee shopping was supposed to be illegal... and I have tested it by quoting high fees but same/next day turn time. It's not the turn time that loses me a gig, it's the fee.

My higher quotes worked for 2-3 months but now I notice I'm getting less and losing out on quotes.

 

[George Hatch]

No offense taken of course.... I know exactly what you mean.

The issue is not only am I fee quoting the AMC, the AMC is fee quoting the lender...

I have quoted orders that I don't get... then an hour later I get asked for a quote on the same property from a different AMC but same lender.

I thought fee shopping was supposed to be illegal... and I have tested it by quoting high fees but same/next day turn time. It's not the turn time that loses me a gig, it's the fee.

My higher quotes worked for 2-3 months but now I notice I'm getting less and losing out on quotes.

You're testing them (possibly several of them) to see what they'll pay. They're testing appraisers to see who will do these and what's the lowest fee they can pay to get something they can use.

That's how the prevailing fee rates will be established.

 

[Surf Cat]

The issue is not only am I fee quoting the AMC, the AMC is fee quoting the lender...

Those numbers would be interesting to know. The margin between what the lender is willing to pay to what the AMC is giving the appraiser.

I have quoted orders that I don't get... then an hour later I get asked for a quote on the same property from a different AMC but same lender.

Another interesting coincidence. The lender has a lot of choices in regards to AMC's.... this shows they're not dedicated to one providing a superior service, but what they're willing to pay because they have to put that "appraisal fee" in the loan docs. Hiding the service fee for the AMC within the appraisal fee, the appraisal fee probably looks "outrageous".

 

[George Hatch]

The timing of this transition could hardly be worse for appraisers. The volumes are down and everyone is already starving.