3.6 The promises, the predictions, the panic and the fight for the dwindling appraiser dollars

[J Grant]

This here is still America. Appraisers do not have to compete in any bidding if they don't want to. Appraisers are 100% free to set their minimums at any level they want, no permission needed.

Gee we know that!! But the reality is that overnight, post HVCC, the minimum appraisals set were now used to deny them work from an AMC if it was above the basement level. The large volume share that the AMC has via the fee split, allowing the lenders to be free of hard cost service, created that reality.

At some point, I will contact the attorneys who are suing on behalf of the borrowers to see if there is any grounds for appraisers wrt a class action suit. I hate to get involved in anything stressful, and it might go nowhere. But it is worth an email or phone call to them.

A borrower claims they were overcharged or denied a disclosure for the one or two appraisals they used over a period of ten years, when an AMC was involved. Perhaps that borrower was harmed by a few hundred dollars.

However, the appraisers who saw most of their former lender clients switch to an AMC post HVCC had to deal with the stark choice of working for an AMC or getting no or very little lender mortgage work. And we know that mortgage lender work is the bulk of work available to a real estate license. The appraiser lost hundreds of thousands of dollars of income in that same ten-year period.

 

[J Grant]

True - but the AMCs that think they can lowball on something that is several orders of magnitude more time-intensive may find - zero takers. (It works both ways - and the 'available pool' of appraisers will ALREADY be down by - 50% )

Best case scenario, it reaches a critical mass where far fewer appraisers are left who will accept or bid such low fees - when fees get too low, it makes no sense to continue in the field or only continue part-time in order to reject the gutter fee orders.

 

[Ca Ar Independent]

True - but the AMCs that think they can lowball on something that is several orders of magnitude more time-intensive may find - zero takers. (It works both ways - and the 'available pool' of appraisers will ALREADY be down by - 50% )

This is the best case scenario. History has shown thus far, there is always someone willing to do it for less. Unfortunately appraisers have never been willing or able to unify against the constant attacks on our profession.

There is zero respect for our expertise, we are needed to "sign off" on the valuation product and take on all of the liability.

If there should be the long awaited appraiser "shortage" then OF COURSE there will be no alternative than AVM's. A well constructed strategy to do away with the only impartial piece of the lending puzzle.

Time will tell.

 

[Non Sequitur]

3.6 is such a mess Scott changed jobs!
(Yeah I know he didn't, still funny)

 

[Non Sequitur]

And not to be outdone, a "techie" appraiser on FB claims 3.6 can be automated by appraisers:

"Alright I got this new UAD 3.6 and they set it up perfect for us techies. Make sure your software provider allows an API or xml input then you can build a system using Base 44 or similar system and build a data oriented auto fill system. Auto connect to public data, auto fills maps, build the zip file for photos, writes the market narrative, all you have to do is choose the comps and dataset, your system will autocomplete the grid, you plug in the adjustments, give your system your basic adjustments, or let the system do paired sale analysis and print results as attachments, let it figure out more complicated adjustments, system fills out the narrative automatically based on your adjustments combined with regression analysis, auto completes charts and graphs, all you do is pick the comps, and review. They created UAD 3.6 as a simple data oriented computer language you just need an appraisal software company that will let you use an API or feed XML with steps built in for auto complete. You can build this yourself using multiple systems builders. You just need APIs or web based data available for auto complete. They just made my work much easier. I’m already in talks with Alamode they’re trying to say that wouldn’t be ethical yet I pay $2800 per year for software. I will find one or Alamode will give a window, backdoor, and I’ll get it done or switch providers. I could build this system in 3 days on Base 44. I already have an AI generated narrative with adjustments explanations and completes the month over month graph and narrative thru an API with MLS. If they just want data, AI systems builders have already automated the process. I’m sure you will these systems being offered for sale soon. You can do it yourself. You just tell the system builder what you want and it builds your system in the cloud, built in database management, invoice management, accounting, the whole thing. All you have to do is have the idea it figures out how to do it. Alternatively I could get the xml code from Fannie Mae and just build it around that. Load the final product in Alamode for mercury delivery or build a save xml and pdf and photo zip file into the separate system."

Good luck getting those API keys.

 

[chad hampton]

Almost had me fooled no way he’s giving up that salary, pension, and probably six weeks paid vacation. He’ll put every independent appraiser out of business before he gives that up.

 

[TerryRohrer]

3.6 is such a mess Scott changed jobs!
(Yeah I know he didn't, still funny)

View attachment 108332

It is unfortunate that the AI views UAD as “appraisal standards.”

 

[Non Sequitur]

It is unfortunate that the AI views UAD as “appraisal standards.”

Yeah, that’s the least of the insta-toot’s worries….

 

[Non Sequitur]

Haha! The power of the Appraisers Forum. Scott has his old job back, and assuming pension and salary too. Congrats!

 

[Sandra Koutsopoulos]

If what they apparently WANT is 'the number', derived by automatically extracting the often incorrect/inaccurate/incomplete info from MLS to feed their beast, combined with extracting cold property data from the databases which pull the county-recorded legal info, it seems to me they are looking at the shell of info, but the real "cherry" inside the shell which is the appraiser's on-site inspection, measurement verification, square footage confirmation, condition revelation, and analysis of the whole package is missing. The recorded legal info often does not reflect additions and outbuildings let alone garages and property condition. The MLS is riddled with puffing and bogus information. AI wouldn't know what is 'salesmanship'. County Records wouldn't know that. IMO, accurate valuation in the event borrower defaulted requires an appraiser's analysis and experience. If the purpose of an accurate appraisal is to support the lender's asset value, leaving out the core entity which is the appraiser who puts it all together in context with their analysis, using the hollow shell created by AI only, it is like buying a pig in a poke, or a box of chocolates only to find out later that the chocolate covered cherries have no cherries inside.

There is rarely a day when I'm pulling comps, and reading the MLS, that I find all the MLS info matches the county recorder's info. Then doing even a drive-by will turn up even more inconsistencies. And that's why in my area, if you want to use 6 comps, you can't just pull 6 sales, because the actual facts will eliminate several that superficially appeared to be comps. So is this 3.6 designed to better/cheaper support lender's asset position? or approve/disapprove a Borrower's loan? or create a database for entities to try to sell something to owners (time to get a new furnace/garbage disposal/paint/patio/etc?) or is it just Big Brother gathering general/conflicting info re: financed real estate? If the info gleaned is for a purpose other than finding the value of the asset for the lender, it is an invasion of privacy... which the Borrower is forced to pay for which is a benefit to others.