A WaMu Newsflash---that old conflict of interest

[Leon Stewart]

Randy:

The Memo don't seem to support what you are saying. It appears as if their intent is to make the Appraiser jump through hoops to get the value that they need. If they wasn't interested in getting a specific value, they would question the value arrived at by the Appraiser in the first place. Anytime the Lender decides to question the Appraisers Estimate of Value, the Lender is programming the Appraiser to meet the Lender's Value on other assignments in the future. If the Appraiser has to start reworking Appraisal Estimates, he/she would end up spending more time on a Report than what they are getting paid for, so it's easier for the Appraiser to get the Lenders Value the first time out, otherwise he'd go broke doing this kind of work.

leon

 

[Leon Stewart]

Oregon Doug:

The Memo implies that the appraisers job is to contact the Lender if the Appraiser Can't get the Lenders Value. How would the Appraiser know that he can't get the value prior tabulating the Report?

I've had some Lenders tell me that once I see the house, I have to decide if I can get the value, if I can't, then call them and they will pay me for my Inspection Trip. Which is silly since I've had to research, evaluate and inspect the exterior of 15 or 20 comps while I inspected the Subject. All that remains after that is the typing of the final Report. Which requires the least amount of time and expertise, and is a small part of the cost of the full Report.

This process allows the Lender to program the Appraiser to reach the Lenders values for future assignments.

leon

 

[Randy Beigh]

Carol

I love it when someone changes my report. They now take full responsibility for it. Because, no matter what happens, one can always fall back on the fact that if they had paid attention to the report, the loan would not have happened in the first place.

Besides, it's their report and they can use it for whatever they want, including TP. The only thing I want is my invoice paid on time.

Leon

You read more into it than what it says. Remember, it says they want to upgrade the report. They are not asking for a specific value. They want whatever value is arrived to be documented and that is real hard to do(make that impossible) with a driveby.

Further, I am dealing from a position of experience and not trying to second guess what some memo says or what someone thinks it says.

 

[Frederick R. Ruffell]

I, like Randy, do have WAMU as one of my clients. They are far and away the best client I have.
What this memo says ""Value Below Sales Price: If your initial opinion of value is below the negoitiated purchase price for the transaction, notify the DSM promptly..."
Now judging from my experiance with wamu what the are saying here is when a drive by is ordered and you complete the assignment (i.e Initial opinion of value on a 2055 form) and your OPINION OF VALUE is below the transaction amount, do not submit the report but rather call and upgrade the appraisal to an interior. I have been doing these drive by's and submitting some of them with "low values" and then getting another assignment on the same property with an interior, for full fee! It seems to me that they are trying to cut down on the ordering and turn times through appraisal port etc.. and not asking us to do anything outside of USPAP or state laws. I bet if you call your AREA Collateral Service Manager at wamu this is the story you will get. I will Check with mine and their Chief appraiser in my area and get back to the forum.

 

[larryhaskell]

As someone else that does work for WaMu, I can confirm what Randy has stated. In a nutshell, what WaMu asked us to do is to upgrade from an exterior inspection to an interior/exterior inspection if we believe there will be any problem supporting the sale price. While we can't estimate the value until we complete the report, I'm not so naive as to believe that we never have a gut feeling about supporting a specific sale price or qualifying value. Obviously, the gut feelings are closer to reality for certain types of properties than others. I never hesitate to upgrade to an interior inspection if I sense that there are any issues that I believe may be relevant to the appraisal process. If after doing an interior/exterior inspection and then completing the appraisal, if we cannot support the sale price, they simply ask us to give them a heads up for when the LO gives them a call which they certainly will.

One other thing they ask us to do is to call the realtors involved for sales they used in their CMA (ha ha ha) or in their discussion with the buyer. I routinely ask for info from realtors so this is no big deal.

Of all the lenders that I have worked with, I have to give WaMu high marks. We receive and deal only with WaMu appraisers. They strongly discourage any interaction between us and the LOs or borrowers. I have never been asked to hit a certain value or change a value.

Regarding an earlier question about WaMu changing values. I can't say for sure one way or the other because I'm not privy to that info. However, I have on occasion tracked a property to see if it sold at what I believed was a sale price higher than market value. I have raised the issue with our WaMu contact and he has told me that while they don't question my estimate of value, they make a decision about funding the loan based on the relative risk to the bank.

 

[Frederick R. Ruffell]

Yup,
Just checked with the area service manager and it is just what I said. If we are asked to do an exterior and the value is low, once we complete the assignment, do not deliver the report but call and have it upgraded to an interior inspection. That is all, they are not asking us to hit a number but to give their clients every consideration. The FNMA computer tells the loan originator for a 2055 ext., That is what gets ordered by the appraisal Dept. so when it does not make value as an exterior product they want to upgrade it before the borrower and LO start screaming.

 

[Leon Stewart]

There wouldn't be any need to update the Appraisal if it was not for the purpose of increasing the value. To me Inflating and Increasing are synonyms.

leon

 

[Frederick R. Ruffell]

Leon,
First, how did you get on the topic of an Update, this thread is about appraisals performed on an exterior inspection basis.
Second, "drive by" (exterior inspection only) appraisals should be done under the extraordinary assumption that the subject property is in Average (average for the market) condition. This assumption must be made unless the appraiser has other credible information as to the subject's condition.
Therefore if the drive by, performed under this extraordinary assumption, produces a lower than expected value and the subject is in fact above "Average" condition AND the appraiser has the oppourtunity to get primary data as to the condition THEN the "New" value (new because the scope of work has changed i.e interior inspection) will be higher.

 

[Jo Ann Meyer Stratton]

Or could be lower after seeing the actual condition of the interior!! The owner's home is a highly upgraded castle according to them. After all that built in ironing board makes it a custom home, more valuable than any other house in the neighborhood. So the upgrade from an exterior 2055 to an interior 2055 could go either way!

 

[Randy Beigh]

Jo Ann

Funny that you mentioned that. We just had one in the past week where the interior came in lower than the driveby.