AMC Appraisers--seriously?

[TJSum]

Here is another example. I do work for a local correspondent lender who has set up their own rotational panel of appraisers. However, they had a loan they were brokering to a Lender that demand the use of their preferred AMC. They were so horrified with the appraisal, they ask me to conduct a desk review on it for their own in-house quality control. I found 9 major errors on the report with only a desk review. The value was not of issue, their loan was still good, but they wanted the loan based on a quality appraisal, not some POS. The appraiser did miss the value by at least 15% however, on the low side, but like I said, this is not their concern as the deal was still on, their concern was having a POS appraisal in the loan file. Many of the problems were not minor, but major violations. Oh, btw, the appraiser lived approximately 90 miles from the property. In this instance, the value did not matter to the client, but it is a shining example that some of these low ball appraisals are not legit and are just as bad as overvaluing properties.

 

[Michael Tipton]

Here is another example. I do work for a local correspondent lender who has set up their own rotational panel of appraisers. However, they had a loan they were brokering to a Lender that demand the use of their preferred AMC. They were so horrified with the appraisal, they ask me to conduct a desk review on it for their own in-house quality control. I found 9 major errors on the report with only a desk review. The value was not of issue, their loan was still good, but they wanted the loan based on a quality appraisal, not some POS. The appraiser did miss the value by at least 15% however, on the low side, but like I said, this is not their concern as the deal was still on, their concern was having a POS appraisal in the loan file. Many of the problems were not minor, but major violations. Oh, btw, the appraiser lived approximately 90 miles from the property. In this instance, the value did not matter to the client, but it is a shining example that some of these low ball appraisals are not legit and are just as bad as overvaluing properties.

Wouldn't a "faulty" appraisal put the originating correspondent lender at risk for a repurchase should the borrower default?

 

[TJSum]

Wouldn't a "faulty" appraisal put the originating correspondent lender at risk for a repurchase should the borrower default?

I am not sure of that end of things. In this instance they are acting as a broker, the lender they are using demanded use of their favorite AMC and the lender is underwriting the loan and appraisal. Not sure why a broker would be held accountable for issues out of their control. They wanted a desk review for their own quality control. StaceyUW might be able to tell us better how it works. A typical broker could have ignored the bad report and just put it all on the lender, but this one who respects quality did not want to do that, they are trying to do the right thing.

This is one of the ironic consequrences of the HVCC, if a broker has nothing to do with the appraisal process, how does this increase their accounability, I would think it takes accountablity totally away from them.

 

[rubberchicken]

Here is a fun comparison. This is a underwriters revision request (whether or not it is a valid revision request is not the point here folks!!) from before HVCC--- When I was ordering the appraisal myself from one of our 15 appraiser list in town:

1. Appraiser to provide at least 1 comp with the same age as the subject property.


Now, here is a revision request from the underwriter on the appraisal that was ordered from their AMC AFTER hvcc:
Need appraiser to review and supply additional information and comments: Comps used are too distant- For suburban properties, need to be located within same market within 1-3 miles with supportive explanation Differences in square footage / basement and site size, have caused excessive adjustments There are recent sales located within 3 miles of subject, similar in square footage and site size and age, that should be considered, which do not support this value. 2.09 miles - 1152 Bumpus Mills Road sold 5/20/09 for $ 71,500 1517 sf 1 acre 2.13 miles - 543 HIckman Mills Road sold 11/17/08 for $ 120,000 1360 sf 1.09 acre 1.4 miles - 440 Hickman Shores Road sold 11/17/08 for $ 159,900 1920 sf .24 acre 1.47 miles - 871 Center Point Road sold 10/10/08 for $ 129,000 1344 sf 2 acres Appraiser to provide supportive sale with finished basement / additional 2 bedroom sale to support market acceptance and lack of room adjustments Re-verify date on sale # 2 (this is over 12 months old) Public records shows sale on 10/31/08. Predominant value is $ 90,000 - Need to comment as to what affect value exceeding predominant value has on the marketability.

EVERY single one of my appraisals ordered thru the lender forced AMC has a ton of revisions compared to the "old" way.

This must be some sort of computer generated BS. I received an almost identical stip on one I did last week. Almost word for word except the distance issue. I finally had enough and put the following in my reply (I have zzz'd out the addresses but otherwise this is a cut and paste from my rebuttal). This is why I hate AVMs. m2:

"zzz S. xxxx sold in February of 2008 (not a typo - 2008, not 2009, and is a HUD home) I see no record of any sale in June and am wondering if it was a bank foreclosure recorded. Same thing with zzz S. xxxx. No sale in the MLS and no record of any transfer in County records. The underwriter and/or the AVM is just picking the lowest sales found. I can find 40 others that sold for less but the are not remodeled which is why ours is selling for more than many others in the neighborhood. Also, the median sale price for remodeled homes in there is $165,000 over the past 3 months (data is on the 1004MC).

To be specific, using piece of junk, in need of repair and remodel type of homes and trying to compare them to ours is incorrect appraisal practice. Just because there are sales lower than ours does not mean they are good comps. All of the sales in this report are remodeled homes, similar in size, similar in age, located in xxxxx Park, with 3 bedrooms, with no
basement area and 2 of them sold within the past 35 to 40 days. One of them is even located right across the street from ours."

 

[Tres Kirkland]

This happened to me one time. It was a semi-rural area, my house was 2 years old 2,000 SF or so with finished basement. Value was in the high 100's. The underwriter came back and said there were sales closer to the subject. I told her I didn't have any and for her to provide them to me. When she sent them to me one was a old manufactured home one was a 90 year old shack you get the point.....

 

[Kevin Mc]

When she sent them to me one was a old manufactured home one was a 90 year old shack you get the point.....

I do.....fairly regularly these days. Apparently lenders have instructed their processors to now act as appraisers.

 

[DMZwerg]

to those who think because he gave low values I called him incompetent. NO!@, not at all. It is because he can't properly fill out the 1004MC, there are always 50 typos in every report, he has taken pictures of the wrong subject property more than once.

AND, this was NOT for a rebuttal of value. It was on the original appraisal report. He cited there were other homes on the street that had sold recently and he mentioned that using those homes as comps would be like comparing apples to oranges and baseball since they weren't like the subject.

Context is everything.
50+ typos, photos of wrong subject, etc, indicate incompetency whereas the statement about "apples to oranges and baseball" sounds like a valid rebuttal out of context.

There are state boards you can turn this <nice guy> in to. If they find him as <thorough and competent> as you feel he is then he will no longer be a problem for your bank. :icon_mrgreen:

 

[Flygirl 152]

FTR, I am goind to use that apple, orange baseball thing , because it is cleaner then my "Chicken Sh_t into Chicken salad" comment!

OMG.....I just about fell off my chair laughing. I've never heard the Chicken salad comment............now that's a new one for me.........hahahahaha....too funny. Gosh I needed that laugh today!

 

[Meandering]

The problem is that appraisers were given the definition of Market Value that we are trying to follow.

Why don’t the GSEs and the AMCs and the lenders just change the market value definition to what they are truly asking of us. The New Market Value definition should read:

What any typically uneducated, sucker for low monthly payments with no concept of future earnings/expenses/taxes will pay for any property that is:

1. within 20% of the gross living area of all sales in the Past 90 DAYS within 1 mile in an urban area or within 3 miles in a suburban area,
2. is the same age, or at most a 5 year difference, of at least three sales within 90 DAYS AND that are within the above stated distances,
3. is on a lot that is within 15% of at least three sales that meet the above stated criteria.
4. is not the only remodeled or better quality home when compared to any of the sales within the past 90 Days within the above stated distances,
5. is not larger or smaller or have more or less bedrooms then any of the sales in the last 90 DAYS within the above stated differences.
6. at the very least can meet all of the above requirements for sales in the past 180 DAYS.
The buyer understands that any proposed purchase of a property that does not meet the above criteria might be financed with a Rural Housing Loan, which many lenders do not or do not want to do.......... or pay cash.

 

[govols]

the appraiser "blows to many deals." come on, you still using that tired, old excuse!!