Appraisal With No Inspection By Appraiser?

[ucbruin]

I have three computer screens on my desktop and work all day long for an average of 10-12 hours per day...it does not take more than a very minimal effort to respond to the nonsense here on the AF

Would this also apply to your employees????

For any type of internet forum/shopping/p0rn/etc. ???

 

[J Grant]

Tmd loves to say fee and quality are not related since no evidence exiss and he has not seen it yet. FWIW the word quality sounds like retail quality--- for appraisals it's credibility and reliability)

It remains to be seen...AMC;s took over a large market share aound 2010 going forward...and prices were low on properties 2010-2014, starting to recover in 2015 and appreciating in 2016 on. The higher price rise appraisals 2016 on will show influence of AMC and many of these appraisals and loans are still too new to see an impact...usually a few years out till they work their way through the system. Also recently some AMC;s doubled down on worst practices, blast emailing bids etc which they did not used to do.

 

[djd09]

Three screens. One is set on CRN. One is set to the AF. One is set to society of Chief Appraisers. You need a fourth for your job.

 

[timd354]

Tmd loves to say fee and quality are not related since no evidence exiss and he has not seen it yet. .

I have have never said that fee and quality are not related....what I have said is that to date, no one has provided any evidence that shows any correlation between fee and overall appraisal quality. If you are going to criticize what I have said, at least have the decency and intelligence to criticize what I have actually said.

Here is a question for you...At what point a low fee begins to affect appraisal quality? Does appraisal quality for a typical non-complex mortgage lending appraisal begin to deteriorate at any fee less than you charge, or at a $400 fee, a $300 fee, a $250 fee, a $150 fee, etc.?) I am open to looking any studies, etc. that analyze the correlation between appraisal fee and quality, but until someone is able to provide such evidence, there is not a damn thing that I or anyone else in a similar position can do initiate any change regarding fees.

 

[TJSum]

The fee and end result of the report might not show as much of a difference as the hand holding that needs to take place during the process. The direct clients who pay full fee don't want to "micro-manage" the appraiser, they want a credible report, on time, with as little hassle as possible to both sides. If the appraiser falls short, they move on to someone else rather quickly. On the other hand the AMC's who take half the fee, micro-manage your every move, 20 page Engagement Letters, etc., they might eventually get to a credible report at some point. The end results might be similar, but the paths taken to get there could be far different. I know that doesn't matter to the end user much, but to say the quality is the same is missing the process it took to get there.

 

[timd354]

Would this also apply to your employees????

For any type of internet forum/shopping/p0rn/etc. ???

You obviously have not worked for a large financial institution (or at least you have not worked at one for a long time) if you think that p0rn, social media (twitter, etc.), or even a some internet shopping sites make it through our internal firewall.

 

[timd354]

The fee and end result of the report might not show as much of a difference as the hand holding that needs to take place during the process. The direct clients who pay full fee don't want to "micro-manage" the appraiser, they want a credible report, on time, with as little hassle as possible to both sides. If the appraiser falls short, they move on to someone else rather quickly. On the other hand the AMC's who take half the fee, micro-manage your every move, 20 page Engagement Letters, etc., they might eventually get to a credible report at some point. The end results might be similar, but the paths taken to get there could be far different. I know that doesn't matter to the end user much, but to say the quality is the same is missing the process it took to get there.

I hear what you are saying, but here is the thing...to the lender and the secondary market, the only thing is the end result and there is nothing anybody in a position such as myself can do to change anything unless it can be shown that the end result is different (i.e., that AMC appraisals are of lower overall quality) even if AMC's make appraisers' lives miserable. Can you imagine the reaction I would get if I tried to propose that my company would not insure loans (or would charge an additional risk premium) if the appraisal was done by an AMC unless I had quantifiable data showing that AMC appraisal quality was lower and that loans with AMC appraisals performed worse than loans with direct engagement appraisals? I can tell you that the reaction from upper management would not be positive.

 

[TJSum]

Back when I started in 1990, licensing was just ramping up. The reason they put licensing into effect was because at that time Appraisal Designations meant everything. So the MAI's of the professional pretty much had very large appraisal companies, they would spend their time overseeing their company with very little to no field work. They would have contractors do the actual appraisal work, and then they would just sign off on the report. Licensing was put into effect to bring some sort of accountability to those who were actually doing the work. Seems to me with these hybrid products we are coming full circle and getting back to the pre-license days of having the appraiser sit in their office and just sign off on AVM results and other peoples work. These new products aren't as new as rehashing what has already failed in the past. I'm not saying AVMs don't have their place, any objective observer would admit they do, but my hesitance is with the appraiser signing off on it and putting their license and liability on the line. If the end users wish to use AVMs fine, but they should take on the liability of that choice. As for someone else doing the inspections, I don't see the advantage to that, unless the inspections would then be assigned to licensed home inspectors or more qualified unbiased professionals.

 

[DWiley]

What is some of it is more risky, or has potential USPAP issues ?

If you are genuinely concerned about risk (and that risk is on the users of our services more than us), then where is the outrage about the current process? I mean, why limit inspection to those things readily observable? That is a huge risk, no? And what about that long list of other things that are assumed away in a standard 1004. No concern about those items?

And what, exactly, is the USPAP concern with something (not personally inspecting) that has been recognized and allowed in USPAP since its inception? Stating whether one did or did not inspect has been in the certification requirements since day 1. Why the big issue now?

Sorry, those "concerns" just ring hollow.

 

[George Hatch]

I think that if inspection becomes a thing that the users will gravitate toward some form of qualification for inspectors as a means of maintaining consistency.