Appraiser Expertise Question

[nicholz12]

If it prevents banksters and appraisers to game the system , then why do they need us?

They don't, it's coming.

 

[Red Flint]

As all of you are probably aware, FNMA is now giving full indemnification for appraisals that score 2.5 or less. There are two areas that drive up the score if they do not match what the FNMA collateral UW thinks they should be:

Thanks, we’re playing low ball now! It used to be where a report had to hit the number over $200,000 (or so), now just need to hit under 2.5! ½ the Wheel!



Add USPAP to the reading list. The system of CU review is creating client pressure on the appraiser to ‘hit a number’, which violates conformance to FIRREA/USPAP.

 

[NEINAPPR]

I have to tell you that in my experience, much of what comes out of the CU is absolute crap. On two or three occasions I have been asked to comment on comparable sales that were ranked much higher in the CU than the comparables I selected for use (or mine weren't even on the list). In each and every instance they were absurd! On the last one I was appraising a higher end rural property in an area filled with the same. I had three comps and two listings within 1 1/2 miles (and had several more good comps I could have used). The first of the CU comps was 12.75 miles away in an entirely different market with a lot that was 6 acres larger than the subject. The second was over ten miles away and was a 100+ year old home (my subject was four years old)! I have no idea what criteria is utilized in their software, but from what I have seen it is garbage and I have heard the same thing from my local appraiser friends. A friend who works at an AMC told me that in his opinion 90+% of the potential comps and suggested adjustments that are spit out by the CU are so far off it is laughable. He said he cringes now when an UW will ask questions regarding the CU data because it is usually so bad he knows that the appraisers are going to be pissed and fire back at them and he is the one on the receiving end, but he understands their frustration completely. So in short IMHO you cannot rely on their data too heavily, especially if the appraiser has explained themselves and their methodology adequately.

 

[Tom D]

[QUOTE="ucbruin, post: 2737528, member: 145071"
So the list had to have originated prior to 1987.....
And shared nationwide.....[/QUOTE]

the list???? i was a real estate broker who wanted to appraise. in 1982 i had my 1st MAI train me. he took me thru 1 house, i followed. that was my total training. i never got the list, or saw one. could have been helpful. i miss those days. that was probable more training that CU has gotten.

 

[Evincere]

I am an UW reviewing appraisals for a large bank. As all of you are probably aware, FNMA is now giving full indemnification for appraisals that score 2.5 or less. There are two areas that drive up the score if they do not match what the FNMA collateral UW thinks they should be:

Actually, nope, I don't believe we all did know. The FNMA overlord shares little of it's robo cop secrets with the masses of property appraisers it oversees and we do not generally receive Lender UW letters.

But nonetheless, I did find a link. Thank you. Good discussion.

https://www.scribd.com/document/254761393/FNMA-Lender-Letter-LL-2015-02-About-CU

http://appraisersblogs.com/UAD-rating-absolute-vs-relative

http://appraisersblogs.com/CU-robot-collateral-underwriter

 

[Eli]

I am an UW reviewing appraisals for a large bank. As all of you are probably aware, FNMA is now giving full indemnification for appraisals that score 2.5 or less. There are two areas that drive up the score if they do not match what the FNMA collateral UW thinks they should be:

1) The condition rating- obviously it looks at previous reports for this property and age and if the rating is not what they think it should be it drives up the score. These variances are usually explained in the description of the condition on page 1.

2) The adjustments is the other big area and this is the area that I have a question on. For instance, in California an appraiser puts the adjustment for site and provides logic but the Collateral UW will be significantly different and this drives the score way up.

As an appraiser are the adjustments for these two areas ( condition rating from C3 to C4 or a site adjustment) driven by standard local market adjustments or paired sales analysis (extracted from subjects market place) for each loan? I am just wondering how FNMA is determining for example a site adjustment in LA county vs. what is being offered by the appraiser. In the example I am looking at the appraiser is reflecting a $10 sf adjustment and the FNMA model is $50sf in LA county? As an appraiser would you want to see this brought to your attention when these large variances occur if you have already explained your logic?

Mr or Mrs OP, I can only imagine what thine eyes see where fastest and cheapest is rewarded. Listen to Denis and many others good advice that has been given. Please share more.

 

[Terrel L. Shields]

much of what comes out of the CU is absolute crap

It is redline crap...the 2.5 number is hard to beat if your property is rural, unique, older, or in a mixed use area. period. Has nothing to do with the appraiser's ability but everything to do with fannie mae blacklisting an appraiser for having too many high numbers.

 

[Eli]

It is redline crap...the 2.5 number is hard to beat if your property is rural, unique, older, or in a mixed use area. period. Has nothing to do with the appraiser's ability but everything to do with fannie mae blacklisting an appraiser for having too many high numbers.

My area in general is so heterogeneous that CU or an AVM couldn't even hit the dart board on most properties, much less give a credible and reliable opinion of value. If they were throwing darts, they would be lucky to hit the dart board and more likely to hit somebody, which would get serious.