Appraisers Don't Understand

[Terrel L. Shields]

So, Himmler tried to cut a deal with the Allies

Many generals on the Eastern front were defying orders in April 45 and trying to get to the Western lines to surrender. They knew what was going to take place if Russia took them prisoner. A small fraction of German soldiers returned, often 10 years after the war, serving in Siberian Gulags before they were released to return to Germany. The Generals knew that they had butchered civilians and soldiers alike. Soviet women soldiers were singled out to be tortured and murdered when discovered, especially the snipers. The Germans would hang their mutilated naked bodies up on fences and posts as a sign to the Russians that they gave no quarter. So, they got the same back once Russia defeated them.

Read "Avenging Angels" or Svetlana Alexievich's "The unwomanly face of war" - interviews with women soldiers from Russia. These women were treated awfully by Germans and none were prisoners. They were all killed if caught. Even the paramedic women were expected to drag a soldier back to the lines that might outweigh them 50 lb. or more and they were punished if they did not bring his rifle back with them. But instead of coming home after the war as heros that they were, they were treated by Russians as outcasts. That book is so rough to read, i simply had to put it down time and again to absorb the horror of it.

 

[Non Sequitur]

More from the CEO of Reggora:

Introducing Reggora's Industry-First Appraisal Review Warranty

Get the only appraisal review solution with a repurchase warranty. When an eligible appraisal passes our automated review, we cover any financial loss associated with a repurchase / LLPA adjustment due to an appraisal defect. | Brian Zitin

www.reggora.com

"Here’s how it works: If you're using our best practice rules and the appraisal passes our criteria, we will contractually warrant against future defects and assume the relevant financial penalties. This means that if there’s ever a repurchase request or fee from a loan level price adjustment, due to an issue with an appraisal that passed our review, Reggora will cover the cost."

"So how are we making this possible? The short answer: AI. Advances in technology, like computer vision and AI model analysis, allow us to check for discrepancies in property photos, identify potential issues like water damage, and much more. Large language models (LLMs) help us better understand the content of appraisal reports and verify the accuracy of the commentary. And by leveraging third-party MLS and public record data, we can analyze comparable properties and subject property information with incredible precision."

From his LinkedIn:

"We released a review tool nearly 1.5-2 years ago that extracts the data from the appraisal and runs hundreds of rules on it in order to automate the manual checklists that human underwriters have to check today ...snip...

With more advanced rules using AI, Computer Vision, Third Party Data and much more, we are so confident in our product that we will be WARRANTING AGAINST APPRAISAL DEFECTS"

 

[alebrewer]

More from the CEO of Reggora:

Introducing Reggora's Industry-First Appraisal Review Warranty

Get the only appraisal review solution with a repurchase warranty. When an eligible appraisal passes our automated review, we cover any financial loss associated with a repurchase / LLPA adjustment due to an appraisal defect. | Brian Zitin

www.reggora.com

"Here’s how it works: If you're using our best practice rules and the appraisal passes our criteria, we will contractually warrant against future defects and assume the relevant financial penalties. This means that if there’s ever a repurchase request or fee from a loan level price adjustment, due to an issue with an appraisal that passed our review, Reggora will cover the cost."

"So how are we making this possible? The short answer: AI. Advances in technology, like computer vision and AI model analysis, allow us to check for discrepancies in property photos, identify potential issues like water damage, and much more. Large language models (LLMs) help us better understand the content of appraisal reports and verify the accuracy of the commentary. And by leveraging third-party MLS and public record data, we can analyze comparable properties and subject property information with incredible precision."

From his LinkedIn:

"We released a review tool nearly 1.5-2 years ago that extracts the data from the appraisal and runs hundreds of rules on it in order to automate the manual checklists that human underwriters have to check today ...snip...

With more advanced rules using AI, Computer Vision, Third Party Data and much more, we are so confident in our product that we will be WARRANTING AGAINST APPRAISAL DEFECTS"

I think it's brilliant. The lender is already getting R&W relief, so the risk to Reggora is pretty low. But what a marketing strategy!

 

[TerryRohrer]

I agree 100%. The GSEs/FHA/USDA should copy the VA appraisal system.

The ONLY reason the VA system is held in high regard is that it is hidden from scrutiny. Few VA appraisals are seen in the wild, and if more were seen, the conclusion would be that they are among the worst of the lot. The VA system has nothing to offer beyond a model for protecting and promoting appraiser advocates.

 

[Joe Flacco]

I think the VA model is very good for promoting unbiased opinions of value.

Are the appraisals better developed? Are the appraisers more highly skilled? Probably not. It is the best model we have of keeping pressure off of the appraiser.

 

[The Bob]

One of the worst appraisal's I've ever come across was a VA. And some of the best were by guys/gals with just a License, not Cr's.

 

[chad hampton]

There will always be random exceptions to the general rules.

 

[George Hatch]

I've always heard that (low quality by comparison) about the VA appraisals. OTOH impartiality is the thing insofar as safe/sound lending goes and I think the VA system puts a lot less pressure on appraisers to cooperate with dodgy deals.

As long as the value conclusion itself is within reason it matters little (to me) if some 90-yr old VA appraiser is using "this is a Complete Limited Restricted Appraisal Report, and the DEPARTURE PROVISION doesn't apply".

 

[alebrewer]

I think the VA model is very good for promoting unbiased opinions of value.

Are the appraisals better developed? Are the appraisers more highly skilled? Probably not. It is the best model we have of keeping pressure off of the appraiser.

insulation is a double-edged sword. I agree that being insulated from pressure to 'hit a value' is integral to being able to produce truly unbiased opinions. However, insulation also creates laziness, which could explain at least part of the phenomenon that VA appraisers garner high fees, yet there appears to be little to no gain in quality for said higher fees.

 

[George Hatch]

I think the argument could be made that if the VA appraisers aren't deliberately telling lies or pimping the deal then that justifies the fee. Of course, I believe the same for all appraisals.

The VA appraisers are isolated from the fee competition, but the addition of more heads to the panel has affected their volumes.