AVMs and UAD

[lefty2cox]

I have not yet developed much in the way of a personal position on any of this yet, as much of it is still either in flux or in a "wait and see" state. I totally agree that there will be many consequences as a result of the UAD and many will not be pretty. My business partner and I are trying to identify and foresee as many of these consequences as possible. That's why I keep coming back to you for clarification.

You have referred to "the AVM," "the machine" and now, "a commercial entity." I'm honestly just curious as to specifically what or whose AVM, machine or commercial entity you are talking about.

I don't know what you mean by "whose AVM". What does it matter? Seriously, I ask because I don't understand the question. A commercial entity is any company that's for profit. An appraisal management company or lending service company. Any company who acts as a go between for appraiser and end user.

 

[lefty2cox]

You're very misinformed. It's not even an AVM, per se. What you're talking about is a future database that can be used for a number of things. Some will help appraisers.

Take Rich's webinar. It's only thirty bucks for the first one (three total).

I never said the UAD is an AVM. I'm saying that if you transmit your report to a client through a go between, management company or other entity, and you grant them permission to, they can use the data for creating a revenue stream in other ways. So I'm not misinformed, I'm just misunderstood at this point, obviously.

 

[lefty2cox]

Why do these unamed Orwlellian entities need to construct a data base in such a painstakingly slow manner? Data on homes is all over the place, on tax records, on Zillow, on Google Earth, on MLS views and other sources avail over the internet.

So an appraiser adds a code that the kitchen was remodelled a year ago. Top secret information !!! By the time anything else is needed on the property, say a refi 3 years down the road, all the codes will be outdated anyway. I am not too worried about it.

This was discussed already. Every subject that is appraised for purchase is now a detailed comp. Every comp that is marked as "similar" or similar to a C1, is now a C1. And before you question the accuracy of the data, the data they have now is much cruder than this and they're selling their product already. Read what C1 means.

 

[CANative]

Why do these unamed Orwlellian entities need to construct a data base in such a painstakingly slow manner? Data on homes is all over the place, on tax records, on Zillow, on Google Earth, on MLS views and other sources avail over the internet.

So an appraiser adds a code that the kitchen was remodelled a year ago. Top secret information !!! By the time anything else is needed on the property, say a refi 3 years down the road, all the codes will be outdated anyway. I am not too worried about it.

It's a "boots on the ground, real time" approach. After a few years of UAD information on millions of properties there will be a real time data base about the condition, quality, value, etc. of many homes in any given neighborhood. I think that is a good thing for everyone.

 

[lefty2cox]

It's a "boots on the ground, real time" approach. After a few years of UAD information on millions of properties there will be a real time data base about the condition, quality, value, etc. of many homes in any given neighborhood. I think that is a good thing for everyone.

Exactly CA. And I like that. I really do. I've always been a proponent of a collaboration between our brethren.

But when you say it will be good for everyone, you're talking about EVERYONE.

Management companies. Keep in mind that the big ones take a lot valuation business with either their staff or an automated product they offer as a substitute for an appraisal.

The general public. By giving a management company rights to your work you absolve them of the exception in certification 21 (on the 1004). Divorces, estates, pre listing appraisals for FSBOs

So we all agree that letting lenders, who paid for the appraisal, and other appraisers benefit from our contribution to this database. That's not in question. And that IS good.

But why do you think that the management company you uploaded your report to doesn't have the same technology that the client uses to automate their underwriting process. Why wouldn't they use that platform, or one like it, to create their own tables? And then, since they already offer a automated alternative to their clients, why would they not unleash their decision engine on this new data?

If they did, in this capitalistic society we live in, would we not be entitled to compensation for this data.

And forget about that. Why do you think that all these as-seen-on-tv ads offer life time supplies of their products once you buy once? It's because they make money selling your information to internet and telemarketing companies, not on the product.

So even if a management company doesn't offer an automated product, they can just sell this information to a company that does? Sounds like a good revenue stream to me. So if someone makes money off of something I provide them, shouldn't I be compensated? Hell, this is how management companies work. They provide the client with the supply for their appraisal demand and in turn, the management company profits. Why sign away your right to that revenue stream which resulted from your efforts?

 

[CANative]

Management companies make their money by exploiting appraisers and skimming fees. What are they going to do with this information (assuming they would be allowed to collect it and use in the MISMO data stream)? Lenders and appraisers will probably get it for free from the GSEs - whether they want it or not.

In any case I don't understand your complaint. This is how it's going to be and there's nothing anyone can do about it.

 

[lefty2cox]

Management companies make their money by exploiting appraisers and skimming fees. What are they going to do with this information (assuming they would be allowed to collect it and use in the MISMO data stream)? Lenders and appraisers will probably get it for free from the GSEs - whether they want it or not.

In any case I don't understand your complaint. This is how it's going to be and there's nothing anyone can do about it.

Let me start at your last comment. If you're saying that there's nothing anyone can do about the UAD, I'm not stupid, I now that.

If you're saying there's nothing to do about what I am complaining about, you're wrong. I already stated what to do. Don't give rights to your work away to 3rd parties for free.

You're right. Management companies make money but skimming fees. But many of the more forward thinking ones don't . A miserable transaction fee is nothing compared to the revenue potential of an automated platform. Ask Google about it.

And as far as permission from the client. Most don't charge the lender or the client. They say to the lender...."we will provide this invaluable service for you for free. All we ask is that you give us access and rights to certain non-personal data contained in the reports". This permission has already been granted folks. Why would a management company want or need intellectual property rights to the appraisal if they haven't already gotten the required permission from the lender? And if they can't get permission, they can just be asked to be named as a client and use the data for their own platform.

I'm willing to bet that all of the people who disagree with me have never read every word of the agreements they've agreed too with the management companies they do business with. I have, every word. Those of you who haven't, who are probably the same people who have never sat on the bowl and read every word of the certifications they sign everyday, crack one open the next time you're logged onto their portal.