Be the Driver, rather than just a passenger of your appraisal practice

[George Hatch]

If they want to call it risk management on their end there is nothing we can do about it. But RM implies a wide umbrella term, and it is not stated on the URAR as the intended appraisal use

The intended use stated on the URAR is evaluate the property for a mortgage lending decision. Which is a more limited and specific use than "risk management"-

Stop fretting the semantics and consider instead the question of "who is doing what?".

The lenders and GSEs *incur* the risk when they initially make the loan. If they are merely looking at the property's value after that they are just re-assessing their current position as of that more recent date. If they're rewriting the loan for rate/term they're still just monitoring their current position except this time the question is whether or not to rewrite.

None of this is about holding the original appraiser's value conclusion as being applicable at a later effective date. That's not what DW said and it's not what he meant.

 

[Fernando]

Doesn't matter. Look at my models on https://www.pacificvista.net/price-models-san-mateo-county. I left out a missing piece - the ranking of the comparables needed to score the subject property. I wanted to keep my distance from providing anything that could be regarded as an appraisal - and created the models as a broker analyst.

But I could have easily made this a semi-AVM, only needing an inspection of the subject property and ranking against an already computer-ranked list of 100+ comparables. based on certain criteria such as condition, quality, design, view. A "person" could come up with a fairly accurate estimate of sale price as of some date, with a casual inspection of the property and then finding its optimal location or fit in a ranked list. A small online program could help expedite things. Although some homes in the top or bottom 5% can be a bit of a problem at times.

I did the entire county of San Mateo. I would say it took me 2.5 weeks the first time doing this in September (although it took longer because I have other things to do). If I had to do it again, them maybe 1 week. - And the process still needs to be speeded up to update the model on a regular basis. To take in a much larger county such as Santa Clara, would require far more work than I am interested in doing. You'd have to create a team to deal with that. San Mateo County (600K+ homes ) is manageable and a cool county to work with.

The future residential appraiser will do this sort of thing. He will build models for counties - and hand them off to inspectors to use. The old residential appraiser disappears. The new one appears. And it is simply new advanced technology with the improvements:

1. Consistency.
2. Objectivity.
3. Speed.
4. Accuracy.

So, appraisal as a profession remains. But, the new appraiser has to be versed in more skills:

1. Non-parametric statistics and data mining.
2. Inspection and measurement technology.
3. Media technology.
4. Database technology and programming.
...


But the GSEs are holding this all back through absolute idiocy. It's so shameful. All those PhD.s are at their disposal and they can't make progress but instead regress into more of a mess. Of course its the whole profession; only for residential the GSEs play a central role.

I don't know how your model takes into account views, curb appeal, typography, and useable land. Computers not as good as a human appraiser. Market range yes but lenders don't want that.
I'd been looking for holy grail since college and I'd given it up that it's too difficult. Each time I personally see a property, I'm confident computers can't do better job than me.

 

[Tiffany Gibbons]

What data do you have showing that they are riskier?


Perhaps you can ask a lender that question.

You have to remember I work rural areas. Lenders, borrowers, and agents are only too happy to show you Desktop Covid appraisals to try and influence value while they are wondering why I have to see the inside. Especially on a refinance. I don't know any Lenders to ask. Maybe you know some Lenders,

 

[Tiffany Gibbons]

Doesn't matter. Look at my models on https://www.pacificvista.net/price-models-san-mateo-county. I left out a missing piece - the ranking of the comparables needed to score the subject property. I wanted to keep my distance from providing anything that could be regarded as an appraisal - and created the models as a broker analyst.

But I could have easily made this a semi-AVM, only needing an inspection of the subject property and ranking against an already computer-ranked list of 100+ comparables. based on certain criteria such as condition, quality, design, view. A "person" could come up with a fairly accurate estimate of sale price as of some date, with a casual inspection of the property and then finding its optimal location or fit in a ranked list. A small online program could help expedite things. Although some homes in the top or bottom 5% can be a bit of a problem at times.

I did the entire county of San Mateo. I would say it took me 2.5 weeks the first time doing this in September (although it took longer because I have other things to do). If I had to do it again, them maybe 1 week. - And the process still needs to be speeded up to update the model on a regular basis. To take in a much larger county such as Santa Clara, would require far more work than I am interested in doing. You'd have to create a team to deal with that. San Mateo County (600K+ homes ) is manageable and a cool county to work with.

The future residential appraiser will do this sort of thing. He will build models for counties - and hand them off to inspectors to use. The old residential appraiser disappears. The new one appears. And it is simply new advanced technology with the improvements:

1. Consistency.
2. Objectivity.
3. Speed.
4. Accuracy.

So, appraisal as a profession remains. But, the new appraiser has to be versed in more skills:

1. Non-parametric statistics and data mining.
2. Inspection and measurement technology.
3. Media technology.
4. Database technology and programming.
...


But the GSEs are holding this all back through absolute idiocy. It's so shameful. All those PhD.s are at their disposal and they can't make progress but instead regress into more of a mess. Of course its the whole profession; only for residential the GSEs play a central role.

Assessors already do this and everyone loves their tax appraisals, don't they, lol

 

[DWiley]

You have to remember I work rural areas. Lenders, borrowers, and agents are only too happy to show you Desktop Covid appraisals to try and influence value while they are wondering why I have to see the inside. Especially on a refinance. I don't know any Lenders to ask. Maybe you know some Lenders,

Got it. You don't have any actual data, just anecdotes. Alternatives are evaluated using data, not anecdotes.

 

[djd09]

That's not what DW said and it's not what he meant.

two four six eight who do you appreciate?

 

[RCA]

Interesting, as usual, Bert. Not sure what it has to do with the post you quoted me from. I was asking where the poster got information indicating that 50% to 60% waivers was "here to stay". Still, glad you had a chance to get that off your chest.

As usual, you are extremely dense. What are the GSEs doing wrong? Think about that. Something to do with making fhe forms less flexible to adapt to change rather than the idiotic reverse as if change weren't coming. Your organization is EXTREMELY dense. The waivers are immaterial, as many loans simply do deserve waivers. That is beside the point. But, you "should" know that.

 

[Joe Flacco]

They don't really care about the report. They just need to be able to chop it up and be able organize the information in their database.

 

[RCA]

As usual, you are extremely dense. What are the GSEs doing wrong? Think about that. Something to do with making fhe forms less flexible to adapt to change rather than the idiotic reverse as if change weren't coming. Your organization is EXTREMELY dense.

They don't really care about the report. They just need to be able to chop it up and be able organize the information in their database.

I don't think they really have a strategy or goal. I sense they are mindless idiots, shortsighted, struggling to keep their precious jobs --- and nothing, I mean NOTHING, more.

Yes, the GSEs have made it possible for many Americans to afford homes. That is good they have done. But they have done that good at the expense of our deficit - and in another 15 or so years, that problem could become catastrophic - - then we can look back on the GSEs and ask how much they, or to be more specific their employees, contributed to the damage through their lack of foresight, proficiency, and application of intelligence.

One might argue such criticism is really not fair. After all, they have paid back their past debts from 2008. But, if they have to be bailed out again, then it is likely they will not be able to pay back the loan because of demographics, population change, and aging. They should be running a tight ship. But I don't think that is the case.

At any rate, my opinion for what it is worth is that they could do a much better job. They are mostly just a lot of inefficient unproductive bureaucrats. And, well, what more can really be expected?

I am not saying we should expect more from the GSEs. They are what they are. Bureaucratic organizations are all kind of the same. Pretty much in nearly every country. It is what is. I'm just saying what it is.

 

[Tiffany Gibbons]

Got it. You don't have any actual data, just anecdotes. Alternatives are evaluated using data, not anecdotes.

Your response makes zero sense when I am speaking of my own personal experiences and referring to some of the "alternatives" I have seen in the course of my work and in conversations with market participants. I'm not trying to sell anything. I just appraise property for the purpose of the assignment, including property disposition efforts when "risk management" fails.