Blind Squirrel and Acorns

[chad hampton]

Order a 2nd or 3rd appraisal instead of a review. Then you decide which one you feel is most credible.

 

[George Hatch]

The "poor/not credible results" you're criticizing about can and has been considered a useful workproduct for the cursory once over-being used to identify which appraisals bear more detailed scrutiny. Back during the boom when I had a contract doing field reviews for one of the big box lenders that was how they identified the assignments they sent to me - by other reviewers doing mass quantities on everything coming in through their wholesale lines.

And just so you know, only some of the reports that they sent in actually had *any* problems on the development side; and of those only a few were so bad I couldn't fix them in my review process. I rejected those outright. At the time it was a little less than 10% of what they were sending me, which was a fraction of what they were reviewing.


-------------------------

A couple years back I heard of one program where the original report comes up on one screen and the comps in the report as well as other comps from other appraisal reports comes up on a map on another screen. One of the things the reviewer would look for was overlap between the two datasets, as well as consistency in quality/condition ratings used for the comps between different appraisers.

Think about it - the big lenders and the biggest AMCs have the resources to buy and use analytical tech that is way beyond what you or I have access to or could afford to buy if we did have access to it. They have so many reports coming in that the data represents another database they can use to compare against each other for review purposes. It's not necessarily better than a local appraiser toiling away at home doing everything manually (which they also do) but it is another mode of analysis that can be considered legitimate and which can be incorporated into their QA processes.

As fee appraisers neither you nor I have the resources or the savvy to provide them with every type of appraisal workproduct they think they need.

Deal with it.

 

[George Hatch]

Order a 2nd or 3rd appraisal instead of a review. Then you decide which one you feel is most credible.

That's ridiculous. Why should a lender wait another week or pay another $600 when they can get the 2nd opinion for a fraction of that cost from someone they know and trust within a couple hours of handing it to them?

 

[J Grant]

The "poor/not credible results" you're criticizing about can and has been considered a useful workproduct for the cursory once over-being used to identify which appraisals bear more detailed scrutiny. Back during the boom when I had a contract doing field reviews for one of the big box lenders that was how they identified the assignments they sent to me - by other reviewers doing mass quantities on everything coming in through their wholesale lines.

And just so you know, only some of the reports that they sent in actually had *any* problems on the development side; and of those only a few were so bad I couldn't fix them in my review process. I rejected those outright. At the time it was a little less than 10% of what they were sending me, which was a fraction of what they were reviewing.

As far as the USPAP SOW, I find it a dichotomy, as it links intended user and intended use (for meaningful results) Obviously, for intended user, speed, high tech computer and software is what they need as they deal in volume, and the appraiser input is minimal and almost superfluous to the process ( in my opinion). Imo, the appraisers in these scenarios are there to basically rubber stamp the process. Anyone could be trained to do it, imo, but I suppose an appraiser background helps, but it's more so they can say an appraiser signed off on the product.

It is interesting that you mention the data streaming in on multiple screens...I interviewed for a job like that roughly 10 years ago. I can't recall the company now, but they were a major corporation who did this type of review, all across the nation. The appraisers sat in cubicles, and had 3 computer screens, (reminded me of air traffic controllers). One screen had the appraisal report on it, one screen had the streaming data, the other screen was on standby, so that when appraiser logged off a screen, the third could be uploading so as not to waste time.

The appraisers reviewed (cursory review) reports nationwide. The chief appraiser giving me the tour was very nice and very professional. I asked him how an appraiser could possibly understand data streaming in from various cities and states of which they had no knowledge. He said I would get used to it and learn what to look for. Their tolerance was very high...a report had to be really "bad" to be flagged for local review...like showing a value 20-30% over the streaming similar sf or area data. Now this was years ago so maybe the tolerance has changed.

They wanted to hire me but it was the wrong fit...I would have gone crazy sitting in the cubicle looking at data all day. I politely turned them down ( the offer came several days after the interview ). The people were very nice, professionally run, would be a good fit for someone else.

My professional opinion is that these cursory reviews let a lot of bad reports fly under the radar. They can only catch egregious and obvious errors. I have done field reviews of slick reports that had pushed values an misleading information and ignored property conditions etc, that likely would have passed some of these cursory reviews. That is my opinion, may not be worth much but I stand by it.
If it satisfies these intended users, so be it. but the speed at which these are done and the distance from which they are done makes them of limited reliability.-------------------------

A couple years back I heard of one program where the original report comes up on one screen and the comps in the report as well as other comps from other appraisal reports comes up on a map on another screen. One of the things the reviewer would look for was overlap between the two datasets, as well as consistency in quality/condition ratings used for the comps between different appraisers.

Think about it - the big lenders and the biggest AMCs have the resources to buy and use analytical tech that is way beyond what you or I have access to or could afford to buy if we did have access to it. They have so many reports coming in that the data represents another database they can use to compare against each other for review purposes. It's not necessarily better than a local appraiser toiling away at home doing everything manually (which they also do) but it is another mode of analysis that can be considered legitimate and which can be incorporated into their QA processes.

As fee appraisers neither you nor I have the resources or the savvy to provide them with every type of appraisal workproduct they think they need.

Deal with it.

That is fine. They can use as much alternate products or cursory reviews as they want...god bless them!

 

[chad hampton]

That's ridiculous. Why should a lender wait another week or pay another $600 when they can get the 2nd opinion for a fraction of that cost from someone they know and trust within a couple hours of handing it to them?

What makes you think a reviewer is any better than the appraiser? I would hope they hire an appraiser they trust.

 

[Tim Hicks (Texas)]

Back to the OP:

Hopefully you are learning that using an AMC is not going to get you the best quality appraisal. There is not an AMC around that is searching for the highest quality appraiser to do their assignments. They are looking for the best match for their fee and profit margin. I am on three AMC lists. LSI only sends me their crap assignments (rural, over built homes, odd ball properties) that have been rejected by their other appraisers. I decline these assignments because they are not worth the offered fee or the hassle of dealing with square peg properties they want stuffed into round holes. Streetlinks sends me occasional assignments, but I screen these assignments for the very same reason. MDA and others send me "offers" for assignments stating that their $225 fee customary and reasonable for which I decline. There was a time when I would appraise any property for the challenge as long as the fee was reasonable. Then AMCs took over and made it impossible to deal with their round peg assignment conditions. No matter how many of their conditions you met, they would come up with more impossible conditions to be met for each oddball property.

I know you think that VA appraisers are no better, but their system is far better. They have a panel set up on a rotation basis and a customary fee schedule. Yes, there are many VA appraisers over 60 that have not kept up with changes in the industry, but they are a part of that objective panel. I am a VA appraiser and I cringe at the questions asked at meetings, so I know. Yet, there system really is the best and no AMC is involved. I don't know why large lenders do not establish their own appraiser panels the same way. It seems like to easy a solution. There is nothing requiring the use of AMCs. AMCs are not the answer because they can't recognize a bad appraisal if it passes the check list. I actually reviewed an appraisal this week where one of the vague comments on the sales comparison (no direct comments on actual adjustments) stated "none of the adjustments exceed Fannie Mae guidelines." You see, if the appraiser would have actually adjusted lot values correctly, all of the sales would have exceeded Fannie Mae guidelines which is really not a big deal unless you are doing a AMC appraisal.

 

[Pilgrum]

A solution to the problem of the AMCs hiring who(m) ever will work the cheapest and fastest is for the lenders to realize they DO NO have to use an AMC. As long as there is some type of firewall between the LO and the appraiser it is OK.
Further. That type of system will make the cost to the customer/lender cheaper, delivery faster, communication more effective and give control of which appraisers set on their fee panel back to them.

i did not want to say this but. this guy is a shill. crying about the appraisals. boo hoo. so is joan. there both jokes and not even appraisers. if I was loaning $100,000 ++++ and thought the appraisal may be lacking, I would pull the money out and order a second appraisal you cheap @@@@.

djd. I have always found the stirring $h1tt sometimes leads to it splashing back on you.

 

[djd09]

djd. I have always found the stirring $h1tt sometimes leads to it splashing back on you.[/quote]


thats ok just take a shower.

still waiting for the op to prove he is an ex appraiser.

 

[George Hatch]

What makes you think a reviewer is any better than the appraiser? I would hope they hire an appraiser they trust.

I never make assumptions about reviewers being better than an appraiser. Or vice versa. I review appraisal reports, not appraisers. I think you should consider doing the same.

What I do know is that when a lender has a direct relationship with a reviewer or an appraiser and they are getting work from them on a regular basis that builds a certain amount of personal credibility - they become the known quantity. OTOH when they're taking appraisals from people they don't know - as was the dominant model prior to the HVCC - then they don't have that relationship.

If you're pining for that obsolete MB select model where the MB controls the appraiser then that's where lies that relationship. But when it's a direct lender taking appraisals from all over those kinds of relationships simply aren't possible.

One more function of reviews is to get the 2nd opinion *in support* of the original appraiser's opinion. That's something I do a lot of when I review reports that are basically reasonable. I provide some reassurance that the report is sufficient for their use even when it has problems - which happens a lot.

I think it's a mistake for appraisers to assume an adversarial relationship with reviewers. I also think it's a mistake to think that the only reports of your's that get reviewed are the ones you get stips on. I pass on a lot of reports without calling for corrections or contacting the appraiser. Depending on the client's preferences, I often expedite their process by repairing a lot of problems in my reviews on my own and without bothering the appraiser. Other times I offer remedial instruction so as to help appraisers avoid problems in the future.

There are a lot of lenders out there that would rather do anything other than be forced to reject a substandard appraisal. If an appraisal can be salvaged or repaired via review that's a cheaper and more expedient solution than simply rejecting and paying for another appraisal.

Lastly, you may have some moral high ground for criticizing the use of reviews in lieu of contracting "better appraisers" if you're working full time at appraising and haven't had to fix any of your own mistakes in the last 90 days. Other than that you may consider your own work to warrant review.

 

[Ken B]

Too bad we don't have a fight room.

We have many fight rooms round here. What we lack is a professional discourse room.