Collateral Underwriter "suggested Comparables"

[EddieB]

Welcome back Marion, I missed you

 

[Deleted member 80407]

I did not imply anything as maybe every loan officer and mortgage broker that steered appraisal to you were 100% honest and upstanding citizens who cared about overall loan quality and were not worried about maximizing their commissions. However, it is not rationally arguable that loan officers and mortgage brokers had a very large monetary incentive to select those appraisers who would make their deals work. Thus, the system of loan officer and mortgage broker selection of appraisers was inherently and irreparably corrupt. Anyone who doesn't acknowledge that is either obtuse or not interested in having an intellectually honest discussion about the HVCC and appraiser independence.

Additionally, your posts have failed to acknowledge and address the fact that loan officer and mortgage broker selection of the appraiser has been illegal under the Interagency Appraisal and Evaluation Guidelines since 1992, which is long before the HVCC came along.

I agree with Eli.
EXAMPLE: One AMC was sending orders to me for REO assignments under my normal fee which I have declined about 10 to 12 assignments. Yesterday, the same AMC sent a regular 1004 (no REO addendum) for a refinance for $100 more than that of the those assignments declined. Hopefully, this will be a start of a new trend ~ paying appraiser's for the work performed and not for price & speed.

 

[Mike Kennedy]

There is a problem here that everybody needs to focus on. FNMA has hard cold facts on appraisers using the same adjustments in every appraisal. Who has been hiring those appraisers for the term that FNMA has tracked?

At last - the Crux of the problem. The Lenders and their Agents (captive & contracted) who were, and are in violation of Federal, and in some states - State Laws.

Federal and/or State Enforcement? ....................................crickets.........................chirp..........chirp.........

 

[Meandering]

At last - the Crux of the problem. The Lenders and their Agents (captive & contracted) who were, and are in violation of Federal, and in some states - State Laws.

Federal and/or State Enforcement? ....................................crickets.........................chirp..........chirp.........

Yeah but,
Yeah but,
Yeah but,
It's different now, cause they don't get a commission.

Only the names change. The game stays the same.

.

 

[Eli]

See, FNMA is the only one with the data about appraisers using the same GLA adjustments in all reports, or the other risk flags CU picks up on, like faulty comp selection, etc., but you know FNMA has already reported some results to higher authorities in order to implement CU with approval. I say they are the only ones, which we know isn't totally true, but the point is they are the only ones reporting the data to higher authorities.

So, it's gonna get deeper, and prolly already is real deep for some, imo, even though they may not know it yet. Many involved in appraisal selection, approval, management are praying for crickets to continue, but I think they have already heard the howling and are nervous. Some will get burnt by CU. Just wait til they start monitoring even more, which I'm sure they already are, but the monitoring part will increase even more. FNMA is under heat. Don't think they won't dump the heat on a lender, AMC, or appraiser, in a heartbeat, especially with facts to back it up, and heat coming down on top of them as a result of analysis performed and reported to those regulators above them.

 

[Eli]

I am confident that production rate by an individual licensee will be monitored more closely, if it isn't already. It probably already is within the CU analysis and correlated with risk in different ways. Seems like an easy correlation to me with their database. Although I realize they are not necessarily tying risk to the credibility of the appraisal in all cases. However, production rate and other factors could lead to deeper analysis in some cases, easily, if too many red flags surfaced on an individual appraiser, lender, or AMC.

 

[djd09]

I did not imply anything as maybe every loan officer and mortgage broker that steered appraisal to you were 100% honest and upstanding citizens who cared about overall loan quality and were not worried about maximizing their commissions. However, it is not rationally arguable that loan officers and mortgage brokers had a very large monetary incentive to select those appraisers who would make their deals work. Thus, the system of loan officer and mortgage broker selection of appraisers was inherently and irreparably corrupt. Anyone who doesn't acknowledge that is either obtuse or not interested in having an intellectually honest discussion about the HVCC and appraiser independence.

Additionally, your posts have failed to acknowledge and address the fact that loan officer and mortgage broker selection of the appraiser has been illegal under the Interagency Appraisal and Evaluation Guidelines since 1992, which is long before the HVCC came along.

Do you think the AMCs are sending appraisals to appraisers who are killing the deals?

 

[Eli]

Do you think the AMCs are sending appraisals to appraisers who are killing the deals?

I believe some of what you refer to is already trackable from HMDA data. I think what you are referring to will be tracked more (or monitored more) including correlations between approvals/declines as they relate to individual lenders, AMC's, and appraisers. I also think fees will be tracked eventually as well as they relate to risk categories. Fees will get separated sooner than later at this point. CU or UAD has thrown too much valuable data at higher authorities for them not to consider bias in any way, form, or fashion. Risk and fairness are at the heart of the matter when it comes to the public's interest. CU or UAD is not hearsay and what we know about is just a drop in the bucket of what CU and UAD is capable of revealing already, especially when combined with other home mortgage disclosure information that is collected in the normal course of business.

 

[Lee Lansford]

I received a revision request today, based mostly on comparable sales which CU said were proximate to my subject. CU listed 35 properties that were claimed to be comparable sales. The subject is an older (115 y.o.) end-unit row house, a one unit rental property, minimally updated. Of the 35 'suggested' properties, all but one were newer detached single family homes, multi-family detached properties, or dwellings in less than market condition (32 detached) needing undisclosed repairs. The one remaining sale was 23.6% smaller than the subject, a fresh high quality renovation, and more suited to owner occupancy than as an income property.

Based on this, my report was given a "5" risk rating. If this keeps happening, I worry that I could make the blacklist. Do I have any recourse other than noting the CU failure in my addendum? I suspect that this will happen a lot throughout the industry.

In the above, you have your response to your client. Provide it to your client and move on.

 

[form1025]

As to comments when exceeding 15%/25%, well, those properties are demonstratively different from the subject and comments should be made. It doesn't mean they aren't the best available comparables. Competent appraisers blew through those "guidelines" all the time when appropriate. If nothing else, the comment requirement mandates a stop and think moment which is never a bad thing. They should have kept it in.

Having these guidelines were one of the contributing factors in creating the CU, many appraisers felt compelled to stay below these thresholds by using incorrect data/adjustments. As noted competent appraisers would explain their derivatives whether or not these guidelines are/were in place. When certain guidelines such as these are disseminated many in the industry take this as law and that it is mandatory ,hence improper interpretation which leads to improper comp selection which leads to improper adjustments which lead to the CU.