Collateral Underwriter "suggested Comparables"

[Meandering]

Appraisers should also carefully read the section of the letter regarding adjustments, especially GLA adjustments. It presents some pretty damning evidence that many (if not most) appraisers have not been basing there adjustments on market data, but have been using "the list" and that have been manipulating their adjustments to fit within the 15% net/25% gross adjustment guidelines that were just retired by Fannie Mae. If appraisers want to know why Fannie felt the need to build the CU tool and why appraisers are likely to see an increase in requests to provide credible support for there adjsutments, they should read this section of the lender letter carefully.

If Fannie wanted to know how/why this happened. It's the AMCs fault. They're the ones "selling quality" and mandate changes, other comps, bs, 15-20-25% adjustments.

It's my story and I'm sticking to it. The responsibility falls to the AMC that demanded, mandated, stipped to death, removed, scored and otherwise boxed appraisers into their stupidness to fly through computer reviews.

How much of Fannie's concerns are within the "mandatory requirements" sent by AMCs with orders?

That's my story and I'm sticking to it.

.

 

[timd354]

So CU and FNMA doesn't vet the "comps" prior to issuing CU warnings?

CU absolutely analyzes the potential "comps" prior to issuing CU warnings and it even numerically ranks the potential comps and the appraiser's comps in order of the model's preference. That being said, CU is an automated computer program that is not 100% accurate and the data that feeds CU, while being better than most property data sources since it is appraiser vetted and provided data is not perfect. CU is not meant to be the be all and end all regarding appraisal quality or be the sole determinant of whether the lender should accept the appraisal. It is a tool to assist lenders in the evaluation of the appraisal and collateral and when used correctly, is a very powerful tool to help identify increased collateral and appraisal related risks. Undoubtedly, some lenders will use the tool properly, and some lenders won't have a clue...but that is nothing new.

never said tim was wrong. i highly disagree with it being called a risk collateral score when the definition of a review is in part "the act or process of developing and communicating an opinion
about the quality of another appraiser’s work"
now if it is a standard 3 review is another question.

I am supposed to educate myself but am not allowed to see the CU system. they will tell me about it but i don't need to see. yea i have a car to sell you too but you are not allowed to start it. i was born on a boat but it wasn't the love boat. what a joke.

Whether you choose to educate yourself on something that is going to have a large effect on the your profession as a residential appraiser is up to you. You can act like a professional and educate yourself so you can intelligently address the issues that undoubtedly arise as a result of many lenders using the CU tool or you can keep whining about what you can't change (i.e., appraiser access to the tool) and not educate yourself and continue to wallow in your own ignorance.

 

[djd09]

when did fannie become the dictator of appraisal guidelines? why do i need a USPAP class when they have all the answers. why do i pay the state when they do nothing. might as well just make federal national mortgage association king and get it over with. i'm done calling them fannie. when did they become appraisal experts and like always when someone questions my appraisal is where is federal national mortgage association appraisal. oh they got none. they can only sponge off appraisers data.

 

[KenAZ]

If you don't want to get flagged for GLA adjustments, CU seems to think that about 30% of the Price per SF is typical, unless there is a very expensive lot due to acreage or view.

 

[ucbruin]

If you don't want to get flagged for GLA adjustments, CU seems to think that about 30% of the Price per SF is typical, unless there is a very expensive lot due to acreage or view.

"CU seems to think that about 30% of the Price per SF is typical...."

From all of the speculative comments regarding CU, it would seem to me that CU data is based upon appraiser provided data rather than some type of formula.

 

[djd09]

CU absolutely analyzes the potential "comps" prior to issuing CU warnings and it even numerically ranks the potential comps and the appraiser's comps in order of the model's preference. That being said, CU is an automated computer program that is not 100% accurate and the data that feeds CU, while being better than most property data sources since it is appraiser vetted and provided data is not perfect. CU is not meant to be the be all and end all regarding appraisal quality or be the sole determinant of whether the lender should accept the appraisal. It is a tool to assist lenders in the evaluation of the appraisal and collateral and when used correctly, is a very powerful tool to help identify increased collateral and appraisal related risks. Undoubtedly, some lenders will use the tool properly, and some lenders won't have a clue...but that is nothing new.

Whether you choose to educate yourself on something that is going to have a large effect on the your profession as a residential appraiser is up to you. You can act like a professional and educate yourself so you can intelligently address the issues that undoubtedly arise as a result of many lenders using the CU tool or you can keep whining about what you can't change (i.e., appraiser access to the tool) and not educate yourself and continue to wallow in your own ignorance.

you like the name calling but i will not drop to your level. questioning a non transparent system is considered "whining" i guess i am guilty.

 

[Meandering]

If you don't want to get flagged for GLA adjustments, CU seems to think that about 30% of the Price per SF is typical, unless there is a very expensive lot due to acreage or view.

Fannie says:

In the December, 2014 Selling Guide update, Fannie Mae removed a long-standing guideline that when adjustments to the comparable sales exceeded 15% net and 25% gross, the appraiser was required to provide an explanation as to why the comparable was chosen for use in the appraisal report. This requirement for commentary was based on the premise that the best comparable would require the fewest adjustments. While this premise remains true in theory, the guideline for 15% net and 25% adjustments was widely implemented as an eligibility "hard stop" due to many rules-based automated review systems. Analysis of appraisals submitted to UCDP made it clear that many appraisal reports never exceeded the 15% or 25% guideline – the focus of many appraisers had become keeping the amount of the adjustments within the guidelines instead of reflecting actual market reaction for specific characteristic(s). To support the decision-making process to remove this guideline, Fannie Mae analyzed 700,000 appraisals submitted to Fannie Mae in Q1 2014, including analysis of more than 2.5 million comparable sales. The charts below reflect the results of the analysis. Nearly 95% of comps analyzed had net adjustments less than 15%, suggesting that appraisers strictly adhered to the net adjustments guideline. Fannie Mae’s concern is that the adjustments might be artificially low.

Not surprisingly, there is a strong correlation between price per square foot and price tier, but GLA adjustments remain much the same. Only at the price level of $900,000 does the median adjustment exceed $50 per sq ft.

Appraiser behavior appears to be the same when the analysis is limited to condominiums. For example, the median adjustment in California is the same as in Mississippi, even though $/GLA is nearly four times higher for California. Additionally, the $/GLA is nearly seven times higher for the District of Columbia when compared to Mississippi. This trend is even more pronounced in an analysis of condominiums by price tier. Median adjustments for GLA are a fraction of the $/GLA and do not scale with price.

Another point of clarification is that Fannie Mae currently does not have, and has never had, a limitation on a single-line item adjustment.

https://www.fanniemae.com/content/announcement/ll1502.pdf

 

[djd09]

all i see tim do is stick up for federal national mortgage association which makes me think he has a vested interest in CU.

 

[Joyce Potts]

well someone is misinformed. who is it? murray saying 35 additional sales or tim saying they only provide 20? again too bad there is no transparency on the CU process so we could make rationale opinions on CU.

If we're insisting on transparency then provide the appraisal on a peer review basis.

 

[Meandering]

We're not entitled to transparency, only Fannie and Lenders are entitled to it.