Collateral Underwriter "suggested Comparables"

[Meandering]

I am suggesting that you had no independence to disregard since those who selected you as the appraiser (mortgage brokers and loan officers) had a vested interest in selecting an appraiser who would make their deals work so that they would get paid there commissions as opposed to selecting a qualified appraiser. This does not mean that you personally neccesarily did anything wrong, but the fact that loan officers and mortgage brokers were allowed to select the appraiser was an obvious inherent conflict of interested that corrupted the system and compromised appraiser independence. Additionally, since 1992, appraiser selection by loan officers and mortgage brokers in a regulated 1-4 unit mortgage transaction was illegal. If you can't see the obvious and inherent conflict of interest if loan officer/mortgage broker selection of the appraiser, then you are beyond help. Not that it matters, because despite your longing for the good old days when your loan production buddies could steer the appraisals on their loans over to you, those days are never coming back as mortgage brokers and loan officers will never be allowed to pick the appraiser again.

It's any different with AMCs?

If too many appraisals don't make loans work, do AMCs still keep their client? Do AMCs still keep those appraisers?

Or is it all better and legal now cause the AMC does not make a commission, but rather can dictate a fee split that is not disclosed to homeowners? Or that the lender can skim the appraisal fee off the top? Or that AMCs that don't read reports just send mindless stips to appraisers for crap already in reports, because they're doing the "quality" review?

nice.

But there was no answer to my question as to where appraisers can report to Fannie that lenders and AMCs are sending over 20 CU comps, in violation of Fannie's lender letter.

.

 

[timd354]

Thanks Tim,
I was more wondering about the AMC sending over 20 comps to address/add to the report.

Some lenders and AMC's who have no clue may do exactly that. Once enough appraisers push back, citing Fannie's latest letter, that behavior should stop. Like any other significant change, there will be a burn in period for CU while everyone figures out the correct way manage the changes wrought by implementation of the CU tool.

 

[Meandering]

Sorry, Marian, but I am not playing that game. I could name same some changes in the past 5 years that I believe were beneficial and you would undoubtedly argue that those changes were horrible and somehow screwed over appraisers, so what's the point?

My point was that many appraisers have PTSD

due to all the things that have gone on over the past 5+ years, so naturally they are more skeptical and adverse to stuff changing when, we still don't see anything being enforced on the PRESSURE side of the table, but rather always read about how we're going to get dinged again.

 

[Meandering]

Some lenders and AMC's who have no clue may do exactly that. Once enough appraisers push back, citing Fannie's latest letter, that behavior should stop. Like any other significant change, there will be a burn in period for CU while everyone figures out the correct way manage the changes wrought by implementation of the CU tool.

Right, because those guys can't read as well as we can.

Again, where do we turn them in to lessen the "burn time".

Perhaps some dings on their behalf will speed the process along.

 

[djd09]

I am suggesting that you had no independence to disregard since those who selected you as the appraiser (mortgage brokers and loan officers) had a vested interest in selecting an appraiser who would make their deals work so that they would get paid there commissions as opposed to selecting a qualified appraiser. This does not mean that you personally neccesarily did anything wrong, but the fact that loan officers and mortgage brokers were allowed to select the appraiser was an obvious inherent conflict of interested that corrupted the system and compromised appraiser independence. Additionally, since 1992, appraiser selection by loan officers and mortgage brokers in a regulated 1-4 unit mortgage transaction was illegal. If you can't see the obvious and inherent conflict of interest if loan officer/mortgage broker selection of the appraiser, then you are beyond help. Not that it matters, because despite your longing for the good old days when your loan production buddies could steer the appraisals on their loans over to you, those days are never coming back as mortgage brokers and loan officers will never be allowed to pick the appraiser again.

maybe they choose me because i best represented their company. what you implied is that they choose me to "hit a number" which is a baseless accusation. if one wanted to find the "number hitters" that would not be a tough task. and let me ask you this if i wanted to end around the hvcc/AMC and talk with the broker and find out what value was needed to make the loan work would it be hard to do?

 

[timd354]

My point was that many appraisers have PTSD

due to all the things that have gone on over the past 5+ years, so naturally they are more skeptical and adverse to stuff changing when, we still don't see anything being enforced on the PRESSURE side of the table, but rather always read about how we're going to get dinged again.

Appraisers with PTSD as a result of the recent changes?....what a load of crap and what a complete insult to those veterans who actually have PTSD as a result of their service in a war zone!

As much as you dislike AMCs, it is ludicrous to argue that the pressure on appraisers to hit a target value has not not been exponentially reduced from the days when loans officers and mortgage brokers controlled appraiser selection.

Did you know that at virtually every federally regulated lender (which includes banks and bank owned mortgage companies), that the risk and and/or QA and/or operations departments control the selection of AMC's, not loan production? (I know this to be a fact since we have vetted most of the top 1,000 lenders in the country as a part of our role as a secondary mortgage market insurer). Thus, while there are and always will be some bad actors, it is patently absurd to state that AMC's are systematically pressuring appraisers to hit values so that they gain or retain lender business. You have absolutely no evidence whatsoever that this is a systematic problem with AMC's or that the use of AMC's makes the problem of appraiser pressure any worse (or any better) than if lenders ran their own internal appraisal panels.

 

[timd354]

Right, because those guys can't read as well as we can.

Again, where do we turn them in to lessen the "burn time".

Perhaps some dings on their behalf will speed the process along.

Some of the burn in time will be the result of AMC's and lenders who don't have a clue trying to figure it out and some of the burn in time will be a result clueless appraisers who need to get up to speed. It is what it is, and whining about it isn't gonna change it.

 

[djd09]

i do not think Marion was trying to insult vets. your reading comprehension is off on that one.

yeah AMC's not pressuring appraisers news to me. seen it. see good bad and ugly.

 

[Scott Kibler]

Interesting that CU issues warnings when some adjustments diverge from peer standards but openly criticizes those peers when it pertains to GLA. You know good and well there's similar peer adjustment problems all over the grid. I'm not criticizing the CU for it, after all you have to start somewhere, but pointing out one reason pretty much everybody is going to be getting hit with CU messages early on. I suspect the peer database is somewhat of a mess and it will take time to smooth out.

As to risk scores, I imagine our rural members, and those that specialize in high end or unique properties will be producing lots of "high risk" appraisals. No doubt the folks at Fannie recognize this. Even the suburban appraiser gets that occasional white elephant assignment. Given enough time, we'll all have some risk level 5 appraisals under our belts.

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 commission based sales people order appraisals was always an inherent conflict of interest but the way most AMCs appear to operate is not really much different: AMC earns $zzz and they go out and find a vendor that allows them to keep the highest percentage of $zzz (a commission) possible without the subsequent report being rejected. In principle, it's not that different than "give me the highest value that won't get rejected". Throw in the practice of broadcast ordering and auto acceptance software and, well, it's a mess. No doubt again that folks at Fannie are aware of that and I imagine those AMCs and the lenders that use them are going to be compared very closely with their counterparts and lenders that order direct. I expect eventual rule changes addressing how vendors are selected and orders processed.

Tim provides some very good insight here from a point of view that most fellow members are unable to attain nor sometimes fully appreciate. I do wonder, however, if Tim and other folk in similar "ivory tower" positions fully appreciate how beat up the residential appraiser in the field feels given how this profession (trade?) has evolved over the past 10 or 15 years. While not particularly pleasant, a little whining is surely to be expected.

 

[Eli]

Well, there is one thing that is so. The market structure has driven many of the best from the profession. Skilled labor costs money. If I am hiring skilled labor on one side of the street, with an inhouse system of paying C&R, and someone else is hiring on the other side of the street paying much less, which employer do you believe will attract the highest skilled labor? Of course, there is a strong indication of which employer has the highest skilled management as well and looking out for safety and soundness for the benefit of the American public.

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? Also, shouldn't we believe that some un-publicized disciplinary activity is going on? I'm not sure to the last question.

In some ways, I think that this is a major warning to management that FNMA has facts that will likely never be lost. And, I think they are telling management to fix it.

And, I think the overall impact is going to have a significant impact on supply, when coupled with all the other trends relative to supply. Demand/supply is still working along with many external forces and powers. I sense some nervousness from AMC's, and I know it is not imaginary.