Collateral Underwriter "suggested Comparables"

[Meandering]

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.

Fannie is saying only 20 you can read it from the link I posted above.

Tim does know what he is talking about. Okay, I disagree with him sometimes, but I do know that he knows what he is talking about 99.9% of the time.\

Murray's issue sounds like an AMC that does not know what it's doing and is violating appraiser independence, while trying to pass it off as CU.

Call Fannie and report them.

 

[Meandering]

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.

Fannie is saying only 20 you can read it from the link I posted above.

Tim does know what he is talking about. Okay, I disagree with him sometimes, but I do know that he knows what he is talking about 99.9% of the time.\

Murray's issue sounds like an AMC that does not know what it's doing and is violating appraiser independence, while trying to pass it off as CU.

Call Fannie and report them.

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

Fannie says the lender must vet the comps prior to passing the comps to the appraiser.

.

 

[timd354]

Now that's interesting. You could be right. There is no attribution to the list of sales.

Whet's even more distressing, then, is that the risk rating was based on the following:

One lot size adjustment materially different from peer and model adjustments
Net adjustments materially different from model adjustments
Comparables different from model-selected comparables
An age adjustment in the wrong direction

This constitutes a maximum risk rating???

I used to work at one of the GSE's when the UAD was created and still have lots of contacts at both Fannie and Freddie and I know with 100% certainty that I am correct that CU did not provide 35 potential comparable sales, because the CU tool simply will never provide more than 20 sales.

Additionally, the CU Risk score appears to be misunderstood by many. It is not an appraisal quality score. It is a score that is utilized to identify appraisals and properties with a higher risk for collateral related issues, including potential valuation and property eligibility issues. Just because the CU score is a high risk score of 4 or 5, that does not mean that the appraisal is deficient and just because the CU score is low risk (1 or 2) that does not mean the appraisal is acceptable. The CU score is not meant to be used to decide which appraisals are acceptable and which are not. Rather , it is supposed to be utilized by lenders to identify which appraisals require additional due diligence because they represent a higher risk of appraisal/collateral issues. Fannie Mae has communicated this over and over to people in the mortgage and appraisal industries, but a a significant number of people in mortgage and appraisal industries are are pretty obtuse and/or are simply too lazy to have taken the time to educate themselves on CU despite an easily accessible Fannie Mae CU web page which has a ton of information on CU, including FAQ's, and E-learning courses.

 

[Mike Kennedy]

Take the time to slowly read through Fannie's Lenders Letter Marion posted above.

 

[timd354]

Fannie is saying only 20 you can read it from the link I posted above.

Tim does know what he is talking about. Okay, I disagree with him sometimes, but I do know that he knows what he is talking about 99.9% of the time.\

Murray's issue sounds like an AMC that does not know what it's doing and is violating appraiser independence, while trying to pass it off as CU.

Call Fannie and report them.


Fannie says the lender must vet the comps prior to passing the comps to the appraiser.

.

It is not some big secret that CU only returns 20 potential comps. This information is readily available on Fannie's CU web site and would be known by anyone who has taken the available CU web based courses that are offered free of charge on the web site.

It never ceases to amaze me that every time that the GSEs make a significant change that greatly affects appraisers, many appraisers are obviously too lazy to educate themselves regarding the changes. I guess it is just easier for many to ***** and moan about the changes and how appraisers are somehow going to be screwed by the changes and how the appraisal profession is now going collapse or so-called "good" appraisers are going to be driven out of the profession or some such nonsense. The same thing happened when the UAD was implemented, yet somehow most appraisers survived.

 

[timd354]

Fannie says:

The lender must not make demands or provide instructions to the appraiser based solely on automated feedback. Also the CU license terms prohibit using it "in a manner that interferes with the independent judgment of an appraiser." Fannie Mae expects the lender to use human due diligence in combination with the CU feedback, and will actively follow up with lenders who are reported to be asking appraisers to change their reports based on CU feedback without any further due diligence.

 Fannie Mae does not instruct or suggest to lenders that they ask the appraiser to address all or any of the 20 comparables that are provided by CU for most appraisals. It is also not Fannie Mae’s expectation that appraisals should contain only CU’s top-ranked comparable sales. In the majority of cases, there may be no material difference between comparable sales utilized by the appraiser and those identified by CU. Before asking the appraiser to consider any alternative sales, it is imperative that the lender analyze the relevance of the sale and determine if the use of such sale would result in any material change to the appraisal report. If the lender determines that there would be no material change, then they should not ask the appraiser to make revisions. Fannie Mae expects CU to enable lenders to accept appraisals "as is" with greater confidence.
https://www.fanniemae.com/content/announcement/ll1502.pdf

Ask them for their due diligence on how those sales are comparable and in line with Lender Letter LL-2015-02

Thanks Tim.

Appraisers would be wise to read the Lender Letter linked above. Much of what is included in the letter has been stated by Fannie before in other documents, but this letter consolidates some of of Fannie's most relevant statements regarding some of the concerns that appraisers have regarding CU and can be referenced in responses to lenders/AMC's who are making unreasonable demands on appraisers based on CU findings.

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.

 

[timd354]

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.

See post 16

 

[djd09]

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.

 

[Meandering]

It never ceases to amaze me that every time that the GSEs make a significant change that greatly affects appraisers, many appraisers are obviously too lazy to educate themselves regarding the changes. I guess it is just easier for many to ***** and moan about the changes and how appraisers are somehow going to be screwed by the changes and how the appraisal profession is now going collapse or so-called "good" appraisers are going to be driven out of the profession or some such nonsense. The same thing happened when the UAD was implemented, yet somehow most appraisers survived.

Tim it's just appraiser PTSD.

We're all just shell shocked for the past 15-20 years or so. From no oversight, to over regulation, and stupid AMCs. It has all taken it's toll on the collective minds. And we're just special people. Not like anyone would "go appraiser" on a client. Okay, there was one guy on a subway train that told the Andy he hated him and might do something. But face it, that is not the typical bent of appraisers.

.

 

[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.