Collateral Valuation Report

[Pittsburgh Pete]

Mark, I'm sure you'll hear from more appraisers after they are able to unload their 8-track manufacturer stock and plow into the current century.

 

[markjp99]

To CAWSAX1:

I realized after my post I didn't directly address your comment about lenders wanting to pay less. Let me tackle that briefly...

Lenders are actually paying more than they normally pay using a CVR. The CVR isn't replacing a 1004. It is replacing a BPO. Lenders pay between $25 and $75 for a BPO. They now have to spend $175 to $195 for a CVR. Why then are they paying more to appraisers for this report? Much more credible data provided by local market experts (appraisers) that have no personal interest in the value of the property. Typically a lender would need to produce more than one BPO to compare against each other to determine the appropriate value. With one CVR they can get the credible information from an appraiser.

 

[jnordquist]

Good morning,

Just so you know I am 35, not a grey beard. Lenders are always looking to cut costs and essentially get something for nothing. Enabling them is not the answer.

Too late, the lenders wanted something cheaper and found the BPO. They got cheaper and we got nothing. If this is something to compete with BPO's I'm for it. Does it not make more sense for appraisers to provide a valuation product to end users versus R.E. Agents? There is a huge market for BPO's we need to take it back, if something like this is the answer, we should support it and not question it. I'm in the decision process with this product, I'm also looking at another product. I'm all for every house in the U.S. needing a 1004 for any loan purpose, but it's not happening nor going to happen. I'm not a grey beard either, 37

Jon N

 

[markjp99]

Thanks Pittsburg Pete!

We get many comments like those in this forum from appraisers that haven't gone through training or fully understand the opportunity. I completely understand their concerns as I would be concerned too. However, those that have taken the time to fully investigate the CVR have found that it is, or could be, a very viable option to add business and income. There is a huge window of opportunity as lenders are now starting to replace BPO's with CVR and source CVR specialists independent of Bradford marketing. We are working to close the top 5 lenders with the first being U.S. Bank...others will follow soon.

 

[markjp99]

To jnordquist:

Good feedback Jon...thank you! You have a clear grasp of the purpose of CVR...competing against BPO's...putting valuation in the hands of those that should be valuating...appraisers. By the way...it's been estimated that there are approximately 12-15 million BPO's done every year...and this number is growing. This is a huge potential for additional income.

 

[Muchacho]

Mark,

Who is using the CVR's? I called US Bank and talked to 3 different people who had never heard of it. It was well publicized last June that US Bank would use it but it doesn't sound like they are. If you can refute that please include how many orders you have processed in the last several months and what clients are buying it.

I don't mind the $25 per order (a little steep) but the $500 for training + losing out on two days of work is a lot to ask when I don't know if anyone will buy the product.

 

[markjp99]

Hello Muchacho!

Thank you for your post and I'd be happy to answer your questions. I can understand your concern at getting a "we don't know what you're talking about" response from the local U.S. Bank locations. I would be very surprised if any appraiser has received a response from a local U.S. Bank branch that they will begin using CVR or are using CVR.

U.S. Bank has been going through an internal process assessment since their agreement with Forsythe and Valocity to issue CVRs. As the 5th largest lender in the U.S. you can imagine their internal processes are quite substantial and open to a variety of challenges as change is initiated. There have been a few projected release dates for CVRs that have come and gone as a result of refining the ordering and review processes associated with this new report format. However, we are being told that U.S. Bank is now in a position to begin issuing orders and the order flow should start in March, 2011.

Realistically, I would expect the order flow to start slowly as U.S. Bank, given their size, has a lot of visibility to the success of this product and liability. They want to make sure, as we do, that they can effectively and efficiently issue CVR valuations to CVR certified appraisers, get them back in a timely manner, have their review process established appropriately, and consume the types of reporting that they expect, and that you expect to deliver as an appraiser. This also goes for Forsythe and Valocity, U.S. Bank's AMCs. They also need to make sure that they can review efficiently CVR work, issue the work to CVR specialists, receive the work from U.S. Bank etc. etc.

U.S. Bank is very aware that they are the first large entity that will be issuing significant volume of CVRs into the marketplace. We greatly appreciate their due diligence in making sure that the issuing of these orders are done correctly from the beginning. Forsythe/Valocity as one of the largest AMCs in the U.S. was the first and largest AMC to take on CVR and we also appreciate their commitment to us and to our certified appraiser base of specialists.

U.S. Bank is not the only major contract you will see in 2011 as there are others that have either internally or publically announced their willingness to provide CVRs. We tackled the top 5 lenders in the U.S. first due to volume potential. However, starting January 3rd we are tackling the top lenders by state outside of the top 5 to generate CVR orders. This is a very good time to be on board with the program!

I would confirm with you again that asking your local U.S. Bank branches about CVR will most likely bring blank stares. We are dealing with U.S. Bank corporate and Forsythe/Valocity. When they have finalized their processes they will most likely release a very well communicated plan with policy to their branch locations with detailed instructions on issuing and receiving CVRs.

Please feel free to contact me if you have any further questions and thank you for your post.

Mark Patenaude
Director of Sales
Bradford Technologies, Inc.
AppraisalWorld, Inc.
(800)622-8727 ext. 214
markp@bradfordsoftware.com

 

[DTB]

Do your math folks. All the millions of BPOs will not magically disappear for a product costing 3 times as much. Some BPOs will disappear, but run the numbers divided by the number of appraisers listed on the ASC website. You will supposedly net $150 apiece. Not big money in my book.

IF US Bank wanted to use this, they would be able to make it happen-Like that!!

I seem to recall a similar product a few years ago that was going to take residential appraising by storm. They were really close to getting a city or two online with a "major" lender, really no really they were!

4 years later we now have this. Maybe there is a demand for it now, but it's not the appraising I signed up for nor is the $$$ there to keep me interested.

Do your math folks.

 

[rijman]

I want to start of by saying I am all for USPAP compliant short appraisal forms if the hourly rate is good and I have investigated the CVR including several conversations with the Bradford sales staff. The problem I have, which is why I haven't proceeded with the training, is I'm not getting the information I was hoping for. Bradford is putting out the message that CVR's can be done in 30 minutes, what about quality? I'm not interested in how quickly a small percentage of appraisers can crank out a crappy report, I want to know it's a quality product, but that's not the message or selling feature. One appraiser I talked to who has done some CVR's says he takes one hour for a standard property and more for tougher properties. Having done Desktop reports for apx 15 years now I know that researching, analyzing and reconciling data to a value could possibly be done in a 1/2 hour but the quality of the report and value is much better when the same appraiser puts 1-2 hours into it.

Another issue is the fees. If you charge $175 and pay Bradford $25 you get $150. So for an hour to an hour and a half appraisal you're billing $100+/hour, which is great. But, I believe most CVR's will be sold through large appraisal companies and AMC's, so fee appraisers will be doing CVR's on a split fee. Selling direct to US Bank? It won't happen, their orders will go through large companies and appraisers will do them on a split fee. I also think the fees will go down in time, look at reconciliations which pay appraisers $25 for a similar amount of work. If fees go down and most CVR's are done on a fee split then the $100/hr product is out the window and appraisers will be lucky to make $50/hr.

Who stands to benefit from the CVR's the most? Bradford does, which is why they are pushing them so hard. They say you could do CVR's in a half hour and make $300/hr, but the vast majority won't make anywhere near that on a split fee if they are conscientious and take their time to do a good job. They are selling the appraisers on the best case scenario because they don't care if the appraiser gets squeezed, they just want to sell tons of CVR's to collect their $25 per report.

I want to reitterate I am all for short reports and I hope residential reports evolve into something similar to a CVR. I also don't mind companies making a buck in the appraisal industry although it is common in our industry to loathe any company trying to make money off appraisers work. I just have a problem with Bradford selling the sizzle and not being upfront with the fact that most CVR's will go through AMC's, every CVR trained appraiser will have to compete with AMC's and nationwide appraisal companies to sell the CVR's and most appraisers won't be able to complete a quality CVR in 30 minutes. Why not be honest with appraisers?

One last comment, In the end the appraiser pulls the data, analyzes it and reconcilies it and when doing shorter reports such as a CVR I believe the appraiser should have more experience, not less, to complete an accurate report. No amount of regression analysis training can make up for a lack of appraiser training.

 

[Lloyd Bonafide]

There have been a few projected release dates for CVRs that have come and gone as a result of refining the ordering and review processes associated with this new report format. However, we are being told that U.S. Bank is now in a position to begin issuing orders and the order flow should start in March, 2011.

This sounds so much like Zaio from 3 or 4 years ago that I can't believe it. Continual announcements of all this work that will be available, and about all these lenders that may be using it, but it never happens.

Obviously the technology is there it produce a regression-based product that looks impressive. A lot of people can do that. But does anyone care whether or not the value produced by this product will be at all close to actual market value?

30 minutes of work to produce a report that I'll put my E&O on the line for? I don't think so.

If a lender is going to use this product to put a value on their REO inventory, I don't think they will be happy with a value that is pretty close 80% of the time. Why would a lender pay $175 for a CVR report when they can get a 2055 done for slightly more, that includes an actual drive-by inspection of the property and the comps? It doesn't make economic sense.