Considering filing complaint for lack of market conditions adjustment on stale comps

[CGinMN]

First, none of those numbers are correct. The gap was greater than $70K and the price reduction from the seller was far less than $35K.

Sorry, these were bad assumptions about the specific numbers. Prior posts from others had me assuming information I should have not.

The point remains. You secured a loan based on your lender’s collateral risk assessment. After you agreed to their terms you’re seeking to punish the two appraisers that you disagreed with. If the appraisal came in at your contract price with an MC adjustment that you found lacks credibility, IMO you aren’t here.

It's evident that you have your mind made up about my situation, who I am as a person, and my motivations behind everything that I have done.

State investigations are a big deal. Some states have shown a willingness to abuse their authority. If I made bad assumptions about your motivations, I apologize. Seems to me consumer protection is an easy cop out.

There are some top notch appraisers here, but nobody is bulletproof. I could tear into any one of their reports and find a flaw, maybe some inexplicable language or residue from a prior report, a poorly supported adjustment and/or one I could contradict, etc.... and so too they with one of mine.

Because of this I maintain the threshold for involving state regulators requires an attempt to mislead and/or a pattern of negligence. But a single adjustment? And honestly, if your not an intended user you don’t even basis for complaint IMO.

 

[Zoe]

Sorry, these were bad assumptions about the specific numbers. Prior posts from others had me assuming information I should have not.

The point remains. You secured a loan based on your lender’s collateral risk assessment. After you agreed to their terms you’re seeking to punish the two appraisers that you disagreed with. If the appraisal came in at your contract price with an MC adjustment that you found lacks credibility, IMO you aren’t here.


State investigations are a big deal. Some states have shown a willingness to abuse their authority. If I made bad assumptions about your motivations, I apologize. Seems to me consumer protection is an easy cop out.

There are some top notch appraisers here, but nobody is bulletproof. I could tear into any one of their reports and find a flaw, maybe some inexplicable language or residue from a prior report, a poorly supported adjustment and/or one I could contradict, etc.... and so too they with one of mine.

Because of this I maintain the threshold for involving state regulators requires an attempt to mislead and/or a pattern of negligence. But a single adjustment? And honestly, if your not an intended user you don’t even basis for complaint IMO.

Yeah, it is kind of a mute point. If they were intended user and the use would have been to make an offer on a house, it would be different. I am not touching the market conditions accusation because I don't have a clue. This person seems sharp enough to present better comparables to lender and request an ROV. Maybe they are not.

 

[Zoe]

That is where VA heads off circumstances similar to this with the tidewater. Everybody and their mother gets in on front end. The ROV or review or second appraisal is answer on conventional. This deal is done. If owner wants a new value, hire another appraiser with a new intended use and user. They don't even have to request Market value as the definition of value.

 

[glenn walker]

If I was the OP and expecting a newborn, and my goal was to get into a house, that was accomplished, Now move forward with your life because this is the least of your worries. Raising a kid today is extremely expensive, and God hope it has no issues. My neighbors had twins 3 years ago, one is healthy the other has numerous health issues, they have aged by 10 years in 3 years and frankly between the house, kids, doctors, there life no sucks. And food and other costs are skyrocketing so lots of money to raise kids, We just blew through $4.00 gas here and my grocery costs are going up every week. I should have invested in pet food its really gone up.

 

[NC Appraising]

18 pages of comments in just over a day? You all (Ya'll) must be slow. lol.

Between "Russ" & "NC Appraising" my office is falling over from laughing.

Thanks!!! Glad to help. I often come on here for a laugh also. Only so much you tube one can watch.

I am busy as crap, turning down 5 a day. lol. I should be going for a walk instead of coming here.

I am a drive-by, hit and run poster. Too many red bulls...Sometimes the next day I wake up and say to myself...did I post that? LOL.

PS, I am that crazy in real life, ask my wife. It is a wild ride.

 

[NC Appraising]

I was with you until that last sentence . Too many just want to fill in the 1004Mc grid and stop. As you point out, if the grid has insufficient data for trend analysis, the job (and the form) is not yet complete. The grid should be supplemented with additional data, as you point out. So, if done correctly, the 1004MC is neither wrong nor useless. It is only wrong and/ or useless when not fully completed.

A conclusion of STABLE should be no less supported than a conclusion of increasing or decreasing. Stable is not an “acceptable default”. It requires support. If there is not enough data to mark increasing, then how is there enough data to mark stable?

I can never make you happy. lol.



The main issue is that (85%) of the time, the lender goes straight to the grid of the 1004MC and sees a stable or declining market. So I mark increasing on page one, but the data on the 1004MC grid shows differently. You know more than me on this, so I guess the computer checking program red flags it and the UW is scratching their head? I understand why appraisers just marks stable (it's not right), saves headaches and explanations. Just like the predominate statement...can we retire this one? Not every home in the PUD with a price range from 200k-400k can be the predominate. LOL

That is why I am not a fan of the 1004MC. It gives some of the appraisers a easy way out, and for appraisers like me, it forces me to include data and results that are not accurate, contradictory and unreliable (1004MC says one thing and my graphs/data shows something different). I would just rather include accurate data...

But then, I realize why the 1004MC form was made....the software companies made a glitch in the URAR that only allows for the appraiser to check stable, in balance and matches the predominate with the appraised value. They will not fix it and I have been complaining for years now?

 

[glenn walker]

I think intentionally checking the wrong box on page one that is different than what the appraisers analysis and data presents is not only misleading but also a USPAP violation . Proper methodology is to produce a credible report. The appraiser is to check the box on Page One that is closest to what his/her data and analysis best represents and then attach the addenda supporting that trend. Not play silly games with the Client and Intended users because the appraiser thinks reviewers are stupid.

In a review we were not there to nit pick- nuances or even possible differences of opinions. But if I was delivered a report that had been checked as "Increasing" but then the appeasers data and his own 1004-MC showed Stable or decreasing-- initially I would assume he had made a mistake on page one and we would have asked him to re-check the box that best matches his analysis This is also a time waster because the Underwriter also has to complete a tech review, so now you just wasted her time too , because when she discoverers that page one is conflicting with your 1004-MC or analysis She would send it to review for us to find out what the discrepancy was and to get it corrected. If you respnded that you do that intentionally in your reports, I would have recommned you be removed from the fee panel because if you will intentionally mislead about market trend then what else will you do and we were not there to be baby sitters.

Another issue is most borrowers now request and get a copy of the report and they like a tech reviewer mostly only look at what boxes are checked. All in all that particular appraiser has not considered that normally three or four sets of eyes are reading his report. Further confusion happens when the appraiser is making-time adjustments but the trend box he checked does not match his analysis.

Finally from a best practices position it's a real good way to get yourself into trouble:
Example: In 2008 to 2010-We had been doing hundreds of reviews for the Mighty Bigger Bank USA who had discovered one of the easiest first lines of attack was on market trend issues because it was rare for the appraisers trend box and analysis supporting his adjustments. In your case your page one is being done intentionally in conflict with your analysis. Your report would have been reviewed and if that box is conflicting how many other mis-checked boxes has the appraiser been fiddling with. Everything else we found would have been added up and looked at in it's totality. Then to see if it was a legitimate mistake or an-over-site we would have pulled another five or ten of your reports. If the preponderance of those reports had been completed the same way and were conflicting with your market analysis by ( Checking Wrong Box ) then your actions would no longer be assumed to be errors or unintentional omissions, but you had done-this intentionally. The legal department and the attorneys who prepared State Board Complaints may have even used the word "calculated deceit" meaning the appraiser had intentionally and knowingly mislead the client and other intended users. The appraiser has now just stepped into the classic USPAP trap. A State Board Reviewer or investigator or other agencie post closing reviewer would be shaking his/her head mumbling this appraiser may have fooled me once shame on you but fool me five or ten times and shame on me. If the appraiser was actually stupid enough to omit that he did this intentionally, then he just led himself down that Yellow Brick Road into Appraisal Hell.

Just some things to think about because in the next downturn market trend will be one of the first gotchas when the defaults-lender buy-back's and foreclosures start hitting us.. That page one is not a "Fork In The Road" where the appraiser says he went one way when in fact he went another direction. If that box is wrong how many other boxes are wrong ? That Page One is the start of where post closing reviews begins and a wrong box being checked leads me right to your analysis and both must match up.

 

[Sadie]

I think intentionally checking the wrong box on page one that is different than what the appraisers analysis and data presents is not only misleading but also a USPAP violation . Proper methodology is to produce a credible report. The appraiser is to check the box on Page One that is closest to what his/her data and analysis best represents and then attach the addenda supporting that trend. Not play silly games with the Client and Intended users because the appraiser thinks reviewers are stupid.

In a review we were not there to nit pick- nuances or even possible differences of opinions. But if I was delivered a report that had been checked as "Increasing" but then the appeasers data and his own 1004-MC showed Stable or decreasing-- initially I would assume he had made a mistake on page one and we would have asked him to re-check the box that best matches his analysis This is also a time waster because the Underwriter also has to complete a tech review, so now you just wasted her time too , because when she discoverers that page one is conflicting with your 1004-MC or analysis She would send it to review for us to find out what the discrepancy was and to get it corrected. If you respnded that you do that intentionally in your reports, I would have recommned you be removed from the fee panel because if you will intentionally mislead about market trend then what else will you do and we were not there to be baby sitters.

Another issue is most borrowers now request and get a copy of the report and they like a tech reviewer mostly only look at what boxes are checked. All in all that particular appraiser has not considered that normally three or four sets of eyes are reading his report. Further confusion happens when the appraiser is making-time adjustments but the trend box he checked does not match his analysis.

Finally from a best practices position it's a real good way to get yourself into trouble:
Example: In 2008 to 2010-We had been doing hundreds of reviews for the Mighty Bigger Bank USA who had discovered one of the easiest first lines of attack was on market trend issues because it was rare for the appraisers trend box and analysis supporting his adjustments. In your case your page one is being done intentionally in conflict with your analysis. Your report would have been reviewed and if that box is conflicting how many other mis-checked boxes has the appraiser been fiddling with. Everything else we found would have been added up and looked at in it's totality. Then to see if it was a legitimate mistake or an-over-site we would have pulled another five or ten of your reports. If the preponderance of those reports had been completed the same way and were conflicting with your market analysis by ( Checking Wong Box ) that conflicted with your analysis, then your actions would no longer be assumed to be errors or unintentional omissions but you had done-this intentionally. The legal department and the attorneys who prepared State Board Complaints may have even used the word "calculated deceit" meaning the appraiser had intentionally and knowingly mislead the client and other intended users. The appraiser has now just stepped into the classic USPAP trap. A State Board Reviewer or investigator or other agencie post closing reviewer would be shaking his/her head mumbling this appraiser may have fooled me once shame on you but fool me five or ten times and shame on me. If the appraiser was actually stupid enough to omit that he did this intentionally, then he just led himself down that Yellow Brick Road into Appraisal Hell.

Just some things to think about because in the next downturn market trend will be one of the first gotchas when defaults-lender buy-back's and foreclosures start hitting us.. That page one is not a "Fork In The Road" where the appraiser says he went one way when in fact he went another direction. If that box is wrong how many other boxes are wrong ? That Page One is the start of where post closing reviews begin and a wrong box being checked leads me right to your analysis and both must match up.

Per Fannie Mae guidance, the 1004MC and the Neighborhood section of the 1004 contains different data sets. 1004MC is your pool of competing properties while the Neighborhood section is the entire neighborhood, not just competing properties. So you can have a declining market indicated on your 1004MC and an increasing one for your neighborhood in general. Any discrepancies need to be explained in the addendum so the users can understand your reasoning behind adjustments or the lack of adjustments.

 

[Tom D]

glen, i agree. when i did reviews for option 1 they would cross out the appraisers name. after a while i could recognize the same appraiser doing the same thing all the time. it was usually the same group crossing my path. why would a bad appraiser only do it once badly, it's the nature of a bad appraiser. i don't know if anything happened to them, but option 1 is gone.

 

[The Bob]

Honestly I may actually hate the game more at this point. I wasn't aware that positive time adjustments across the board were a red flag for underwriters.

If you're in that situation, how would you approach it? Honest question. My guess would be you'd need to loosen your criteria for comps, so maybe expanding geographically or by product type to find something that the market would view as a close substitute, then finding a recent sale and then adjusting it from there to match the subject.

The problem in lot of areas is a lack of recent sales. I've never seen inventory this low. I'm working on one now with contract dates of 11/20, 9/20 and 6/20. I'm making across the board market adjustments based on two pending sales. I'm also coming in $5000 (+3%) over the highest closed sale, but it's bracketed by the pending's (one of which has since closed).
A lot of appraiser's push back on that. They think the value HAS to be based solely on closed sales. But that ignores how the market really works. We just sold our house and when we priced it we were looking at the current competition, not what sold x months ago.
I think your appraiser just didn't know how to articulate what he was seeing, so he just ignored it.