Crappy Hybrid Inspection

[bnmappraisal]

They do not need a full blown apraisal to see if a high value house is worth more than 500k- but 500k is still a substantial amount of money. If the borrower defaults on 500k they come after the appraisal along with rest of the file. If an investor is buying the paper for 500k they want to know if the appraisal was solid .

(my bold) Then I guess that's why this lender is getting the review done. But that wasn't the OP's question. The OP asked WHY would a lender

IS DUMB ENOUGH TO ALLOW THIS TO BE A HYBRID???

So I stand by my post above

 

[Tim Hicks (Texas)]

What is the appeal of a hybrid appraisal again? I forget.

 

[Andee]

I have read recently there is a real problem retaining people to complete the On-Site inspections foor the Hybrid type assignments. I signed up for E-mail list of companies trying to hire 'Home Inspectors'. They are not looking for ACTUAL Licensed Home Inspectors(to expensive).

It's funny that you bring that up because my son came to me one day talking about something like this and asking about it. I asked him what the job really was but he wasn't 100% sure, so I looked into it. I told him that if he decides to move forward with it, he needs to learn to do the process right and he could go out on some appraisals with me to learn. He's smart and would pick up on it quickly, has even considered being an appraiser, then you mention schooling, classes, and writing reports, that's when he tunes out and decides it not for him.

 

[Overimprovement]

If anyone who does not like hybrids or thinks they should be greatly restricted in their use (count me in that group) gets the opportunity to review one--by all means be very detailed, diligent and provide the client a good reason to never order one again. We all know lenders want the cheapest and quickest way to get loans into the hands of the GSEs. If appraisals were completely optional starting tomorrow, how many would lenders order for loans going secondary market? Sometimes I wonder how many they would order if they were keeping the paper...

We unfortunately are in a position to prove our value for full assignments. So...if you see a crappy hybrid or desktop in a review, by all means flout your feathers and make em think next time--but be warned, you best be able to fully back up your statements in YOUR report.

I think only time and bad loans will fully reveal the load of dung that hybrids/desktops are for purchases and large refinances. Yes, the 35% LTV home can probably do without a 1004, but we also know these are being done up to 90% LTV. From an institution that already had to be bailed out once. SMH.

 

[Overimprovement]

What is the appeal of a hybrid appraisal again? I forget.

It is nothing more but grooming to allow the eventual acceptance of NO appraiser involvement. IMHO anyway. They do NOT save time, they do NOT save money and you can argue til you are blue in the face but I will NEVER believe that are as accurate in opining market value as a full appraiser-inspected interior 1004.

 

[George Hatch]

I think the issues with the inspection, all readily apparent to an appraiser (or reviewer) working at their desktop, is fair game in an appraisal review where an appraiser is relying on a source of information which obviously has problems.

We employ the use of assumptions to cover the issues we believe to be true but can't confirm. But the use of assumptions isn't an excuse for reliance on info that we CAN SEE is inaccurate. I realize the following clip is a reference to Extraordinary assumptions, but the caveat relating to "have a reasonable basis" applies equally to all the assumptions we use.




You can't use an assumption to scope your way past squaring a data source that you can see has a problem. The same applies to the use of all our data sources. If you know that info in an MLS listing or public records entry is inaccurate then you can't hide behind the assumptions it's accurate just because it's expedient to do so.


THIS is something we can't do:

Public records says this building is 5000sf so even though I measured and saw it's only 2500sf I'm going to assume the public records is accurate and base my appraisal on that GBA. ​

 

[George Hatch]

I would go so far as to suggest that if the inspections from Fly-By-Night-Inspectors are known to be unreliable that the appraiser is getting into a situation were they would be unable to claim they had a reasonable basis to believe the accuracy of the facts asserted in those inspections.

The appraiser isn't responsible for the accuracy of those inspection reports (obviously), but they ARE responsible for the choices they make as to which inspections they believe to be accurate vs which they don't. "I had reason to believe this inspection report was accurate", so I used it; vs "I didn't believe the accuracy of that inspection report so that's why I declined to use it".

If the appraisers can't use an inspection company's inspection reports then that renders that company's reports unmarketable for the purposes of use in an appraisal assignment. If appraisers continue to use data they know to be error prone then that's on them. Moreover, those decisions undermines the legitimacy of their complaints about those types of assignments.

 

[Andee]

Side note: @Andee please use the enter key once in a while. It would make your post(s) so much easier to read

OK B, I'm gonna throw all your info into one here,

Sorry, it was like 4:30 this morning and I was trying to finally get to bed, reason for not hitting enter.

As for the loan value, they funded a $1.3Mil, so still a jumbo loan, I would think that a hybrid would not be used for that amount, even in this area where they didn't know what the possible value would be. The homes in this area are all high dollar homes, even the little ones that are sold for land value only to be razed and rebuilt go for over $800K for a lot that is 8,000 sf to 12,000 sf.

The grill...many of the homes in this area have one and there is no shortage to determine an adjustment, it wasn't placed in the grid, just a small note on the first page in the improvements section under "Describe the condition of the property".

The laundry room...I did fail to mention it is on the second floor, so the last thing you want is a room with no protective coating over the drywall to have a water leak, because now it will just cause issues on the first floor if it makes its way down...once again, late night, was tired and just typing.

 

[Andee]

What is the appeal of a hybrid appraisal again? I forget.

I have no clue...I did 1 and only 1 where I inspected it and wrote the report later and will NEVER do them again. I've even had requests to write them based on the inspection and told them I won't do it. I don't want the liability or the headache.

 

[J Grant]

OK B, I'm gonna throw all your info into one here,

Sorry, it was like 4:30 this morning and I was trying to finally get to bed, reason for not hitting enter.

As for the loan value, they funded a $1.3Mil, so still a jumbo loan, I would think that a hybrid would not be used for that amount, even in this area where they didn't know what the possible value would be. The homes in this area are all high dollar homes, even the little ones that are sold for land value only to be razed and rebuilt go for over $800K for a lot that is 8,000 sf to 12,000 sf.

The grill...many of the homes in this area have one and there is no shortage to determine an adjustment, it wasn't placed in the grid, just a small note on the first page in the improvements section under "Describe the condition of the property".

The laundry room...I did fail to mention it is on the second floor, so the last thing you want is a room with no protective coating over the drywall to have a water leak, because now it will just cause issues on the first floor if it makes its way down...once again, late night, was tired and just typing.

Wow I do not get that picky about such minutia of low value items even in my own appraisal. Who cares about a grill or if the laundry room is on the second or first floor or has protective coating on the paint? Delving into a list of dinky items can undermine your own credibility, to the point where by the time you comment on substantial major items they might question your judgement. .