Crappy Hybrid Inspection

[shrubberyvaluation]

Many, many reasons come to mind regarding this, one being maybe the borrower is only trying to borrower say $500,000 - you don't need a full blown 1004 to tell me the property is worth more than $500,000

Then they should not order an appraisal asking for market value.

 

[shrubberyvaluation]

AGREE! The Problem is many residential appraisers as a group are poor business people. We are exactly where the AMC's and Lenders want us. Sadly many have no idea of their true value.

Who is being reviewed, the appraiser or the property "inspector"

 

[J Grant]

Then they should not order an appraisal asking for market value.

That this appraisal is getting reviewed should put appraisers on notice - if they accept a desktop hybrid on the idea that it is "only" an equity loan for a 30 k pool, or "only " 500k loan on a 3 million property, the appraiser is still on the hook for the value or loss .

WRT equity lines of credit , or other loans for "smaller " amounts, these can be like second position liens on a house, and can end up in collection or sold to investors for cheap who then chase the owner and appraiser to recoup a loss. The origination lender usually gets the loss satisfied on default or short sale so is less likely to chase the appraiser-

 

[shrubberyvaluation]

That this appraisal is getting reviewed should put appraisers on notice - if they accept a desktop hybrid on the idea that it is "only" an equity loan for a 30 k pool, or "only " 500k loan on a 3 million property, the appraiser is still on the hook for the value or loss .

WRT equity lines of credit , which can be for "smaller " amounts, these are like second mortgage liens on a house. These kinds of liens are often sold to investors who contract them out for collection. If they do not get paid out of the short sale or REO, they pursue the owner and appraiser, and can go after people harder than the origination loan lender does, ( the origination lender usually gets the loss satisfied on sale thus far less likely to go after the appraiser for the $ unlike a second lien who will go to the ends of the earth to recoup a loss.

I've asked multiple times what would happen if the hybrid inspector made mistakes and assumed they would just go after the appraiser. You are correct.

 

[J Grant]

I've asked multiple times what would happen if the hybrid inspector made mistakes and assumed they would just go after the appraiser. You are correct.

The third party hybrid inspector does not get chased if they make mistakes, only the appraiser. The appraiser still did the appraisal and made the judgement call to rely on the inspection or in case of a desktop, relied on other data.

Though if a client asks an appraiser to do the inspection part, idk if the inspecting appraiser can be held liable for their mistakes. Need to consult their E and O policies. If the client makes the appraiser sign they did the inspection acting as an appraiser, that might make them liable.

Speaking of E and O, both appraisers and E and O companies are virgins in the newer use of hybrids and desktops for origination loans/purchases. If the E and O companies see an uptick in claims for these products, they might decline to cover them, or charge more to an appraiser doing these products. Only time will tell.

 

[ramrcdk]

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.

WHY was this report ...."reviewed" by you at all ?? Wasn't insufficient-conflicting information- FOUND on the order assignment to "Review IT" initially? Aren't we suppose to inform the Lender UPFRONT that conflicting data on the Hybrid Appraisal Report (to be reviewed) is "CRAP"?
Then the Lender-Client is suppose to escalate the Order to a FULL Traditional (ANSI) OR it's "back on the client" to decide, right?

****ALL of this for FREE unless YOU charge for your time during ...Order Creation. What a mess you have found yourself IN.

 

[djd09]

All you can do is write up what you found in your review and send it to your Client. Of course, depending on your state, you can send it to the appraisal board with a complaint however, a lot of boards will then also review your review and pick it apart for every error that they can find.

why write it up just send it to the state

As for the ANSI issue, ANSI is only for appraisals of single family dwellings with full interior/exterior inspections. I don't know if that means the appraiser has to inspect personally... or if it applies to 3rd party inspections that the appraisal is based on. If I had to guess, I'd guess that there is a loophole for hybrids.

so much for repeatable and consistent results ansi is junk anyways

 

[Carnivore]

No buyer is forced to take a waiver. He/she could tell the loan officer they want an appraisal and the lender would order an appraisal ( and charge the buyer for it of course)

Sure, I understand that. I don't think he knew that, and I was not going to tell him about that option. It simply was not the reason he called. Plus, the problem with that is the intended User. He was running out of the due diligence period. He had to get off the pot or you know what.

 

[J Grant]

As a reviewer, we should not speculate on what we think an appraiser should have done -not make an assumption comment like " The appraiser should have given the assignment back"

We can comment on what is available from data and sources and apply it to what we see in the OA. For example, "The appraisal relied on data about sf and construction type which look to be not reliable because.... ( state what was found from other data sources/research and why it is more reliable. )

 

[Sadie]

I had not completely gone through the entire report before my post, just the section about the improvements comparing them to the pictures and information provided by the inspection.

I'm looking at comments made by the appraiser which in one area it states

View attachment 65107

then later in the report is says this

View attachment 65108

I don't even know what to say at this point about this report except they need a new one.

Its not the "level of inspection" that is the problem, it is the actual inspection, 2 different things.