Data Cancer Due to Waivers

[J Grant]

I would like to know if the consumer is charged the same for a hybrid as they are for a traditional appraisal. If everything is so transparent, why can't the reps for Fannie and Freddie disclose that here ? What is the big secret?

 

[alebrewer]

My experience is that its typically a wash - both WRT speed and cost, although we haven't processed very many. I think the new offering matrix was just released this month. Its definitely more work for the lenders' Appraisal Departments when processing two orders instead of one.

 

[George Hatch]

How much more and what are they saying differently with a PDR report vs when the appraiser inspects, and what percent of time does this happen?

The fake Appraisers can be biased; the so-called "problem" was based on lawsuits where it sounded like the banks settled just to avoid a trial, and the second privately ordered appraisal was too high, not that the original appraisal was "biased." And all Fannie or freddie could produce from their massive data was a tiny margin more of appraisals that did not meet the CS price in some zeip codes. That was the extent of of what was found - basically nothing. So I would like details of what they are finding now and examples - FF can redact names and addresses and post the hybrid comments and the traditional appraisals so we can see them. How else do we know if we can trust their findings?

Perhaps with someone else inspecting, the appraiser is reacting more to photos taken, trying to figure out WTF since he or she was not there and has not personally absorbed the info. I have no idea

What percent of Hybrids meet or exceed SC price vs traditional appraisals? Or a value trend higher in a refinance?

The debate on hybrids and SOW precedes the "appraiser-r-racists" allegation that people are attributing to the use of hybrids. IMO that was a example of dogpiling on top of the original debate, not a primary motivator from the outset. Then or now. I think that appraisers who continue to cite the bias argument as being the primary motivator are gaslighting the point that hybrids have been around for a long time before anyone said anything about refis not going off because appraisers treat black borrowers differently than white borrowers. "Been around for a long time" being the operative phrase that's being ignored.

The popular conclusion around here seems to be that Fannie/Freddie have been lying to appraisers all along about their in-house comparisons. Maybe that conclusion is mostly or completely supported by the facts. I'm just looking at the situation that they're describing.

 

[Non Sequitur]

PDCs are a solution looking for a problem. All of the talk about modernization, better condition ratings, etc. are problems that could be solved with better processes but PDCs are flat out money makers for the AMCs (along with those who are connected in one way or another). The increased use of hybrids will put ever increasing pressure on lenders who manage their own panels because the only thing harder/more expensive than managing a panel of appraisers is managing a panel of appraisers and a panel of PDC runners. That's a win for AMCs and their advocates.

 

[J Grant]

The debate on hybrids and SOW precedes the "appraiser-r-racists" allegation that people are attributing to the use of hybrids. IMO that was a example of dogpiling on top of the original debate, not a primary motivator from the outset. Then or now. I think that appraisers who continue to cite the bias argument as being the primary motivator are gaslighting the point that hybrids have been around for a long time before anyone said anything about refis not going off because appraisers treat black borrowers differently than white borrowers. "Been around for a long time" being the operative phrase that's being ignored.

The popular conclusion around here seems to be that Fannie/Freddie have been lying to appraisers all along about their in-house comparisons. Maybe that conclusion is mostly or completely supported by the facts. I'm just looking at the situation that they're describing.

Since some on the board were able to research the data on the court case bias appraisals, it was bogus about a low value - and the small percent difference in a few zip codes FF found was preposterous, yet they used bias as a reason to send a nonappraiser to the property- is that trustworthy behavior? Their actions favor a shift to AMC's doing the ordering, and yet they ignore the impact on quality or who can afford to remain in the profession due to the AMC fee problem. They ignore what appraisers tell them as feedback on the board. I have not seen any change that supports appraiser independence against value pressure.
.
There is no transparency from their side, it is all on our side - they see all our reports, and yet they do not make available the reports they call out as questionable.,

 

[J Grant]

PDCs are a solution looking for a problem. All of the talk about modernization, better condition ratings, etc. are problems that could be solved with better processes but PDCs are flat out money makers for the AMCs (along with those who are connected in one way or another). The increased use of hybrids will put ever increasing pressure on lenders who manage their own panels because the only thing harder/more expensive than managing a panel of appraisers is managing a panel of appraisers and a panel of PDC runners. That's a win for AMCs and their advocates.

Agree, and I wonder if a hybrid costs as much as a traditional appraiser to the consumer.

 

[alebrewer]

I personally see the separation of the two activities as a natural progression of division of labor. I do think that the two activities potentially represent two different highest and best uses - one being that of property inspection and measurement and the other being that of data analysis. So that, on a theoretical basis, I don't see issue with splitting the activities. The issue, as I see it, is that the GSE's, in their rush to speed up this organic process, have introduced a tremendous amount of instability in the process. The inspectors are NOT trained - regardless of the GSE attempts to convince folks they are. The appraisers were 'forced' into this change of roles, instead of being allowed to adopt organically, and the market isn't prepared/adequately knowledgeable about the new processes. And when natural progressions are sped up unnaturally, end results can be less predictable than they otherwise would have been. One needs only watch Jurassic Park to understand that concept.

 

[Tom D]

Agree, and I wonder if a hybrid costs as much as a traditional appraiser to the consumer.

My direct lender totally hated them. They would switch them to a 1004 every time. They had to go thru an AMC. Said it cost more and took longer to get done.
I do think that a waiver is the preferred no expense appraisal way for me, if i'm a lender.

We won't know until there is enough data to see which way created the higher loses, years away. Sorta like the titanic sailing unsinkable, till it hit an iceberg. Same with foreclosure loses.

 

[J Grant]

I personally see the separation of the two activities as a natural progression of division of labor. I do think that the two activities potentially represent two different highest and best uses - one being that of property inspection and measurement and the other being that of data analysis. So that, on a theoretical basis, I don't see issue with splitting the activities. The issue, as I see it, is that the GSE's, in their rush to speed up this organic process, have introduced a tremendous amount of instability in the process. The inspectors are NOT trained - regardless of the GSE attempts to convince folks they are. The appraisers were 'forced' into this change of roles, instead of being allowed to adopt organically, and the market isn't prepared/adequately knowledgeable about the new processes. And when natural progressions are sped up unnaturally, end results can be less predictable than they otherwise would have been. One needs only watch Jurassic Park to understand that concept.

A division of labor for appraisals? are you kidding - an appraisal for a property worth hundreds of thousands $ is not a happy meal at Mickey D's, one worker flipping fries and the other worker flipping burgers. However, the profiteers would like to divide the labor so they can add an upcharge twice now on an appraisal. Plus, sitting at a desk and not going into the field neuters appraises and makes them invisible and unable to participate in the all-important inspection process on an appraisal they work on. A faceless ghost, churning out volume, a terrific way to protect the public trust.

There is no reason to separate the appraiser from inspecting the subject of their own appraisal expert that it makes using staff appraisers or a panel of inspectors more profitable for an AMC, and of course, it can and will lead to appraises doing the desk part doing far away geo areas they are not familiar with. Reserve it for emergency use, perhaps- it is the integration of field knowledge and the "data" that makes an appraiser a professional with what they bring to the table.

 

[alebrewer]

A division of labor for appraisals? are you kidding - an appraisal for a property worth hundreds of thousands $ is not a happy meal at Mickey D's, one worker flipping fries and the other worker flipping burgers. However, the profiteers would like to divide the labor so they can add an upcharge twice now on an appraisal. Plus, sitting at a desk and not going into the field neuters appraises and makes them invisible and unable to participate in the all-important inspection process on an appraisal they work on. A faceless ghost, churning out volume, a terrific way to protect the public trust.

There is no reason to separate the appraiser from inspecting the subject of their own appraisal expert that it makes using staff appraisers or a panel of inspectors more profitable for an AMC, and of course, it can and will lead to appraises doing the desk part doing far away geo areas they are not familiar with. Reserve it for emergency use, perhaps- it is the integration of field knowledge and the "data" that makes an appraiser a professional with what they bring to the table.

No, I'm not kidding. You just can't help it with the aggressive and condescending tone. That's why folks pick on you so much, J. You don't understand how to engage in a meaningful and thoughtful manner. Nor do you understand basic Economics - hence I will not waste my time responding to this blather other than to say that I'd trust a licensed home inspector for a property inspection 11 days a week over that of an appraiser. Let that sink in and maybe you'll begin to understand the concept of division of labor.