Fannie and Freddie - UMDP / UAD Forms Redesign Initiative - They ARE interested in appraiser input. Surprise!

[RCA]

I am forever reminded of the parable:

"A group of blind men heard that a strange animal, called an elephant, had been brought to the town, but none of them were aware of its shape and form. Out of curiosity, they said: "We must inspect and know it by touch, of which we are capable". So, they sought it out, and when they found it they groped about it. The first person, whose hand landed on the trunk, said, "This being is like a thick snake". For another one whose hand reached its ear, it seemed like a kind of fan. As for another person, whose hand was upon its leg, said, the elephant is a pillar like a tree-trunk. The blind man who placed his hand upon its side said the elephant, "is a wall". Another who felt its tail, described it as a rope. The last felt its tusk, stating the elephant is that which is hard, smooth and like a spear."

This is the FNMA, TAF, the AI and so on. They can't tell a good appraiser from a bad. All they know is whether and to what extent an appraiser is doing things according to their protocols (well as flimsy as they are).

So, for someone out of this camp to talk about appraisers "with different levels of ability or competence" is nonsensical - since they don't know the difference to begin with. Seriously, very seriously, they do no know.

- Now you would think they would have the income approach locked down by now. It is straightforwrad. LOL. No, even the best will decry the DCF as something in practice that becomes nearly meaningless and that the only approach that make sense is Direct Capitalization. I mean - I hear this from Certified General/MAIs in the business for decades. Direct Capitalization? Are you serious? Nobody to this day in the profession knows anything for sure. No one has nailed down any firm principles .... And the Cost Approach, that is another story for sure.

 

[Fernando]

Fannie and USPAP can do all the changes they want for want-to-be appraisers to follow. As long as they follow and don't deviate, it's considered a legitimate appraisal.
Whatever changes, the Fernando Way in appraising will derived same appraised value.

 

[Non Sequitur]

I’m all for using technology and setting standards for quality, descriptions, etc. But the nature of what we do often doesn’t fit into checkboxes. It reminds me of the old saying: “All models are wrong, but some are useful.” The experience to know what’s useful is what makes an appraiser a real appraiser.

 

[RCA]

I’m all for using technology and setting standards for quality, descriptions, etc. But the nature of what we do often doesn’t fit into checkboxes. It reminds me of the old saying: “All models are wrong, but some are useful.” The experience to know what’s useful is what makes an appraiser a real appraiser.

Well, we are talking a different language.

When you say "model" you are thinking of some static model that appraisers are given that is supposed to work across a wide category of problems (i.e. appraisals of certain property types.

When I say "model" I am talking about a model that a specific appraiser creates for a specific property type in a specific neighborhood for some range of dates. If he plugs in property data to the model, he gets an estimate of sale price based on the inputs, plus a residual difference with the actual sale price if any.

When you say "checkboxes" you are talking about a few static checkboxes someone gives appraisers --- for the above purpose.

When I talk checkboxes - I am talking about a sequence of steps the appraiser creates for himself based on a type of scope of work that he commonly works with, and available options for each step. In essense the steps and checkboxes define a kind workflow and potentially the results of the associated tasks.

My method requires analysis for each property, a lot of knowledge, experience and a lot more intelligence and work than the typical appraiser has at his disposal. So unfortunate.

Imagine doing a DCF where you have to factor in all of the major significant risks that have a significant chance of occuring over the next 15 years:

1. Earthquake
2. Pandemic
3. War
4. Forest fires
5. Recession
6. Inflation
7. Stagflation
8. ...

Then we request that you produce a range of values under various scenarios with probability curves, along with an associated analysis and conclusion of Mortgage Lending Value.

How many MAIs can do something like that?

Caveat: If a company can get insurance to cover any of the above catastrophic/disruptive events, then they can most likely be removed from the scope of work and replaced with the cost of the insurance, with the understanding there is then an additional risk that the insurance rates can increase with time, - depending on other events.

 

[djd09]

Even With Timelier Data, Home Prices Still Up Nearly 20%​

https://www.mortgagenewsdaily.com/news/07142022-FNMA-fannie-home-prices-price-appreciation-pr

it must be the AMC's pressuring the appraiser to "hit that number" or be gone

 

[Surf Cat]

Based on looking at the "samples" of the dynamic sales grid. It appears that Fannie and Freddie are sending a subliminal message to make the value.

The subject which is in Sunnyside is pending for $489k. Comparables 1 and 2 which are also in Sunnyside bracket the subject's site area, GLA, are identical in construction, identical in quality and condition ratings. Comps 1 & 2 gross sales prices are $460k & $450k respectively.

Comp 3, which is outside the subject's market area in "Hilldale" is flat in topography
(not rolling like the subject and comps 1 and 2) and is the only sale that supports the subject's pending price @ $520k.

All the comps suck for the same reason in that they are all 4 bedrooms (across the board adjustments). The subject has 5 bedrooms.

That Units section is confusing as the adjustments don't indicate whether they're going up and down. Additionally, it appears as if there's double dipping (GLA and bedrooms).

No adjusted sales price column with net and gross adjustment percentages.... I guess sequence of adjustments is out the window?

Maybe I've got to read the entire proposal...I couldn't get past the grid.

 

[djd09]

‘Escalate Penalties’ Against Wells Fargo: Maxine Waters​

House Financial Services Committee Chair Maxine Waters, D-Calif., says that the hundreds of millions of dollars Wells Fargo agreed to pay over its “myriad” offences have been insufficient to deter it from wrongdoing.

sow means you give the intended users just what they need or want or you could be cast to the do not use list, accordingly independent thought is not allowed, and never mind the carnage.

 

[Non Sequitur]

‘Escalate Penalties’ Against Wells Fargo: Maxine Waters​

House Financial Services Committee Chair Maxine Waters, D-Calif., says that the hundreds of millions of dollars Wells Fargo agreed to pay over its “myriad” offences have been insufficient to deter it from wrongdoing.

sow means you give the intended users just what they need or want or you could be cast to the do not use list, accordingly independent thought is not allowed, and never mind the carnage.

I’m not a fan of her politics but she’s correct about Wells. Here’s an oldie but goodie, and honestly I’m discouraged that captive AMCs and the behavior described is still common:

“ValueIT eventually changed its name to Rels Valuation, a Defendant in this case. Plaintiffs claim that "Rels is a `captive' puppet of Wells Fargo, either by virtue of partial ownership by a common parent or economic power as its largest client." Id. ¶ 39.”

“In June, 2007, Sound Appraisal received a request from Wells Fargo through Rels to appraise a home in Enumclaw, Washington. After Sound Appraisal's sole proprietor, Don Pearsall, submitted the completed appraisal, Rels contacted Pearsall and "asked that he alter the Uniform Residential Appraisal Report he submitted."Id. ¶ 44. Pearsall refused to alter the report. Rels' area manager, Randall Pierzina, told Pearsall that Pearsall "took USPAP too seriously" and that Pearsall was going to "kill the deal." Id. ¶ 55.”

“When Pearsall inquired about the sudden decline in work, Pierzino stated that Pearsall had been "suspended and was no longer an approved appraiser for Rels Valuation." Id. ¶ 47.”

“After providing these appraisals to Rels, a "Collateral Compliance Reviewer" for Rels emailed Savage and included information "to support an increased value" of the appraised property. Id. ¶ 52. Savage then reviewed its appraisal and determined that no such increased valuation was appropriate. The next month, Savage received a letter from Rels, which stated that he had been removed from its approved panel of appraisers. The letter did not provide an explanation for the removal.”

Sound Appraisal v. Wells Fargo Bank, N.A., No. C 09-01630 CW | Casetext Search + Citator

Read Sound Appraisal v. Wells Fargo Bank, N.A., No. C 09-01630 CW, see flags on bad law, and search Casetext’s comprehensive legal database

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[RCA]

I still haven't heard anything back from Fannie Mae on my request for information related to the new UAD.

 

[J Grant]

Based on looking at the "samples" of the dynamic sales grid. It appears that Fannie and Freddie are sending a subliminal message to make the value.

The subject which is in Sunnyside is pending for $489k. Comparables 1 and 2 which are also in Sunnyside bracket the subject's site area, GLA, are identical in construction, identical in quality and condition ratings. Comps 1 & 2 gross sales prices are $460k & $450k respectively.

Comp 3, which is outside the subject's market area in "Hilldale" is flat in topography
(not rolling like the subject and comps 1 and 2) and is the only sale that supports the subject's pending price @ $520k.

All the comps suck for the same reason in that they are all 4 bedrooms (across the board adjustments). The subject has 5 bedrooms.

That Units section is confusing as the adjustments don't indicate whether they're going up and down. Additionally, it appears as if there's double dipping (GLA and bedrooms).

No adjusted sales price column with net and gross adjustment percentages.... I guess sequence of adjustments is out the window?

Maybe I've got to read the entire proposal...I couldn't get past the grid.

I fail to see how anything you wrote above indicates Fannie and Freddie are sending a subliminal message to make value. Seems like their sample page is a sample page for demo purposes of how it would look filled out and not to taken literally wrt any value derived.