Freddie Mac: Quality & Condition Ratings

[Non Sequitur]

This is what will be left for residential appraisers in the not too distant future, and remember what Lyle Radke thinks: "Addressing property data collections specifically, Radke says that appraisers are well positioned to do property data collections. "Some appraisers really enjoy this aspect of field work and this change allows appraisers to diversify into this. There is a lot of opportunity for appraisers to get involved as property data collectors," says Radke."

Couple that with ""When I was FHFA Director, Fannie and Freddie were very upfront about their view that the appraisal process was just friction to be smoothed out. They compete with each other for originator business, and they want to squeeze friction out of the process. They don't see a lot of value to the appraisal process. Notwithstanding the problems that Zillow found itself in, they have a view that appraisals can be replaced by big data and see themselves as the curators and holders of that data," Calabria argues."

PDC Solicitation from a party who shall remain nameless, mostly because I can't afford a lawyer:

"Take pictures that show the whole property and any extra structures.
● Make sure the photos and video give a clear view of the property's condition and
layout.
● All pictures should be Horizontal.
● Make sure that the pictures should include the ceiling and the floor.
● Turn on lights or open blinds for better photo lighting.
Here is a list of all the spaces that need to be photographed:
1.FULL EXTERIOR
a.Front of home (Front yard, sidewalk, Driveway, and the Roof)
b.Left side of home
c.Right side of home
d.Back of home
e.Garage (Outside and Inside)
2.FULL INTERIOR
a. Living room
b. Hallways
c. Stairways
d. Kitchen
e. Bedrooms.
f. Bathrooms
g. Basement and/or Mechanical Room
3. MISCELLANEOUS
a. Heating and Cooling System (AC and water Heater)
Special Instructions Expectations: * 60+ photos of interior & exterior combined. * 1 exterior video walking around the house and the lot * Photos of streets, roadways, crossroads * 1 interior video walking room by room to give us feel of the layout * Photos/videos of the rooftop, to determine roof condition. No need to go up on roof from sidewalk works * Picture of the front of the house as an album cover * Photos to include electric box, water heaters, HVAC system, any garages, barns, basements, etc. * Please, no talking in the video. Pay 100.00"

Maybe Lyle can survive on $100 orders that take half the day to complete, most professionals can't.

 

[Tom D]

I am big urban, little row homes, appraiser. I could do 10 a day. Most of us can see the end is here already, maybe 2 more yrs left. But after us, it ain't my concern. The person who does our MLS photos does the best photos i have ever seen. There's your inspector.

 

[Non Sequitur]

I am big urban, little row homes, appraiser. I could do 10 a day. Most of can see the end is here already, maybe 2 more yrs left. But after us, it ain't my concern. The person who does our MLS photos does the best photos i have ever seen. There's your inspector.

That's always been the big lie about these things, "I could."

First, good luck having 10 a day assigned to you, then another 10 for the next day, then another batch. Second, you still need to create files, coordinate with occupants (and remember these things usually have a 24-48 hour TT), hope it's blue skies all day and traffic is light, then good luck downloading all of that to whatever clunky website they have without ever missing anything in the upload or in the field, then keep track of receivables. Never mind taking any time to eat, use the bathroom, take a call, gas up your car, etc. If that's your plan take a shot. But I highly doubt the muckety-mucks pushing these things really think it's a viable career or would actually complete any themselves.

 

[Tom D]

Non Seq, i.m just saying little row homes verses big homes, or rural homes, make a discrimination on the amount of $100 pay per time/job. Personally, saying 10 was just expressing my easy urban life.

I do not want an inspection factory job. And it is not a viable career, there will be a HIGH TURN OVER RATE DOING THEM. Well at least for the better people, not the hamburger flipper. Maybe a in between career change job.

I hope most here are giving thought to some alternative before the door closes. The younger crowd, may be lost at this moment, as to their future outcome.

 

[Non Sequitur]

Non Seq, i.m just saying little row homes verses big homes, or rural homes, make a discrimination on the amount of $100 pay per time/job. Personally, saying 10 was just expressing my easy urban life.

I do not want an inspection factory job. And it is not a viable career, there will be a HIGH TURN OVER RATE DOING THEM. Well at least for the better people, not the hamburger flipper. Maybe a in between career change job.

I hope most here are giving thought to some alternative before the door closes. The younger crowd, may be lost at this moment, as to their future outcome.

Understood, and I appreciate the banter. Just pointing out the pure fantasy that's being sold to some appraisers who are really desperate right now. And you are correct, and they know that complexity varies. $100 is on the high end from what I have seen, $50-70 is more in line with what you are describing.

 

[J Grant]

Allowing appraisers to inspect (PDR collection, in their sterilized verbiage) was allowed to maximize AMC profits ( they order the majority ) and increase the supply side for the inspection section, cut off from the appraisal like a fast food production line.

Appraisers will compete with nonappraisers for these, and that will keep fees low. This is by intention. I doubt an appraiser is the first choice for these orders anyway. Not pliable enough ,perhaps.

They will not be fast to do for the on-site time, and that assumes the tech works. Add travel time to and from the property plus the cost of gas/tolls. There will be a high turnover. It competes with UBER or Insta cart as a side hustle and is much harder with no consistency of work flow.

 

[George Hatch]

One of the allegations about appraisers is that they'll sometimes "adjust" a subject rating in order to expedite their analysis because they're performing both functions. Everyone here has seen appraisers do that before. Not More commonly as a matter of expediency rather than borrower advocacy, although the latter has also occurred before. Most of us have probably engaged in "expediency" themselves; I know that I have done it before.

A 3rd party appraiser or other individual doing the inspection isn't performing the appraisal so they have no reason to "adjust" a rating nor any way of ascertaining in advance when an appraiser might want to do otherwise as a matter of expediency.

Then the appraiser who subsequently uses that info to perform the appraisal CAN'T change what the inspection data says, they can only agree or disagree on their end.

 

[J Grant]

One of the allegations about appraisers is that they'll sometimes "adjust" a subject rating in order to expedite their analysis because they're performing both functions. Everyone here has seen appraisers do that before. Not More commonly as a matter of expediency rather than borrower advocacy, although the latter has also occurred before. Most of us have probably engaged in "expediency" themselves; I know that I have done it before.

A 3rd party appraiser or other individual doing the inspection isn't performing the appraisal so they have no reason to "adjust" a rating nor any way of ascertaining in advance when an appraiser might want to do otherwise as a matter of expediency.

Then the appraiser who subsequently uses that info to perform the appraisal CAN'T change what the inspection data says, they can only agree or disagree on their end.

As you said, it is an allegation. And if an appraiser does it on a regular basis, why is the client using them? The inspection was rarely, if ever, the problem in the hundreds of bad appraisals I reviewed after the 2008 bubble. It was usually the comp choices or fudged adjustments.

To my knowledge, the third-party inspector does not assign a rating. Assigning a rating is an opinion and puts them into appraisal practice.

The appraiser still assigns the rating, so a bad apple appraiser will do the same thing with a third-party inspecting.

 

[J Grant]

I believe more appraisers will innocently give a wrong condition rating based on a third-party inspection. Not the inspector's fault-- no matter how good the photos are ( and I have looked at many good MLS photos but they never convey the real feeling of property ) - some properties photograph better and some worse- then they actually are. . Let alone what a third party might leave out.

I often change my mind after an inspection, even after extensive pre-inspection research with extensive MLS and online photos, maps, etc.

That is why buyers like to tour a property they are purchasing physically. Now, the appraiser, never having set foot on the property, will be less well-informed than the typical buyer. That is a severe disadvantage and will make it harder to defend a value .

 

[George Hatch]

Maybe the 3rd party ratings will be more inconsistent than the appraisers' ratings. WRT the appraiser's own SOW, less is still going to be less. So we shall do, so shall it be.

As for the wisdom of using these desktops it is the users who are driving that trend. Same as it always was. It's not a case of the appraisers trying to sell them a SOW they don't want to buy.

Of all the things that didn't happen, "I can't find appraisers who are willing to do 1004s at the full fee" is something that didn't happen the most.