Freddie Mac vs Appraiser Bias

[glenn walker]

No matter how precise they try to make UAD categories, many houses are a blend of quality - some aspects may be Q5 and other Q4 in one dwelling

So which is dominant ? There is no way UAD can possibly address each property- which is why. Imo, if an appraiser is not trying to be misleading, whether they call a borderline house Q5 or Q 4 , it should not affect the credibility of the appraisal, - if you can think of a way to fool proof categorize every finsih, upgrade and defect, of every single diverse dwelling out there, would look forward to seeing it!

A high and low and medium C rating would help. How many times we deal with A almost Low C.3 and it's a coin toss. Remember pre USA we saw a AVERAGE Plus when border line was near Good.

 

[George Hatch]

The whole thing with the appraiser inspection, is that sometimes quality can't be illustrated by a photo. Homes that are well built but not necessarily updated can have a Q rating than a newer home that is all flash and no substance. Same for condition. We all know that (or should). The inspection by a qualified appraiser should be the standard. Perhaps its the individual appraisers as J Grant pointed out.

If appraisers as a group were performing to specs then "robo inspections are inferior" would be valid. But unfortunately our performance hasn't been as advertised. If an appraiser spotted the stain in the carpet or the cracked floor tile or the missing CO2 monitor but didn't mention it in the report that has the same effect on the outcome as if they hadn't seen it at all.

 

[residentialguy]

Since when did condition ratings come with a value attached?

 

[J Grant]

If appraisers as a group were performing to specs then "robo inspections are inferior" would be valid. But unfortunately our performance hasn't been as advertised. If an appraiser spotted the stain in the carpet or the cracked floor tile or the missing CO2 monitor but didn't mention it in the report that has the same effect on the outcome as if they hadn't seen it at all.

Appraisers were performing to specs. Very few if any complaints were about the inspection. they were about the value.

The only reason they are introducing this is speed for the lender and profit for those using staff.

 

[glenn walker]

Appraisers were performing to specs. Very few if any complaints were about the inspection. they were about the value.

The only reason they are introducing this is speed for the lender and profit for those using staff.Bingurmned om "_

Bingo- The Light Turned on

 

[CGinMN]

Since when did condition ratings come with a value attached?

Good point. I would say since they instituted the UAD. The whole point of the rating system is to develop an automated valuation. So a consistent application is going to improve the AVM.

DW: “…the data clearly shows that that is a contributor to improving our results and getting less bias in those condition ratings.”

I read “our results” as the results of the AVM.

The more they improve the AVM, the less they rely on appraisers, the faster lenders can make loans. The biggest challenge in AVM reliability has to be quantifying obsolescence. Enter the PDR and Value Verify products which assist in that.

 

[Terrel L. Shields]

80% of properties are in the range of C4 or C3 condition ratings. Accuracy is not a reasonable benchmark with the varying scope and timing, of updates or remodeling. There is no one is correct and the other is not correct. 80% of properties are somewhere in the range from low end of C4 to high end of C3.

Really? In every market? Rural? Small communities? Detroit? Middle of West Baltimore? Washington Highlands, DC? Or, Columbia Heights? I don't hear good things about those areas.

 

[Zoe]

The basis for that is comparing (1) the data, comments and photos in the report, (2) the condition rating assigned by the appraiser, and (3) the actual definition of that rating.

Example: Home is ~100 years old, with kitchen and baths that have not been updated in the last 40 years. Photos show roof and siding not in the best condition. Appraiser reports condition rating as C3. What more does one need to determine the C3 rating is incorrect? Do you really think that you need to inspect that home personally to determine it is not in C3 condition (as that is defined by the GSEs)?

The report should contain enough data, comments and photos to validate the condition rating. If the report does not contain such information, that is an error of a different type.

Okay, your saying the same thing does not happen with 3rd party inspector? Correct me if I am wrong.

 

[Zoe]

If the appraiser's SOW is a desktop appraisal then they already aren't responsible for anything the inspector did or didn't do. We're only responsible for what WE do.

In the event we have reason to suspect the accuracy of a data source then that would be a reason to decline to use it. But in lieu of information to the contrary it is not unreasonable to assume the info is sufficient for our use. Especially given the point that we already include that as being a standard assumption,

View attachment 68988

Okay, Whom does that benefit? Let's go back to square one. Why in the first place?

 

[Zoe]

Okay,, GH, I know you have probably had engineer's reports on properties that were like an encyclopedia and all the engineer's qualifications even though you personally inspected the property.

Back to square one. Why on the subject for a GSE in most cases?