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Free Advice Phil E 192

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Terrel L. Shields

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His take away has been mine to some extent. For 25 years we've preached that our structure and formats combined with due diligence will lead to a uniform and reliable product that the "public" (whomever that is) can "trust"(whatever that is.) Now some of our own ilk claim we can craft a SOW which may prove to be less reliable...much less reliable, but is adequate for a client's needs, somehow. But is it so unreliable as to skirt the very edges of "credible"? IMNSHO, hybrid reports and other desktop products will quickly be expected to back loans and be as accurate as the conventional inspected report. Is that "public trust" supposed to mean clients accustomed to our work must now accept work that might be three standard deviations from the mean whereas one Sd was once considered a minimum acceptable accuracy? Or, that they honestly believe an appraisal is an appraisal and all have a narrow range of normal deviation that applies regardless SOW, format, or depth of data verification?
I am betting clients and borrowers alike expect ANY reported value on any form to be reasonably accurate, regardless the question of what form was used, how inspected, or what caveats expressed. Just because the hybrid may be intended to be internal to the bank, they will eventually be used as subs for evaluations, which is a lending decision just like a URAR. With the de minimus raised to $500,000 a given, in fly over America that's 90+% of housing. Hybrids are just Zillow with your license stamp on it.
 

DWiley

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To many, the concept of "Hyrbid" (someone else inspects subject) is a relatively new concept. However, such services have been around for a long time, and there has been plenty of opportunity for testing of the results. Thinking that an entity as big as Fannie for example, would adopt such a change without extensive testing would be a mistake.

As appraisers we have to realize the value that we bring to the table. For many years, just the data collection aspect of what we do was a huge component of the appraisers contributory value to the risk analysis process. Well, that has changed dramatically over the past decade. Analysis of the data is now far more important than collection of the data, because there are now many more sources for collecting the data. So called hyrbid appraisals are just an extension of that reality.

When someone figures out how to measure the accuracy of an opinion, please let me know :)
 

timd354

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Maryland
To many, the concept of "Hyrbid" (someone else inspects subject) is a relatively new concept. However, such services have been around for a long time, and there has been plenty of opportunity for testing of the results. Thinking that an entity as big as Fannie for example, would adopt such a change without extensive testing would be a mistake.

As appraisers we have to realize the value that we bring to the table. For many years, just the data collection aspect of what we do was a huge component of the appraisers contributory value to the risk analysis process. Well, that has changed dramatically over the past decade. Analysis of the data is now far more important than collection of the data, because there are now many more sources for collecting the data. So called hyrbid appraisals are just an extension of that reality.

When someone figures out how to measure the accuracy of an opinion, please let me know :)
No Danny, appraisers need to do exactly the same thing that they have been doing for 25 years or longer and refuse to change anything they do....If lenders don't want a "full" appraisal (URAR), then they get nothing....I mean, the nerve of clients telling appraisers what is meaningful and useful to them! LOL
 
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residentialguy

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No Danny, appraisers need to do exactly the same thing that they have been doing for 25 years or longer and refuse to change anything they do....If lenders don't want a "full" appraisal (URAR), then they get nothing! LOL
Careful not to bite your tongue off while planted in your cheek. The fact remains that the appraiser chooses the appropriate SOW. If an order is not an appropriate SOW, then (per USPAP), it must be turned down. An appraiser must not allow assignment conditions to limit the scope of work to such a degree that the assignment results are not credible in the context of the intended use. That is the appraiser's call to make, not the lender's.
 

timd354

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Careful not to bite your tongue off while planted in your cheek. The fact remains that the appraiser chooses the appropriate SOW. If an order is not an appropriate SOW, then (per USPAP), it must be turned down. An appraiser must not allow assignment conditions to limit the scope of work to such a degree that the assignment results are not credible in the context of the intended use. That is the appraiser's call to make, not the lender's.
True, but if you are asserting that it is never appropriate for a mortgage lending appraisal to have an SOW that that requires anything less than a full interior/exterior inspection by the appraiser, then you are living in the stone age.

The problem with some appraisers is they do not seem to realize that the SOW is sufficient if it produces credible assignment results in the context of the intended use. The sufficiency of the SOW is not measured by whether or not the appraiser will make less money on the assignment than a so-called full appraisal

The simple truth is that if bifurcated appraisals paid as much as a so-called full appraisal, most appraisers would be more than happy to do bifurcated appraisals. 99.9% of the opposition to bifurcated appraisals among appraisers is due to the perception that appraisers who do them will be making less money.
 

residentialguy

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Mar 24, 2009
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Certified Residential Appraiser
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Minnesota
True, but if you are asserting that it is never appropriate for a mortgage lending appraisal to have an SOW that that requires anything less than a full interior/exterior inspection by the appraiser, then you are living in the stone age.
No such assertion made.
Some forms, however will always be unacceptable in most cases. The UAD 2055 with their certs comes to mind.
 

hastalavista

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May 16, 2005
Professional Status
Certified General Appraiser
State
California
Careful not to bite your tongue off while planted in your cheek. The fact remains that the appraiser chooses the appropriate SOW. If an order is not an appropriate SOW, then (per USPAP), it must be turned down. An appraiser must not allow assignment conditions to limit the scope of work to such a degree that the assignment results are not credible in the context of the intended use. That is the appraiser's call to make, not the lender's.
Agreed.

That's why I have no problem with appraisers determining, for their situation, a so-called hybrid is not something they should do.
Likewise, I have no problem with appraisers determining, for their situation, a so-called hybrid is something they could do.

For the first outcome, fee/turn-time are irrelevant.
For the second outcome, fee/turn-time will be the significant criteria for accepting the assignment. :)
 

J Grant

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Dec 9, 2003
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Certified Residential Appraiser
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Florida
Now hybrid, aka a non licensed appraiser inspects, as a data collection source has been around for years, ( sending a runner out to the property). Some clients have been using it for REO or other servicing, now Fannie is testing it for origination appraisal work. Right up there with fannie allowing waivers, airbnb income etc. How'd it work out the last time secondary market and lenders pushed the boundaries of risk and acceptability? A little blip called the housing market collapse.

I might enjoy it if I sit home in pajamas while some schlepp goes out and inspect.

Accuracy of an opinion, there is the reliability of an opinion if it was developed credibly and thus supportable . Credibility and reliability gets reduced the more pieces a factory style appraisal gets carved into, as if doing an assembly line factory style results in same result as the appraiser integrating the work they have personally done including field inspection.

If fannie and lenders accept hybrids for origination work, appraisers will either do them, or not. It will take years for these products to work their way through the system to see if under real world conditions, not fannie test conditions, they hold up well. It sounds like a hybrid is more practical for a client using staff appraisers rather than fee appraisers.
 
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