Give me a break

[J Grant]

So I am guessing you missed the order that floated around social media last week - the one that communicated the needed value right on the appraisal request.

I dont go on social media other than site, but yes there can be a rogue player here and there... .anyway it was the loan officer who was the bad guy or girl communicating a needed value...

 

[NC Appraising]

No, I assume most loan officers do not want to lose their jobs or license... I have not had a single one put it on an order or communicate it and besides, you of all people should know individual loan officers no longer order the appraisal - even with a direct lender it is all anonymous wrt to "who" ordered it, it comes over a portal with the lender/client name and perhaps a regional staff person or such .

I have to disagree with you. I have had many new clients to contact me and lost some after a few orders. It could have been me, my longer turn times or because I came in low on refi's. I have a feeling, I know, that if one comes in to many times low on a refi, the LO or someone contacts the AMC and tells them not to use that appraiser anymore. No blacklisting, just no more orders or one becomes the complex appraisal King. lol.

Even my direct lenders have a say. New construction for example. They have their preferred appraisers, I think the same is true for purchases too. The lender has a relationship with the agents and they do not want to screw it up. The lenders will not admit it for obvious reasons, but their top lo's have a say in the game. The lie about it when I ask them.....but I am not stupid.

We are back, in most part, to the pre-HVCC day's. Most lenders, not all, just have a pre-approved list of their own appraisers that they give AMCs to use. So if you want to get on a list, you go to the lender and not the AMC. Most of my new clients happened this way. The lo gave my info to the AMC and the AMC contacted me. Now I will say it is not because I am a number hitter, but because the LO noticed the quality of my reports and I actually use market condition adjustments. I think some of the other appraisers were killing deals because they were marking stable and not making market condition adjustments, which is insane in this market.

 

[NC Appraising]

The issue that I am concerned with is for purchase transactions and appraisal waivers.

As I have said before, RE agent know appraisers are there to keep them in-line. That is one of their talking points when they are trying to get a listing and the borrower has very higher differing opinion on the list price.

So what happens if appraisal waivers become more common on purchases? Will the RE agents have the same feeling and have the "it will not appraise" in their mind when listing or negotiations? Will appraisal waivers offer more fraud and less protection to the public due to no appraisals being ordered? Checks and balances?

I think so. If they know that if an appraisal will not be ordered, I think consumers will over pay for properties and artificial inflation could become a problem. Agents make more if a home sells for higher and they only get paid if a home closes. Both sides, selling and buyers agent.

 

[J Grant]

I have to disagree with you. I have had many new clients to contact me and lost some after a few orders. It could have been me, my longer turn times or because I came in low on refi's. I have a feeling, I know, that if one comes in to many times low on a refi, the LO or someone contacts the AMC and tells them not to use that appraiser anymore. No blacklisting, just no more orders or one becomes the complex appraisal King. lol.

Even my direct lenders have a say. New construction for example. They have their preferred appraisers, I think the same is true for purchases too. The lender has a relationship with the agents and they do not want to screw it up. The lenders will not admit it for obvious reasons, but their top lo's have a say in the game. The lie about it when I ask them.....but I am not stupid.

We are back, in most part, to the pre-HVCC day's. Most lenders, not all, just have a pre-approved list of their own appraisers that they give AMCs to use. So if you want to get on a list, you go to the lender and not the AMC. Most of my new clients happened this way. The lo gave my info to the AMC and the AMC contacted me. Now I will say it is because I am a number hitter, but because the LO noticed the quality of my reports and I actually use market condition adjustments. I think some of the other appraisers were killing deals because they were marking stable and not making market condition adjustments, which is insane in this market.

Actually, we agree ! ( reason I asked Danny why he thinks maintaining an environment which still can exert pressures for values would be able to ensure unbiased appraisers...

The point I addressed was the individual statement about lenders communicating a needed $ amount of LTV refi % for refinance orders ( i have not seen it )
However, that does not mean the pressure is gone wrt refinance orders to come in "high" on value, and I have had more trouble on refi orders than on purchases/ also experienced certain clients stomp sending work.. I agree we are almost back to where were were pre HVCC, just more slick now in how they do it. Clients are too slick now to announce they dropped an appraiser for not making value enough times, they simply stop sending work and give a vague answer such as they are slow if asked why.

Some clients are ethical and will not dump an appraiser for failure to high value hit - thank god - however many clients are still playing games and can use their leverage over appraisers to do it.

 

[Overimprovement]

I have never, ever had a "magic number communicated or hinted to me in a refi since the change post HVCC . I find it hard to believe any loan officer would risk communicating it now nor any legit appraiser ask if of an owner. 80% ltv idk, but prices have risen so people doing refinances now have more equity.

But the lender can tell the borrower what is needed for a deal to work. No HVCC issues there. The borrower can hint around to an appraiser. They are not under HVCC. That is how the game is played.

 

[J Grant]

But the lender can tell the borrower what is needed for a deal to work. No HVCC issues there. The borrower can hint around to an appraiser. They are not under HVCC. That is how the game is played.

sure a loan officer can tell a borrower what is needed - though I have at most twice in last 5 years had an owner tell me what that amount is ...(which did not innfluence my appraisal ), However it is normal that owners often try to cheerlead for a higher value at an inspection, which is easy to let roll off back, just as one learns to ignore RE agents doing similar.

wrt a belief appraisers are hitting specific numbers to make a magic 8/20 threshold ? Maybe a few rogue appraisers are doing that, but more likely that prices have gone up the last few years esp this year, creating more equity - and to be fair then share how often do valuations FF does for waivers clear the magic 80/20 threshold in a refi - esp when the loan officer provides their estimate of value?

 

[Alsie35]

But the lender can tell the borrower what is needed for a deal to work. No HVCC issues there. The borrower can hint around to an appraiser. They are not under HVCC. That is how the game is played.

The smart borrowers will offer information on what # they are looking for. If they offer it, I always say that I cannot discuss value or the appraisal itself, but that they are free to give me whatever information they want.

Knowing their "magic #" is useful because it can tip you off to whether you can expect a problem (ie complaining) after the report is done. The other obvious factor is that an appraisal will come up with a value range, and I'd hate to come in just under what they need if it falls within the range.

Has it ever made me get other comps to "make value"? No.

On this same topic, about half the VA appraisal orders come in with a box filled in titled "loan amount". I did some asking around and concluded that that the number is probably the estimated property value that either the borrower or the lender think the property is worth. (But with VA loans sometimes going with 100% financing, it could actually be either one). Anyhow - useful info if you know what to use it - and what not to use it - for.

 

[J Grant]

AVM's aren't biased - at least with respect to the parties to the transaction. Any bias in an AVM is a mathematical bias and can be solved by using appropriate predictors.

An AVM itself is not biased - but what about the clients and users of them ? My understanding is AVM value is either a range or a point value with a confidence score - so is a client allowed to choose any value the wish as long as it falls within a range or the confidence score around a point value ? What happens when a lender using AVM's provided by X , is not getting enough loans funding due to "low " values - can they call up and ask X if they can tweak the algorithms to see higher values?

Seems any time humans are involved they can find a way to game any system. At least appraisers have a better shot at remaining unbiased due to it being a professional standard - with a license to lose or keep related to that... and An appraiser can interact with parties , providing some kind of link in the process and still maintain their independence..

 

[Terrel L. Shields]

The data seems to strongly indicate that the “magic number” is being communicated in some manner - unless one believes it is all just a big coincidence

But the lender can tell the borrower what is needed for a deal to work. No HVCC issues there. The borrower can hint around to an appraiser. They are not under HVCC. That is how the game is played.

Fud's First Law of Opposition. If you push something hard enough, it will fall over.

In Pavlov's experiments, he would ring a bell and a dog would slobber. In Bankster world, they ring the appraisers bell often enough, they will scramble to find the "magic number" to avoid the pain of stips, ROVs, complaints, and outright banishment to the hinterlands. Simple. To keep the peace the appraiser hits the number and again, I argue that the quick TT and low fee makes any alternative almost impossible. You learn how to manipulate the data to avoid the pain that will come if you don't do the bidding of a loan originator. The Realtor gets you banned. The borrower files a complaint. The LO who lost a commission gets you banned. So what do you expect an appraiser - especially the newbie and the hungry to do? They either have to kowtow to the pressure or they have to seek an alternative way to be an appraiser outside the secondary market. And I dare say that those of us who have succeeded in doing just that have a much higher job satisfaction than those who have to submit to the yoke of the secondary market. But you know it has to mean that the bulk of "number hitters" are doing the secondary market dance. In other words, Fannie gets and therefore sees, the least competent appraisers and appraisals and should expect no more than what they ask for.

By not defending the appraisers from low fees and uncalled for stips, and demanding accountability of the AMCs, Fannie, et al, is the mother of the b*st*rd step children that are hitting numbers. Holding not only the appraiser but the AMC and most importantly, the bank that hired the AMC accountable for these bad reports would go a long ways toward improving the quality of the reports. Instead FF seems to think that they can create a new form every few years that solves all those problems. Last, by creating this mass of keypunch kings, unraveling them and turning them into competent appraisers will be a long term and difficult process, perhaps impossible. They have done this for so long, they really no longer have any concept of what is real analysis. I endured sitting by a joker in USPAP class a few years ago who kept muttering under his breath that he could do 2 appraisals that day instead of having to sit through class. He said it more than once, that "that's not the way to do it in the real world"... really? Who trained them to be number hitting form monkeys? Fannie Mae and FHA can take no small credit for the conduct of the appraiser they groomed to submit to low fees and rapid turn times.

 

[DWiley]

The issue that I am concerned with is for purchase transactions and appraisal waivers.

As I have said before, RE agent know appraisers are there to keep them in-line. That is one of their talking points when they are trying to get a listing and the borrower has very higher differing opinion on the list price.

So what happens if appraisal waivers become more common on purchases? Will the RE agents have the same feeling and have the "it will not appraise" in their mind when listing or negotiations? Will appraisal waivers offer more fraud and less protection to the public due to no appraisals being ordered? Checks and balances?

I think so. If they know that if an appraisal will not be ordered, I think consumers will over pay for properties and artificial inflation could become a problem. Agents make more if a home sells for higher and they only get paid if a home closes. Both sides, selling and buyers agent.

It is important to keep in mind that just because there is no appraisal, that does not mean there is no check on the collateral value. Frankly, when a waiver is offered it means that the property is of the type where the AVM has proven to provide a more reliable result. In such cases, the odds of default actually go up if an appraisal is used. I know that appraisers dont really like hearing that, but it is what the data shows.