Give me a break

[RCA]

You know, in some areas Zillow is getting pretty good. Yet, despite the progress the AVMs are making, I don't see the day where anyone, especially individuals are going to commit to a $1M+ investment without getting the value verified by a licensed professional.

And, people being people, as time goes on, as accuracy increases, they will want even more accuracy and more reassurance, not less.

The profession will be around for a long time but Appraisal ------> Valuation Engineering. Learn CAD, GIS, statistics, computer programming, ....

 

[Mike Ault]

You know, in some areas Zillow is getting pretty good. Yet, despite the progress the AVMs are making, I don't see the day where anyone, especially individuals are going to commit to a $1M+ investment without getting the value verified by a licensed professional.

Unfortunately the appraisal performed by that licensed professional more than likely will not be acceptable for lending purposes in the not so distant future, one appraiser being replaced instead by these hybrid assembly-line style valuations.

 

[DWiley]

Are you calling Joan a liar?

And are you now defending Joan? My how the world has turned.

i would say that piece reflects an uniformed view. No uber drivers being used here. In fact, those doing the inspections are required to have more formal training on doing inspections than appraisers. You looked at the AQB criteria lately?

 

[J Grant]

You do understand that a “mortgage transaction” means more than just closing a loan, right? All the risk tools employed, be they for collateral, credit or capacity are used to evaluate the potential performance of the loan for the life of the loan. Surely as an experienced appraiser you cannot honestly believe that all the information collected is just to insure a valid closing - that is just silly. I just don’t understand how an appraiser with your experience wants to debate whether or not appraisal reports for lenders are risk management tools.

Performance of a loan is NOT the intended use or purpose of an appraisal. Show me it in USPAP, where is the standard about loan performance?

A mortgage transaction is NOT the same as the life of the loan. TRANSACTION means a closing, a sale. A mortgage loan closes on X date, just as the appraisal has an effective date. A mortgage loan gets recorded on the public records on X DATE.

Comparing an appraisal to credit, income etc is absurd, comingling borrower qualification of the borrower and appraisal of the collateral. WHAT IS THE EFFECTIVE DATE in appraisal for? Why is an appraisal update or new appraisal ordered again after 6 months or a year? The appraisal due to changing market conditions is not considered relevant after so many months and you know it. If an appraisal is reviewed forensically, it is reviewed back to its effective date .

Tying an appraisal in with how a loan "performs" is a use the agencies created for appraisal as a "risk management tool".

 

[J Grant]

Transaction Definition - Investopedia​

www.investopedia.com › Business › Business Essentials


Apr 20, 2019 — A transaction is a completed agreement between a buyer and a seller to exchange goods, services, or financial assets. ... The accrual accounting method requires a transaction to be recorded when it occurs, regardless of when the money is received or the expenses are paid.

Mortgage transaction is the closing of the mortgage, not the performance of the loan after the mortgage closed.

 

[J Grant]

"'This appraisal report is subject to the following scope of work, intended use, intended user, definition of market value, statement of assumptions and limiting conditions, and certifications. Modifications, additions or deletions to the intended use, intended user, definition of market value, or assumptions and limiting conditions are not permitted. "

INTENDED USE: The intended use of this appraisal report is for the lender/client to evaluate the property that is the subject of this appraisal for a mortgage finance transaction. INTENDED USER: The intended user of this appraisal report is the lender/client.

Above pasted from the certs/limited conditions: The intended use is for a MORTGAGE TRANSACTION, and transaction is defined as a sale /transfer ( occurs on X recorded date) .
The stated use is not "loan performance " nor is it "Risk analysis ". Furthermore, the use of appraisal is to evaluate the property (not to be a risk analysis tool for the loan ).

An appraisal by design can not "perform", an appraisal is a document related to property condition and value as of the effective date. A loan however, can perform (or fail to perform). Tying the appraisal to loan performance to measure the appraisal as a risk analysis tool is not a stated intended use...

Modifications to the intended use are not permitted lol... the agencies can do what they want it seems wrt to modifications of the intended use ( see above )

 

[DWiley]

"'This appraisal report is subject to the following scope of work, intended use, intended user, definition of market value, statement of assumptions and limiting conditions, and certifications. Modifications, additions or deletions to the intended use, intended user, definition of market value, or assumptions and limiting conditions are not permitted. "

INTENDED USE: The intended use of this appraisal report is for the lender/client to evaluate the property that is the subject of this appraisal for a mortgage finance transaction. INTENDED USER: The intended user of this appraisal report is the lender/client.

Above pasted from the certs/limited conditions: The intended use is for a MORTGAGE TRANSACTION, and transaction is defined as a sale /transfer ( occurs on X recorded date) .
The stated use is not "loan performance " nor is it "Risk analysis ". Furthermore, the use of appraisal is to evaluate the property (not to be a risk analysis tool for the loan ).

An appraisal by design can not "perform", an appraisal is a document related to property condition and value as of the effective date. A loan however, can perform (or fail to perform). Tying the appraisal to loan performance to measure the appraisal as a risk analysis tool is not a stated intended use...

Modifications to the intended use are not permitted lol... the agencies can do what they want it seems wrt to modifications of the intended use ( see above )

Not going to argue this with you because there is nothing to argue. If you honestly do not understand that appraisal reports are risk management tools for lenders, then I do not know what more can be said.

 

[J Grant]

Not going to argue this with you because there is nothing to argue. If you honestly do not understand that appraisal reports are risk management tools for lenders, then I do not know what more can be said.

Danny, believe me, I understand that. However, the risk management comes after the appraisal is done, and risk management applies to the loan, correct ? The appraisal is for the property .

Do you also agree with my post 326, that risk management tool IS NOT a stated intended use of the appraisal?

If you disagree, on what grounds do you argue it, when it is right there on the URAR form that intended use is for a mortgage TRANSACTION ? ( and no modifications/additions to intended use permitted )
Which is not my personal opinion or understanding/lack of understanding, that is what the URAR certs say.

 

[J Grant]

It also says that the intended use is for the lender to evaluate the property for a mortgage transaction. That is risk management. .

MORTGAGE TRANSACTION, not loan performance. You can keep referencing risk management, but it is not stated as the intended use on the appraisal. I am not trying to be obtuse by refusing to recognize it, I am citing fact that the appraisal itself is to evaluate the property and references intended use for a mortgage financing transaction ( not lifelong performance/loan performance ).

 

[DWiley]

Danny, believe me, I understand that. However, the risk management comes after the appraisal is done, and risk management applies to the loan, correct ? The appraisal is for the property .

That is not correct, for several reasons. Risk management does not begin after a loan is made. Sometimes a decision is made not to even make a loan, and that is certainly risk management. And a mortgage transaction is not complete until the mortgage is paid off.