GSE Waiver & Data Collection Data

[DWiley]

If the GSE’s liked everybody except the appraiser doing the field inspection work, why didn’t they come up with new certifications 25 years ago to allow for the use of runners? Why is it only after their breakfast club buddies figured out they could make a whole hell of a lot more money using them did they create new certifications at lightning speed?

There’s that coincidence again.

The technology used for PDRs did not exist 25 years ago. IIRC, the iphone is still not yet 20 years old. And, "runners" could have been anyone. Data collectors are required to have training, testing, performance monitoring, background checks, etc.

Your premise that GSE hybrids are more profitable for AMCs is not consistent with my experience in AMCland. They required maintaining two panels, handling two assignments, and QCing two documents. The profit per property was actually less for the company I worked at.

I do not understand the reference to "lightning speed" given that hybrids were tested for over 5 years prior to adoption.

 

[J Grant]

As stated before, for traditional appraisal reports, the error rate for identifying things that should be subject to repair or subject to inspection is is 1.9 times the error rate for appraisal reports based on a PDR.

If a home has standing water in the basement, a large foundation crack, etc. and the appraisal is done "as is" rather than "subject to", then that is a significant risk. It also drives up costs, as those are some of the most common repurchase issues.

Then that appraiser is not competent and why are clients engaging them - it is not a CDC vs personal inspection issue- that is a serious example and it is hard to understand who across the board there is a 1.9 "error rate-" We never get to see the examples case by case -

 

[J Grant]

The technology used for PDRs did not exist 25 years ago. IIRC, the iphone is still not yet 20 years old. And, "runners" could have been anyone. Data collectors are required to have training, testing, performance monitoring, background checks, etc.

Your premise that GSE hybrids are more profitable for AMCs is not consistent with my experience in AMCland. They required maintaining two panels, handling two assignments, and QCing two documents. The profit per property was actually less for the company I worked at.

I do not understand the reference to "lightning speed" given that hybrids were tested for over 5 years prior to adoption.

Doesn't matter that the technology is improved- the appraiser was still denied the first-hand inspection and added observation first-hand.

Since most buyers and sellers and RE agents have been inside the property.with a thrid party PDC collection, the appraiser is now less well informed then the others in a transaction.

 

[DWiley]

Then that appraiser is not competent and why are clients engaging them - it is not a CDC vs personal inspection issue- that is a serious example and it is hard to understand who across the board there is a 1.9 "error rate-" We never get to see the examples case by case -

As far as I know, all the folks with appraiser credentials are humans, and humans do make mistakes. The same is true, of course, for data collectors. Neither is perfect, and perfection is not expected. What has been tested is comparison of the two methods, both of which are subject to error.

As long as you have been participating in the forum, I don't think it should be hard to understand some of the probable reasons for the results.

 

[George Hatch]

If the GSE’s liked everybody except the appraiser doing the field inspection work, why didn’t they come up with new certifications 25 years ago to allow for the use of runners? Why is it only after their breakfast club buddies figured out they could make a whole hell of a lot more money using them did they create new certifications at lightning speed?

USPAP allows for the use of unlicensed runners to perform various tasks so long as "significant real property appraisal assistance" are disclosed and the appraiser is taking the responsibility for the work of their (actual) subordinates. It's some of the users who think personal inspection of the comps and personal inspection of the subject by the signatory is "meaningful to intended users".

As of 2025 all of those "appraiser did inspect" requirements still apply to almost all of the other assignments in the GSE pipelines, so they HAVEN'T changed those assignments.

And you need to stop doing the form monkey. It isn't the SR2 cert (the report) that creates the requirements for the SR1 development. All the certs do is REPORT the terms of the assignment.

What you're complaining about are the assignment types the lenders and the GSEs have subsequently added to their program. Heck, the GSE have always allowed appraisers to use licensed trainees to solo inspect in their assignments; it's most of the lenders who never trusted those "did not inspect" Supervisors.

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As for the other allegation of trying to put fee appraisers out of business altogether or herding 10% of the current population into cubicle farms for 10 hours a day at $15.95/hr, maybe that is their intent and maybe they will attempt to make that happen to the best of their abilities and resources (aka too many appraisers competing for too few opportunities)

So what? What are the other 90% of fee appraisers (who don't follow your example of quitting the business or going to part time) going to do to stop the lenders besides simply declining to participate in the hybrid pipeline? Nothing. That's what they're going to do. Their only option is to take it or leave it. No different in execution from the businesses and workers who suffer adverse outcomes from various other conditions which are beyond their personal control.

This storm wiped out the corn crop​

These tariffs increased my wholesale costs​

This salmonella outbreak at a another location of my employer's fast food conglomerate cut into my hours​

This incorporation of AI into my employer's process rendered my clerical job obsolete​

The failure of my employer's automobile mfg business resulted in my factory being closed​

I like appraisers. Full stop. But IRL there's nothing inherently different about our business from any other business. We're not special. What we do isn't sacred. The principle of substitution doesn't cease to exist in this business just because we will suffer if it doesn't.

 

[chad hampton]

How about a level playing field? If AMC’s can use runners, appraisers can too? Change all the certifications to say who knows who did the inspection and who really cares?

I guess the money only flows one way. Probably why I never got an invitation to the breakfast club.

 

[TerryRohrer]

"The Appraisal Institute strongly urges policymakers, industry stakeholders, and the public to exercise caution when considering recent research findings published on Mar. 13 by Freddie Mac as justification for expanding the use of hybrid appraisals.

Freddie Mac claims that property data reports (PDRs) and hybrid appraisals outperform traditional appraisals in identifying serious property condition issues, yet the enterprise has not released the full research study supporting these conclusions. Without access to the methodology, sample size, and specific criteria used in their analysis, appraisal professionals are unable to independently evaluate these claims. If the data truly demonstrates such a significant improvement, why not make it available for full industry scrutiny? "

https://www.appraisalinstitute.org/...research study supporting these conclusions.a

 

[Terrel L. Shields]

lack of personal viewing by the appraiser

What is not said is whether that appraiser still has accountability for the inspection and I suspect if push comes to shove that the appraiser will be sued along side the inspector and held accountable. After all, which one has E & O insurance?

 

[Terrel L. Shields]

What has been tested is comparison of the two methods

But the key is that the Hybrid is CHEAPER. It is not BETTER nor is it FASTER. AND it comes the expense of the appraiser who now has every incentive to rush thru a report and hope beyond hope that they can make it up in volume... But volume is a static number independent of fee. Hybrids do not create more work.

 

[TerryRohrer]

'“An appraisal falling below the contracted sale price may allow a buyer to renegotiate with a seller, but it could also mean families might miss out on
the full wealth-building benefits of homeownership or may be unable to get the financing needed to achieve the American Dream in the first place. This
is a persistent problem that disproportionately impacts hundreds of thousands of Black and Latino applicants,” said Michael Bradley, senior vice
president of modeling, econometrics, data science and analytics in Freddie Mac's Single-Family division. “Our research marks the beginning of a
comprehensive effort to better understand the key drivers contributing to the appraisal gap. Our goal is to develop solutions to this persistent problem,
including appraisal best practices, uniform standards for automated valuation models, enhanced consumer disclosures, improved value processes,
and revised fair lending exam procedures and risk assessments.”'

https://freddiemac.gcs-web.com/news-releases/news-release-details/freddie-mac-research-explores-causes-appraisal-valuation-gap#:~:text=MCLEAN%2C%20Va.%2C%20Sept.,resulting%20in%20an%20appraisal%20gap.