Hybrid Appraisals

[Non Sequitur]

What do you mean? What did he say?

Pretty much what you said, waivers and alt products were authorized due to pandemic needs and were not meant to continue.

 

[J Grant]

I am not expecting to see hybrid's scale in today's market. I think some lenders will use them in a targeted fashion like rural areas where they could pick up some efficiency. I think they could scale if/when the market picks up. A few years ago in testing when volume was high, we observed a ~5-6 day average turn time savings for hybrids. Weeks in some areas. High volume is when it really works for the appraiser too because they are not flipping back and forth between the traditional and hybrid process. Appraisers could sit at their desk with a queue of PDCs ready to go and complete 3-6 hybrids a day. At $350-$450 per, they were making good money and we had many say they didn't want anything but hybrids. It takes volume for this to happen, but we all know the market is cyclical and there will be high volume periods again.

It's important to remember, we do not dictate what valuation option a lender and consumer use. We present options based on our calculated risk of the loan.

I agree the spikes in high fooume is when they make sense, and we appeasers would appreciate it if you advised to use them only in high volume spikes - as it is now they are right up there on the options for an appraisal for no reason whatsoever.

I imagine the cost to consumers is the same as for traditional, so mostly AMCs would use a hybrid to squeeze volume from staff appraisers who could stay at the desk .

I find it hard to believe that an appraiser could produce a credible 1004 desk portion of a 1004 wrt 6 a day. I did a few during the pandemic, and the desk part was a regular appraisal, which took me 4 hours or more, depending on the desk portion. (for a more or less vanilla order, not a very complex one which takes longer ) . And clients would only pay $350- $400 for a desktop poriortn During high volume the rest of the time wrt to the AMC 's would shop the fee down -

The empahiss on "efficiency" at the loss of so much else IMO is a bad bet when so much is at stake for each loan - yes of course they are on deadlines and appraisers are faster than ever with a promise 48 hour turn time from inpseicon typical now but the entities trying to produce them as a fast food widget - for what aim? It will not increase profit to lenders because their profit is in loan volume and the nature of RE is that there is a fixed and finite amount of loans given a year, even in a busy cycle,

It is not a consumer product like food or sneakers, where turning out faster or cheaper results in more sales .

 

[J Grant]

You add nothing to conversation.

The comment was not meant for you, snarky one !

 

[chad hampton]

We created a new job title....because it's a new job. They are not an appraiser, they are not an inspector, they are simply collecting objective property characteristics at a property. They are not performing an appraisal service in any way, not concluding with any opinions...just collecting data. It doesn't take much of a wizard and we certainly didn't need consultants to come up with a name for this new job...property data collector is exactly what they do.

Sorry, that’s what appraisers did for the last 30 years. And states required you have a licensed to do that.

Not sure if you are aware that issues with the appraisal inspection are a major issue when comes to state board complaints. In the spirit of public trust, who does the state board go after when a member of their public says they had an issue at the appraisal inspection? I have recommended to my state board that they go after the AMC’s in the situations because they are managing the process and they hold the license that governs these unlicensed appraisers in the field.

They certainly can’t tell the public that there’s nothing they can do.

 

[George Hatch]

If you didn't do the inspection then you are not exposed to inspection-related complaints. You still have access to other data sources about your subject. If you check your other sources and everything lines up then its clearly reasonable to proceed "in lieu of information to the contrary I assume this info is accurate enough for this use". The same as when you are doing a 2055. Really, same as you're doing when you inspect, too. You're seeing it if/when your measurements are showing different from the other sources and you're taking steps to reconcile.

Your clients are the ones who ordered the appraisal and are using it to make a decision. Not the borrowers. These clients know what they're getting and that includes the additional limitations that are involved. They can't say they were misled when it was their decision in the first place.

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If the strategy only economically scales when the demand is higher than the supply then it actually takes the stress off the supply side. Less expansion/contraction during the RE cycle.

If there's no demand for trainees when its slow, and no demand for trainees when its busy-but-handled via leveraging the incumbents' productivity then there will be fewer supervisors taking on trainees when it's busy. With that said, I would also expect the fees to drop when it's slow and more appraisers are doing these but that's going to happen anyway.

 

[J Grant]

If you didn't do the inspection then you are not exposed to inspection-related complaints. You still have access to other data sources about your subject. If you check your other sources and everything lines up then its clearly reasonable to proceed "in lieu of information to the contrary I assume this info is accurate enough for this use". The same as when you are doing a 2055.

But the entire appraisal relies on the PDC info - which can generate a complaint not limited ot the inspection because the appraisal value or other conclusions are off.

It is impossible to know what an appraiser would have concluded differently about a property, site, and neighborhood they never set foot in vs having a set of photos and notes to work from

The 2055 was often ordered when an appraiser could not enter the subject for various reasons or for a limited $ amount HELOc or the like.

Will the response be that USAP does not require an inspection, or a reminder that the appraiser relies on third-party data for the comps? An echo chamber of the GSE talking points.

 

[George Hatch]

The 2055 has been around for many years and prior to that there were other exterior-only forms that appraisers used when performing exterior-only assignments. We never saw the entirety of the exterior, we never measured, and we never walked inside to see the interior. I did lots of exterior-only assignments on SFRs and condos, both before and after licensing. I do at least a couple exterior-only assignments every year on non-residential properties; I always have. Matter of fact I'm doing an exterior-only on a church in a couple days, and that's not going to be a problem for anyone either.

I have never once heard of an appraiser getting hassled for an inspection related issue on a 2055. Have you? No, you haven't. And neither has anyone else.

It's a choice, just like any other assignment type. These users don't need you or any other individual to accept these assignments against your will because if you won't do it they'll just go find someone else who will. Actually, that someone else will probably approach them for the work so they won't even have to "go find". They prolly only need maybe 5-10% of the fee appraisers to make that choice.

 

[J Grant]

The 2055 has been around for many years and prior to that appraisers still did exterior-only assignments. We never saw the entirety of the exterior and never walked inside to see the interior or to measure. I did lots of exterior-only assignments on SFRs and condos, both before and after licensing. I have never once heard of an appraiser getting hassled for an inspection related issue on a 2055. Have you? No, you haven't. And neither has anyone else.

I am not talking about getting hassled for the inspection

I am talking about the appraiser's perspective is different when they see a property and site and neighborhood vs when they do not, and that can throw the entire appraisal off in value or other conclusions- and we may not realize it at the time.-

The 2055, again, was for a specific reason - either lack of entry to a subject or a limited HELOC or the like. I received a limited amount of 2055 orders over the years in res lending -

 

[ucbruin]

The 2055 has been around for many years and prior to that appraisers still did exterior-only assignments. We never saw the entirety of the exterior and never walked inside to see the interior or to measure. I did lots of exterior-only assignments on SFRs and condos, both before and after licensing. I have never once heard of an appraiser getting hassled for an inspection related issue on a 2055. Have you? No, you haven't. And neither has anyone else.

Once....

While on BofA SoCal staff my coworker appraiser told me her husband (also a BofA staff appraiser in a different office)....
Was fired for "missing" something the bank deemed detrimental located in the backyard....
I think she mentioned that management told him he should have driven to a higher elevated street behind the subject to view the backyard....
After 30+ years, I may be wrong on some of the details....

 

[Surf Cat]

We created a new job title....because it's a new job. They are not an appraiser, they are not an inspector, they are simply collecting objective property characteristics at a property. They are not performing an appraisal service in any way, not concluding with any opinions...just collecting data. It doesn't take much of a wizard and we certainly didn't need consultants to come up with a name for this new job...property data collector is exactly what they do.

You know the folklore that vampires need to be invited into a home before they can enter? This concept serves as a symbolic barrier, protecting the homeowner's free will and space. This is how the homeowners should treat the unlicensed, uninsured, PDC and not invite them in.

When appraisers sign up for AMC's, they invite the vampire into their business and they get their fees sucked dry. Additionally, vampires might use tricks or glamour to persuade someone to invite them in....."you can do these hybrids in an hour". It's a frigging 1004 with different certifications.....sheesh.