Hybrid Appraisals

[Non Sequitur]

I don't know and you don't know.

Would it be unreasonable to expect the GSE that published the chart and has the data to know?

And it would be nice if the GSEs even pretended to care about the health of independent appraisers.

 

[J Grant]

The primary impetus for exploring the use of hybrid appraisals was the long turn times that result when the market spikes. Anyone remember the spike in 2015 or 2016 that gave rise to the term the "COW" states (Colorado, Oregon and Washington) - those where states were turn times were VERY long. And, of course we all know what happened during COVID. Having someone else collect the data and having the appraiser focus on analyzing the data is just a way to gain efficiency in such times.

Of course, right now there is little concern about turn times, because loan volume is so slow. But we all know that markets change, and there will be another spike someday. The use of hybrids is a way to help alleviate the stress on the system that a spike could generate. The findings related to condition ratings and inspections/repairs was not an expected result, just something that the analysis revealed.

That makes sense as a reason; however, then hybrids should only be used in the infrequent market spikes of high volume.

If you expand and use hybrids all the time, it will deprive appraisers of income ( and job satisfaction ) and drive even more out of the profession.

 

[CGinMN]

That drop is an objective fact, but is that because of waivers? We've heard for years that the average age of an appraiser is ~60 years. Have they finally started retiring and would they have retired anyway? Does the drop in loan volume mean that there are less appraisals to go around and that has an impact on unique appraiser submissions? Is it some combination of all of these? I don't know and you don't know.

I would think knowing would be important for risk management.

 

[Joe Flacco]

GSE meddling in appraisal issues has been a disaster all around.

 

[Joe Flacco]

GSE appraisal guidelines are very problematic. That whole section should be removed from the selling guide and replaced with simply appraisal reports that comply with USPAP.

 

[Joe Flacco]

The GSE's come up with these crazy ideas like measuring the houses with ANSI when the data for the comparable properties are not reported in ANSI. The meddling in appraisal development and reporting is crazy. The appraisal section should be removed from the selling guide.

 

[CGinMN]

Removing the appraisal section of the guide and deferring to USPAP would be the ultimate efficiency play. No wasteful back and forth between underwriters and appraisers to make sure the appraiser comments on things that don't require comments. This is more efficient for the lender, appraiser, and consumer. If I was DOGE I would be looking at this. What other solutions?

 

[Bobby Bucks]

Yes I do get the feeling they are trying hard to sell it, including bringing a rep to these forums.

Yes indeed, plus being selective about which questions to spin answers to and which to ignore.

 

[Joe Flacco]

Removing the appraisal section of the guide and deferring to USPAP would be the ultimate efficiency play. No wasteful back and forth between underwriters and appraisers to make sure the appraiser comments on things that don't require comments. This is more efficient for the lender, appraiser, and consumer. If I was DOGE I would be looking at this. What other solutions?

The appraisal section in the GSE selling guide is most definitely the biggest cause of inefficiencies in the appraisal process. They should definitely remove it and defer to USPAP.

 

[CGinMN]

I bet if lenders were able to offer a small bonus for early delivery (say within 3 business days), they'd solve most "friction" just by sheer market force. However, Reg Z makes resclosing appraisal fees basically impossible and overly burdensome. If lenders could simply redisclose appraisal fees they could eliminate a lot of disclosure staff, cutting costs to consumers. Instead, they just shop and shop til they find an appraiser who takes the assignment at the quoted fee. That shopping ends up wasting a lot of manpower, and results in bottom-of-the-barrel appraisals. The costs are passed on to the consumer and the risks are passed on to the taxpayer. Another dumb and wasteful part of the process that needs reform.