Hybrid

[Eli]

All this talk about the public trusting...trusting what and who? That those who will make financial loan decisions - usually borrowers aka general public who more often than not are uneducated about appraisals let alone hybrid evaluations will even know the real differences between these products?

That a realtor or some other 3rd party lackey will be hired to provide 2nd or 3rd hand information to the “appraiser” about their property? I’m sure those LO s will go to great lengths to explain these products to the “public” consumers Assuring them through the process that they can be “trusted”. What a joke.

It would have to be extraordinary assumptions in bold print in every report. I have never read a hybrid report. Then credibility and competency is next.

I can see where it puts realtors in a precarious position. Appraisers too.

 

[djd09]

Mission Statement
The Appraisal Foundation is dedicated to promoting professionalism and ensuring public trust in the valuation profession. This is accomplished through the promulgation of standards, appraiser qualifications, and guidance regarding valuation methods and techniques.

http://www.appraisalfoundation.org/...spx?hkey=29e7fa40-63f3-49fc-b769-450d8072f90f

Public Trust through Standards and Qualifications.

Unlike the others, here is the mission statement.

And note it doesn't say public trust through profits.

 

[djd09]

Fannie Mae and Freddie Mac extend appraisal waivers to condos

Fannie Mae and Freddie Mac are making condominium loans eligible for automated appraisal waivers that could reduce mortgage borrowers' fees and shorten closing times for lenders.

Fannie Mae added the eligibility in recent updates to requirements for its property inspection waivers, and Freddie is following suit with a similar update to its eligibility for its automated collateral evaluations. Mortgage lenders can submit condo loans that may be eligible through Freddie's automated underwriting system, Loan Advisor Suite, starting on July 16.

"We continue to see the share of condo loans we purchase increase, especially among first-time homebuyers," David Lowman, executive vice president of Freddie Mac's single-family business, said in a press release. "ACE for condos will help increase the efficiency of the mortgage origination process, offer greater certainty and help save our clients, and their customers, time and money."

Appraisals need to be substantiated by in-house and third-party data sources in order to be eligible for the waivers, in line with the two government-sponsored enterprises' broader move toward simplifying loan processing through automated verification of underwriting information. To validate appraisal information, the GSEs examine historical home valuation data they have, as well as multiple listing services and public records, using proprietary models.

In addition to using data validation to simplify loan processing, the agencies often rely on it to extend representation and warranty relief to lenders.

Condominium data can be tougher to verify than data on traditional loans because there is less structured data in the market. Condos are run by homeowners associations that often are staffed by volunteers, so information can be challenging to collect.

https://www.nationalmortgagenews.co...reddie-mac-extend-appraisal-waivers-to-condos

Waive everything. There you go.

What is Fannie mission statement? Public Trust or Public Bailouts?

More of the fox guarding the hen house.

 

[chad hampton]

AMC's must be getting pretty desperate to find people willing to accept these things. For about the last 3 months, I've been getting about 1-2 desktop order a month from an AMC I haven't done work for in probably 5 years. I usually just let the time expire on accepting them, or wait till the last minute and decline them, but I actually decided to read the last one they sent. One thing caught my eye - it said it was an interior desktop?? I got to reading the fine print and they said all interior information, including photos will be provided by the AMC and must be incorporated into my report. And they had a list of 100 other things that needed to be done. The fee was $100, which is fine for a normal desktop that I can get out of here in less than an hour, but this seemed like putting together basically a URAR w/o calling it that or paying for it. I emailed them back and told them desktops aren't interior, so please explain yourself. The order was removed from my list, lol. I was hoping to drag it out another day or 2 before declining.

So this report goes to a borrower/lender/anyone and it is called an interior desktop. That is extremely misleading. So misleading, the 2 words don't even making f'ing sense. Just because there is a line buried in the report somewhere that the appraiser did not personally inspect the property - you have a report with interior photos, interior details, and an appraisers signature. That would tell a normal person that an appraiser saw the interior of the home, when in fact, they did not. This is w/o question very misleading. And the AMC will never be the one in front of a board explaining this. It will be the appraiser and maybe the agent that if forced to defend this work.

The AMC needs to learn to tell their clients no. The same way I had to learn to tell brokers no back in the day. And yes, you may lose a client, but that's part of business. You wanted it, now do your job. Instead, since AMC have no license on the line, little fear of any state board growing a backbone to go after them, they just tell their masters yes, we will do anything you want. Then they hand it over to their managers to go find appraisers willing to sign anything we give them.

I'm sure the banks would love to be able to print out their own form, with whatever value their computers think the home is worth and get an appraiser to sign it. But that's not how this is supposed to be done. Not yet at least.

What a mess.

 

[Evincere]

So this report goes to a borrower/lender/anyone and it is called an interior desktop. That is extremely misleading. So misleading, the 2 words don't even making f'ing sense. Just because there is a line buried in the report somewhere that the appraiser did not personally inspect the property - you have a report with interior photos, interior details, and an appraisers signature. That would tell a normal person that an appraiser saw the interior of the home, when in fact, they did not. This is w/o question very misleading. And the AMC will never be the one in front of a board explaining this. It will be the appraiser and maybe the agent that if forced to defend this work.

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Liability Concerns
Craig Capilla, a trial lawyer with the Franklin Law Group who specializes in real estate appraiser cases, says that the single most significant issue that appraisers face when performing hybrid appraisals is the reliance on third party data, subject property inspection or otherwise. “An appraiser must have a reasonable expectation for relying on information that he or she has not personally observed. This is not a new requirement. It is something the appraiser must remember when developing any opinion of value. However, the risk with hybrid reports is that the appraiser gets too comfortable and fails to adequately address this issue,” says Capilla.

Appraisers have already begun to face trouble with their state boards over hybrid assignments, according to Capilla. “We have started to see licensing complaints related to hybrid appraisal products in Illinois and I am certain there will be complaints in other states as more of these assignments are performed. Similarly, we have not seen a civil suit specific to these hybrid reports yet, but that typically follows the licensing complaints as it often takes more time to prepare those claims for litigation. We expect these lawsuits to arise in the near future,” reports Capilla.

The majority of the complaints and lawsuits that Capilla foresees will originate from the homeowner/borrower. “Most clients are sophisticated enough to know if the appraiser’s product is sufficient for their needs, or if they need to get a different report. However, the homeowner/borrower does not typically have the same level of understanding about real estate and asset value, and so it is often this confusion that leads to litigation,” Capilla says.

http://www.workingre.com/navigating-hybrid-appraisals-2/

 

[Carnivore]

Franjly I do not know if a Homeowner/Borrower gets a copy or not. I made a point earlier that several examples I have seen have Fine Print for some Important stuff. Hmmm, digital pages/photos are pretty cheap. Why have it in fine print. One example I had to use my magnifying glass to read the fine print and even then I was loosing track of what I was reading.

 

[Evincere]

One last thing. Do these trainees and newbies, and then see what the state says when they monitor your work log and you claim 8 hours time while the AMC/whomever says you did it in 45 minutes. Then see what the investigator says about the report. I bet a lot of folks may end up not being licensed over faulty hybrids.

Yet judged by state boards. USPAP provides the minimum of what is "meaningful" to ALL intended users.


Yet judged by state boards. USPAP provides the minimum of what is required to be "credible" to ALL intended users.


Yet is judged by state boards, in relation to meeting the minimum USPAP requirements and not violating minimum USPAP requirements Standards and comments and not considering FAQs. Because FAQs are not enforceable as they are not USPAP.


Sorry, but the state board judges it all and enters the picture after loans default and lenders suddenly decide they were mislead and what was provided to them was not meaningful. Can we all say Chase at the same time?


USPAP is the external benchmark, and that benchmark is used by state boards to determine if the appraiser provided a meaningful and credible report, according to how the state board interprets USPAP, because let's face it. If the loan was made, the report must have been meaningful and credible, that's why the lenders have underwriters. So, what made all those reports not meaning and credible, 2007-today???

And if all this BS was correct, USPAP would not make the appraiser responsible for the appropriate scope of the work. USPAP would be a two sentence document, Do what the client tells you to do, and make a number that the client can use, solidifying your credibility.

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Maintaining Control
At OREP, a few of our insureds are experimenting with these assignments and have encountered several companies where the hybrid form is online, hosted by the providing company. In these assignments, the appraiser simply fills out the online forms and submits their conclusions through the hybrid provider’s portal and online forms. However, appraisers should be very careful to maintain control over their report and avoid assignments where that control may be compromised.

An important question to ask is, if you realize an error was made within the report after it is submitted, or a critical piece of information is missing, do you have the ability to reopen the appraisal report, make the change, and re-submit the report? Appraisers should maintain control over the report. Without control over the report or access to it, you cannot comply with USPAP. Additionally, the appraiser should be careful to save a copy of the final report for every assignment, as well as all information required to be in the workfile.

http://www.workingre.com/hybrid-appraisals-and-risk-management/

 

[Artemis Fowl]

Are Realtors that are involved in the transaction doing inspections and taking these photos? If true...that strikes me as a VERY bad idea. Any Realtor involvement in subject valuation (party to transaction or not) would reduce the credibility of the data below any reasonable threshold IMO.

 

[Doug in NC]

We finally got our appraisal fees over $400, so now naturally Big Brother needs to step in again to make sure appraisers aren't making too much income. One new hybrid product I've seen recently proposes to pay $125 or less to perform an appraisal on the data collected by some third person.

So sick of being the political pawn of the government and their bosses in the banking industry. Our industry goes from one financial catastrophe to the next in a regular cycle, and appraisers are used by the industry to be the fall guy when the next meltdown occurs. Damn I wish I had trained to get a legitimate career during college.

 

[Meandering]

Quick!! Someone had better get in touch with those folks over at the OCC, FDIC, etc. that have provided lenders with written approval for use of such products. Just tell them that "M said so." I am sure that will mean a LOT more to them than their own reading of their own regulations.

Maybe you can post the regulations from these people that says someone other than the appraiser can inspect the property, and the appraiser can make the EA that they were provided the correct inspection information.. And perhaps you can supply the USPAP section that says Restricted Use reports are allowed for lending, which has multiple users, and that the report can be relied upon by any additional purchaser of the loan, not just the user the report was restricted to.

That's all we need,

Just one regulation that says this is allowed for lending.

No hearsay, or studies underway. Just one regulation.

Go ahead Danny, post it.

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