Hybrid

[Meandering]

dup

 

[Meandering]

H canary offers these as a substitute for the evaluation below $250K, which means they expect to undercut even the cheapo products that my banker friend said "weren't worth the paper they are written on"...but it makes for compliance to bank regs...no one cares about appraisal compliance.

But USPAP does not have a different reporting or development process for loans below $250k, and the IAEG requires evidence that regular intended users find them credible, and USPAP requires credibility be in the eyes of typical intended users, and since it is the GSEs and regulated banks that are the regular intended users, and their regulations have no such statements that assumptions concerning interior condition and verification by the appraiser of the interior condition are allowed there is no evidence that any of the regular intended users of lending products find these products credible, even though specific users may order them.

I don't think they are touting these as being a lending product other than the IAG evaluation, which does allow someone (anyone) to "personally inspect" the property.

Then they should have non-appraisers doing evaluations, because appraisers are still held to USPAP, which does not provide a development and reporting standard for an evaluation, and actually warns appraisers that they need to up the scope of the work or with draw, if the client limits the scope of the work beyond what is credible for typical users. A regulatory circle appraisers can not escape.

But how long before the cry and hue once again is that there is a "shortage" and the banks "need" to use these hybrids in order to turn appraisals around.

Until the next down turn.

HouseCanary promises a 5 day turn around to the client, but the appraiser is expected to "just do it" in 3 or even 2 days?

Which is not any faster than appraisers were turning reports 6 months ago. Want to make appraisal turn time faster? Stop the stupid stips, some are just ridiculous, provide all the mandatory information to the appraisal that Fannie says must be provided, and then provide the things that are easily catalogued, flood map, zoning, approved subdivisions, HOA fees, Superfund site info if in or near the neighborhood, tax maps, taxes, zoning, minimum zoning requirements. those are the things that save time, not this silly game of liability and monetary shift.

.

 

[djd09]

Who do you work for? StreetLinks?

 

[J Grant]

The terms Hybrid is an umbrella term for desktops with an ext inspection to (mainly ) substitute for a BPO or AVM, and are the products typically paying for appraisal portion fees of $45-$75 .

Hybrid is also used to describe a bifurcated appraisal being tested now by Fannie, to be used for origination loans to replace some traditional appraisals. That is where most of the concern lies. A traditional appraisal is an integrated valuation where on site the appraiser is not just "collecting data", they are forming judgement and opinions about the subject, and then its immediate surroundings/neighborhood and the comps inspected to form the basis of other judgement and opinions for the appraisal. The information at on site inspections come not just from physical inspection but from talking with owners, RE agents, builders, neighbors , etc. It changes the appraisal from an integrated whole to an assembly of parts, with a crucial part now performed by a non appraiser third party inspector.

Yes a third party inspector can be trained to measure, photo and take notes. But will their impression of a property be not the same as the appraiser's, and at inspections there are frequent surprises, even on "cookie cutters", enclosed areas/additions/odd site issues etc arise. The other issues, aside from fees, is turn time, as the speed pressure will be even greater, both on the inspector and the appraiser, since supposedly one of the benefits of bifurcated is saving time. Why saving 1 or 2 days is of such great concern for a loan of hundreds of thousands of dollars and lasting 30 years with a months long short sale or REO process if things go bad is so important makes no sense but bankers are pushing for it. The consumers are not going to run out and start buying/borrowing on properties just because the process is shorter or an appraisal costs less.

The bifurcated seems more efficient for staff appraisers of big box AMCs/lenders, who can also put the inspectors on staff , or bulk contract with inspectors. It will create an additional burden on smaller lender or credit union to hire an inspector AND an appraiser and coordinate results. For the big box players, bifurcated means their staff appraisers can do more volume and they can reduce number of staff appraisers and save money, so they would benefit the most from bifurcated expansion. It could lead to appraisers expanding their geo area, since now they don't have to drive to a property. Which can lead to an appraiser doing a desk portion of a property then did not inspect, in an area they are not familiar with.

 

[Eli]

But USPAP does not have a different reporting or development process for loans below $250k, and the IAEG requires evidence that regular intended users find them credible, and USPAP requires credibility be in the eyes of typical intended users, and since it is the GSEs and regulated banks that are the regular intended users, and their regulations have no such statements that assumptions concerning interior condition and verification by the appraiser of the interior condition are allowed there is no evidence that any of the regular intended users of lending products find these products credible, even though specific users may order them.

Then they should have non-appraisers doing evaluations, because appraisers are still held to USPAP, which does not provide a development and reporting standard for an evaluation, and actually warns appraisers that they need to up the scope of the work or with draw, if the client limits the scope of the work beyond what is credible for typical users. A regulatory circle appraisers can not escape.

Until the next down turn.

Which is not any faster than appraisers were turning reports 6 months ago. Want to make appraisal turn time faster? Stop the stupid stips, some are just ridiculous, provide all the mandatory information to the appraisal that Fannie says must be provided, and then provide the things that are easily catalogued, flood map, zoning, approved subdivisions, HOA fees, Superfund site info if in or near the neighborhood, tax maps, taxes, zoning, minimum zoning requirements. those are the things that save time, not this silly game of liability and monetary shift.

.

State law is involved too on whom can perform what is disclosed on truth in lending disclosures. Antitrust law is written all over the current actions as well.

Lawyers will have a heyday soon.

 

[Terrel L. Shields]

USPAP does not have a different reporting or development process for loans below $250k,

Nope which is why...

they should have non-appraisers doing evaluations, because appraisers are still held to USPAP

A CG that I have worked with surrendered his CG license and does commercial evaluations for about half price ($500) which makes sense. He has a lot more work, no liability, and a 4 - 8 page report that meets the IAG. He wanted to keep his license but there is no real way to put the license on ice. So if he decides to return he will have to take additional course work and basically reapply although his samples are still "good" in the eyes of the board.
Most of the employees of his company are ex-assessor appraisers or people that they simply train and have them sit through a few Kaplan or McKissock RE courses.

 

[Meandering]

A traditional appraisal is an integrated valuation where on site the appraiser is not just "collecting data", they are forming judgement and opinions about the subject, and then its immediate surroundings/neighborhood and the comps inspected to form the basis of other judgement and opinions for the appraisal. The information at on site inspections come not just from physical inspection but from talking with owners, RE agents, builders, neighbors , etc. It changes the appraisal from an integrated whole to an assembly of parts, with a crucial part now performed by a non appraiser third party inspector.

Worth repeating.



Send that paragraph to regulators.

 

[Meandering]

A CG that I have worked with surrendered his CG license and does commercial evaluations for about half price ($500) which makes sense. He has a lot more work, no liability, and a 4 - 8 page report that meets the IAG. He wanted to keep his license but there is no real way to put the license on ice. So if he decides to return he will have to take additional course work and basically reapply although his samples are still "good" in the eyes of the board..

As I've said before, and I'll say it again,
AMCs could indemnify appraisers, they are very familiar indemnity agreements.
Yet they balk at this simple fix.

 

[Joe Flacco]

Understood. No worries. I do find it interesting that some seem to think that my current role creates some kind of conflict. Some even state blatantly that I am no longer even an appraiser, despite the fact that I engage in appraisal practice virtually every day. While my main focus is on policy, strategy and compliance, most days I find myself spending at least some time dealing with the kinds of issues that field appraisers deal with regularly - is it a PUD or a condo? How does one reconcile a GIS map that says the site is 7 acres with a survey that indicates 4.5 acres? And those were just yesterday I like the opportunity to talk through such things with other appraisers.

I have yet to find a case where what is generally in the best interest of the independent fee appraiser is in conflict with my current role, but I understand that some will have such a perception/belief. In my adult life I have never had a non-appraisal related job. I spent 29 years as an independent fee appraiser, and I did not suddenly forget all those experiences when i started working in PA. I spend a great deal of my time trying to improve things for appraisers. In some cases some will view an honest disagreement over what is in the best interest of appraisers as some sort of company driven bias, even if my current employment is not germane at all. That is just reality in social media.

What you do is avoid making statements publicly that go against the interests of your company. You can't even make a obviously true statement that third party inspection is not the same thing as physical visit by the appraiser and that it is less reliable. Pretty pathetic.

 

[DWiley]

The terms Hybrid is an umbrella term for desktops with an ext inspection to (mainly ) substitute for a BPO or AVM, and are the products typically paying for appraisal portion fees of $45-$75 .

Hybrid is also used to describe a bifurcated appraisal being tested now by Fannie, to be used for origination loans to replace some traditional appraisals. That is where most of the concern lies. A traditional appraisal is an integrated valuation where on site the appraiser is not just "collecting data", they are forming judgement and opinions about the subject, and then its immediate surroundings/neighborhood and the comps inspected to form the basis of other judgement and opinions for the appraisal. The information at on site inspections come not just from physical inspection but from talking with owners, RE agents, builders, neighbors , etc. It changes the appraisal from an integrated whole to an assembly of parts, with a crucial part now performed by a non appraiser third party inspector.

Yes a third party inspector can be trained to measure, photo and take notes. But will their impression of a property be not the same as the appraiser's, and at inspections there are frequent surprises, even on "cookie cutters", enclosed areas/additions/odd site issues etc arise. The other issues, aside from fees, is turn time, as the speed pressure will be even greater, both on the inspector and the appraiser, since supposedly one of the benefits of bifurcated is saving time. Why saving 1 or 2 days is of such great concern for a loan of hundreds of thousands of dollars and lasting 30 years with a months long short sale or REO process if things go bad is so important makes no sense but bankers are pushing for it. The consumers are not going to run out and start buying/borrowing on properties just because the process is shorter or an appraisal costs less.

The bifurcated seems more efficient for staff appraisers of big box AMCs/lenders, who can also put the inspectors on staff , or bulk contract with inspectors. It will create an additional burden on smaller lender or credit union to hire an inspector AND an appraiser and coordinate results. For the big box players, bifurcated means their staff appraisers can do more volume and they can reduce number of staff appraisers and save money, so they would benefit the most from bifurcated expansion. It could lead to appraisers expanding their geo area, since now they don't have to drive to a property. Which can lead to an appraiser doing a desk portion of a property then did not inspect, in an area they are not familiar with.

If you believe so fervently that personal inspection is so critical, how many times since 1989 have you written to the ASB to encourage them to change USPAP to align with your views?