Hybrid

[hastalavista]

Maybe but the appraiser is responsible 100% in my state for actions of a trainee....

Mine too unless the trainee is committing fraud and the appraiser has done his/her due diligence and the fraud went unidentified.
But that's not what we have in the scenario were a company engages an inspector who happens to have a trainee license. The signing appraiser (who is doing the valuation component) is not the trainee's supervisor. They are two different entities, engaged separately to complete two different assignments. Yet, the trainee, licensed, is required to follow the USPAP but the appraiser, who is not that trainee's supervisor, is not liable if the trainee, inspecting the property, violates Ethics or Competency requirements.

 

[J Grant]

Mine too unless the trainee is committing fraud and the appraiser has done his/her due diligence and the fraud went unidentified.
But that's not what we have in the scenario were a company engages an inspector who happens to have a trainee license. The signing appraiser (who is doing the valuation component) is not the trainee's supervisor. They are two different entities, engaged separately to complete two different assignments. Yet, the trainee, licensed, is required to follow the USPAP but the appraiser, who is not that trainee's supervisor, is not liable if the trainee, inspecting the property, violates Ethics or Competency requirements.

Regardless of appraiser not being responsible if the trainee violated USPAP since they are not the supervisor, the appraiser is still liable for appraisal results. If a trainee or other party inspects the subject, their inspection become integrated into the appraisal and thus affects results.

. The missing link is the disconnect between what a trainee or inspector finds and what an appraiser would find at an inspection that might go beyond rote measurements or photos. If the appraiser might have seen/judged the property and surrounding are differently had they been there. The "stakeholders" are doing an end run around supervision for trainees and non appraisers inspecting by saying an inspection alone is not appraisal practice or significant assistance on the premise that all an inspection consists of i s "collecting data"

An appraiser at an inspect does not just collect "data", they form firsthand opinions and judgements about the property, (and surrounding area) which they are not able to do when they have not visited the property.

One can only hope appraisers when hybrids take hold for origination work organize a consumer outreach website links that informs borrowers about how the person doing an inspection might be a trainee or non appraiser and that borrower should be aware of that at time of application, and request an appraiser to inspect as part of contract clause or application to lender....I assume lenders will charge borrowers same or similar $ no matter who inspects.

 

[hastalavista]

Regardless of appraiser not being responsible if the trainee violated USPAP since they are not the supervisor, the appraiser is still liable for appraisal results. If a trainee or other party inspects the subject, their inspection become integrated into the appraisal and thus affects results.

Anyone have a case where an appraiser was fined, sanctioned, or sued due to a hybrid appraisal where (a) the inspector concealed facts or misrepresented what existed, (b) the appraiser, who never saw the property, did their level of due diligence as outlined in the SOW, and (c) while not always necessary (depending on how the SOW is written), assuming there is an EA in the report regarding property inspection, that EA was found to be improper?

JGrant, what I hear you arguing is that hybrids just aren't as good as a drive-by or interior-inspection appraisals completed by the same appraiser. I'll give you that argument because I agree with it.
I also hear you saying that the signing appraiser will be responsible for an inaccurate result if the inspection is in error (by the inspector... willfully or through negligence). I won't give you that argument because, as long as the appraiser properly discloses what was done and to what level things were verified, they've done their due diligence consistent with the assignment's requirements.
Furthermore, I hear you say that loans shouldn't rely on hybrids. I agree with part of that; some loans should not use hybrids; period!
Lastly, I hear you say these assignments don't pay enough. I agree with that for my business model. If they get to a rate where it meets my business model, and assuming I'm in agreement with the SOW, then I'll consider doing them myself.

 

[timd354]

and I am confident ditto for information supplied by a third party. DUE DILIGENCE means as the signing responsible party, you should have caught the mistake.

So the appraiser is liable for the survey of the subject property that is incorrect or the home inspection report that was provided to the appraiser that missed hidden electrical problems or the incorrect comp GLA listed in the public records or MLS or the bad well water and should have caught these mistakes even if there was no indication that any of these things were an issue? I don't think so. LOL

 

[djd09]

Verification is part of the appraisal process.

I will dub your group the 'scope away bandits'. Good appraisal practice is not your strong suit.

 

[djd09]

The hybrids remind me of the no doc loans. No surprise the bailed out clients are looking to cut corners, again.

 

[Terrel L. Shields]

the appraiser is liable for the survey of the subject property that is incorrect or the home inspection report that was provided to the appraiser that missed hidden electrical problems or the incorrect comp GLA listed in the public records

Perhaps... when obviously wrong, and readily detectable, and you never looked. When you "relied" upon someone else's work but were suspicious of it, and it was plainly wrong, then you didn't rely on it after all. I detected an error when acreage of survey differed from assessor. Looking at the survey of the adjacent parcel, I realized the two legals overlapped, both claiming an abandoned railroad ROW. The legals were so old, pre-WWII, that no one alive could say which was right, but the existing fence line suggested the surveyor, while technically reading the one legal correct, was not on the actual original division line. I've driven comps clearly not correctly measured, usually the agent inflated the size or assessor hasn't remeasured an addition.

the 'scope away bandits'

Agree. Denis's "fix" is scope away everything making it all one big fat disclaimer. A Sgt. Schultz solution. When the error is big enough, …?

When laying a water line a large mound of dirt was left on my property, the civil engineer overseeing the project "signed off" that it was done. The inspector overlooked it. Complaining to the city, guess who was responsible? The construction crew, long gone? Or, that engineer?

 

[hastalavista]

Agree. Denis's "fix" is scope away everything making it all one big fat disclaimer.

Denis' "fix" fixes the appraiser liability (as in reduces to eliminates it). Which it should do if the lender believes that a 3rd party inspection is sufficient for the appraiser to rely upon for its lending decision.
You are arguing the prudence of the valuation for the particular lending decision. That's a valid point to argue for a stakeholder; I make the same argument myself; I just don't conclude that the hybrid is never appropriate.
I'm arguing what can be done per USPAP and how, if it is done correctly, the appraiser's liability is no greater (I would argue it is less) than what they take on when doing any other assignment. That's a valid point to argue as an appraiser.
We both agree that any individual appraiser can decline these assignments on the principle that the inspection process is never reliable; if you want to add to that "public trust therefore prohibits me from accepting it", I'm fine with that!

 

[Meandering]

Anyone have a case where an appraiser was fined, sanctioned, or sued due to a hybrid appraisal where (a) the inspector concealed facts or misrepresented what existed, (b) the appraiser, who never saw the property, did their level of due diligence as outlined in the SOW, and (c) while not always necessary (depending on how the SOW is written), assuming there is an EA in the report regarding property inspection, that EA was found to be improper?

JGrant, what I hear you arguing is that hybrids just aren't as good as a drive-by or interior-inspection appraisals completed by the same appraiser. I'll give you that argument because I agree with it.
I also hear you saying that the signing appraiser will be responsible for an inaccurate result if the inspection is in error (by the inspector... willfully or through negligence). I won't give you that argument because, as long as the appraiser properly discloses what was done and to what level things were verified, they've done their due diligence consistent with the assignment's requirements.
Furthermore, I hear you say that loans shouldn't rely on hybrids. I agree with part of that; some loans should not use hybrids; period!
Lastly, I hear you say these assignments don't pay enough. I agree with that for my business model. If they get to a rate where it meets my business model, and assuming I'm in agreement with the SOW, then I'll consider doing them myself.

Anyone have a case where an AMC was fined in California for anything? How about a predatory lender? Just because the enforcement hasn’t caught up, doesn’t mean laws aren’t on the books, and could be enforced at any time.

 

[Meandering]

Hey, it’s almost like that illegal aliens argument. Yeah there’s a law no one enforces, so pretend it doesn’t matter