Hybrid

[djd09]

Mortgages without appraiser visits? Fannie Mae pilot asks why not

In a bid to cut time and costs from the mortgage process, Fannie Mae is testing whether appraisers can accurately determine a home's value without actually visiting the property.

Instead, the government-sponsored enterprise is asking appraisers to combine local market data with property-specific details from a home inspection to create a "hybrid appraisal" report.

Fannie Mae declined to comment about the program, but the pilot was described to NMN by multiple sources familiar with the tests.

Hybrid appraisals tend to be faster for lenders and cheaper for borrowers than traditional, "full" appraisals, particularly in rural areas and hot markets where there are appraiser shortages, and they are being increasingly used for originations in the home equity market in response to higher rates, costs and competition.

"We think it's a game changer, the fact that they're going down the path of testing it," said Jim Smith, president of Property Solutions, the valuations, title and asset management division of Computershare.

The use of alternative appraisal products has long raised questions about data integrity and accuracy. For example, the quality of the subject-property data in a hybrid appraisal will vary based on the skill and experience of the home inspector, said Mark Johnson, president of property valuation company LRES.

"The pro for the lenders is everything is faster and easier. Really what you are doing there is taking the appraiser out of the drive-time and appointment equation, and allowing them to focus on the analysis and conclusion. An appraiser can do more appraisals per day sitting at his desk," Johnson said.

https://www.nationalmortgagenews.co...ppraiser-visits-fannie-mae-pilot-asks-why-not

 

[Carnivore]

So the practical and real time way of looking at this goes like this:

Determine Annual Cost to open your doors and hang out your shingle. - Essentially a fixed annual cost:. License Fee,s, E&O, Realtor Fees, MLS Fees, CE Cost(includes non-productive time lost 14 hours annually because of CE), etc etc 50 week time frame 5 days per week, 8 hours daily = 2,000 hrs. You have other non-productive time in the form of record keeping. Holidays, Vacation, etc This is not a complete list, its just to illustrate what you always have to consider first.

OK, these cost exist no matter what. Zero Appraisal Work. = Zero Gross Income - Your at a loss on day one of each tax year year.

Net Income before taxes is the result; Immediately because your self employed 15.2% of every dollar is your next cost in SE Tax.(Social Security)

OK, I made a point above about something all of us already know. So its not relevant to just Desktops Its relevant to all Evaluation Services.

So here is my Reconciliation:

What do we risk losing/diminsihhing if we are completing a whole Lot of Desktops - Market Segment Geographical Competence .

Is risk still the same? Yes, No, Maybe.

Is USPAP Record Keeping Requirements Lessened? Absolutely not!

Is Standard One USPAP Lessened? Absolutely not!

Is analysis of Market data for the SCA diminished? Absolutely Not!

Is HBU analysis Different or lessened? Absolutely Not!

Is analysis and utilization of the Cost Approach Lessened? Absolutely Not! If its applicable ask for SOW Increase. It will be denied/Canceled and sent to Mr Bragadocious, Boiler Plate Billy or Me Too Sally. OK, i already knew that.

So here is some advice. When you turn down a Desktop assignment or any Assignment DONOT give them any Appraisal Results. Just say your to busy or something. Otherwise you trip the Record Keeping Rule requirement. you dont want to be forced to keep a paper thin file around for five years do you?

So I am not opposed at all to Desktops work. I am convinced that it is not the Cash Cow some appraiser's think it is and you can be dragged into court over any appraisal product. Just ask Peter!

 

[djd09]

You are correct USPAP is not lessened. And misleading is misleading, and not credible is not credible.

Yes the insurance companies can quash the whole idea if the refuse to cover this junk.

And apparently fannie secret project will be disclosed after the opening of their 200 million dollar building. Party away.

 

[djd09]

Just ask Peter!

"Appraisers/AMCs/inspectors providing hybrids for loan origination are the canaries in the coal mine."

http://www.appraiserlawblog.com/2018/05/hybrid-appraisals-speaking-about.html

hahahaha. hold on. hahahaha. Ask him.

 

[Mr Rex]

The use of the term "Inspectors" is misleading and should come to a head shortly.

 

[djd09]

"Appraisal Institute Roams The Halls of Irrelevance in DC – Despite being denied re-admittance to TAFAC for not agreeing to honor the TAF mission statement, Scott DiBiasio of the Appraisal Institute continues to attend Appraisal Foundation meetings like this week’s, trying to insert influence and assert AI’s presence despite its current industry irrelevance. The more feedback I get about their actions, the more I am convinced they have some sort of private agreement with REVAA (Real Estate Valuation Advocacy Association) to encourage the industry adoption of evaluations despite pushback from their own residential members. Time will tell but as history has shown us, they don’t share these types of things with their members. Afterall, it took members a decade to get AI National to admit and disclose their deal with FNC. Residential appraisers I know – who are and are not AI members – continue to scratch our heads wondering why they are so unnaturally and over-enthusiastically supportive of demeaning our profession to enable us to do $25 (and I have heard of $7 to $12) evaluations as if that serves their members best interest. No logical reason for their over the top enthusiasm has been shared. To date, AI National has had no success on the state legislature level nationwide with this agenda that is unsupported by their members and in fact, I heard AI just lost its bid to enable appraisers to switch on or off their USPAP licensing requirements in Florida by a 1-7(?) vote."

http://www.millersamuel.com/note/june-8-2018/

Bingo

 

[Meandering]

By the way, Marion, if you (or anyone of like mind) want to make the argument you are making, then the best place to make it is to the financial regulators overseeing the lenders, the GSEs, FHA & VA.
If they agree that, for any lending purpose by a FRI or GSE/etc., any time an appraisal is required then, at a minimum, the inspection must be done by an appraiser, hybrids then disappear from the lending universe; and i'd be happy with that.

Otherwise, just arguing with me may convince other appraisers who are reading our discussion that the SOW for these assignments is inappropriate and they therefore cannot be completed, but it isn't going to have much of an impact anywhere else.

Now here we disagree.

I think the best place to make the argument is to the public. After all, these regulations for "safe and sound" are in place to protect the public, and the public believes they are being protected by these regulations, yet, they are not told that no one is enforcing these regulations and the state of the matter is exactly opposite of these regulations. Among many possible results could be that we're paying government employees wages, benefits and pensions, who are not enforcing regulations they wrote.

Ghee, that won't be pretty.

.

 

[Meandering]

But there is a really easy fix here for AMCs, appraisers and the GSEs.

Just let the appraisers be indemnified from any responsibility for the scope of the work, or the opinion of value based upon information provided by only one side of the interested parties to a transaction.

Easy enough,

Indemnify appraisers so that;

Appraisers hold no liability for scope of the work or opinion of value for these appraisals that fall outside of the IAEG requirements. Let the decision makers hold all the liability.

Easy peasy.


.

 

[Terrel L. Shields]

The only thing that the lender wants is your signature and that shifts liability away from them. Remember that the commercial paper brokerages created bonds by stuff junk mortgages in with sufficient good mortgages to trick (or browbeat) Moody's et al to rate the bond a much higher rating than warranted. Did the creators of this garbage go to jail? No. Moody's, who appraised and rated the bond, took a huge hit with fines but the creators, who knew they were packing crap in with the candy, skated. And banks want your signature for the same reason. Did Moody's create the problem? No. They were the fall guy for a deliberate defalcation.

 

[George Hatch]

What's easy peasy is holding appraisers accountable for the things they are doing, and not holding them accountable for things they aren't doing. As is already required of appraisers in USPAP.