Hybrid

[George Hatch]

It may be true that Fannie can dictate and change their requirements at whim per the rules they have written.

Its not at all unreasonable for anyone, especially those expected to fulfill those requirements to question, debate, and openly challenge whether they are acting appropriately and prudently - when considering their ONLY objective and interest is to stay profitable, accommodate and service their partners needs - which does not include Appraisers.

I never said anything about endorsing their actions. I don't think it's prudent to use these in any but a limited number of low intensity uses.

But as far as servicing the needs of their partners, that's really only a unidirectional track that includes their investors. Not their vendors.

When was the last time appraisers were concerned about servicing the needs of their formsware providers or their MLS boards or other dataplant providers. When we're the customers we expect our vendors to hop to it, and regardless of how well one of those vendors are doing for us that doesn't stop us for constantly looking for the bigger/better deal.

We sure as hell didn't support our typist "partners" back when the technology enabled us to drop those services altogether. I don't see how appraisers are in any moral position to be making demands of our clients to provide us with the safe space from the ravages of technology and business trends that we might find offensive.

 

[George Hatch]

You also told us guys 10 years ago that AMCs would be good for us too.

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That is an untruth. I never thought that, I never said that. At the time and prior to the implementation that gutted certain elements of the original verbiage of the HVCC I didn't even think the AMCs would become a more significant part of the market. I thought the lenders would be forced into direct engagement.

I was obviously very wrong about that, but only because I took the signatories of the HVCC at their word.

What I was right about was that getting the MBs out of the loop was both inevitable and a positive step toward safe/sound. Now people might look at the excesses these lenders are pulling right now, but the difference between 2018 and 2005 is that now the lenders can't blame any other parties but themselves for these actions, right down to the individuals who sent the emails. Whether the gov't will do it's job is its own variable, but in no case will it be as difficult to identify the individuals who made the big decisions this time as it was last time.

 

[J Grant]

There;s a difference, a typist was not performing appraisal practice, nor is software forms- they are serviced or products that facilitate an appraisal being done. BTW many appraisers continued to use typists or assistants, ( some still do )....but none of these transtions such as glue on photos to digital photos replaced appraisal practice, they just replaced means of getting it done. And appraisers are not always looking for the "better deal", but rather a reasonable price , or even paying more for quality in the $ we spend on digtal cameras, laptops, data services, etc etc.

The difference with bifurcated is it is replacing what for decades was considered part of appraisal practce ( the int inspection for 1004 work ), by now calling it "data collection" and a non appraiser sent out to do that portion.

The fact that USPAP allows appraisals do be done without an inspection is not the point. The point is for 1004 work, an inspection is relied on. For decades, lender, Fannie, FHA precedent it was important enough to require the cert appraiser personally do it for subject and ext of comps ,or accompany the trainee do it and AF considered inspections important enough for getting licensed supervisor needed to accompany or review/sign off on reports where trainee inspected. .

Why were trainees not allowed to inspect on their own? Is it that they could not be taught in a day how to measure or take a photo?

Of course they could, that is the rote aspect of the inspection . They were not allowed to inspect on own because the inspection was providing a basis for the appraisal, gathering not just "data", but observing features and defects impact on value and thus forming the basis for judgement,s opinions and perceptions of the subject, comps, and neighborhood. USPAP FAQ defined the inspection by a trainee as contributing 'significant assistance" a Tier 1 part of appraisal practice

With bifurcated the end run around saying the inspection is part of appraisal practice is when a non appraiser inspects, they do not form, or communicate judgement, opinons about what they see, they act like robots checking a list or notes and measuring/photos. The appraiser is expected to form opinions, judgement relying on what the inspector provided.

There can be a disconnect between a third party providing information vs what the appraiser themselves would have observed and concluded in person. In some cases that will be minimal and not matter, in others it will, but barring an easy to find descprecncy, nobody can know when that is the case. Factor in pressure of faster deadlines to both the inspector and appraiser will only add to any issues of the disconnect.

And for what...so lenders get funded a day faster? (if they do, it is unknown how "efficient" these bifurcated really will be.

 

[Evincere]

I never said anything about endorsing their actions. I don't think it's prudent to use these in any but a limited number of low intensity uses.

But as far as servicing the needs of their partners, that's really only a unidirectional track that includes their investors. Not their vendors.

When was the last time appraisers were concerned about servicing the needs of their formsware providers or their MLS boards or other dataplant providers. When we're the customers we expect our vendors to hop to it, and regardless of how well one of those vendors are doing for us that doesn't stop us for constantly looking for the bigger/better deal.

We sure as hell didn't support our typist "partners" back when the technology enabled us to drop those services altogether. I don't see how appraisers are in any moral position to be making demands of our clients to provide us with the safe space from the ravages of technology and business trends that we might find offensive.

We live in societies here in the USA where all are affected by the economics that happen to be trending. Save the select few we were ALL seriously affected by the last housing crash. I wasn’t referring to an Appraisers typist being replaced or fixed annual fees we pay to MLS or Software vendors.

While we agree on what might be an appropriate low limited use of these products, generally it goes without saying, give an inch and (Fannie) will take miles once the horse has left the barn. And right now, via their pilot hybrid that horse being groomed in the back stables.

As a tax payer (who happens to be an Appraiser) their rush to profit and commitment to their investors to the peril of all tax payers should absolutely be questioned (especially) by those (Appraisers) they hope will line up to do them.

These hybrid discussions are ALL in order and appropriate

 

[Evincere]

. Whether the gov't will do it's job is its own variable,.

As an outliar.

 

[J Grant]

The US has a president whose own business history is high debt/leverage/risk and stick others with the bill...three bankruptcies, a trail of thousands of lawsuits and stiffing contractors. The admin is dismantling consumer protection laws and agencies and rolling back regulations . The outcome short term/long term is unknown. One can look to history however and say how'd that work out last time...of course a balance between over regulation and open door to the next generation of Enron type activity is ideal..

Back to the grunt work of appraisers...I wonder how over time how appraisers doing fast turn time 1 hour (supposed ) desktop hybrids will fare.

It's not a problem, until it's a problem. Lenders are using it for lower risk tier of mortgage work such as a HELOC. For a HELOC, maybe the credit line might be, for example, only 30k. But remember the appraiser is responsible for the whole of the market value opinion. Thus, if the appraiser's opinion of MV for a subject is 350k , it means the appraiser is responsible for the 350k, not the fact that "only" 30k is the loan amount or line of credit.

 

[Meandering]

Do you really think that AMC's are ordering the bifurcated appraisals that are part of the Fannie pilot just so they can turn around throw them in the trash as opposed to the lender using these bifurcated appraisals to determine the collateral value for a Fannie loan that is part of the pilot? That is ridiculously silly as the AMC's are not obtaining these appraisals unless they are ordered by a lender.

By the way, both Fannie and Freddie give certain lenders all kinds of different variances on a regular basis to originate loans that don't meet the GSE's published guidelines. Fannie calls these side deals Lender Variances while Freddie calls them Terms of Business (TOB's) and lenders are not obligated to share these variances/TOB's with appraisers nor anyone.

What most people don't realize is that the GSE's published guidelines are inside a smaller box than their internal credit policies. Variances/TOB's that are outside of the published guidelines but which are still inside of their internal credit policy guide are granted on a regular basis to certain well performing lenders. One example is Coops...Freddie's published guidelines do not include guidelines for originating Cooperatve Share loans (except for HARP and Refi Relief loans), yet they allow certain lenders to obtain a TOB that allows them to originate new Cooperative Share loans, which is why their guidelines state the following:

4201.22: Cooperative Share Loans (11/15/17)

Cooperative Share Loans are eligible for purchase if permitted by the Seller's Purchase Documents. A Seller should contact its Freddie Mac representative to discuss how to obtain the applicable term of business.

There are literally scores of additional TOB's that are not referenced at all in the published guidelines...some of these are standardized TOB's granted to more than one lender and some are unique TOB's negotiated by a single lender. By the way, typically when the GSE's grant a variance/TOB to a particular lender, no public announcement is made by either the GSE or the lender(s) involved.

Not a single item concerning appraisal, or appraisal quality in this change.

http://www.freddiemac.com/singlefamily/guide/bulletins/pdf/bll1726.pdf

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[George Hatch]

The US has a president whose own business history is high debt/leverage/risk and stick others with the bill...three bankruptcies, a trail of thousands of lawsuits and stiffing contractors. The admin is dismantling consumer protection laws and agencies and rolling back regulations . The outcome short term/long term is unknown. One can look to history however and say how'd that work out last time...of course a balance between over regulation and open door to the next generation of Enron type activity is ideal..

Back to the grunt work of appraisers...I wonder how over time how appraisers doing fast turn time 1 hour (supposed ) desktop hybrids will fare.

It's not a problem, until it's a problem. Lenders are using it for lower risk tier of mortgage work such as a HELOC. For a HELOC, maybe the credit line might be, for example, only 30k. But remember the appraiser is responsible for the whole of the market value opinion. Thus, if the appraiser's opinion of MV for a subject is 350k , it means the appraiser is responsible for the 350k, not the fact that "only" 30k is the loan amount or line of credit.

Are you worried about your exposure to liability for an error - of your own - in a hybrid appraisal that was performed for use with a HELOC?

 

[BRCJR]

With any "product" on the market you need to know how to handle it.

Simply, know what you are doing and only do what you know.

 

[George Hatch]

We live in societies here in the USA where all are affected by the economics that happen to be trending. Save the select few we were ALL seriously affected by the last housing crash. I wasn’t referring to an Appraisers typist being replaced or fixed annual fees we pay to MLS or Software vendors.

While we agree on what might be an appropriate low limited use of these products, generally it goes without saying, give an inch and (Fannie) will take miles once the horse has left the barn. And right now, via their pilot hybrid that horse being groomed in the back stables.

As a tax payer (who happens to be an Appraiser) their rush to profit and commitment to their investors to the peril of all tax payers should absolutely be questioned (especially) by those (Appraisers) they hope will line up to do them.

These hybrid discussions are ALL in order and appropriate

The wisdom of lenders taking shortcuts with their various forms of underwriting is obviously an issue, but that doesn't belie the point that the primary concern of most appraisers is the impact of the use of these on their business interests. And that's a good thing to be concerned about.