Hybrid

[Meandering]

J,
If you missed reading all the copy and pastes of the regulations,

Please go back and review the thread.

It is not about opinions of anyone who does not/did not/has not, read the regulations that pertain to the assignment.
.

.

 

[J Grant]

My post has nothing to do with regulations...

My point was, hybrids with appraiser not travelling to the property will allow appraisers to expand their coverage area, and the less ethical or competent appraisers will exploit that to the max to get a lot of hybrid work. OF course AMC;s or big box lenders using staff want their staff appraisers doing max production with hybrids in farther out areas so they can fire half their staff appraisers and save $. Not hard to figure out what is driving this decision.

 

[Meandering]

You are right,
your post was not about the regulations.

But when you read the regulation and realize that it is not a product that can be produced for the intended use of lending,

everything else you posted, doesn't even matter.

.

 

[J Grant]

You are right,
your post was not about the regulations.

But when you read the regulation and realize that it is not a product that can be produced for the intended use of lending,

everything else you posted, doesn't even matter.

.

They will work around and get it approved for intended use of lending., Fannie is helping to facilitate it, use a checkbox for hybrid with a different set of certs. I am not defending it, but that is what they will do if they want it to happen

 

[Terrel L. Shields]

Let's be blunt. The effort for 25 years was to "improve" the profession via strict rules, licensing, meticulous research and detailed reporting, and punishment of people for not "doing it right". Tantamount to that effort was the elimination of the "letter appraisal"...Now we have the mindset that we can caveat the appraisal down to a bare bones and therefore with exacting wordsmithing, we can provide a letter appraisal which is "bullet proof" and completely divorced from the idea that the ultimate goal is to provide a CREDIBLE value. The notion that there is some broad range of possible value which might or might not be captured with a skeleton report (both Std 1, and Std. 2) is difficult for me to grasp. So if my hybrid turns out to be dead wrong then my protection is that "the devil made me do it" and within the "scope of work" and the "intended use" [which is merely to serve as a compliance document for a bank], I'm fine...no problem, no liability, nary a chance someone will come after me. yeah, right.

 

[J Grant]

How much will the very fact that the appraiser has not set foot on the property influence their value opinion? Would they err on the side of caution, or a higher value to not make waves? As an appraiser, I'd find it a lot harder to go to bat/defend my value on a property I've never seen.

 

[J Grant]

How much will the very fact that the appraiser has not set foot on the property influence their value opinion? Would they err on the side of caution, or a higher value to not make waves? As an appraiser, I'd find it a lot harder to go to bat/defend my value on a property I've never seen.

GH makes a comparison to 2055 form...that is not in wide use for origination loans, usually used for servicing or other/lower loan products...so the values are rarely challenged, and the SOW is understood it might not produce the most accurate/credibly supported value anyway. I bet a lot of times it does not, but merely is acceptable for intended use. But hybrids for origination loans will be challenged more by parties/others, and their value does matter more in lending decisions.

The other comparison made is to review work...well yes in review work appraiser does not inspect interior but that is not a positive, it comes with the territory since often a review is retrospective or contentious and the client does not have interior access via the owner. This is not the case in hybrids, interior access is possible and will be granted, just to a non appraiser inspector. The primary purpose of a review is different from an origination appraisal anyway ( most of the time )

can an appraiser do a good job with a property they have not inspected in a hybrid ? Yes. Can they do a comprised/poor job if they have not inspected in a hybrid? Yes. The fact that it is a hybrid just introduces one more layer of non credible/diffuse parties who did what when things go wrong....and the potential impact of non/less geo competent appraisers offering to do desktop work of hybrids for properties in areas they are not familiar with has to be considered

 

[George Hatch]

Let's be blunt. The effort for 25 years was to "improve" the profession via strict rules, licensing, meticulous research and detailed reporting, and punishment of people for not "doing it right". Tantamount to that effort was the elimination of the "letter appraisal"...Now we have the mindset that we can caveat the appraisal down to a bare bones and therefore with exacting wordsmithing, we can provide a letter appraisal which is "bullet proof" and completely divorced from the idea that the ultimate goal is to provide a CREDIBLE value. The notion that there is some broad range of possible value which might or might not be captured with a skeleton report (both Std 1, and Std. 2) is difficult for me to grasp. So if my hybrid turns out to be dead wrong then my protection is that "the devil made me do it" and within the "scope of work" and the "intended use" [which is merely to serve as a compliance document for a bank], I'm fine...no problem, no liability, nary a chance someone will come after me. yeah, right.

You can't unbreak an egg and you can't rewrite history.

The credibility of a workproduct is judged within the context of the intended use- which IRL has always been the case. We have ALWAYS done different SOWs for different uses/users. We have never NOT done different SOWs for different uses/users. Those uses have always decided what - in addition to our minimums - they think is meaningful to their use, and they have never NOT had that discretion.

If you think its a bad thing that some of these users are only now coming around to understanding how much discretion they actually have then that's unfortunate. But as far as any kind of appraisal standards argument goes there haven't been any significant changes relating to SOW decisions since the SOWR itself came online 12 years ago and even THAT change didn't alter what appraisers could and couldn't provide back during the Departure Rule era.

Now what the lenders are allowed to use seems to be changing, but those changes are occurring at the regulatory level, not at an appraisal standards or licensing issue. The main reason "inspections" are so widely considered by most people to be appraisal practice is because of the disclosure/cert requirements. But if you think about it., there's nothing distinctive about how an appraiser measures or photographs or inspects a property that would be of effect on an appraisal.

I'm not saying these are positive developments for our business - I don't think they are. But notice that I just referred to our business interests, which is a different argument than an appraisal standards issue. If appraisers didn't feel like they were under the constant and unrelenting assault on their livelihood and the fee for doing one of these was $300 then most of the people in this thread wouldn't be doing to moonwalk as they stagger toward their fainting couch and equating these to acts of criminal fraud as if they're the same thing.

 

[glenn walker]

This thread makes me laugh - We have got one poster who has fraud on the brain and others that think a hybrid is OK and others are not sure BUT we do know for a fact that major money center banks are using them and and they have hundreds of attorneys that do nothing but lending and real estate and we have State Boards that can simply send out notices to their appraisers as to legality of hybrids BUT they won't because there is nothing in USPAP that prohibits a hybrid and everyone but a certain poster knows this.

As George Hatch stated this ship has sailed but for some they really can't seem to accept that Physical Inspection is not a USPAP requirement nor is the use of assistants. A report could be done by flying a drone over the house and taking exterior photos and GLA and other items from public record and the appraiser cold complete the report on a sheet of plain paper and attach whatever addenda and certifications needed. Of Course now the question becomes do I have to disclose the photos were taken by an unlicensed drone and operator.

 

[George Hatch]

GH makes a comparison to 2055 form...that is not in wide use for origination loans, usually used for servicing or other/lower loan products...so the values are rarely challenged, and the SOW is understood it might not produce the most accurate/credibly supported value anyway. I bet a lot of times it does not, but merely is acceptable for intended use. But hybrids for origination loans will be challenged more by parties/others, and their value does matter more in lending decisions.

The other comparison made is to review work...well yes in review work appraiser does not inspect interior but that is not a positive, it comes with the territory since often a review is retrospective or contentious and the client does not have interior access via the owner. This is not the case in hybrids, interior access is possible and will be granted, just to a non appraiser inspector. The primary purpose of a review is different from an origination appraisal anyway ( most of the time )

can an appraiser do a good job with a property they have not inspected in a hybrid ? Yes. Can they do a comprised/poor job if they have not inspected in a hybrid? Yes. The fact that it is a hybrid just introduces one more layer of non credible/diffuse parties who did what when things go wrong....and the potential impact of non/less geo competent appraisers offering to do desktop work of hybrids for properties in areas they are not familiar with has to be considered

I'm not making the argument that a 2055 is an appropriate service for a purchase money decision. I'm making the argument from the appraisal standards perspective that nobody can say that personal interior inspections by the appraiser are a minimum standard and that you can't do a USPAP compliant appraisal without one.

And you're completely right that the more assumptions an appraiser uses in an assignment the more limitations are going to be involved. And you're also right that lenders who use these are taking additional chances and incurring additional - and avoidable - risks, and what they're risking is other people's money. AND I think its a mistake for the regulators to let them take those risks. I haven't once disagreed with any of those other points. I've only been working on the appraisal standards angle of what is and isn't.