Hybrid

[Eli]

$25? Is that the bonus? Surely not a real fee.

"hybrids", "bifuricated", or whatever other buzzword of the day people like to use to sound smart won't exist very long even if they ever do amount to anything real. Appraising is already barely a livelihood at "full" fee, it goes away all together if the fees go any lower.

It's an economic thing. I don't know any serious appraiser that values their license that will sign their names for $25.

I know some people on this board that maybe couldn't cut it as an appraiser have agendas and want the profession to go away. It's human nature I suppose. It's fun to watch.

Well, obliviously many find it disgusting instead of “fun to watch”. No wonder more don’t post or join.

 

[Meandering]

Employees don’t have “independence” of decisions made or of their reports.

Subcontractors bear the burden of their decisions.

Oh my, think how those fines to LPS would have been reduced if their robo signers has been subcontractors and were responsible for recognizing fraudulent documents they were creating.

Bye bye res lending people.

Don’t worry, the AI “cares”

.

 

[Michigan CG]

.....................If in 2008 the lenders had been faced with an acute shortage of appraisers would they have still trusted their appraisal procurement to an AMC that might have several different customers competing for services from the same appraisers? If there had been a shortage at the outset would the AMCs have gotten very far with their take-it-or-leave-it fee splits or would they have been FORCED by the lack of leverage in the market to pay higher fees in order to attract their share of vendors? What do you think?

You wouldn't be referring to supply and demand? Surely not.

 

[Terrel L. Shields]

The math does not work. Say you could get as much as 50% of a "normal" fee from a hybrid (not 20% as offered currently)
That means the total appraisal fees are going to be halved or if only 50% of transactions are hybrid, the total fees will be 3/4 at best. So you stretch the appraisers dollar.

The red herring is the notion you can "do" 8 or 10 a day. That is 8 or 10x the liability, and for no increase in pay. So you do 8 at $65 - $520. Sure. How many appraisers will get 8 assignments per day? Zero outside an office geared to punching them out in a metro area that can support it. There are not going to be 8 assignments in Guymon, Oklahoma, or even Joplin, MO in a day, in the former, probably not in a week or two. And you have to compete with X number of appraisers for that 8 appraisals. Do the math. The average appraiser doing 300 assignments annually for $400 is going to make a gross of $120,000. If they get 4 of these $65 appraisals a DAY, then again, a regular work week gives you 1,000 assignments and a net of $65,000 - if you are lucky enough to collect. I doubt the average appraiser would get 4 assignments a day. Maybe 1 a day average and a few "regular" assignments, but fewer of them because these hybrids will eventually be used for loan origination. At present the PIW can only be used on 10% of appraisals according to Crawford...what happens to your residential business when you are 50% hybrid at $100 and 50% "conventional" at $400? First, with a shortage of work, it will be like 2008...fees get cut or you find another job.

 

[djd09]

IV. Appraisal and Evaluation Program

An institution's board of directors or its designated committee is responsible for adopting and reviewing policies and procedures that establish an effective real estate appraisal and evaluation program. The program should:

Provide for the independence of the persons ordering, performing, and reviewing appraisals or evaluations.

Establish selection criteria and procedures to evaluate and monitor the ongoing performance of appraisers and persons who perform evaluations.

Ensure that appraisals comply with the Agencies' appraisal regulations and are consistent with supervisory guidance.

Ensure that appraisals and evaluations contain sufficient information to support the credit decision.

Maintain criteria for the content and appropriate use of evaluations consistent with safe and sound banking practices.

Provide for the receipt and review of the appraisal or evaluation report in a timely manner to facilitate the credit decision.

Develop criteria to assess whether an existing appraisal or evaluation may be used to support a subsequent transaction.

Implement internal controls that promote compliance with these program standards, including those related to monitoring third party arrangements.

Establish criteria for monitoring collateral values.

Establish criteria for obtaining appraisals or evaluations for transactions that are not otherwise covered by the appraisal requirements of the Agencies' appraisal regulations.

https://www.FDIC.gov/regulations/laws/rules/5000-4800.html

Safe and sound? The laws are not written for appraisers, but they sure do affect them.

Power line tower on the next door neighbor's property. Hope they report it to the appraiser. May not be a value issue but defiantly needs to be addressed.

Who is the inspectors E&O company? I need copy for my files.

The casino is now open...

 

[George Hatch]

The math does not work. Say you could get as much as 50% of a "normal" fee from a hybrid (not 20% as offered currently)
That means the total appraisal fees are going to be halved or if only 50% of transactions are hybrid, the total fees will be 3/4 at best. So you stretch the appraisers dollar.

The red herring is the notion you can "do" 8 or 10 a day. That is 8 or 10x the liability, and for no increase in pay. So you do 8 at $65 - $520. Sure. How many appraisers will get 8 assignments per day? Zero outside an office geared to punching them out in a metro area that can support it. There are not going to be 8 assignments in Guymon, Oklahoma, or even Joplin, MO in a day, in the former, probably not in a week or two. And you have to compete with X number of appraisers for that 8 appraisals. Do the math. The average appraiser doing 300 assignments annually for $400 is going to make a gross of $120,000. If they get 4 of these $65 appraisals a DAY, then again, a regular work week gives you 1,000 assignments and a net of $65,000 - if you are lucky enough to collect. I doubt the average appraiser would get 4 assignments a day. Maybe 1 a day average and a few "regular" assignments, but fewer of them because these hybrids will eventually be used for loan origination. At present the PIW can only be used on 10% of appraisals according to Crawford...what happens to your residential business when you are 50% hybrid at $100 and 50% "conventional" at $400? First, with a shortage of work, it will be like 2008...fees get cut or you find another job.

This is an economic argument, which is fine by me so long as we acknowledge it as such. There are lots of comments in this thread alluding to the same point - the primary objection is to the fee. If people could get the $300 for doing one of these then they'd consider doing them. And all that bleating about lenders committing fraud? IRL most of you wouldn't fret that angle so long as you got your fee. I get it. I always got it. Everyone can see that argument for what it is. nobody is being fooled by the faux outrage. Which is why I'm urging people to drop the pretense and just be honest - I really think you'll get farther that way.


Since the part the appraiser is doing in these assignments is the higher-skilled portion that only the appraiser can perform I think it's a big mistake to price them at the same hourly rate as they'd charge for a 1004 that is comprised of a much higher percentage of the time being used to perform the lower skilled work that can be reasonably performed by the clerks and jerks. Anywhere else, the lower skilled work would get priced at one rate and the higher skilled work would get priced at a higher rate. THAT's where I think this discussion should be happening.

But that only happens if the appraisers - as a group - are sufficiently well informed on the distinction to make that distinction and then act accordingly. Moreover, I don't think you'll be able to sell the legitimate argument to the users by cloaking it in an argument that everyone else can see is just a cover.

One more thing - I also think it's either really dumb or really dishonest to assume that the (non-inspection related) development and reporting expectations at these users are exactly the same for these as for the 1004s unless that is actually the case. If the lenders are incorporating the 1004mc analyses and 2 actives and the charts and graphs for every adjustment then that's one thing - but if their expectations are more high speed-low drag in nature then we should be honest enough to acknowledge that. AND in that same vein we should be smart enough to acknowledge the point of diminshing returns that exists once appraisers decide to grossly exceed the user expectations. Sure, you can volunteer do more, but you can't expect the users to want to pay for stuff they're not asking for.

As far as SOW decisions go, you can't push on a string.

 

[Michigan CG]

AND in that same vein we should be smart enough to acknowledge the point of diminshing returns that exists once appraisers decide to grossly exceed the user expectations. Sure, you can volunteer do more, but you can't expect the users to want to pay for stuff they're not asking for.

Part of the problem NOW with the 1004 is that many users of the 1004 aren't getting what they are paying for in that product. I see a lot of garbage in/garbage out. If they are getting a lot of garbage then why not get some less expensive garbage.

 

[timd354]

Part of the problem NOW with the 1004 is that many users of the 1004 aren't getting what they are paying for in that product. I see a lot of garbage in/garbage out. If they are getting a lot of garbage then why not get some less expensive garbage.

That is no bigger of a problem now than it has ever been. In fact, I would argue that overall appraisal quality prior to 2008 was worse than it is currently.

 

[Meandering]

The math does not work. Say you could get as much as 50% of a "normal" fee from a hybrid (not 20% as offered currently)
That means the total appraisal fees are going to be halved or if only 50% of transactions are hybrid, the total fees will be 3/4 at best. So you stretch the appraisers dollar.

The red herring is the notion you can "do" 8 or 10 a day. That is 8 or 10x the liability, and for no increase in pay. So you do 8 at $65 - $520. Sure. How many appraisers will get 8 assignments per day? Zero outside an office geared to punching them out in a metro area that can support it. There are not going to be 8 assignments in Guymon, Oklahoma, or even Joplin, MO in a day, in the former, probably not in a week or two. And you have to compete with X number of appraisers for that 8 appraisals. Do the math. The average appraiser doing 300 assignments annually for $400 is going to make a gross of $120,000. If they get 4 of these $65 appraisals a DAY, then again, a regular work week gives you 1,000 assignments and a net of $65,000 - if you are lucky enough to collect. I doubt the average appraiser would get 4 assignments a day. Maybe 1 a day average and a few "regular" assignments, but fewer of them because these hybrids will eventually be used for loan origination. At present the PIW can only be used on 10% of appraisals according to Crawford...what happens to your residential business when you are 50% hybrid at $100 and 50% "conventional" at $400? First, with a shortage of work, it will be like 2008...fees get cut or you find another job.

Not to worry.

Once appraisal fees are 50% of what they currently are now,

more people will buy houses, and prices will rise because it is the appraisal fee that's holding them back now.

IV. Appraisal and Evaluation Program

An institution's board of directors or its designated committee is responsible for adopting and reviewing policies and procedures that establish an effective real estate appraisal and evaluation program. The program should:

Provide for the independence of the persons ordering, performing, and reviewing appraisals or evaluations.

Establish selection criteria and procedures to evaluate and monitor the ongoing performance of appraisers and persons who perform evaluations.

Ensure that appraisals comply with the Agencies' appraisal regulations and are consistent with supervisory guidance.

Ensure that appraisals and evaluations contain sufficient information to support the credit decision.

Maintain criteria for the content and appropriate use of evaluations consistent with safe and sound banking practices.

Provide for the receipt and review of the appraisal or evaluation report in a timely manner to facilitate the credit decision.

Develop criteria to assess whether an existing appraisal or evaluation may be used to support a subsequent transaction.

Implement internal controls that promote compliance with these program standards, including those related to monitoring third party arrangements.

Establish criteria for monitoring collateral values.

Establish criteria for obtaining appraisals or evaluations for transactions that are not otherwise covered by the appraisal requirements of the Agencies' appraisal regulations.

https://www.FDIC.gov/regulations/laws/rules/5000-4800.html

Safe and sound? The laws are not written for appraisers, but they sure do affect them.

Power line tower on the next door neighbor's property. Hope they report it to the appraiser. May not be a value issue but defiantly needs to be addressed.

Who is the inspectors E&O company? I need copy for my files.

The casino is now open...

And Fannie does not make safe and sound lending regulations.
So, your client can only be unregulated banks, like Quicken Loans and the like.

But, if you get an order and the stated client is a bank, send it on to the FDIC and OCC.

I'm sure they would love to here from appraisers, prior to another Countrywide fiasco.

You wouldn't be referring to supply and demand? Surely not.

When you don't want any,
one is an oversupply.

.

 

[Terrel L. Shields]

Since the part the appraiser is doing in these assignments is the higher-skilled portion that only the appraiser can perform I think it's a big mistake to price them at the same hourly rate as they'd charge for a 1004 that is comprised of a much higher percentage

You keep say it is an economic argument? ¿?¿ OK. But the fact you CAN do them at any price you're happy with (the unemployed might be happy with minimum wage) so? I can do them as desktops, but I would not trust an agent to vet condition, so how can I do them unless I am willing to average $3-7 an hour for my expertise? Because I would verify every statement made and scrutinize every photo. If interior pix are on Zillow I will trust them first and also verify that the inspector didn't provide me MLS pix instead of really inspecting the place. After all how many appraisers rely on MLS photos? Do you think agents aren't just as lazy?