Hybrid

[Michigan CG]

Now if you have reason to believe the third party is unreliable then you would be violating the above cert if you chose to proceed anyway.

It is no secret that Realtors were having their kids do inspections of REO properties during the recession. How reliable are the measurements of a 16 year-old kid who learned how to measure from their Realtor mom who has never measured a house in her part-time career?

 

[Carnivore]

An appraiser is only responsible for what they do; not what other people do. In fact, one of the certs in the Fannie form addresses this:



Now if you have reason to believe the third party is unreliable then you would be violating the above cert if you chose to proceed anyway.

But other than that, if the client ordered a hybrid from you and your report discloses both that point as well as the point that you relied on the 3rd party info and if it turns out to be incorrect it might have an effect on your value conclusions then that client would be hard pressed to say they were tricked into anything by the appraiser.

But sure, if you're incapable of making that argument then you should most definitely avoid putting yourself into the unlikely position of ever having the explain what/why you did what you did in this type of assignment. Or any other assignment, for that matter.

Yes I understand your point and its a good one. However in the world of litigation ,,,jury's final opinion can hinge on one word.

"....and if it turns out to be incorrect it might have an effect on your value conclusions"

Of course USPAP States it a Little differently under Extraordinary Assumption they use the word May They do this for good reason because it differentiates between what a common 'assumption' is interpreted/defined leaving that intact and Using EA, because it is specific to UPAP Valuation Services.

In common dictionary the definition of "assumption" = a thing that is accepted as true or as certain to happen, without proof.

So that I am not thought of as a Naysayer, or someone who argues every nit picking tiny insignificant minor point; I am suggesting the following change to USPAP, and other documents like a Desktop,

I submit the following suggestion for comments

Substitute the Word(s) Could, May, Might, etc too "Will" or if that's to much heartburn then use "Would" I prefer "Will"

Surely, no one should have any real objection to that! Maybe a College Level English Professor may have an objection

 

[J Grant]

Here's yet another question that has no right or wrong answer: If some lenders are going to start using these things, would you rather see them performed by a licensee who has the knowledge and experience to appraise properties, or by a non-licensed person with fewer qualifications?

Questions have right or wrong answers....If lenders use hybrids, perform them by a licensed person with experience. How could using less qualified possibly be a right answer?

The main threat I see to credible results for these assignments (as with any type of assignment ) is extreme time pressure to get it done fast, which means it's hard for even an experienced person to do a credible job. And if lower pay accompanies both the inspection and the desktop, there is no incentive to do anything other than the bare minimum, which is a lot lower for some people than others.

The entire lending process being sped up. Borrowers make wrong decisions under pressure and same for lenders, and now the pressure of speed for speed sake is on appraising /evaluations

. The ironic part is no matter how fast lenders process loans via apps/r digital mortgages, the amount of borrowers will not increase. It just means the same limited amount of borrowers get processed faster.

Fannie seems dazzled by apps and UBER, and speeding things up./appraisal waivers, hybrids, etc. And same for borrowers, digital mortgages, approved over an app instantly etc. But borrowing large amounts of money and buying/selling a home is not the same as ordering a ride or a pizza.

Remember "toxic loans" during the crash, or toxic paper....the banks bundled A and B credit loans with C and D credit loans and bundled them in one package, mis represented as A and B loans. I see hybrid appraisals that way. Some inspectors will do a good job, others will not. The appraiser does not pick the inspector so who knows when inspector is good or bad. And even with a good inspector, the appraiser did not walk the property/ talk to owner or builder or RE agent on site, so there may be something missing, lost in translation.
The appraisers doing the desktop portion fast to meet deadline, some will do a good job, others will not,-with reviewing nothing more than a QC list who can tell the difference. Thus, like the toxic loans, good and bad appraisals and good and bad inspections will become intermingled in the system. How reliable is a system based on that? We can only speculate but we've seen from past cycles lenders willing to take on risky short term policies since others will clean up the mess later.

 

[Non Sequitur]

It is no secret that Realtors were having their kids do inspections of REO properties during the recession. How reliable are the measurements of a 16 year-old kid who learned how to measure from their Realtor mom who has never measured a house in her part-time career?

About as reliable as the appraiser who does the same. And my-oh-my how the worm turns, it wasn't long ago when the MI Realtor association purchased an AMC. Where was the outrage? How has that worked out? Was it everything you hoped for? I recall more than a few here thought the Realtors would save us, just like those who think Realtors will save us from PIWs now.

Back to the OP: A full fee Fannie 1004 isn't the answer to every valuation problem a lender has. Now after years of appraisers lobbying against BPOs they are pretty much a no-no for lending use. But here we are, appraisers pushed and pushed for action, and didn't follow up with a solution so others have (again).

Either way, if the SOW is based on a third party inspection (whether it's a PCR for a HUD REO, a foundation report for FHA manufactured, or a sketch/photos from a third party) the appraiser completing the report is good to go. Making blanket statements that Realtor or any other third party site visits are not reliable isn't going to cut it in the real world especially when nearly all appraiser generated reports have pages of "I ain't no expert" boilerplate attached.

 

[Carnivore]

In Hybrids they have determined that the Inspector is NOT Significant Assistance. OK, yet for 2055's and 1004's Licensed Trainees can be used but WE have to accompany them and Sate We Inspected by most if not all AMC's . Many AMC, Claim this is the Lender Requirement. Maybe it is maybe it isn't. I suspect this is requirement is actually a Added requirement by them. I dont have proof of it, but I am suspecious of that. Fannie Mae has no such restriction. Almost simultaneously the AQB went through a process of Changing Educational/experience requirements for licensing because of a Supposed Appraiser Shortage and/or future shortage.

There is a disconnect here that I don't understand. Some inspections by an unknown person are complete with interior. Question; is this now significant assistance or not?

Once again I am not opposed to Desktop/Hybrids under the current USPAP. I have been offered four to date and turned all four down because Data Sucked! No way could a I produce a Credible(worthy of belief) appraisal.

 

[Non Sequitur]

There is a disconnect here that I don't understand. Some inspections by an unknown person are complete with interior. Question; is this now significant assistance or not?

If the appraiser's employee/trainee completed the visit that's significant assistance to the appraiser, if the SOW is based on data (sketch/photos) presented to the appraiser it's just part of the SOW.

 

[Carnivore]

If the appraiser's employee/trainee completed the visit that's significant assistance to the appraiser, if the SOW is based on data (sketch/photos) presented to the appraiser it's just part of the SOW.

Not sure If that answered my question. Unless you mean that there is an expectation of the Trainee because they are licensed as a Trainee. What if the Identified Inspector is a Trainee(and they Identify themselves that way) but not registered with me as the Supervisor? Meaning a trainee is going out to practice measuring, conducting site inspections to hone skills to apply when they do actual supervised appraisals for different addresses to earn credit.

 

[J Grant]

In Hybrids they have determined that the Inspector is NOT Significant Assistance. OK, yet for 2055's and 1004's Licensed Trainees can be used but WE have to accompany them and Sate We Inspected by most if not all AMC's . Many AMC, Claim this is the Lender Requirement. Maybe it is maybe it isn't. I suspect this is requirement is actually a Added requirement by them. I dont have proof of it, but I am suspecious of that. Fannie Mae has no such restriction. Almost simultaneously the AQB went through a process of Changing Educational/experience requirements for licensing because of a Supposed Appraiser Shortage and/or future shortage.

There is a disconnect here that I don't understand. Some inspections by an unknown person are complete with interior. Question; is this now significant assistance or not?

Once again I am not opposed to Desktop/Hybrids under the current USPAP. I have been offered four to date and turned all four down because Data Sucked! No way could a I produce a Credible(worthy of belief) appraisal.

I read that the way inspectors will be able to be noted as not giving significant assistance is that the inspector will NOT offer any value opinions...such as they wont rate the quality or conditions, they will simply make neutral notes about it. They will write: "roof has hole in it" rather than roof is C 6. In that way they are "gathering information " rather than providing appraisal assistance and thus not need to be named on the report. Incredibly creative on the stakeholder side, agree? Pretty amazing...

 

[Non Sequitur]

Not sure If that answered my question. Unless you mean that there is an expectation of the Trainee because they are licensed as a Trainee. What if the Identified Inspector is a Trainee(and they Identify themselves that way) but not registered with me as the Supervisor? Meaning a trainee is going out to practice measuring, conducting site inspections to hone skills to apply when they do actual supervised appraisals for different addresses to earn credit.

Who hired/contracted/directed the person suppliying the inspection? If you did it’s significant assistance to you, if the client did it’s part of the SOW.

 

[Carnivore]

Who hired/contracted/directed the person suppliying the inspection? If you did it’s significant assistance to you, if the client did it’s part of the SOW.

Gotcha...OK, so If I have the trainewe do it them they get Experience credit from State for Licensing...If ABC Lender via AMC ABC hires the Trainee person then they just make money, but NO EXPERIENCE CREDIT!

Well that Sucks for the Trainee.