Hybrid

[Joe Flacco]

Increasing speed is good. Just not when it is at the expense of reliability. In appraisal, speed always comes at the expense of reliability.

 

[Joe Flacco]

I guess not always. Tools like MLS and total increased speed without impact to reliability.

 

[timd354]

It takes about the same time in most markets. It is probably quicker in the areas like the pot states where it often takes longer than a week.

It is definitely the delays in the COW states that initially was one of the main drivers that caused them to go down this path.

 

[ucbruin]

It is beyond absurd to think nobody but an appraiser can correctly measure a house and that it would not be easy to train property inspectors to measure homes. There are some legitimate arguments that can be made regarding hybrids, but this is not one of them.

While I believe your post is correct....
The 2 companies that have contacted me don't require inspectors provide a sketch....
So no taping necessary...

 

[Terrel L. Shields]

I don't think so. I think sometimes they will measure the house

They can and they might but they might also say, "gee, I have MLS photos in and out, why bother?" After all they are being paid a very small fee too. And they have zero skin in the game.... #SITG is central to what they will or will not be doing.

 

[DWiley]

How much time is saved when you have 2 people in the process? .

We have been doing "hybrids" for over a decade now, and the average turn time is about half the turn time for a 1004 in the same area.

The inspectors used generally complete the inspection and deliver a property report in less time than it takes for the typical appraiser to schedule the inspection.

Now, having said that, I think one mistake that many are making (both appraisers and those who are looking at using such services) is looking at the times and fees associated with the current process and thinking they will automatically apply to a Fannie developed process. That is why I think most of the fee talk that is being tossed around is silly. Just one example - for most past "hybrid" work the square footage was just taken from pubic records and/or MLS. If Fannie's adopted solution requires something else (like measuring/sketching), that changes a lot with regard to both service time and fee.

 

[Joe Flacco]

We have been doing "hybrids" for over a decade now, and the average turn time is about half the turn time for a 1004 in the same area.

The inspectors used generally complete the inspection and deliver a property report in less time than it takes for the typical appraiser to schedule the inspection.

Now, having said that, I think one mistake that many are making (both appraisers and those who are looking at using such services) is looking at the times and fees associated with the current process and thinking they will automatically apply to a Fannie developed process. That is why I think most of the fee talk that is being tossed around is silly. Just one example - for most past "hybrid" work the square footage was just taken from pubic records and/or MLS. If Fannie's adopted solution requires something else (like measuring/sketching), that changes a lot with regard to both service time and fee.

You are comparing exterior inspection hybrids with a 1004. Doesn't really get any more misleading than that.

 

[Terrel L. Shields]

If Fannie's adopted solution requires something else

I think we should just make it all up...oh, perhaps that is what a lot of us think is going to happen....and when (not if) the next downturn comes, the finger is still pointed back at the appraiser and like the last bust, all the bankers and their minions get to walk scott free... 1100 bankers went to jail in the S & L Crisis. Zero went to jail in the Great Recession. The blame got shifted into the ozone...we're all innocent, no moral hazard. No one is to blame... no one saw it coming (which is, of course, an outrageous lie)

 

[Meandering]

They are not going to measure the house, just regurgitate the obvious....from the assessors measurements or the MLS. I bet a high percent of these "inspections" won't involve a drive by at all, simply mining the MLS and assessor for info. So the "desktop" appraisal will be based on a "desktop" inspection.

measuring is not the issue.

The issue is that real estate borrowing is cyclical. How do AMCs and the lenders that own or affiliate with them make money in a down cycle?

How do AMCs and Lenders that own or affiliate with them "grow" profits?

When inspectors take 2-3 days to take and send photos, nobody has saved any "time" in this process. And specifically because appraisers have requirements to verify the information, this garbage SHOULD TAKE LONGER FOR THE APPRAISER TO VERIFY, instead of just seeing it the first time, themselves.

Oh but look, it's still an appraisal with an interior inspection so no "discount" is due to borrowers who paid for "interior appraisals".

So, let's play some math.

In Anyplace USA there are 10 residential Appraisers that complete 22 appraisals a month, each. There are no loans that require appraisals and no appraiser can be found to perform them.

100% of the loans for property are being funded by appraisals performed by one of the 10 appraisers in Anyplace. The Annual Appraisal volume for Anyplace USA is 2,640 appraisal orders.

Now here comes the bi-f/hybrid. (Personally I think bi-f is a more appropriate name, because of the double F indicated, but let's see what the math says.



So, if there is a decline in lending and appraisal volume, The volume of appraisals ordered, would be able to decline 57.9% before the AMC/Lender lost one penny from the decline, - if they used all bi-f appraisals instead of ordering all 1004 appraisals.

But with a 59.7% decline in appraisal ordering most appraisers would just stop doing residential lending appraisals, and do something else until another day. But AMCs are one trick ponies, so they need to find a way to survive such a downturn in volume, especially with PIWs picking up.

So let's say that the market does not decline in appraisal volume and Anyplace USA still generates 2,640 appraisal orders annually that are being serviced by 10 appraisers.

If we could move all appraisal orders to bi-f appraisals,
we can greatly increase profits to the lender and AMC,
but that is not incentive for anyone to come buy a house or to refinance a house.
So the volume of work remains the same.
Look what happens to the appraisers.




I don''t know too many people that can survive on $14,330 and still pay the electric, water, sewer bills and buy groceries, unless they are on social security or receiving welfare. And that welfare is not going to allow deductions from gross pay for those things listed above as fixed expenses.


So, if lenders can get all appraisals to be bi-f instead of 1004s, look what it does to annual gross to the AMC/Lender



Now you see why it is so important to AMCs to get appraisers to "accept" bi-f work.


And let's not talk about an appraiser shortage, because if all that work goes bi-f, 8 out of 10 current appraisers, won't have any reports to do.

.

 

[Terrel L. Shields]

this garbage SHOULD TAKE LONGER FOR THE APPRAISER TO VERIFY, instead of just seeing it the first time, themselves.

I believe that is the key element. You might save drive time and gas, but parsing someone else's work will take time, OR, you are going to be hand fed this in the cloud on a foreign form, or not even in a form, rather in a simple menu check list. You will have no control over it, you won't even know if the inspection part was done by another appraiser, which would trigger a requirement that you name them, and we don't yet know how the states and TAF will modify their requirements to pander to Fannie. Not that Fannie Mae will care because they will require you do it "their way" regardless TAF, or state boards. FHA, of course, will fall in line and do the same.