Hybrid

[djd09]

They can exist just like banks. Just remove all government guarantees on any of them and properly disclose appraisal fees on truth in lending disclosures.

You know For Profit cannot make rules for Public Trust.

 

[Eli]

You know For Profit cannot make rules for Public Trust.

A genius that left too soon.

 

[Deleted member 130081]

You are projecting onto me views that I did not express Please point out where I said that anything was appropriate. You cannot, because I did not. Valuers in other countries express the same concerns about FASB and the international accounting rules that appraisers in America express about lenders and their role in valuation. I didn't say anything was appropriate. I said that our situation is not unique, and I asked questions for consideration.

My biggest question was the last one - how much of the concern is driven by real worry about risk, and how much is driven by worry about preservation of income? Until there is an honest answer to that, I think a solution will be evasive.

LOL.

You are one serious piece of work dude. Wow. I believe you could succeed in politics.

I believe you understand "projection" quite well, though might have a difficult time being honest about when who is projecting what and where.

I'll just stick to keeping it simple and calling out BS.

 

[Addie]

Someone asked somewhere what the Fannie scope of work was vs. non-Fannie.

This is Fannie Mae SOW for the interior desktop pilot program (1 that I know of, probably a few different types)

SCOPE OF WORK AND REPORTING PROCESS
This is an APPRAISAL REPORT which is intended to comply with the reporting requirements set forth under S.R. 2-2 (a) of the Uniform
Standards of Professional Appraisal Practice. As such, it presents a summary discussion of the data, reasoning, and analyses that were used
in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the data, reasoning, and analyses
is retained in the appraiser's original file. The depth of discussion contained in this report is specific to the needs of the client and for the
intended use stated. The appraiser is not responsible for unauthorized use of this report. The report is intended for the sole use of the client
noted as the LENDER on the report and any other uses are expressly prohibited. In accordance with prior agreement between the client and
the appraiser, this report is the result of a specific scope of work. The intended user of this report is warned that the reliability of the value
conclusion provided may be impacted by the scope of work that has been determined to be appropriate for this assignment. The appraiser
did not inspect the property identified on this report but did rely upon an Exterior and Interior Inspection of the subject property and the
immediate neighborhood which was performed by a third party. The report was completed from the appraiser's desk, did not value
the site (unless requested by the client), and did not use the cost approach and income approach in developing the appraisal because
neither is necessary for credible results. Buyers rely heavily on comparisons, and the sales comparison approach yields the best value
indication. The sales comparison method was completed using a traditional sales grid. Additional description of scope of work including extent
to which the property is identified, the extent to which tangible property is inspected, the type and extent of data researched and the type and
extent of analysis applied is found in the ASSIGNMENT CONDITIONS section of the report.

 

[DWiley]

I believe you understand "projection" quite well, though might have a difficult time being honest about when who is projecting what and where.

I'll just stick to keeping it simple and calling out BS.

OK. Should we then call BS on at least some of the "concern" that is being aired by appraisers about so-called "hybrid" reports? At their root, these "hybrids" are just desktop appraisals, with the minor twist that in addition to data from public records, prior MLS listings, or whatever other data source might exist, there will be a property report prepared by a third party. By any objective reasoning, the "reliability" of "hybrids" should be at least a step up from "desktops." If there is all this inherent issue with "hybrids," then why have these appraisers not been yelling at the ASB since 1989. That is when USPAP was first introduced, and from the very first day of its existence it has acknowledged that an appraisal can be developed without a personal inspection. A lender or GSE that opts to use "hybrids" is merely availing itself of something that appraisers have formally recognized as acceptable for over 25 years. I don't see how that means, in any way, that appraisers are caving in and/or allowing lenders to drive the appraisal process. Lenders/GSEs are just considering using processes that appraisers long ago approved.

It seems to me that much of the complaining is not really based on any lack of appraiser control of the process. Instead, it seems to be driven by the perceived economic impact such a change might have. That is certainly a valid concern, and one that should not be minimized. I just don't think that addressing that concern with red herrings about losing control of the appraisal process contributes anything toward a positive result. It seems to me that appraisers are actually in pretty firm control of the appraisal process. What appraisers are not in control of is the risk appetite of users of appraisal services.

Is a "desktop"/"hybrid" good enough for a lender? How much is lender risk affected? If I were a power user of appraisal services, I would experiment. I would try the "hybrid" process and examine the results. Who wants to bet on whether or not current testing of the "hybrid" process involves sometimes actually ordering two appraisals (one "hybrid" and one regular) and comparing the outcomes? Without such data, any speculation about relative reliability of the "hybrid" process is just that.

 

[Meandering]

Someone asked somewhere what the Fannie scope of work was vs. non-Fannie.

This is Fannie Mae SOW for the interior desktop pilot program (1 that I know of, probably a few different types)

SCOPE OF WORK AND REPORTING PROCESS
This is an APPRAISAL REPORT which is intended to comply with the reporting requirements set forth under S.R. 2-2 (a) of the Uniform
Standards of Professional Appraisal Practice. As such, it presents a summary discussion of the data, reasoning, and analyses that were used
in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the data, reasoning, and analyses
is retained in the appraiser's original file. The depth of discussion contained in this report is specific to the needs of the client and for the
intended use stated. The appraiser is not responsible for unauthorized use of this report. The report is intended for the sole use of the client
noted as the LENDER on the report and any other uses are expressly prohibited. In accordance with prior agreement between the client and
the appraiser, this report is the result of a specific scope of work. The intended user of this report is warned that the reliability of the value
conclusion provided may be impacted by the scope of work that has been determined to be appropriate for this assignment. The appraiser
did not inspect the property identified on this report but did rely upon an Exterior and Interior Inspection of the subject property and the
immediate neighborhood which was performed by a third party. The report was completed from the appraiser's desk, did not value
the site (unless requested by the client), and did not use the cost approach and income approach in developing the appraisal because
neither is necessary for credible results. Buyers rely heavily on comparisons, and the sales comparison approach yields the best value
indication. The sales comparison method was completed using a traditional sales grid. Additional description of scope of work including extent
to which the property is identified, the extent to which tangible property is inspected, the type and extent of data researched and the type and
extent of analysis applied is found in the ASSIGNMENT CONDITIONS section of the report.

Just send them a PDF

Then you won't have to wonder about how a lender suddenly became a "sole" user of an appraisal report,

like they only lend their own money.



.

 

[Meandering]

O
It seems to me that much of the complaining is not really based on any lack of appraiser control of the process.
.

Then apparently you have not read enough of my posts in this and multiple other threads on the subject.



Oh, and while you're at it,

it is not just "a lender" that needs and decides what it wants, unless "the lender" is a non-regulated lender who will not be reselling loans to the GSEs or to regulated lenders. But for the banks, well, it is not their decision what they need either. That's why we have banking regulations.



.

 

[Carnivore]

Someone asked somewhere what the Fannie scope of work was vs. non-Fannie.

This is Fannie Mae SOW for the interior desktop pilot program (1 that I know of, probably a few different types)

SCOPE OF WORK AND REPORTING PROCESS
This is an APPRAISAL REPORT which is intended to comply with the reporting requirements set forth under S.R. 2-2 (a) of the Uniform
Standards of Professional Appraisal Practice. As such, it presents a summary discussion of the data, reasoning, and analyses that were used
in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the data, reasoning, and analyses
is retained in the appraiser's original file. The depth of discussion contained in this report is specific to the needs of the client and for the
intended use stated. The appraiser is not responsible for unauthorized use of this report. The report is intended for the sole use of the client
noted as the LENDER on the report and any other uses are expressly prohibited. In accordance with prior agreement between the client and
the appraiser, this report is the result of a specific scope of work. The intended user of this report is warned that the reliability of the value
conclusion provided may be impacted by the scope of work that has been determined to be appropriate for this assignment.
(separated the below /and I think you will understand why)

The appraiser did not inspect the property identified on this report but did rely upon an Exterior and Interior Inspection of the subject property and the
immediate neighborhood which was performed by a third party. The report was completed from the appraiser's desk, did not value
the site (unless requested by the client), and did not use the cost approach and income approach in developing the appraisal because
neither is necessary for credible results. Buyers rely heavily on comparisons, and the sales comparison approach. yields the best value
indication. The sales comparison method was completed using a traditional sales grid. Additional description of scope of work including extent
to which the property is identified, the extent to which tangible property is inspected, the type and extent of data researched and the type and
extent of analysis applied is found in the ASSIGNMENT CONDITIONS section of the report.

OK, I see some things i would change.

First off read that above ...did you notice it is all fine print and jammed together. ...like loan docs...pages and pages and my favorite Para Legal always explained the loan papers to the buyer:

"You are entitled to read all the documents. What she also says to them is simply this; "If you dont Pay you don't Stay!" After that they start signing.

It would seem to me that certain items should be at least bold. as I did above.

But maybe even better enumerate and bold by line items found in this paragraph

--------------------------------------------------

So i will hit upon some major points that i have made through out these discussions(BIF/Hybrid.

1. You still have to comply with Standard 1
2. You still have to perform an HBU. I emphasis this because I have only received four Desktop request and in all four I saw a potential 'HBU' problem. I turned down all four.
3. This is a Big One! : I strongly suggest that you don't become the Top Producer of Desktop/Hybrid in your market! If you do you will lose whether you believe me or not your Market Area Geo-Economical competence. You wont notice at first,,,but it will happen. Unless you complete a mix of SOW reports.
4. Don't forget the Record Keeping Rule. If by chance you get a complaint on ANY report, your board if its like mine will want to see your workfile(all of it). They may even ask you to provide you Report Log! Of which they may want to see several Desktops!

 

[Deleted member 130081]

OK. Should we then call BS on at least some of the "concern" that is being aired by appraisers about so-called "hybrid" reports? At their root, these "hybrids" are just desktop appraisals, with the minor twist that in addition to data from public records, prior MLS listings, or whatever other data source might exist, there will be a property report prepared by a third party. By any objective reasoning, the "reliability" of "hybrids" should be at least a step up from "desktops." If there is all this inherent issue with "hybrids," then why have these appraisers not been yelling at the ASB since 1989. That is when USPAP was first introduced, and from the very first day of its existence it has acknowledged that an appraisal can be developed without a personal inspection. A lender or GSE that opts to use "hybrids" is merely availing itself of something that appraisers have formally recognized as acceptable for over 25 years. I don't see how that means, in any way, that appraisers are caving in and/or allowing lenders to drive the appraisal process. Lenders/GSEs are just considering using processes that appraisers long ago approved.

It seems to me that much of the complaining is not really based on any lack of appraiser control of the process. Instead, it seems to be driven by the perceived economic impact such a change might have. That is certainly a valid concern, and one that should not be minimized. I just don't think that addressing that concern with red herrings about losing control of the appraisal process contributes anything toward a positive result. It seems to me that appraisers are actually in pretty firm control of the appraisal process. What appraisers are not in control of is the risk appetite of users of appraisal services.

Is a "desktop"/"hybrid" good enough for a lender? How much is lender risk affected? If I were a power user of appraisal services, I would experiment. I would try the "hybrid" process and examine the results. Who wants to bet on whether or not current testing of the "hybrid" process involves sometimes actually ordering two appraisals (one "hybrid" and one regular) and comparing the outcomes? Without such data, any speculation about relative reliability of the "hybrid" process is just that.

I like this post of yours and disagree with very little of it. I agree that a hybrid is a step up from a desktop. I do not agree appraisers approve this sort of product for a loan, especially in today's world where banks have zero accountability and the taxpayer foots the bill when things go south. I think a desktop is appropriate for SOME pre-list, pre-offer or portfolio assignments, not a loan origination - but that's me.

I think you are right when you say many appraisers do not complain about losing control of the process. I think you are also right that economics is a main factor when it comes to appraiser complaining. My point is, and has been for a very long time, and maybe my opinion is far outside of the majority opinion, that the appraiser bottom line is affected when we lose control of the process, among many other very important things that are also affected when we lose control of the process, such as independence and producing reports that are meaningful and not misleading. It is my contention, that for all the right reasons, with economics being only one benefit, an added benefit even, that appraisers and appraisers only ought to have control of the process. The ways things have been done, and appears that they will continue to be done, is the client dictates the process by designing the forms, designing these alternate products, experimenting (as you say) and last but not at all least, applying lobbying power to government that appraisers have never matched. In short, I think it is a sick joke to assert appraisers actually have control of the process and if you are counting the sliver of non-lender work while making such a claim, then the claim is taken out of a realistic context.

So to sum it up, when it comes to hybrids and what we should do concerning them, and numerous other issues, I do not believe the solution is evasive as you say, rather I think the solution is right in front of us and really quite simple, if not somewhat difficult to actually accomplish - the solution is organization.

Think of it this way, instead of the lender clients experimenting as you say, if appraisers were organized, the lenders could simply pose the question of hybrids to the organization, and the organization could provide an official answer. Armed with this information, lender clients could use hybrids at their own risk, while appraisers wipe their conscious of the issue. In today's world, its pretty much chaos, with the only party even remotely holding on to the wheel being the lenders, who as history shows, could care less if they bring down the world economy or not.

Don't get me wrong Danny, I place the blame for this mess 100% on the appraiser community. We should be behind the wheel and steering our clients in the best direction possible. If the profession were run like that, fees wouldn't even be part of the discussion.

 

[DWiley]

I think it is a sick joke to assert appraisers actually have control of the process and if you are counting the sliver of non-lender work while making such a claim, then the claim is taken out of a realistic context....

Where do you think the idea of bifurcating the process and producing "hybrid" reports originated? It wasn't lenders or GSEs. It originated with appraisers. The GSEs first started looking seriously at it when they hired an appraiser who had experience with the process and suggested that they consider it.