Hybrid

[J Grant]

We normally consider the "professional" work of an appraisal to come down to analyses, opinions and conclusions. Other functions can be completed by clerks but an "appraisal" is an opinion. Data entry can be done by anyone. Simply measuring and photographing can be done by anyone. The main gray area with a 3rd party inspection that I can see would be rating quality and condition; because those would often be characterized as opinions, not necessarily facts.

The cost breakdown submitted by a contractor isn't the same thing as a cost approach to value that appraisers do because we take those costs, add whatever profit or accrued losses there are and then reconcile for value. An Environmental report, or a Survey are reports that are generally completed by 3rd parties and although we would usually reference them in our reports we wouldn't usually consider those individuals to be providing appraisal assistance.

When an appraiser inspects, they see the property through the lens of value, rather than mechanically- mechanically would be how a home inspector or insurance inspector would view a home since they are not trained for value perspective. A RE agent is not trained mechanically but they see a lot of properties...though many see only the similar properties in their listing area.

RE agents are value oriented but see value from a sales point of view rather than unbiased evaluation point of view. Will an appraiser looking at a third party's notes/sketch/photos get the same value "read" on the property they would have had they walked it/toured it themselves? Add n that an appraiser will miss out on the feedback /ability to question property with an owner, agent, builder or other party at inspection.

As more assignments get piecemeal out assembly line style, will that lead to different opinions from an appraiser then they would make had they done the steps themselves as an integrated whole?

Over the next years as more experienced appraises exit the res lending end and more inexperienced trainees /newly licensed take their place with no one around to guide them except a harried "supervisor" on staff, too busy cranking out work to bother with them,...judging by the increasing number of bewildered help wanted posts recently from trainees new licensed struggling with AMC orders...I'll leave it at that.

 

[Carnivore]

(my bold)

Terrel-

I'm surprised you are asking this question or I'm misinterpreting what you are asking???
They are licensed. Their license requires them to follow the USPAP. The USPAP includes services other than appraisal and appraisal review. For work experience (the bulk of it), a trainee must have appraisal or appraisal review experience such that they complete all the elements in SR-1 and SR-2. In my state, one cannot use a restricted report for one's license-experience log.

So, of course measuring a house doesn't meet the requirement for appraisal experience.
And, of course since they are licensed and if they are being engaged by virtue of that license, they have to follow the USPAP that applies (Ethics and Competency) and the jurisdiction that grants them that license can enforce that part of the USPAP.

Denis, I dug it out of our State Law and here is basically what I learned.

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"21 NCAC 57A .0604 TYPES OF APPRAISAL EXPERIENCE (a) An applicant may receive experience credit for standard appraisals, supervising appraiser's reviews, review appraisals, and condemnation appraisals. (b) If the applicant performed at least 75 percent of the work associated with an appraisal, including a field inspection and preparation of the appraisal report, full credit shall be given for that appraisal. Except as provided in Paragraphs (d) and (e) of this Rule, no credit shall be awarded if the applicant performed less than 75 percent of the work on an appraisal."
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So, If a Trainee does a site inspection and that is all they do! Then NO Experience can be credited towards there minimum pre-licensing

They can knock themselves out all day n night for whatever fee it may be, and probably be a Trainee Forever

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So my conclusion is simply this: If the Trainee signs up for Prop Inspections, the Supervisor signs up for desktops and they somehow fanangle to get both sides;

then its a win win Trainee makes $25 Bucks and the appraiser makes $75 bucks = $100 Bucks total

Final Reconciliation Conclusion: Trainee has the best end of the deal because he/she has ZERO Risk, but will take forever or never get license. Appraiser will have a stack of very thin files....OH Wait that Pesky Standard One and that Pesky Record Keeping Rule. Well Who will know if I don't have all the Standard One work in the File when I send the report with my signature. I mean for $75 bucks what do they expect The whole Kitchen Sink!

That Folks is exactly what is going to happen!

 

[Terrel L. Shields]

Data entry can be done by anyone. Simply measuring and photographing can be done by anyone

Exactly.

That's pretty much your answer to anything you disagree with: Licenses are worthless. Boards are useless. USPAP is useless. No one follows it, no one enforces it, etc., etc., etc.

Well....tell me. How will enforcement be handled for someone with a license who is measuring...or data inputting. Who turns them in? Themselves? Who else is even going to know? Nor is there even a signature requirement, like George said, "Anyone" can do it.

I have never argued licenses are worthless but our enemies certainly seem L bent on rendering them so. Boards in any profession are amateurs...they earn the moniker of "Kangaroo Court" because of their lack of legal skill. They are now under siege as in the case of LA and the Dental board case as being shills for the industry. I know one instance where I am confident a board member lobbied to get on the board solely for an axe to grind. Only common sense from the other members kept his axe from coming down upon a fellow appraiser whom he disliked intensely. And I recall another board stacked by the DOT who quickly initiated a board complaint against their nemesis, an appraiser who worked for people opposing eminent domain. In the end, he won at a horrific monetary cost in court plus having 2 years were he could not testify without being asked if he was under investigation.

Two former forumites here dropped licenses over investigations on their work under one of our investigators. In the end, the board was glad to see the investigator gone and he was by far the shortest serving investigator we've had. The simple fact is the best appraiser is not a jurist. And legal matters should be before a trained jurist, not simply a practitioner of the art. When one board sanctioned someone using the review of her work from her ex-husbands new appraiser-wife, what jurist with any training would have proceeded without seeking another review from someone who was not most likely adversarial to the person they sanctioned? It took a real court to clear her name. And frankly, every appraiser board ought to be made up of 50% trained jurists with the rest industry experts. Some boards and/or state agencies are bright enough to refer any potential sanction to a hearing officer who is usually, a retired judge. Why not that system for all state boards. We are supposed to act like disinterested third party opinions yet we allow our boards to be anything but disinterested or independent opinions.

USPAP could be better written. The minuscule changes in the last book beg the question, "Why bother?" And FAQs, etc. are "not" USPAP, but if so, why are they being taught as if they were? My problem is that enforcement requires knowledge and where such knowledge is unlikely to come to light, then it becomes like stopping at a stop sign in West Texas highway with nary a car in sight...it is meaningless, no one there to enforce it.

 

[Meandering]

Typical Marion red herring....Neither Fannie, Freddie, the VA or FHA purchases or secures loans that are HPML's, so this rule simply does not apply to the overwhelming majority of residential mortgage transactions. Additionally, the rules for HPML's only apply to closed-end (HELOC's are excluded) consumer credit transactions (meaning mortgages on primary residences only - not second home nor rental home mortgages are covered by the rule) and there is a small loan exemption of $26,000 which means any small first or second mortgage loan is not covered by the rule. Other exclusions from the rule include construction loans, bridge loans with a term of 12 months or less, , and reverse mortgages.

There are very few mortgage lenders that originate such loans and there is little doubt that these lenders are obtaining appraisals with an interior inspection in order to comply with the rule. Even if somehow one of the HPML lenders mistakenly orders a bifurcated or exterior only appraisal, that is the appraisers problem unless the lender informed the appraiser (or the appraiser somehow otherwise knows) that the report is being in done in conjunction with a HPML and that is the only appraisal the lender is obtaining (i.e., the lender is not also obtaining an apprasial with an interior inspection from another appraiser)

But other than an FHA or VA assignment,

How do appraisers know?

Where are all those "must disclose to appraisers"??


.

 

[hastalavista]

Denis, I dug it out of our State Law and here is basically what I learned.
So, If a Trainee does a site inspection and that is all they do! Then NO Experience can be credited towards there minimum pre-licensing

Agreed; that is similar to my state's requirements.

But they'd still be subject to the USPAP (my state) if they were engaged to do the inspection. Just no Standard Rules.


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

So my conclusion is simply this: If the Trainee signs up for Prop Inspections, the Supervisor signs up for desktops and they somehow fanangle to get both sides;
then its a win win Trainee makes $25 Bucks and the appraiser makes $75 bucks = $100 Bucks total
Final Reconciliation Conclusion: Trainee has the best end of the deal because he/she has ZERO Risk, but will take forever or never get license. Appraiser will have a stack of very thin files....OH Wait that Pesky Standard One and that Pesky Record Keeping Rule. Well Who will know if I don't have all the Standard One work in the File when I send the report with my signature. I mean for $75 bucks what do they expect The whole Kitchen Sink!

That Folks is exactly what is going to happen!

I suppose a firm could try to set themselves up like that (and I guess some might try to do that), but it doesn't sound profitable at the current fees to do so. One would think in a large, metro-market, it might be possible. In smaller markets, I don't think so.

Right now, in my markets, appraisers are getting $100 to $175 for their end of the hybrid. I don't know what the inspector gets (I'm guessing it is somewhere between $40 and $60 dollars).
If an appraiser is happy doing these for $125, let's say, why would that appraiser want to take on the responsibility of having a trainee (which would be an employee) and try to offset the employment-costs (let alone any profit) on the $40-$60 the inspector gets?

 

[hastalavista]

Exactly.
Well....tell me. How will enforcement be handled for someone with a license who is measuring...or data inputting. Who turns them in? Themselves? Who else is even going to know? Nor is there even a signature requirement, like George said, "Anyone" can do it.

(my bold)

Terrel-
First, George says, "anyone can do it" with training. I interpret it that to mean, "It isn't that difficult to train someone how to inspect and measure a property." No college education is necessary for that.

Second, you cannot have it both ways.
If there is liability to any party in this process because the property is mis-measured, then how is that going to be identified? If it is identified and the person is licensed, how is that person going to escape investigation if a complaint is filed? Do you think that the inspector's identity is not part of the documentation?

There may be no signature requirement on the appraisal report (why should there be if the inspector is only completing an inspection? I don't ask a contractor to sign my report when I use their bid as part of my analysis) but there is a record of who did the inspection.



Again, there are a lot of good reasons for any appraiser not to do these assignments.
I think there are better arguments to be made when these assignments (hybrids) shouldn't be used (like for the HPML).
But as far as making stuff up (or taking an argument to an unreasonable extreme), it seems more of that is going on in the "these should never be used for X reason" camp then in the "for some transactions these might make sense" camp.

 

[timd354]

But other than an FHA or VA assignment,

How do appraisers know?

Where are all those "must disclose to appraisers"??


.

Read my comments more carefully. The GSE's and many lender do not originate or purchase HPML's either, and HPML's do not apply to mortgages for second homes or investor properties, HELOCs, construction, loans, bridge loans, reverse mortgages, etc....Thus, for probably more than 95% of residential mortgages, a competent appraiser will know without anyone telling them. If in doubt, an appraiser can simply ask the client.

Geez, none of this is rocket science

 

[Carnivore]

Agreed; that is similar to my state's requirements.

But they'd still be subject to the USPAP (my state) if they were engaged to do the inspection. Just no Standard Rules.


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

So my conclusion is simply this: If the Trainee signs up for Prop Inspections, the Supervisor signs up for desktops and they somehow fanangle to get both sides;
then its a win win Trainee makes $25 Bucks and the appraiser makes $75 bucks = $100 Bucks total
Final Reconciliation Conclusion: Trainee has the best end of the deal because he/she has ZERO Risk, but will take forever or never get license. Appraiser will have a stack of very thin files....OH Wait that Pesky Standard One and that Pesky Record Keeping Rule. Well Who will know if I don't have all the Standard One work in the File when I send the report with my signature. I mean for $75 bucks what do they expect The whole Kitchen Sink!

That Folks is exactly what is going to happen! [/QUOTE]

I suppose a firm could try to set themselves up like that (and I guess some might try to do that), but it doesn't sound profitable at the current fees to do so. One would think in a large, metro-market, it might be possible. In smaller markets, I don't think so.

Right now, in my markets, appraisers are getting $100 to $175 for their end of the hybrid. I don't know what the inspector gets (I'm guessing it is somewhere between $40 and $60 dollars).
If an appraiser is happy doing these for $125, let's say, why would that appraiser want to take on the responsibility of having a trainee (which would be an employee) and try to offset the employment-costs (let alone any profit) on the $40-$60 the inspector gets?[/QUOTE]


I agree...Why would an Appraiser take on a Trainee or an Inspector as a team? They wont! Why complicate something when you don't have to. Plus why have a witness seeing you "Run the Stop Sign" as Terrell so aptly put it in his analogy. LOL

 

[George Hatch]

Lenders who use AVMs already assume the responsibility for their choice to use such a SOW as well as the assumptions upon which they're based. If a lender is unhappy with a BPO or AVM provider they handle their end of it on their own. I don't see why it would be any different for 3rd party inspectors, but then again there's nothing stopping the states from developing and running their own licensing programs for those activities.

I wouldn't think that solution would appeal to the "gov't regulation sux" crowd but then again whether or not those gophers are are adequately controlled will be the lenders' problem, not necessarily our problem.

 

[Meandering]

Read my comments more carefully. The GSE's and many lender do not originate or purchase HPML's either, and HPML's do not apply to mortgages for second homes or investor properties, HELOCs, construction, loans, bridge loans, reverse mortgages, etc....Thus, for probably more than 95% of residential mortgages, a competent appraiser will know without anyone telling them. If in doubt, an appraiser can simply ask the client.

Geez, none of this is rocket science

Which nothing to do with GSE required disclosures to appraisers, that really are only not applicable for reviews.

.