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LSI & Bank of America are at it again.

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Mountain Man

Thread Starter
Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Here is an email I got today:

Dear Georgia Appraisers

As many of you are now aware, LSI stopped doing appraisal work in volume for the Hallandale and St. Petersburg Loan Centers of Bank of America in the state of Florida. Some of you have seen a precipitous drop in appraisal volume from LSI due to this. The reason for this, is the client started to use what they are calling the desktop appraisal.

Attached to this e-mail is a copy of the desktop appraisal form (Microsoft
Word Document) the bank is using for their loans in Georgia. At the present time, Bank of America is supporting the use of this form for appraisals for Bank of America.

The reason for this e-mail is to present the form to you, and inquire about
your willingness to provide this appraisal product to LSI. At this time,
this form is not available on any software packages (but it will be at the
end of August for both ACI and Lighthouse). The fee that LSI will pay for
this appraisal is $35-$50. We would require a 24 hour turnaround time for
this product.

This product is completed by an appraiser, who pulls subject information and comparable properties while in the office, completes the form, and
determines an estimated value to the property, without making a physical
inspection or trip to the property. Thus it is called a desktop appraisal.

Please respond to me to this e-mail, either yes or know, regarding your
willingness to complete this appraisal product for LSI according to the
price and turnaround time listed above. Responding to this e-mail is
sufficient.

Thank you very much for your time

Damon Zeigler
Vice President, Supplier Management
Lender's Service Inc.
700 Cherrington Parkway
Moon Township, PA 15108
(p) 412 299 4315
(f) 412 299 4345
[email protected]

I tried to post the form, but could not figure out how to get it on here. It has a grid that looks like the 2055 with this mice type disclosure:

The undersigned appraiser has performed a desktop valuation of the subject property. The purpose of this desktop valuation is to determine the market value of the subject property. This appraisal is intended for use by the above-referenced client/lender for mortgage loan purposes. It is not intended for use by any other party or for any other purpose. The property rights appraised are fee simple.

The data selection and analysis were performed manually by the appraiser, as noted below.



Here are the limiting conditions on page 2 of the form:

DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and acting in what they consider their own best interests; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in this limited residential appraisal and summary report is subject to the following conditions:

1. This assignment is conditioned upon the availability of adequate information regarding the subject property and comparable market data for a 12 month period preceding the date of this valuation.

2. This limited appraisal invokes the Departure Provision of' the Uniform Standards of Professional Appraisal Practice Standards Rule 1-4. In this report, any reference to the term "report" means: limited residential appraisal and summary report.

3. The zoning for the subject property is residential. The subject property is assumed to be a single family dwelling in compliance with this current zoning. The use of the real estate is assumed to be residential and this is the use that is appraised in this report.

4. The reliability of this valuation is considered to be impacted to a certain extent by the appraiser's lack of inspection of the subject property and the comparable sales.

5. The HIGHEST AND BEST USE as improved is assumed to be the present use and is the reasonably probable and legal use that is physically possible, appropriately supported, financially feasible, and results in the highest value. This assumption is an extraordinary assumption, which if found to be false, could significantly alter the value opinion expressed in this report.

6. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of its being under responsible ownership.

7. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand.

8. The appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable. The appraiser has assumed that there are no such conditions and makes no guarantees or warranties, expressed or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, this report must not be considered an environmental assessment of the property. If the subject property was built prior to 1978, the dwelling may contain lead-based paint.

9. Information regarding the subject's physical characteristics was obtained either from information supplied on the appraisal request or from third party sources that the appraiser considers to be reliable and believes the data to be true and correct. The appraiser does not assume responsibility for the accuracy of such data that were furnished by other parties.

10. The appraiser will not disclose the contents of this report except as provided for in the Uniform Standards of Professional Appraisal Practice.

11. The appraiser must provide his or her written consent before the lender/client specified in this report can distribute this report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower, the mortgagee or its successor and assigns, the mortgage insurer, consultants, professional appraisal organization, any state or federally approved financial institution, any department, agency, or instrumentality of the United States, or any state or the District of Columbia, except that the lender/client may distribute the property description section of this report only to data collection or reporting service(s) without having to obtain the appraiser’s prior written consent. The appraiser’s written consent and approval must also be obtained before the report can be conveyed by anyone to the public though advertising, public relations, news, sales, or other media.



APPRAISER’S CERTIFICATION: The Appraiser certifies and agrees that:

1. I have researched the subject market area and have selected a minimum of three recent sales of properties most similar and proximate to the subject property for consideration in the sales comparison analysis. Differences in the subject and comparables were analyzed to arrive at the value conclusion in this report. Utilizing the Sales Comparison Approach, I placed most emphasis on the comparable(s) considered to be most similar to the subject.

2. I have taken into consideration the factors that I am aware of that have an impact on value in my development of the value conclusion presented in this report. I have not knowingly withheld any significant information from this report and I believe, to the best of my knowledge, that all statements and information in this report are true and correct.

3. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.

4. I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.

5. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

6. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

7. I have not made a personal inspection of the property that is the subject of this report.

8. In this assignment the appraiser has relied exclusively on the Sales Comparison Approach. Based on prior agreement with the client, an inspection of the subject property, the Cost Approach and Income Approach were excluded from this report. I have considered these exclusions and determined that the exclusion of an inspection, the Cost Approach and the Income Approach would not result in a report that is misleading to the client.

9. Although I have not personally inspected the subject property and the properties utilized as comparables in this report, I certify that I have no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions within the immediate vicinity of the subject property.

10. I personally prepared all conclusions and opinions about the real estate that were set forth in this report. If I relied on significant professional assistance from any individual or individuals in the performance of this report or the preparation of this report, I have named such individual(s) and disclosed the specific tasks performed by them in the general comment section of this report.



APPRAISER:


Signature:

Name:

Company Name:

Company Address:

Date of Report:

State Certification #:

0r State License #:

State:

Expiration Date of Certification or License:

ADDRESS OF PROPERTY APPRAISED:

APPRAISED VALUE OF THE SUBJECT PROPERTY $
EFFECTIVE DATE OF APPRAISAL

Their proposed fee is :lol: :lol: :evil: USPAP? that is the appraisers problem :twisted: :twisted: :twisted:
 

George W Dodd

Senior Member
Joined
Jul 9, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Just when I thought that I had heard it all!

Too bad that they will actually find "appraisers" to do this kind of report.
 
K

Kevin Shannon

Guest
It seems to me they got us over a barrel. Either we do these "Desktop Appraisals" for them or - they use AVMS or BPOS.

Hmmm, $35 to $40 a pop for sitting at my desk pulling data.............????
 

Soar Ohio

Sophomore Member
Joined
May 8, 2002
Professional Status
Certified Residential Appraiser
State
Ohio
" I have considered these exclusions and determined that the exclusion of an inspection, the Cost Approach and the Income Approach would not result in a report that is misleading to the client. "

I most be missing something here. They want us to state that not doing an inspection would not lead to a misleading report. I would have to do an inspection to determine that an inspection is not needed before I could make such a claim.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Ummmm.... read the articles I posted about BPOs. The Realtors won't do them now for less than $100.

This is really sick!!!!

I agree about the inspection statement. BS... I won't sign anything like that.
 

Mountain Man

Thread Starter
Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
And my answer is.....

No Thanks. That is just an altered 2065 form with conflicting statements in the form, mice type disclosures, and limiting conditions. My fee is $zzz for any limited, summary appraisal or $zzz for the 2075 Property Inspection. This latest ploy is very disappointing as it is coming from a client of whom I had held a higher opinion, as being one that did not want just cheap quality, bottom feeder, type work. You would be better served by an AVM from a non-thinking computer than dealing with a low quality, ignore the facts, lying appraiser; who generally are the ONLY type that would accept this request.
 

Oregon Doug

Senior Member
Joined
Jan 15, 2002
Professional Status
General Public
State
Oregon
Take a copy of the form to your state board....NOW.

State regulations vary but some states require a physical inspection by the appraiser. So, it's possible to be compliant with USPAP but noncompliant with state regulation.

whoops, Oregon Doug
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
And now for an opposing opinion.

I looked through the original post here and I don't see an actual USPAP violation. There might be one, but I'm not seeing it. To be sure, I don't consider it sufficient the way it's written and I'd like to add a bit more disclosure as to the limitations of the process and report, but I think it can be done in compliance with USPAP. IMO, it can even be done safely.

I know my opinion ($.02) isn't going to be popular here and I doubt many of you will agree. That's OK. We all have to make these decisions for ourselves. But this is going to end up being a business decision, not an appraisal decision; at least not automatically.

Look, there are appraisers who have been doing pre-comps without any documentation and for free for years. And there are still others who have been taking assignments on contingency, thus casting their objectivity and professionalism into question. This 'desktop appraisal' product is a way to handle these types of situations, where appropriate, in a manner that will afford at least some protection as well as compensation to the appraisers who can use it properly. It will still require some judgment on our part and will still require some skill to do it right. But not much more so than doing a simple SFR appraisal on a tract home.

Obviously, a 2055 'drive-by' is not going to be as comprehensive as a full URAR, and our clients shouldn't be misled into thinking that it is. A 'desktop' appraisal is going to be even less comprehensive than the 2055; again, let the buyer (the client) beware. If the clients are truly willing to accept the risks and the federal regulatory agencies are willing to roll over and let them get away with it, we are then faced with two choices: Either we can insist on providing only the one product and never anything less, or we can offer and provide a lesser service but do so in a manner that is defendable. I don't think that I have to tell you what the consequences of either of these choices are.

We should keep up the pressure and make sure the lenders, the federal regulatory agencies and the public understand that, regardless if an appraiser is involved with the product or not, there is a significant difference between an AVM or even a 'desktop appraisal' and an appraisal that involves at least an exterior physical inspection/observation. Just as a 2055 format with no interior inspection is not necessarily appropriate for every property they are ordered for, the AVM products and any non-inspection appraisal products will not be sufficient for at least some properties. We should continue to protest and fight the ever-rising deminimus levels that the lenders are using to avoid appraisals because these policies have already proven disasterous. If we continue to fight maybe someday these cookie-cutter assignments we use to augment or even make up the entire bottom line will all come back. But in the meantime we need to face the fact that if the choice is quicker and cheaper (AVMs) vs. 10% more accurate (full appraisals), we're at a disadvantage for a significant percentage of assignments.

Any value opinion rendered by an appraiser will still be subject to requirements that the appraiser be able to demonstrate that sufficient information about the subject and the comparable data are present, and that the work product is sufficiently credible in relation to the defined scope of work developed for and agreed to by the client. The appraiser makes the call and lets the client decide whether to go forward with a more comprehensive assignment or to bail out. We all have had expereinces in the past where our clients have chosen to go with the more comprehensive product when we recommend it. I expect the same will hold true for these non-inspection valuation products. But we can't make the judgment call and give the client the option to make such a decision if we aren't in the game, especially if it's because our pride has gotten in the way of our common sense.

Remember when a person with a limited education could get a job for life with a company as a professional typist? 45WPM with no mistakes could earn you a living. Not a whole lot of original thought or multiple skills were necessary. Work in a typist pool for 40 or 50 hours a week and in 10 years maybe you can become a personal secretary to one of the big shots? Those days are gone. It was just a brief blip in the 20th Century; that job didn't exist before then and won't ever exist again. Well, the same may end up holding true for developing and producing full SFR appraisals on tract homes to the exclusion of everything else.

I don't know that this concept will gain wide acceptance. It might. If it does, a few more SFR appraisers will be able to continue to make a living at their chosen profession for a few more years. But make no mistake, the easy assignments are going to end up being gobbled up by the machines. We'd all be better off learning how to handle the ones that won't fit inside the box.

Rant over, you may now fire at will.


George Hatch
 

Karl

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
Bank of America has used this out here in AZ for a while. However there is a lady there that just enjoys sending us out to do Repo's for them. She enjoys it so much we fiqure she'll eventually will lose her job. Our shop gets a minimum of a 1 repo each week not all Bank America's but a very good share are.
 

Roger

Junior Member
Joined
Jan 24, 2002
Professional Status
Certified General Appraiser
State
Missouri
I got the same thing (or just about the same) from Nationwide Appraisal (NASCO) today, but they did not mention a client.


Told me their typical fee for this was $50.

Go figure.
 
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