More AMC and PDC Bull$hit

[OSU Beavers]

We need a good 20% drop in resale values nationwide to shake things up. Everyone is comfortable with Alt valuations when the market is increasing. When crashing, not so much.

 

[George Hatch]

Bad deals are made during good times

 

[J Grant]

First off, checking up on the accuracy of a PDR is arguably just common sense. Of course you should check up on them. Why wouldn't you?

You already look properties up in your public records databases and reconcile for any obvious contradictions in your MLS listings. You don't charge extra for checking up on the info in your subject's MLS listing.

Appraisers have to chase down contradictions on MLS listings on comps because we do not have access to inspect the comps. However, there is access to inspect the subject, typically,- but in a hybrid, the appraiser is denied that access - instead, a random PDC person is sent to the subject property.

If the data on a comp is contradictory and can not be reconciled, the appraiser can choose to discard the comp and continue with the assignment. But if the data is bad on a PDC, then the appraiser can not continue. Either the assignment gets upgraded to a "traditional appraisal," or the order is cancelled? I assume it would be up to the client at that point.

 

[J Grant]

Bad deals are made during good times

Fannie Mae, through its "Value Acceptance" (formerly Appraisal Waiver) program, explicitly states that the estimated value accepted from a lender in a waiver scenario might not be the actual current market value of the property.
annie Mae
Here are the key points regarding this statement from Fannie Mae's guidelines:

• Lender-Submitted Value: When an appraisal waiver (value acceptance) is offered, Fannie Mae is accepting the value submitted by the lender, which is typically based on the contract price (purchases) or an estimated value (refinances), rather than an appraiser's in-person valuation.
• No Warranty on Value: Fannie Mae does not warrant that the estimated value provided by the lender is the true, actual value of the subject property.
• Limited Representation: While Fannie Mae provides the lender with representation and warranty relief for the property value and condition, this does not mean the property's actual market value was verified by an independent party.

 

[Tom D]

So much for driving by the subject and comps. It now means that there was no value to ever having done that. Although the aerial view seems just as good as a drive by. The rules change for me, but not for thee.

 

[chad hampton]

we’re supposed to check the fake appraisers work he does during the appraisal inspection? No, that’s the AMCs job. I would never do one of these fake appraisals, but if I did, I would have no choice but to assume the fake field appraisers work is accurate. After all, the AMC trained them well. Then obviously you have to add disclaimers that say if the fake field appraisers work isn’t true and accurate, this entire report is null and void.

All this idiocy just so the AMC can keep more of the fee. I wonder what they kick upstairs to the GSE heads for their support?

 

[George Hatch]

Appraisers have to chase down contradictions on MLS listings on comps because we do not have access to inspect the comps. However, there is access to inspect the subject, typically,- but in a hybrid, the appraiser is denied that access - instead, a random PDC person is sent to the subject property.

If the data on a comp is contradictory and can not be reconciled, the appraiser can choose to discard the comp and continue with the assignment. But if the data is bad on a PDC, then the appraiser can not continue. Either the assignment gets upgraded to a "traditional appraisal," or the order is cancelled? I assume it would be up to the client at that point.

I wasn't referring specifically to the comps. If/when present you will also look over the subject's MLS listings for that reason, too.

Insofar as what the appraiser did/didn't do in their own SOW, we cannot form our own opinions about the subject or make any comparisons to the subject without first sussing out the info that's available to us within the limitations of our SOW. And then making assumptions about the info being sufficiently accurate for our usage. That's one of the standard assumptions we assert on every assignment whether we're also performing our own physical inspection/measurements or not.

And then we form our opinions about the subject attributes prior to selecting comps and making comparisons. If I review your appraisal report I cannot form my own opinion about the quality of your work or the reasonableness of your value conclusion or agree/disgree with that value conclusion without:

• reading your report for content
• checking up on the accuracy of the facts asserted (to whatever extent is available to me)
• making assumptions (if/when in lieu of info to the contrary) about the accuracy of those facts, even when supported by other sources
• forming MY OWN conclusion that I don't see any obvious problems with your representation of those facts
• And then proceed to form my own opinions and conclusions of the quality of the work product and if applicable the reasonableness of the value conclusion
• Once stated, my opinions and conclusions are my own. Not your's. Even when I agree with everything you did, that agreement is my own opinion, a fact to which I am certifying in my appraisal report certification. Along with the other assumptions and limitations I'm using in that assignment.
• Every assignment includes the use of limitations and assumptions. There is no such thing as a no-assumption appraisal and that goes double for the conventional 1004. Even the "gold standard" we most commonly sell cannot be considered the 100% solution for factual accuracy - we acknowledge that limitation in every report we sign.

 

[sputnam]

I received a call from an AMC representative regarding participation in a PDC + appraisal product. During the talk, I asked how appraisers are compensated if they review the PDC data and identify errors or determine the data is not credible enough to proceed. I was told that there is no compensation for reviewing the PDC data unless the assignment is upgraded to a full appraisal and requires a site visit. So we will be used as free labor to review their PDC inspectors work. What a joke of a profession this has become.

The joke is... it's our own doing. As long as there are appraisers who will accept lower fee assignments and/or do additional work for free, there will be Clients who will choose them.

 

[J Grant]

I wasn't referring specifically to the comps. If/when present you will also look over the subject's MLS listings for that reason, too.

When the appraiser inspects their own subject, it is a far more reliable way to be able to tell what differences exist between their personal observation of the subject and what MLS shows.

 

[George Hatch]

On the one hand I agree: "more is always more than less". You COULD do a more detailed inspection that you normally use, and that more would be in excess of what you already do.

But that " more is always more" isn't the question the users are considering. What they are considering is whether or not "sometimes less is sufficient to purpose".