More On Free Comp Checks

[JSmith43]

What an interesting little coalition we have beating the drum so loudly for comp checks. Imagine the consequences if they should ever establish a business relationship. Open minded fee shops + loan officers = goodbye disinterested third parties. Of course we know that never happens.

Most people do their conspiracy theory posting in the lounge. There is a good one going about checkered contrails....whatever they are called.

Right now we are in the Improving the Profession forum.

What do you have to offer?

 

[Offshore]

Right now we are in the Improving the Profession forum. What do you have to offer?

More specifically this is a thread concerning free comp checks in an appraisal forum, not a mortgage ballyhoo. It’s obvious that your definition of “we” differs considerably from mine. I don’t allow myself to be bullied in real time by mortgage brokers and fee shops and I’m certainly not going to permit it to happen in here. Your agenda is obviously biased based on the lack of criticism of the comp checker last week who had a blatant disregard for standards.

 

[Marcia Langley]

What an interesting little coalition we have beating the drum so loudly for comp checks. Imagine the consequences if they should ever establish a business relationship. Open minded fee shops + loan officers = goodbye disinterested third parties. Of course we know that never happens.

Richard,

I'm having a hard time following this thread because I can't figure out who it is you think is defending comp checks.

You seem to know the difference between comp checks and USPAP compliant desktops but seem to think that defense of the latter equals defense of the former. Is that the case?

If not, it seems that no one is arguing with you.

If so, the argument is not really about comp checks, rather about desktop appraisals.

 

[Offshore]

Marcia the point I’ve attempted to make which elicited an emotional outburst is I find it very difficult to believe that high volume fee shops concentrating on B & C paper while offering comp checks as SOP do so in a fully USPAP compliant manner. Human nature being what it is, they will skew to the high end of the range with both the comp check and the next level of the staged assignment. To procure repeat business in the sub-prime world, the worst behavior is rewarded.

 

[JSmith43]

Your agenda is obviously biased based on the lack of criticism of the comp checker last week who had a blatant disregard for standards.

Tease me all you want, I'm not going to go back and read all these posts. This is hardly the first thread to cover the topic. I'm not sure what it takes to "bully" you. Disagreement, perhaps?

There is the USPAP records requirement. Some people follow it, some probably don't. If someone is going to go through the trouble of utilizing a minimalist scope, communicate the result to a client, why not keep a file? The stuff is all there? It could even be paperless what with the widespread use of scanners, .pdf, etc.

Is your argument about price? I guess it hasn't occurred to some of you that "bullying" a competitor about price is potentially a chargeable offense. Restraint of trade, price fixing. People can fall off of high horses.

The practicality of bringing forth such a charge in court may be lacking. Generally, class actions have proved more profitable and interesting.

However, practicing restraint of trade, pressuring competitors in an attempt at price fixing (bottom setting), etc, puts an appraiser on which side of USPAP ethics rules? I know the good state of MN knows anti-competitive behavior when it sees it (heck, sometimes when only it sees it ).
It strikes me that you are the one attempting the bullying of competitors not to offer USPAP compliant work product alternatives. One of your implied arguments is price. But the overall argument appears to be an attempt at restraint of trade.

 

[Marcia Langley]

Marcia the point I’ve attempted to make which elicited an emotional outburst is I find it very difficult to believe that high volume fee shops concentrating on B & C paper while offering comp checks as SOP do so in a fully USPAP compliant manner. Human nature being what it is, they will skew to the high end of the range with both the comp check and the next level of the staged assignment. To procure repeat business in the sub-prime world, the worst behavior is rewarded.

(my red)

OK, so your argument is that you simply do not believe there are any appraisers that do USPAP compliant desktop appraisal even though this thread has discussed in detail the USPAP issues that would insure compliance. Do I understand you correctly?

Most everyone here has expressed opinions that it is very unusual for appraisers to do this correctly. In that, your view is shared by all, no arguments from anyone, as far as I can tell.

Where your opinion seems to diverge from the rest is at the point where you think it is virtually never accomplished.

I have to side with the others and agree that it can be accomplished and that I think there are those rare appraisers that do in fact do USPAP compliant desktops.

 

[Kevin Mc]

Agreed....

(my red)

OK, so your argument is that you simply do not believe there are any appraisers that do USPAP compliant desktop appraisal even though this thread has discussed in detail the USPAP issues that would insure compliance. Do I understand you correctly?

Where your opinion seems to diverge from the rest is at the point where you think it is virtually never accomplished.

I have to side with the others and agree that it can be accomplished and that I think there are those rare appraisers that do in fact do USPAP compliant desktops.

That is in fact a broadbrush assumption that is insulting to those they clearly stated they do otherwise. I don't do them but if there are folks that will do them and clearly state they perform them in a compliant manner why wouldn't one believe them?.....Skippy doesn't frequent this forum, he/she is too busy churning and burning paper unlike the rest of us who seem to have an awful lot of free time these days.

 

[hastalavista]

Denis,

From what I have been told by some (more than one) mortgage fraud investigator, there ARE oral appraisal reports documented by the MBs/LOs with the appraiser's name and contact information, license information, etc., written by the MB/LO and attached to one or more AVM, used to close mortgages. Appraisers ARE being held liable for these.

Pam-
I know you deal in this arena and I take your word for it.
You probably cannot get specific, but what kind of loans are being made with a verbal notation and an AVM? And, is the verbal required; is the AVM enough?
FWIW, a long time ago (8-10 yrs ago?), I was approached by a broker who had an office in the same building I did at that time. He said that he was looking for an appraiser to give him a written valuation (didn't have to be on an appraisal "form") and that the lender would loan on that + a prior appraisal. I would think that given the general use of AVM products now, who needs the appraiser if the lending question is that simple?
(And, I did not provide the service )

If you deal in doing comp check desktop appraisals, it would be wise to deliver the desktop appraisal report to that 'client'. I don't know about you, but if my work is going to be used to close a loan, I ain't about to give it away for free! If you are delivering these appraisals via an oral report, that can come back to bite big time. That MB/LO can write down any value they want and claim you said it. VERY dangerous territory!!!!!

Now, the above is an area where I disagree but I could be wrong: Here's how I see it and the whys/wherefores:

A. By providing a written valuation, the value is documented; the client has a copy and one is retained in the workfile. The verification process can be easily completed by comparing the two.
On the surface, makes sense to me. Where I have the concern is that by providing them with a written copy, they now have my signature and a document with my letterhead, company name, etc., that can be manipulated in photoshop and can be morphed into almost anything. Yes, I have the original copy in my workfile, and when the two are compared, the differences stand out. But, they have a document they can manipulate; in this scenario, it is assumed that the client is perpetrating fraud, so I see this as a way to make the fraudulent valuation appear "credible" as all they do is change a value in the document.

B. By providing a verbal valuation, the summary of the analysis and certification are retained in the the workfile.
No documents are provided to the client, and therefore any manipulation will have to be from the start (i.e., to fabricate the entire document). This, while not an impossible task, would require some effort on the part of the fraudster. And, the verification process is the same- workfile vs. what the fraudster provides.
In the case of the verbal, the engagement agreement states that the results of the appraisal will be given in a verbal format. And, this process is the same for all desktop appraisals. Grab 20-workfiles, and it contains the same types of things; one of which is never a written report to the client. In my view, this is a safer way of protecting oneself from fraud.

A fraudulent "verbal" could be manufactured under any circumstance. It seems to me that the only way to protect oneself from this type of fraud is to:
A. Never do a desktop (always an option).
B. Do one consistent with USPAP (my option).

THIS IS a very dangerous slippery slope where even with your USPAP compliant workfile and documentation, it will be difficult to prove who said what. If you are going to do this, I would suggest it would be best to deliver a written report with proof that it was delivered.

I put this entire quote in bold because it is worth repeating in that, because of the level of abuse of this service, USPAP compliance is a must if one is going to protect oneself from liability.
You may recall that the original poster included part of the intended use statement in one of his posts; in it, it said that the intended use was for a lending decision. That's when I chimed in and offered an alternative for him to consider; the intended use of this assignment is not (at least, mine aren't) for a lending decision. That is the intended use of the mortgage finance transaction appraisal. The intended use of this assignment is for loan submission consideration- a real life problem that appraisers can provide at least part of the solution.

But, as I've said before, if the desktop appraisal becomes verboten tomorrow, I'll stop it, and so will a lot of others on this forum who complete them in compliance- A group, I would add, while not a "silent majority", is larger than one might think (but are hesitant to post because of the haranguing they inevitably get when asking "how can I do this in compliance?"); all of which have the same intent-
Can this be done in a compliant manner that maintains the integrity of the appraisal process and makes business sense to me?

Have USPAP eliminate this assignment type and, for a fact, anyone who does complete them will be acting unethically. Which doesn't really address the core-issue (as I see it):
Stopping "comp checks" as a means of providing implied/pre-determined values.

 

[JSmith43]

Paradoxically, if appraisal products under USPAP were defined as the universe of valuation products that declared themselves to be USPAP compliant appraisals, the problem would be solved. Regulatory requirements that lender products backed by USPAP compliant appraisals hasn't done much to keep alternative valuation products at bay anyhow.

I think it is time to spin off requirements of appraisers/appraisals for mortgage purposes where there is some sort of federal guarantee and valuation products for the rest of the economy. That keeps in tact the primary fig leaf rationale for T11 regulation of appraisers, while freeing the rest of the economy to use the best, most efficient valuation products available.

If that ends up being BPO's scribbled on the inside of a match book cover or back of a business card, so be it. Just let the rest of the economy do what it wants to do. The market will decide. The current system creates mind boggling economic distortions and strange behavior by investors. It does appraisers no great favor in the long run.

 

[Offshore]

(my red)Where your opinion seems to diverge from the rest is at the point where you think it is virtually never accomplished.

Exactly. I have major doubts. Since some argue their point with a religious fervor, a good analogy might the one about a camel passing through the eye of a needle. I suppose it is possible, but highly unlikely. I’m not judging, merely questioning.

Mr. Roger as far as going back and reading all the posts, we have found common ground on that at least. I have no desire to read them either. As for your comparison to restraint of trade, I suppose a member of the oldest profession in the world could make a similar accusation against a vice squad while on the way to the pokey.