More On Free Comp Checks

[Marcia Langley]

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.

(my red)

Then we all seem to agree.

I’m not judging, merely questioning.

Questioning is good. This has been one of the best (of many) threads we have had about the details required to develop a fully compliant desktop appraisal.

Maybe some readers will be inspired to become compliant where they previously were not.

 

[Carnivore]

(my red)

Then we all seem to agree.


Maybe some readers will be inspired to become compliant where they previously were not.

They wont need to become compliant once they figure out how much work a desktop is for very little pay. Marcia, you knew that, but you just did not want to give them the bad news.

 

[JSmith43]

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.

Not at all applicable. That argument would fall on deaf ears, since the activity about which you allude in the quoted material is illegal (in most jurisdictions).

 

[Caterina Platt]

Great analogy Richard with the camel and the eye of a needle!

I'm sitting here reading this thread with no less than 5 or 6 'comp check' requests on my desk right now. They're not going anywhere from my office except to Pam's database. One is for a absolute nightmare of a property I did over 2 years ago for one of our less beloved former forumite AMC owners. The man has owned this property for over 40 years, and at the time was doing a 'one time bail out' with a B/C lender named after traffic signals. Sad to see him back at the B/C trough in the same shape today. :icon_frown:

Which brings up another interesting point. Granted, Denis confirmed that the potential client that does actually want to walk thru the compliant process with the appraiser is akin to hen's teeth, but when they do happen around, are we most likely exposing ourselves to higher risk assignments when we work with the lending world?

I qualified that last statement to be specific to the lending world, as the more I think about it, there are perhaps some situations in the litigation aspect where a desktop/staged assignment would be beneficial.

 

[Steve Owen]

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.

I did one, once. I promptly got trounced by a bunch of Forumites who didn't think it was possible. That experience tends to make one want to defend himself with a certain amount of fervor.

Since you all know my position on working for free, you also know I got paid for the one I did. Not enough, though.

It wasn't nearly as hard as passing a camel, but getting paid was a little like passing something.

I hardly ever get a comp check request anymore. Guess I'm pretty much out of the business.

are we most likely exposing ourselves to higher risk assignments when we work with the lending world?

Not sure I know the answer to this one. In fact, I'm not really sure I understand the question. Is a marginal property a higher risk assignment? Not necessarily so long as you CYA.


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[Caterina Platt]

Hi Steve,

I'll clarify my classification on higher risk.

You know the feeling you get when you've done an appraisal on a place in the past, and you see it on the market as an REO? Don't get me wrong, I'm not concerned about someone catching my sins, if you will. I call it accurate and supported by solid market data. But I'm looking at the aspect of an investor feeling the loss and looking for blood wherever he can find the E & O policy. The fear of having to fight over whether the roof was leaking prior to my effective date, or perhaps maybe you didn't explain to a vindictive retro reviewer's liking the fact that this particular market did not have a negative response to the freeway in the subject's backyard. (no lie, I have townhouses where I've tried to measure an adjustment and can't prove one!)

We take risks every single time we sign our names and hit 'send'. But I'm sure we can likely agree that the B/C paper world exposes us a bit more with the higher likelihood of default, B/C condition properties, items we can't see (or just plain didn't see).

I suppose I'm surveying the condition of the sub-prime world and asking, even if we could maintain a compliant desktop product, is it really worth it in the long run?

I'm sure there are instances of that A paper borrower and pristine property that will not pose a higher risk. Sure, it can happen. But I'm speaking in generalities. Most often in my experience, it's not that good as gold borrower when the lender has to know ahead of time.

 

[Offshore]

Caterina that’s one of the few verses I remember. I’m afraid I’m as lacking in formal religious training as I am in many parts of USPAP. Getting numerous comp checks does tend to put me into an Old Testament kind of mood and makes me want to smite the wicked or whatever they used to do before the advent of PC. On that note another observation should be made, I’ve seen more than one jawbone of an *** on this thread.

 

[hastalavista]

I suppose I'm surveying the condition of the sub-prime world and asking, even if we could maintain a compliant desktop product, is it really worth it in the long run?

Caterina-

I don't understand the basis of the question?
There is a "risk" of the desktop being used for fraudulent purposes. That risk is true with any appraisal. Assign a higher risk factor for a desktop if you wish by assuming those who are asking for them are more prone to fraud than those who don't (not necessarily an unreasonable assumption).

But, isn't that risk eliminated once the mortgage finance appraisal is completed? Or, to put another way, the risk is transferred to the mortgage finance appraisal. And, the risk of that appraisal is the same with or without the desktop service, no?

There was another thread started that asked if FICO scores should be provided to the appraiser so that the appraiser could determine the overall "risk" level of the loan and charge accordingly (as lenders do, based on risk). Is this somewhat where you are going?

 

[Caterina Platt]

Denis,

The thought process is I think we take on more risk when we associate ourselves with certain types of assignments. Many appraisers feel FHA is a high liability/exposure type of assignment and have chosen not to complete that type of work as a result. I do FHA work.

Some feel complex properties open you up to more exposure. I live in a location where complex properties are a part of life.

Personally, I feel marginal borrowers and marginal properties can pose an uncomfortable level of risk. While I could care less about the FICO scores or employment history (not my business), I do care about the property condition when there is a greater chance of this loan going south. There's a greater chance everything about the file will be looked at under a microscope should the loan go bad. God help me if I missed the failing septic system that they carefully threw dirt over and hid with whatever they could....the weeds and debris is stacked up along the north side of the house such that you couldn't see the crack in the foundation....Can this happen with any place we look at? Of course it can, but the likelihood, in my opinion, is greater with B/C borrowers and their 'haven't had the money to fix it' properties. I will place my 'I'm not responsible for that which I can't see, not a professional in the field of plumbing, electrical, etc...' disclosures in my addendum, and cover myself as best as possible. Inspect as throroughly as I can, and by the grace of God, there go all of us who do these. It's not a wish of mine to make this type of deal a huge part of my business.

I'm not trying to be elitist or look down my nose at others. Hell, we've probably all suffered hard times at one point or another in our lives, and have needed a leg up a time or two. Everyone needs a place to live, and they all can't be the Taj Majal. But I also know I've been lied to or have had attempts at flat out deceipt by desperate people in desperate situations as well.

It has been my personal observation that 90% of the time, those who require a 'comp check' are what I consider the higher risk situations.

JMHO

So, fire away. If my thinking on this aspect is skewed, I'd be happy to hear your take.

 

[Lobo Fan]

I am with Caterina on this one. but for maybe a different reason. If somebody want a guarunteed value then you know you are dealing with a corner cutting shady type individual. You know, the ones that the FBI is preparing search warrants for.

Sometimes we can be guilty by association.