New FNMA ROV requirement

[Zoe]

It is way deeper than lawsuits the way things are being spread out and who will be responsible for what. The worst started happening with commingling of appraisal fees on truth in lending disclosures.

 

[George Hatch]

How long of an explanation do you make when all of your comps have no adjustments, are located within .1 mile and sold within the past 2 months? What verbiage do you use in the original report to make it clear that sales further away over double the size are not as comparable? Sure I could just point to cert 7 for every ROV, but I think that would be obnoxious.

Lemme see how long it takes me to write the search parameter explanation from scratch:

"The subject property consists of a 1984yb 3bd/2ba subdivision home of 1290sf located in a 120unit subdivision which originally consists of 4 floorplans ranging from 1090sf-1490sf. The subject's observed attributes include C3/Q3, similar to most other units in the immediate neighborhood. All of the above comparables are model matches of comparable condition and can therefore be considered among the most proximate and similar sales available. Properties located outside of this neighborhood cannot be considered more similar than Sales #1-#5. "​

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Then when the ROV comes in citing sales in other neighborhoods or including freshly remodeled units you can just respond with this:

"These other sales are not more similar to the subject than S#1-S#5. "

 

[shrubberyvaluation]

Lemme see how long it takes me to write the search parameter explanation from scratch:

"The subject property consists of a 1984yb 3bd/2ba subdivision home of 1290sf located in a 120unit subdivision which originally consists of 4 floorplans ranging from 1090sf-1490sf. The subject's observed attributes include C3/Q3, similar to most other units in the immediate neighborhood. All of the above comparables are model matches of comparable condition and can therefore be considered among the most proximate and similar sales available. Properties located outside of this neighborhood cannot be considered more similar than Sales #1-#5. "​

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Then when the ROV comes in citing sales in other neighborhoods or including freshly remodeled units you can just respond with this:

Sure I give my reasoning why they are the best in my report. I guess my point was that it won't stop an ROV no matter how detailed you are. Also be aware there is a federal task force that states that using comps in the subject's community is discriminatory, so you can get hit up for that.

 

[George Hatch]

I already said there is no silver bullet. But you do have the means to build your reports in a manner which enables you to effectively respond to the fallacious ROV within 60 seconds and without ruining your schedule for the rest of the day.

 

[J Grant]

I already said there is no silver bullet. But you do have the means to build your reports in a manner which enables you to effectively respond to the fallacious ROV within 60 seconds and without ruining your schedule for the rest of the day.

Many of us already do that, and we get fewer ROVs. But it does not take 60 seconds to dismiss an ROV, even with the best appraisal and the worst ROV sales - the lender or client does not allow the appraiser to just make a one-paragraph statement, and it's done. They want the appraiser to address every sale sent in the ROV individually and explain why it was not used - which is very time-consuming.

We are talking about ROVs from owners/agents, etc. - not a review that asks about alternative sales or points out an error for correction.

If an appraisal hits the desired value or SC price, that appraisal can have the worst comps and boilerplate narrative, and nobody cares. The ROV for parties to contest a value with a form to make it easy for borrowers is just one more event in a cascade of events from teh entities to intimidate appraisers to hit values or be punished by unpaid hours and sometimes days of extra work to address ROV, field off adversarial calls or emails etc

I get far fewer of these than most, the clients matter as well as the work but if it increases that by 10% it is an adverse development,

 

[George Hatch]

See screen grab from my report, repeated above. WRT the 5-sales submitted by the borrower:
1. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.
2. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.
3. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.
4. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.
5. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.

 

[Zoe]

See screen grab from my report, repeated above. WRT the 5-sales submitted by the borrower:
1. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.
2. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.
3. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.
4. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.
5. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.

I usually go into more detail on why the sales in the presented were not considered the most similar recent comparable sales available. And not if the client don't supply me with me supporting reasoning and analysis for what they send me. If the lender/client(s) has to provide me with supporting reasoning analysis on every comp they send me for an ROV?

Catch my drift?

I am not summarizing and analyzing 6 different comps for them. I have already done my job on obtaining the most similar comparables to my subject.

 

[Zoe]

I will throw a zillow list in a revised report and say these were not considered the most similar recent comparables for the subject property.

If they will comply with my request, then I can get down to nitty gritty on 2 or 3 comparables and make sense of it. If not, I will throw their list in a revised report and say they provided no supporting reasoning or analysis why I should consider these comparables more similar than the comparables utilized.

 

[Joe Flacco]

See screen grab from my report, repeated above. WRT the 5-sales submitted by the borrower:
1. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.
2. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.
3. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.
4. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.
5. Doesn't fit the search parameters on pg 2 of the report. Not as similar as S#1-#6 in my sales comparison.

That would be an unprofessional response to a ROV. It's a 'I don't give **** about your concerns" response.

 

[Joe Flacco]

Besides, more often than not, the other sales will fit the criteria but are not as good as the ones in the report and need to be explained why. They might even be good as half of the comps in the report, but are not as good as the one or two that are the best.