New FNMA ROV requirement

[TerryRohrer]

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

That is an opinion with an undefined term. What are "the requirements" an appraiser must comply with in response to an ROV request? The only two I can find are:

1) Appraiser responsibilities
After receiving the request from the lender, the appraiser must analyze the relevance of the information provided with the ROV. Regardless of whether the ROV request results in a change in value or not, a revised appraisal must be provided within the defined time frame with a description of the points in dispute and the outcome."

Appraiser Update June 2024 | Fannie Mae

Welcome to our June 2024 Fannie Mae Appraiser Update.

singlefamily.fanniemae.com

2) Q10 As part of a borrower–initiated ROV, if the borrower identifies a minor error in the appraisal report and the appraiser determines the error does not impact the value of the property, is the appraiser required to update the appraisal report? Yes, for each borrower-initiated ROV, the appraiser must update the appraisal report to correct any errors and provide comments on the change(s).

https://singlefamily.fanniemae.com/media/40591/display#:~:text=On%20May%201%2C%202024%2C%20Fannie,and%2For%20appraisal%20deficiency%20exists.

 

[Zoe]

I just finished one. It didn't make contract price on a tidewater. One comp sent by agent through the lender was in a small gated subdivision on a lake with higher historical property values than the subject subdivision. Another one the agent sent through lender had about a relatively new inground pool with a high estimated cost to replace( high is relative). Cost sources would say $30-$50,000 K to replace on the concrete pool and surrounding landscape. The third one the agent sent through the lender was a good comparable I was already using in the sales grid. Concrete pools locally are most expensive to build vs vinyl or gunite.

I can handle that.

I didn't even go into that much detail although I knew the agent had cherry picked some comps and why 2 out of 3 they supplied were not considered the most similar recent comparables available.

 

[Joe Flacco]

That is an opinion with an undefined term. What are "the requirements" an appraiser must comply with in response to an ROV request? The only two I can find are:

1) Appraiser responsibilities
After receiving the request from the lender, the appraiser must analyze the relevance of the information provided with the ROV. Regardless of whether the ROV request results in a change in value or not, a revised appraisal must be provided within the defined time frame with a description of the points in dispute and the outcome."

Appraiser Update June 2024 | Fannie Mae

Welcome to our June 2024 Fannie Mae Appraiser Update.

singlefamily.fanniemae.com

2) Q10 As part of a borrower–initiated ROV, if the borrower identifies a minor error in the appraisal report and the appraiser determines the error does not impact the value of the property, is the appraiser required to update the appraisal report? Yes, for each borrower-initiated ROV, the appraiser must update the appraisal report to correct any errors and provide comments on the change(s).

https://singlefamily.fanniemae.com/media/40591/display#:~:text=On%20May%201%2C%202024%2C%20Fannie,and%2For%20appraisal%20deficiency%20exists.

I wouldn't respond like that. It is an unprofessional response to a client asking you to take another look at it.

If you don't like the client so much that you need to respond like that, then it would be better not to do business with that client.

 

[TerryRohrer]

An appraisal report is not a social media platform. A succinct, factual response is not unprofessional. I don't read reports to anyone. When they ask a question, I tell them if it is covered in the report as submitted.

 

[Zoe]

Sometimes when your client is a lender and the buyer has one agent representing them and the seller has one agent representing them, one agent may not always agree with the other agent.

Be careful. You can be biased as an agent for your client.

 

[J Grant]

I think there is a real concern, and a fairly high likelihood, that appraisers will be swinging in the wind to such an extent that a large percentage will be forced/enlightened enough to find something (sometimes even better things) to do, and when the worm turns, there will actually be a shortage of appraisals. That possibility/likelihood is probably behind much of the rush to get waivers and deficient valuation products and AMC staffing infrastructure in place.

Covid proved there does not have to be a sound valuation mechanism in place...just one that gets the box checked. A short stint in my youth as a government employee made clear the magic of lists with check boxes. It soon becomes obvious no one checking the boxes know why the box exists. They just know something has to be in the file, and their cookies keep coming.

Covid is when prices climbed sky high for no apparent reason - I don't think the WAIVERS/alt products are sound - whatever percentage they form of purchases set the next round of prices for the next AVM to greenlight a waiver or the next appraisal .

 

[George Hatch]

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.

Three things
The unlikely hypothetical I was responding to involved model matches, so the summary on pg 2 will mention that these were picked because they are apparent model matches and will also mention the comparatively narrow search parameters it too to get to those model matches.

You're completely right about "their" comparables sometimes having some overlap, in which case"

S#3 is similar in age and sized but doesn't fit my search parameters because of the (different location or larger size or superior condition as being a fresh remodel) or whatever. Same answer (not as similar) but with a couple more words.​

And lastly, if from the outset I summarized my search parameters - whether wider or narrower depending on the availability - then that's the reason. If their sales are not *more similar* then they cannot outweigh what I already have. That isn't even a matter of discretion on my part. Moreover, I was supposed to acknowledge that there are other sales out there which are (as similar and showing the same] or (less similar but still indicative of similar trends after considering their different attributes].

Obviously this strategy can only work if I actually did work from the macro to the micro before selecting the comps for my report, and if I did end up analyzing to one extent or another 3x or 4x as many sales as I presented in my report. Such as I would imagine is what you are doing in your reports. It's the appraisers out there who only do analyze just a handful of sales or who leave their process to the reader's imagination because they didn't explain it - those are the appraisers who are more vulnerable to having to CYA after the fact.

 

[djd09]

you can dismiss all the comps you want...they will just file with HUD discriminations center instead...so lose lose...my lawyer said it would be best not to respond

 

[togatour]

I agree with the views of those who don't feel a short regurgitation of comments already in the report addressing the adequateness and criteria of the comparable sales selected for analysis in the report is the way to address an ROV, though it is always tempting when things are busy.


When a value comes in below the contract price, I anticipate some push back. Even knowing this, there is really no way to stop it, especially when it is initiated by an unhappy seller and their agent, and in recent times an unhappy borrower??. Even if the agents know the value is fair, they will not want to discourage their clients and will do their job and represent their interests.

What I try to do, and I probably take more time than I should because, luckily, I dont really see too many, is push back hard in a professional way to make sure they understand why their comps which are 50-60% larger, newer, and on better lots, ect, are not appropriate or not as appropriate as the comparable sales provided.

Recently, I had a realtor send over new construction comps for a 30 year old house in an established neighborhood with 6 similar sales in the past year, 3 of which were less than 90 days. They had 4 offers, the one accepted was 30k above the next highest (yes, i did ask for and receive the signed offers from the listing agent). How do you say outlier? The buyer's agent who submitted the offer also submitted an ROV according to the listing agent, but i never saw that one. House did settle at the appraised value, but I got a request to make comments on the new price/ addendum to the COS. It never ends.

 

[George Hatch]

I think the point I'm driving at is to disprove the predictable pushback in the original report.