New USPAP Q&As published March 6, 2025

[glenn walker]

so when the gse's waive the appraisal...how do they come up with their adjustments? or is the lender's unlicensed mortgage broker appraiser just basing it on experience?

There are no adjustments it's computer based algorithms and risk based on large data pools. The individual value doesnt mean a lot in portfolio management on billion dollar mortgage security's.

Since Quality is not measurable that's not the end goal but it makes for a good story to burden the appraisers with more forms and scope creep because many equate filling out more forms and adding an extra hour to the job as increasing quality. But Since 95% of all appraisals sold to GSEs come in at the contract price most waivers are based on a low risk and a say 2% to 3% variances are expected.

This Unfourtently is the reason the
GSEs and Money Center Banks are not trying to expand the appraisal profession and in my opinion just biding time that eliminations through attrition of age the lack of fees keeping up to other wages and professions and retirement and death the residential side will fade away to a standing force of say 5% to 10% as we see declining numbers renewing in many States. The remaining in the end years may service the few non waiver transactions and do private assignments.

 

[djd09]

"When a DU loan casefile receives a value acceptance offer and it is exercised by the lender, Fannie Mae accepts the value estimate submitted by the lender as the market value for the subject property"

https://singlefamily.fanniemae.com/media/5916/display

try again...

 

[timd354]

fixed it for you. As I've said, USPAP gets superficial acknowledgement by the PTB, and FNMA rules the residential world. "Paired Sales", unless you rely solely upon one single pair likewise "bracket" a range of values reflecting our imprecision in measurement and the variability between sales. None of our adjustments are set in stone. The average appraiser "observes" an effective age that relate to another sale of known age. Few calculate it using something like Epley's method. And even if you do, two appraisers might judge the total life of a dwelling at a different level, might estimate land value (site) differently, yet could potentially still have a close final value.

When you adjust for "view" or "location" you and you alone make the judgment about the impact. You might see the mountains from one house while another nearby house may have a view blocked or, worse, partially blocked. Are the two even comparable enough to "pair" without making multiple adjustments? So, without multiple pairs, you have a very poorly supported but quantified, result. And if you have 10 pairs, you will have 10 different results. So, which in the rate is closest to your subject? Or is that the only pair you have? If so, how valid is it? Well, I suppose we can argue that a dartboard is very quantifiable.

Without multiple data points few things can be quantified beyond simply saying they support an adjustment. Even with multiple data points, you are going to have a range with a margin of error. In reality, all adjustments are disputable and are only valid with the assumption that there is a margin of error in each and it is your judgment otherwise.

They can play silly word games all they want, but using numbers does not create "quantitative" results. It's just a tool to SUPPORT your opinion, not to PROVE a value.

I freely acknowledge that the process for deriving adjustments is often based in large part on qualitative analysis and I also freely acknowledge that the the support for many adjustments that appraisers make is, at best, weak. But as soon as the appraiser adjusts a comparable sale price by a dollar amount (of a percentage amount), he has expressed his judgment in the form of a quantity and has, by, definition, made a quantitative adjustment. Whether that adjustment is credible or well supported is another story, but that does not change the fact that it is a quantitative act to adjust the sale price of a comp.

 

[Terrel L. Shields]

In the interest of full disclosure, the room where CARE met did not have any windows.

a prison?

 

[glenn walker]

"When a DU loan casefile receives a value acceptance offer and it is exercised by the lender, Fannie Mae accepts the value estimate submitted by the lender as the market value for the subject property"

https://singlefamily.fanniemae.com/media/5916/display

try again...

That's not how it works. If we submitted a estimate value of say the purchase contract price..$' a waiver would only be received if their system showed the values were equal or higher...plus the borrowers LTV and credit history.

The waiver is not an appraisal or a value it's a cap on how much the borrower can pay without additional money down etc.

If the waiver comes in lower the borrower had the option of getting a full appraisal or putting more cash into the deal. But a waiver is not an appraisal.

 

[glenn walker]

A borrower could also receive a waiver based on us having him put more cash down at a lower LTV. We also had the option of not using the waiver and requiring a full appraisal.

 

[Mejappz]

There are no adjustments it's computer based algorithms and risk based on large data pools.

Yes, they are known as coefficients. However, it is questionable whether they make sense or can even be utilized in the sales grid, which is one reason I believe they keep it private.

 

[djd09]

exactly...they do not make adjustments to waivers but requires the appraiser to do so....it is like 2004 cant analyze fraud and now cant analyze waivers

 

[timd354]

The one I posted is what came up searching appraisal institute references to qualitative adjustments. So qualitative comparisons and qualitative adjustments are the same thing.

Now look up appraisal education course content. It doesn't matter if it is residential or commercial. Under sales comparison approach and adjustments, it is always quantitative and qualitative.

You are really making yourself look foolish by insisting that qualitative adjustments are not a thing in appraisal. There are situations when quantitative adjustments work best and there are situations when qualitative adjustments work best. They are both necessary and recognized methods of adjustment.

So, you did a search and found a outdated, 10-year old document to reference without finding the current document....congratulations on a job well done!

You state that "qualitative comparisons and qualitative adjustments are the same thing" and then have the audacity to claim that I am making myself look foolish, lol.

 

[timd354]

Now look up appraisal education course content. It doesn't matter if it is residential or commercial. Under sales comparison approach and adjustments, it is always quantitative and qualitative.

So now you want me to do your work for you and look up supposed references in appraisal education courses that support your position? LOL. You claim that education course content always teaches that adjustments can be both quantitative or qualitative....but you offer no support to this assertion, other than "I say so". While it is possible that you will be able to find some course summary from an outdated course or from some low-quality education provider, I highly doubt you can cite anything that is both current and from a credible appraisal education provider.