Review Apprasials/Appraisers

[MARKETVALUE]

Hey gang-

Wanted to see if any of you have shared this experience as of late. And what your opinions may be.

Like clock work, once a month we get a phone call from an appraisal department on the West coast. I can set my watch by it. For the past four months, I have been contacted regarding 11 appraisals my company has performed for the lender (last check 11 out of 248 total performed for the lender in question for that time period, about 4.5%). These appraisals were reviewed with full drive bys (not desk tops). The review appraisals have cut my supported data and indicated value anywhere from 5-30%.

I am frustrated on several fronts. The first being that a 5% deviance in value in entirely in line for any appraisal performed. Second and the most brain dead, most of these reviews are so f****ng sloppy and inconsistant that i wonder if they are done in crayola crayons. The data is typically extremely narrow and utilizes inferior sources. Several times they have used foreclosed properties for no reason and then dont even have the sense to disclose the distressed sale. On outer counties, their comps tend to be further in mileage than ours. etc, etc...

Im not bitchin here, we are big kids and can take care of ourselves. It is just that I dont appreciate having my product and name brought into question without cause. It puts me on the defensive and gets you all the recognition you dont want in this biz. It appears these guys have absolutely no accountability for their reviews and honestly sometimes it feels like they are intentionally supporting an inferior value to support their place in the process.

Anybody else experiencing this?

In the words of Cliff Clavin "its a dog eat dog world and i'm wearing milk bone underwear"

Have a great weekend all.

MRM

 

[jtrotta]

MRM,
Reviews are in general performed by people who have no idea what a Review is; they've been taught for years to get in there and "kill em".
Very little thought is put into what is required by USPAP or any other of the association's. I have found a real good & very devastating solution, which I use and it's mine and it works every single time. 8O

But for you I would suggest getting rid of the "milkbone underwear" and stand up for yourself.

Wahooo 8)

 

[Farm Gal]

MRM:

If you actually get a chance to review these reviews of your work you are among the few and the lucky... some of us get told our work "got cut 5%" and to please defend the cut and never get a chance to see the review...

If you actually get your hands on a butcher job: and you feel your work is impeccable: turn that sucker into the state with a counter complaint attached. Yo may not get very far: but you might feel better.

The only time any one in our office ever had to respond to the state was on a complaint against one of us as the reviewer. What made it particularly annoying is that the reviewer absolutely had access to our review: and the state reviewer insisted that as reviewers it was required that we provide "paired sales" while NOT requiring it of the reviewed report.

Said report had flaws you could drive a truck through: including but not limited to the fact that the subject was (visibly from the road) not completed!! Personal property inclusive of a D-7 dozer included in one of the sales and a sale in which the original appraiser, kind of sort of, forgot the other 40 acres. (ooops).

The other part you need to do is really scrutinize your work for error: is it truely defensible as writ, or would a few more phrases explaining what went on between your ears result in a decrease in the hatchet jobs??

Regards,
Lee Ann

 

[MARKETVALUE]

Jrotta,

We do, every single time. Its just a pain in the neck to have to run circles around these clowns with a rebuttal. I can crank another 1004 in the time it takes me to research why their work is inferior. It would be nice to have the reviewer actually define why our submitted appraisal is not accurate (ironically, the desktop form provides for more extensive explanation of why you are ripping some one).

The real solution here is to ditch the client. However, I'm not willing to take the volume hit. So I must continue to pick apart these nameless SOB's who take so much joy in debunking my solid work....

Ho hum, another day another dollar....

MRM

 

[MARKETVALUE]

Lee Ann,

You must have been posting as I was responding to Jtrotta.

I guess I should point out the silver lining here. It has allowed us a ton (too much) one on one time with the appraisal department for the lender. These conversations have by all means changed several ways we 'used' to do our appraisals. And honestly has us putting out a better product.

As all of us have fumed before, I can't fathom why my work is getting redflaged versus the quality of work I oft see from my fellow brethren in the biz.........

Last week, had a request for an appraisal, previous appraisal dated from october 2001 was provided to us on the front end. Immediately go to page two, comps look great, GLA similar, bed/bath count similar, lot size similar, good appraisal.....................................one small problem, Comps were all brick ranches, the subject was a Double wide. How does this guy manage to draw a check and not get kicked off every list from coast to coast??

Getting beat up for all the wrong reasons..........but it has given us a new perspective.

THanks!

MRM

 

[Farm Gal]

MRM
Sounds to me like you have the right attitude: which folks do learn more every day, even if it wasn't what we set out for that morning. 8) :lol:

I know there are some real stinkers out there, :roll: someday some way some one is going to have to DO something or the profession is going to die... I don't much care what it is: return to designations as a meaningful acolade, or what, :?: :?: but something HAS to be done! :evil:

Double wide to all brick sit builts is a bit of a stretch... 8O
HAng in there venting does help GRIN

 

[Ruth Langkawel]

In my experience, there are 3 serious deficiencies in the "Review" process that penalizes good appraisers. Which one is happening to you is anyones guess - but here they are:


1. Some Lenders are experiencing increasing losses because of the lack of oversight of the mortgage processing industry, who benefits only by selling the borrower on the wisdom of going in debt, and processing the paper file for a mortgage that they know that they will not suffer the consequences of. The actual Lender providing the funds for the loan, rather than assuming direct control over their risk by being intimately involved in the processing, are not being honest about tightening their lending parameters. They are coercing a lower loan to value ratio by utilizing an inhouse "review" process that indiscriminantly slashes appraised values, and trumps up ridiculous, non-peer criticisms to blame the appraiser. No review process was performed, nor written report provided except for 2 or 3 ambiguous unsupported statements.

2. BPO's or "driveby appraisals" are being used as a review by an in-house clerical person comparing the complete appraisal by a regulated appraiser to the information used on a BPO of the same property, performed by a "quick sale" sales agent - totally unregulated as to how to develop an opinion of value, and whose assumption is that the clients motivation is getting a fast sale for a corporate owner for a properly that will frequently be "distressed" by the foreclosed occupant. In the markets that I work, a quick sale of a home in less than peak condition sells for 10% to 50% less than a typically motivated and adequately maintained home.
Many appraisers take the most conservative view of the subject when performing a "driveby" appraisal, due to the fear that a driveby is ordered to hide the fact that the interior is trashed.
Neither of these "reviewers" are even aware that their report will be used as a review.


3. Loan officers are offered substantial "incentive" bonuses if they exceed a certain dollar amount of closed transactions for the month. As they approach that target - typically during the last 7 to 10 days of the month - suddenly, ridiculous "stipulations" and "review issues" pop up to delay a closing and deny them their bonus. Appraisers are then blamed for the delay, and the loan officer searches for an appraiser that will get their deals closed.

...And the beat goes on.



I hate to whine about a problem without offering a solution.
Cure:
1. Make taxpayer supported insurance and/or funds unavailable to any lender that does not hold a loan for the first 5 years.

2. Each state should announce that as of July 1, 2002, the residents of their states are not required to honor loan contracts (including consumer loans and credit cards) with companies that are not licensed and regulated by their state. (Gives the lenders 90 days to get licensed in the states in which they are doing business - or sell the loans to someone who is.)

3. Make taxpayer supported insurance and/or funds unavailable to lenders that do not use an unaltered Complete Appraisal performed by a regulated and qualified appraiser, or a Complete Review Appraisal by a Master Review Appraiser, for all real estate secured loans above $30,000.

4. Make qualifications for Master Review Appraiser a minimum of 5 years at or above the license level of the appraiser under review, plus 50 hours of specialized review education - 25 of which is in depth USPAP - plus submission of sample reviews and an acceptable thesis on the function and purpose of the MRA position.


Of course, laws are a waste of time and paper, unless they are enforced.

 

[jtrotta]

MRM,
good for you; and yes it is a pain in the Butt, yes you can put out more work if you didn't have to respond, but thats what the review and why the review was implemented.
LeeAnn; Ruth and the others have all made good points, but you also need to bear (growl :x ) in mind that in general 1 of 10 reports gets reviewed no matter what, it was your turm :!:

Good Luck 8)