Review for Valocity/IndyMac Made Me Mad

[Tudor]

Robin,

Sorry to be late in this response but just saw the string.

OK- Valocity will NOT ask you to do something unethical for IMB. However, the truth is the end goal and it is certainly possible that your first report did not address the situation adequately. But, I do not know for sure.

Now I wrote the specs for the scope of work- personally. Why additional comps? Because I was just plain old sick and tired of seeing the field reviewer get lazy and just agree with value when it was pretty clear that the original was wrong. How would I know? Appraised value is $300K and uses comps 6/10-1 mile away when I have 50 sales of homes of similar size, year built, etc. within half a mile selling in the low 2's. Of course, nothing automatic but such a circumstance absolutely needs explanation.

So, I now require 1 comp to demonstrate they did not use the 3 highest in the market if you are going to agree with value and 2 more if you will disagree. Level 1 and level 2. The level is up to you as it will depend upon what you find.

IF I am going to court or forcing repurchase on this I need the additional data- and the darn MLS sheets as well on the old ones and the new ones (unless your board prohibits that).

And this does not change the assignment at all- about every one of these is a full SR-3 review that includes an opinion of value; I'm just asking for additional support. And that IS part of the scope of work ordered- hopefully clearly stated.

I do NOT want you to lie and tell me that the original was wrong if it was not. I could NEVER defend that in court if it gets that far and I'm sure NOT looking for bogus stuff. I DO want you to tell me if the original was wrong if it was. Whether or not it ends up in repurchase or in court is not something you need worry about; we would tell you if we anticipated needing your testimony and that is quite rare.

So these retro reviews are SR-3 compliant with specific scope of work requirements from the client (me). Accepting or rejecting the assignment and the fee paid is between you and the agent company ordering them- in this case Valocity.

Valocity WILL question you if they think you are wrong or have not adequately supported your opinion- just like any other client/agent for a client.

Anyone who gets these ought to first think about why they are being ordered. Do you think I want to waste money on geting these unless I actually suspect something? Now, my suspicions cannot always be right, of course. THAT is one of the reasons I'd engage a local appraiser.

Pull out your first report and look it over. Was your report clear in support of the origination value and circumstances? Did the extra comps you gridded out demonstrate that? Was there other data that on paper looked like a much lower value was appropriate but that you know from your own market experience were really not indicative of value?

I get them in daily. About 10-20% are probably just garbage; hence the AMC asking you for either clearer data or more data. Remember you are producing this for a client that can be thousands of miles away.

Brad E.

Brad,

I can understand why you would want these enhanced reviews. How much more does it cost your company for these enhanced reviews? How much do you pay the appraisers for these reviews? If it is not inline with what experienced qualified review appraisers will accept, then why would that product be any better then the original appraisal you ordered? Why not just pay for better quality appraisals so that you won't need to order these enhanced reviews.

"a thought"
Is it a valid excuse to use lesser qualified professionals in order to make a larger profit? Would it be a valid excuse for me to use a known inaccurate or unproved data source verses a known accurate and proved data source because the latter was cheaper?

 

[T.E. Faravelli]

The purpose of the review is to buy down the risk with the reviewer appraiser's E&O policy. Experienced, educated and technically proficient appraisers will not incur the risk and liability for such little reward and hence, like water, the process seeks the lowest level. It is analogous to packaging a product in the retail profession. For very little cost they get a second opinion of value that supposedly enhances (like super-sizing your order of fries) the value of the product. Unfortunately, the reality is often not the same as the perception.

 

[Non Sequitur]

Anyone who gets these ought to first think about why they are being ordered. Do you think I want to waste money on geting these unless I actually suspect something? Now, my suspicions cannot always be right, of course. THAT is one of the reasons I'd engage a local appraiser.

So you know why it was ordered, the AMC knows why it was ordered and the appraiser is supposed to know why. You don't think this is a problem?

As some others have pointed out and I have said in the past review appraisals are, for the most part, no longer a QC product. Lenders don't pull X% of appraisals at random and have them reviewed anymore, they just send the problems. Now we have a mess because the appraisers that get the bulk of these know what's up and the AMC will QC you to death if you agree with the value. And what happens if a review appraiser agrees with to many reports? It's like killing to many deals on the origination side.

I'll leave the debate over fees to others, appraisers will never win that battle.

 

[Brad Ellis]

Pam,

I'm astounded that you would think that I'd ever discuss fees I pay- whether to an AMC or directly to an appraiser. Of course I will not tell you what I pay or what the field reviewer gets.

What I will tell you is that it is by no means anything "standard".

What any AMC passes along to a field reviewer is between them and their vendors. And it may well vary by a great deal depending upon the relationship between that appraiser and the AMC. For example, if an AMC calls an appraiser out of the blue the appraiser might ask for $zzz but if they are already getting a lot of work from that AMC the fee may well be less.

I do not intersperse myself in between my vendors and their vendors, and I rarely even find out what portion is passed along. In those circumstances where I was told, the fee did seem reasonable for the work involved.

I pay plenty for the work and expect it to be right. It is their responsibility to get it done correctly and they, for the most part, do just that. Overall I think it a good company and we usually get good work.

This continues to go back to the very question of AMCs in the first place. I have said- only about a million times- that such a decision is up to the individual appraiser. Appraisers have no G-d given right to receive these orders directly- I know that is much to your chagrin, but true nonetheless. It is expensive to maintain an approved appraiser panel so many clients choose to use the AMC who has already borne this expense. If this type of work does not fit into an appraiser's overall business, then they have the perfect right to just say "No".

But, once the assignment is accepted, it IS the responsibility of the appraiser to complete the work competently and to produce a product under the scope of work ordered. When an appraiser does not understand the scope they ought to either ask more questions or decline the assignment is it is not a fit for their own business model.

Now you might think that if I engage an appraiser directly that I will somehow get a better product. I'll put that to rest right now. That is by no means a fact. Sometimes it happens but as often as not the work you get is just as limited as what you might get thru the AMC. And again, all of this revolves around the relationship with the AMC and the appraiser's needs.

I am sure I told you that, when I was in private practice I worked for an AMC all the time. In fact, it was one of those you named as a bad one. My experiences with them were generally positive up until I ultimately fired them for failing to take my side in a dispute over a missing plat of survey (for a famous sports star). The guy's brother lost the darn thing and then blamed me for takng it. But I had dutifully sat at the kitchen table and copied down a full legal page (tyewritten) of a metes and bounds legal description and typed it into an addendum. They could never answer the question of why I would do something like that when I could easily have photocopied the legal description right off the survey and attached it to the report. So we parted company.

But the fees I got from them were actually well above what my peers got and were fully adequate for the high value type of work I did for them. They used me only for those tough assignments and I got to quote each job. I knew what was involved with each one. Sometimes I just had to go the extra mile to get it right; other times it ended up being far easier than one might imagine. It all worked out in the wash. And, BTW, I was never once pressured in any way by this firm- never once.

What is really maddening here is that any competent appraiser ought to know what it is going to take to get it right. It is then up to them and their AMC to noodle out an appropriate fee. If they failed to do that, just who is to blame?

To Annamieke,

NAIFA is about to roll out a designation program for reviewers. Soon. You can watch for that announcement and for the course(s).

Brad

 

[Michigander]

Well put Brad!

I am sick to death of all the fee whining here on the forum and the blaming of the AMCs for all the ill in the world. If you don't want to do the work, don't, but if you accept the assignment then do the quality of work you would for any other client you have. Your fee should not be commesurate with your due diligence. And FYI, before I entered the world of corporate appraising, the only time I EVER did AMC work was for RELO work, and at my normal fee. Others I turned down. Individual choice, plain and simple.

My biggest gripe is turn time! Hard to do the due diligence required on most/many appraisals in some of the unrealistic requested turn times. But then again, NEGOTIATE AND STOP WHINING. Or don't take the work.

 

[CANative]

I "luv" ya Brad and you're always polite and professional when we speak of the phone and goodeness knows I don't want to do anything to get me in hot water with IMB, but you're preaching from an ivory tower, taking the corporate stand and you may have been out of the trenches too long.

My brother, dad and I had a combined business for years. Then we parted company and work different areas now. But I kept the old telephone number while they established new ones. I'm constantly getting calls for fee quotes for reviews and from AMC's including valocity. I quote them a reasonable fee and they say it's more than they can pay. 2 minutes later the phone rings again and it's the same phone monkey (sorry Annemieke) wanting a fee quote thinking they're talking to my dad or brother who are 50 or 60 miles from the property instead of 5 or 10 miles like I am.

They don't freaking care about competence, local experience or anything else. They just want a 2nd value for half the price.

Yes, it's up to the appraiser to do a credible report. The problem is the cheap guys don't know this and that's who the AMC's are hiring.

 

[CANative]

L/S has to constantly send out emails with pdf files explaining how appraisers should do their jobs. The content of these pdf's are discussing such basic, appraisal 101 issues that it's obvious the appraisers they are dealing with have "issues."

 

[Carnivore]

My biggest gripe is turn time! Hard to do the due diligence required on most/many appraisals in some of the unrealistic requested turn times. But then again, NEGOTIATE AND STOP WHINING. Or don't take the work.

Serena,

Thats why many are whining about the fee. The turn time is not long enough to account for a lower fee. :icon_idea:

I recently turned down an assignment for just that reason. The turn time was so short that I was not going to be able to finish it and also do my job. The AMC just would not budge. Even after I explained all the issues. I even said they could keep the FEE.

Man o Man I wanted so bad to do this Review! This guy would no longer be appraising after I was finished with him! Just for you, the lender was your old employer!! The AMC probably got a dumbass to do the review and your old employer is now most likley upside down in the mortgage to the tune of about $250,000.

See a good review for lets say $500 bucks would save them over a quarter million in potential loss!!!

Same goes a long time ago for Indymac. I did a post foreclosure appraisal that revealed a $175,000+ dollar loss that was unnecessary in the first place had they ordered a simple tech review(remember those? Great product!! Good results for small money.).

 

[Tudor]

Pam,

I'm astounded that you would think that I'd ever discuss fees I pay- whether to an AMC or directly to an appraiser. Of course I will not tell you what I pay or what the field reviewer gets.

What I will tell you is that it is by no means anything "standard".

What any AMC passes along to a field reviewer is between them and their vendors. And it may well vary by a great deal depending upon the relationship between that appraiser and the AMC. For example, if an AMC calls an appraiser out of the blue the appraiser might ask for $zzz but if they are already getting a lot of work from that AMC the fee may well be less.

I do not intersperse myself in between my vendors and their vendors, and I rarely even find out what portion is passed along. In those circumstances where I was told, the fee did seem reasonable for the work involved.

I pay plenty for the work and expect it to be right. It is their responsibility to get it done correctly and they, for the most part, do just that. Overall I think it a good company and we usually get good work.

This continues to go back to the very question of AMCs in the first place. I have said- only about a million times- that such a decision is up to the individual appraiser. Appraisers have no G-d given right to receive these orders directly- I know that is much to your chagrin, but true nonetheless. It is expensive to maintain an approved appraiser panel so many clients choose to use the AMC who has already borne this expense. If this type of work does not fit into an appraiser's overall business, then they have the perfect right to just say "No".

But, once the assignment is accepted, it IS the responsibility of the appraiser to complete the work competently and to produce a product under the scope of work ordered. When an appraiser does not understand the scope they ought to either ask more questions or decline the assignment is it is not a fit for their own business model.

Now you might think that if I engage an appraiser directly that I will somehow get a better product. I'll put that to rest right now. That is by no means a fact. Sometimes it happens but as often as not the work you get is just as limited as what you might get thru the AMC. And again, all of this revolves around the relationship with the AMC and the appraiser's needs.

I am sure I told you that, when I was in private practice I worked for an AMC all the time. In fact, it was one of those you named as a bad one. My experiences with them were generally positive up until I ultimately fired them for failing to take my side in a dispute over a missing plat of survey (for a famous sports star). The guy's brother lost the darn thing and then blamed me for takng it. But I had dutifully sat at the kitchen table and copied down a full legal page (tyewritten) of a metes and bounds legal description and typed it into an addendum. They could never answer the question of why I would do something like that when I could easily have photocopied the legal description right off the survey and attached it to the report. So we parted company.

But the fees I got from them were actually well above what my peers got and were fully adequate for the high value type of work I did for them. They used me only for those tough assignments and I got to quote each job. I knew what was involved with each one. Sometimes I just had to go the extra mile to get it right; other times it ended up being far easier than one might imagine. It all worked out in the wash. And, BTW, I was never once pressured in any way by this firm- never once.

What is really maddening here is that any competent appraiser ought to know what it is going to take to get it right. It is then up to them and their AMC to noodle out an appropriate fee. If they failed to do that, just who is to blame?

To Annamieke,

NAIFA is about to roll out a designation program for reviewers. Soon. You can watch for that announcement and for the course(s).

Brad

"My Bold"

Brad,

That comment does not make sense, if the AMC is looking for quality work and they turn down a reasonable fee for the assignment because someone else will do it cheaper (most likely because they don't understand the complexity of the assignment) then are they really looking for quality work? or how to make the most profit?

Some may think I am whining about fees, call it what you want, but when lesser qualified and lesser experienced appraisers accept low fees and produce low quality work it reflects poorly upon my profession, I have a right to "whine" about that.

I am curious, is there a minimum requirement for review appraisers with AMC's? If so, what is it?

 

[Non Sequitur]

Your fee should not be commesurate with your due diligence.

On an intellectual level I agree but in what world is this true? In my neck of the woods you can't buy a Lexus for Chevrolet prices. This is a basic concept for any product in the world. Want a Sony laptop? Don't expect Sony to match Acers prices.