Reviews Asking Me To Comment On Other Appraiser Condition/quality

[pgerarde]

I have received a report review from one of my lenders that is requiring me to address several items that I have not seen before.

" OTHER appraisers have reported a different quality/condition for Comparable #3 THAN YOU REPORTED" Please address.

"The appraiser has used Comparable #1 in another report(s) and used a different condition/quality" Please address.

How can I address what other appraisers have done in their report???

As each of my reports are also confidential, how can I even begin to address this?

My understanding is that these alerts are for the lender's and not to be used to force the appraiser to try to address each and every item that the lenders are seeing due to their computer printouts.

I want to find out how other appraisers are handling these issues.

Thank you for your help.
Patti in Port Angeles, WA

 

[J Grant]

Simply state that "I can not comment on other appraiser's quality/condition ratings since I have not reviewed their work or how they arrived at tehir conclusions. I rated comp 3 in X condition And Y /quality because ( and explain briefly why...what property characteristics of comp 3 led to your ratings).

As far as if you used comp 1 in a prior report with a different condition/qualty rating...why did you rate it differently? Perhaps state that revisiting this comp you changed your rating to reflect X on most recent report due to Y learned about this comp.

 

[hastalavista]

My understanding is that these alerts are for the lender's and not to be used to force the appraiser to try to address each and every item that the lenders are seeing due to their computer printouts.

Your understanding is partially right.
The alerts are for the lender. However, there's nothing stopping the lender from using them as part of the QC process.

Did anyone really think that CU wouldn't be used as a review tool? I mean, a lender submits an appraisal to the GSEs and the GSEs come back and say,

"We have the 5 following risk flags on the appraisal report you are going to submit to us along with the loan package; we'll share with you now what we are going to see if you submit the package with the appraisal as-it-is."​

What lender in its right mind is not going to review the CU risk-flags and get the appraiser to comment on those items before they submit the appraisal to the GSEs?

In regard to the first issue (different ratings from other appraisal reports), while my initial reaction would be to respond as JGrant suggests, I'd take a step back and not respond like that. Rather, I would look at my report to see if I've adequately communicated why I rated the comparables as I did. If I had adequate commentary, I'd refer the reviewer to that existing commentary. If I didn't have the commentary, I'd amend the report to include it.

In regard to the second issue (using the same comps for different assignments but with different condition ratings for those assignment) could be more problematical.
The reason could be that the comps have been updated/renovated or have experienced some negative condition influence since the last time the appraiser used them; if that is the case, the appraiser would be able to describe what new information s/he has learned and why it warrants a different condition rating than before.

The reason could be that the appraiser didn't realize the comp was used before and the condition-rating is on or near the boundary between one rating and another. In the individual appraisal, it may not impact credibility because it is a discrepancy in the rating and not in the comparison or adjustment. When evaluating multiple appraisals, it may look like a problem (appraiser is fudging the condition to fit a specific outcome).
I understand that this can be a good tool for fraud, but the application could get unnecessarily burdensome. I'd like to see Robert Parker (Wine Connoisseur) taste the same wines over and over again without the benefit of remembering what he rated them previously, and consistently rate them the same each and every time. I don't think it would happen. I think there should be an expectation that the condition rating... especially those on the margin.... have a good probability of being inconsistently rated in different reports over time.

Or, the appraiser could be fudging the condition rating (that's what this screen is designed to detect).

I'm assuming in your case, the reason for the different comparable ratings is either something had changed since the last time you used the comparables, or it is simply a case where the rating could fall either way and in this assignment, it fell differently than in the last. Either of these scenarios can be adequately explained (IMO).

Good luck!

(BTW: Northern California Appraisers- there is a Residential Symposium on August 3rd in Dublin, CA. One of the sessions is going to be a presentation by a lender and a National AMC to discuss how the CU is being used in the QC process; what are the common problems, how they can be avoided/addressed, etc., etc. See this thread for more details: http://appraisersforum.com/forums/threads/residential-symposium-in-dublin-ca.207951/).

 

[pgerarde]

I can see that I will need to NOT include the differences in the kitchen or bath upgrades in the condition rating if they want the condition rating for a property is to always to be the same. i.e. Comparable #1 has a superior remodeled kitchen/bath with granite compared to Subject A with updated kitchen with formica counter tops. But in the next report when I use Comparable #1, the Subject had a remodeled kitchen and bath with similar materials as the Comparable. While I have used the condition line in the past to show the market difference between the same quality home but with a updated, cheaper kitchen/bath versus a remodeled, higher quality, I can see that I will need to now break these items out on the Sales Analysis Grid or continue to deal with these types of review issues.

 

[J Grant]

The condition and quality ratings are NOT supposed to be assigned relative to the comps. The condition and quality ratings are supposed to best reflect characteristics of that property, regardless of what it is compared to..

The appraiser comparing a property to other comps is a different appraisal question than what is the actual condition or quality of a property.

It is natural to be influenced by comparison, however we have to keep in mind Fannie instruction that condition and quality reflect the property itself, rather than how that property compares to others.

 

[Noreen]

I've only had one and the same question, what I said was "I could not speak to another appraiser's thought process, that this appraiser blah, blah, blah. " as previously stated, because my explanation was in my report. I wanted to say "I am NOT Marvin, the Mind Reader. but that would sound smart azz. I will not speculate on how another does things, I can only speak to my own process.

 

[J Grant]

Your condition rating should not change when comparing the same comp to a different subject. The ADJUSTMENT (or lack of ) between the properties is what you would change.

We can have a comp and subject with same condition or quality rating but one has superior upgrades...not enough to change a condition rating but enough added upgrades to be recognized in the market and command value. In that case I break out the upgrades in a separate line and adjust for them ( and explain why)

 

[Terrel L. Shields]

How can I address what other appraisers have done in their report???

You can't.

As each of my reports are also confidential, how can I even begin to address this?

Other reports are not confidential if provided to you. You have to requirement to keep other appraiser's work confidential unless explicitly asked that you do.

Did anyone really think that CU wouldn't be used as a review tool?

Amen, bro... Didn't we all predict this? The solution is to stop doing Fannie Mae and see what happens.... Of course, you won't be able to herd cats...or appraisers, not even for 30 days to bring FM to its knees.

Your condition rating should not change when comparing the same comp to a different subject

If you have used this report before then the quality and condition ratings should always be the same. That is an issue and probably an issue where you don't put your comps in a consistent database. Otherwise, changing the condition to suit the situation is not a good appraisal practice.

 

[bnmappraisal]

Your condition rating should not change when comparing the same comp to a different subject. The ADJUSTMENT (or lack of ) between the properties is what you would change.

We can have a comp and subject with same condition or quality rating but one has superior upgrades...not enough to change a condition rating but enough added upgrades to be recognized in the market and command value. In that case I break out the upgrades in a separate line and adjust for them ( and explain why)

This is where I typically make my adjustment; a separate line item at the bottom of the grid

 

[Meandering]

I have received a report review from one of my lenders that is requiring me to address several items that I have not seen before.

" OTHER appraisers have reported a different quality/condition for Comparable #3 THAN YOU REPORTED" Please address.

"The appraiser has used Comparable #1 in another report(s) and used a different condition/quality" Please address.

How can I address what other appraisers have done in their report???

As each of my reports are also confidential, how can I even begin to address this?

My understanding is that these alerts are for the lender's and not to be used to force the appraiser to try to address each and every item that the lenders are seeing due to their computer printouts.

I want to find out how other appraisers are handling these issues.

Thank you for your help.
Patti in Port Angeles, WA

The risk analysis performed by CU is for exclusive use by the lender in their analysis of the appraisal report. After completing a thorough review, a lender should be able to have constructive dialogue with the appraiser to resolve specific appraisal questions or concerns. Although the lender may use output from Collateral Underwriter to inform its dialogue with appraisal management companies and appraisers regarding appraisals they supplied, the CU license terms prohibit providing these entities with copies or displays of Fannie Mae reports that contain CU findings, including without limitation the CU Print Report, the UCDP Submission Summary Report, or any other CU report. The lender must not make demands or provide instructions to the appraiser based solely on automated feedback. Also the CU license terms prohibit using it "in a manner that interferes with the independent judgment of an appraiser." Fannie Mae expects the lender to use human due diligence in combination with the CU feedback, and will actively follow up with lenders who are reported to be asking appraisers to change their reports based on CU feedback without any further due diligence.
https://www.fanniemae.com/content/announcement/ll1502.pdf

Dear Client,

this is not constructive dialogue.
The comments as to how I derived my condition ratings opinions was contained within the report.
I have no idea what condition ratings other appraisers used, and NO CONDITION RATING OF ANY OTHER APPRAISER HAS INTERFERED WITH MY INDEPENDENT JUDGEMENT, AS REQUIRED BY FANNIE MAE.

Have a Nice Day.


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