Reviews, Quit whining and wake up

[Tim Hicks (Texas)]

I have read some of the negative comments about field reviews and I agree there are some pretty lame reviewers out there. However, I suggest you volunteer to do some review work. I do plenty of reviews and I think there is too much slipping through the cracks or slithering under the radar, whichever way you want to look at it. If you are an honest appraiser, you can withstand any questions and can defend you estimated value, so why worry? If on the other hand, if you actually did some field reviews, you might change your mind about the review process. Far too many appraisals slip by without reviews that need to be reviewed. We have "hired gun" appraisers all over my area and they will do whatever makes their lender happy. Ignore that the subject was listed for $10,000 less, no problem. Ignore the 90+ sales in the addition and use the sales from somewhere else, no problem. Need that PMI removed less than six months after purchase, but you need 20% more value, no problem. I, for the life of me, can't understand why an appraiser will risk his license for a $325 fee, so a borrower can get $50-100,000 in equity that really isn't there. There aren't enough checks and balances being made and the insanity has got to stop. So, I think a few questioned good appraisals is not a bad thing. Good appraisals can always be defended. It may be a pain in the behind, but it is a good idea to let everyone know they are not above review. Just my opinion, of course.

 

[Larry Lyke]

Tim --

Your opinion is correct.

The reason Appraisers are willing to "risk his license for a $325 fee" is that the enforcers aren't watching or don't care.

ALSO, it's really a lot of work to directly turn in a bad appraiser to your state board. You have to back up your word by interviews and court testimony, usually. And the Lenders will blackball you or beat a path to your office, whichever, depending on how THEY feel about the Reivewer's action.

 

[liznindy]

Tim,

I have to agree with you. I have been doing several retrospective field reviews over the past few months of which most (if not all) have been very poor appraisals. I would even say fraudulent appraisals!

I begin a review with no preceived notions, but like you say, prior sales are being ignored...concessions are not being reported (let alone adjusted for)...good comparables are being overlooked in favor of those that "make the number".


It is obvious the search for comparables in the reviews I have run across lately is based upon the sales price instead of similar characteristics!!

To be fair, though, my client already suspects the appraisal is poor quality. So I am not likely reviewing appraisers who do the job right!

 

[Tim The Enchanter]

I've reviewed a lot of appraisals over the last 2 years plus. I will never take shot at the appraiser, no matter how bad the report is. I don't know them, and nothing personal. I will point out problems with the appraisal clearly. I won't nit pick, but often there are serious errors or lack of detail. Not to mention apparent fraud, in which case every little thing gets hammered. :!: I was pleased to see 1 bad apple who's reports I assassinated :twisted: several times got his license revoked by the OREA. :twisted:

When the overvaluation (it's never under) is obvious, then it's not so hard. But sometimes it's more subtle, like very limited (inadequate) description (of course no pics, that I see anyway), then the subject is compared to complete remodels and highly upgraded homes. Or home in the flats, comps in the hills with views, or across the Blvd in a higher priced area. Highest sales in the 'hood. Hmmm.. Seen it from the $100k's to the 2-3 Mil+ range.

Really I'm much happier to review a good or at least decent appraisal, versus some tossed together haphazardly, or with a PUSHED value. the decent job is much easier to review, and of course the lender hates it when you check box 12 "no", the value is not reasonable. Then maybe you get a rebuttal to go over.

The appraisal where nearly every box is checked "no", "it's bad", except box 12 "value is reasonable" checked yes, are not much easier.

There are lots of good appraiser out there. It appears from the postings that most if not all of you on this forum are honest and competent.

Unfortunately many of the appraisals I review are foul dreck. :evil: :evil:

Let's see, sale as HUD REO 11/00 at $65,000. Total rehab per MLS, then sold for $110,000 11/01. Ten days later it goes on the market and "sells" for $146,500 in about 60 days. Appraisal ignored this HUGE red flag, and that was just the biggest issue. :x :evil: Oh the "rebuttal". :lol:

There should probably be MORE reviews to weed out the rotten apples, and hey as long as you do a thorough job, no worries mate :!: Would make for some easier reviews on the good jobs. That would be nice.

And if I think it's high but within 5%, box 12 is "yes reasonable" although I will say value "may be high, but within 5% and considered within reason" in my comments. :wink:

 

[MARKETVALUE]

Tim,

I appreciate your opinions and agree with you to a certain extent. I am sure you have reviewed my previous post from a few days ago, and it may have something to do with your current post. As i mentioned, in a follow up post to that original topic i posted, i have had a lot of one on one time with the appraisal department of the lender i am incurring these problems with. I would like to point out something that may not be known by several if not many people who post here.

First, the basics that we all should know. Lenders who sell their paper on the market 'package' there deals to the paper buyers, banc one, washington mutual, etc. They group their paper into groups, whether it be by borrower type (A,B,C, etc.), LTV's, whatever, i dont know. The purchaser of the paper offers a dollar to dollar figure for the paper. For high risk loans, they may discount the figure at which they buy the paper. The buyer wants to ensure the quality of the paper it is buying, and randomly selects appraisals for review. If it can prove the appraisal for the loan to be sub-par hence putting the loan into a high risk situation then they offer a discounted (less than dollar for dollar) price for the loans meeting this criteria.

So with this in mind, it is advantageous to a certain extent that the paper purchaser find fault in as many appraisals as possible (spelled out, the more appraisals it can claim are sub par, the cheaper they can buy the paper for and hence the more profit margin they have). Of course, this process is neccessary as all of us have posted know there are many shady appraisers out there.

BUT....coporate bottom line is obviously to buy the paper as cheap as they can get it, good or bad. And this is where my beef comes in with reviews. The appraisals I am having to defend are typically cut and dry. Good solid work. The reviews I am shredding are not. We can defend our work fine. As I have said before, I dont appreciate my work being brought into question. I am not above it, but when it is not warranted it is a damn nusiance. Again, if I have erred our dropped the ball by missing someting with an appraisal, fine, it happens to all of us. But this rebuttal crap is a huge coporate political waste, as i know damn well, and the review appraiser knows damn well, he is being asked to low ball the hell out of the property so his client can buy paper at a discount.

I know this is all part of our business. But surely you understand how valuable our time is in this business. I just can't stand to see my time wasted on coporate BS when i can be making more money or better yet working on my handicap.

Let me know what you think.

MRM

 

[Mountain Man]

The appraisal where nearly every box is checked "no", "it's bad", except box 12 "value is reasonable" checked yes, are not much easier.

Ohh boy, I have had that one before too. I think those are harder to explain. When the lender calls and says HOW? The only thing I can say is, even a blind hog finds an acorn every now and then. 8)

 

[Lee SW IL]

I think that an appraiser that performs an appraisal, should also know how to review. Each review I have done, good or bad, I have learned something from it. More education on reviews is needed.

I just completed a review last week, everything in the report was wrong, subject property is in an area with homes with external depreciation, all comps are in a superior location. All comps are superior, but that is not the bad part of the appraisal. ALL comps had the wrong sale price, sale date, and square footage. That is just plain stupid. I wrestled with that damm thing, I thought I was the crazy one when the MLS showed one sale price and his appraisal showed another, county records confirmed the MLS price and date.

From that appraisal I learned where to send the bad report to. :lol:

 

[Tim The Enchanter]

even a blind hog finds an acorn every now and then.

Usually a sale eh :?: :lol:

But this rebuttal crap is a huge coporate political waste, as i know damn well, and the review appraiser knows damn well, he is being asked to low ball the hell out of the property so his client can buy paper at a discount.

An interesting thought MRM. I've never come across that pressure to lowball when doing a review, not that it means it isn't happening. Seems to me that

being asked to low ball the hell out of the property

is as wrong as the lender asking to push value too high.

There's usually a range of numbers that would be reasonable, and if it's in the range then it's probably OK methinks.

I know this is all part of our business. But surely you understand how valuable our time is in this business.

Yes, I agree and hate time wasting questions, but such is life in appraisal biz.

Makes you a little nuts sometimes, huh :?: :lol:

Lee in SW Ill

From that appraisal I learned where to send the bad report to

Would that be Hades :?: :twisted: :lol:

 

[Dee Dee]

MARKETVALUE,
Interesting post, I have never heard of this point of view. Thanks for the input, certainly something to consider.

Dee Dee

 

[G-man]

:?: I have wondered why I would be reviewing an appraisal from two to three years ago. If a lender is buying certain mortgages, I guess that would explain it, they area looking to see whether or not the purchase of certain "paper" is a good risk or not based on how good the appraisals are. I do, however, love the RUSH order for review of said two year old appraisals. Ya'll had two years to get it reviewed, now I have to hurry up and get done? Yeah, right. :roll: