Reviews, Quit whining and wake up

[Lee SW IL]

Another thing I learned from doing reviews is to describe the interior of the home better. If each room is described in more detail I think this would help your estimated value. Interior photos should be required.

Just my opinion.

 

[Tim The Enchanter]

Another thing I learned from doing reviews is to describe the interior of the home better. If each room is described in more detail I think this would help your estimated value. Interior photos should be required.

Description of the home beyond the boxes on the form is important in most cases IMHO. Even if there's only 1 extra paragraph cuz it's a small house.

I mean, linoleum or limestone, or tile, or hardwood or ... Granite counters or formica? Fancy new cabinets or old ones with 27 coats of paint? Details help, the form does not contain enough data just by cheking the boxes for amny properties, again IMHO. Sometimes you wonder if the bloody thing is falling down or not!

I was always advised the lenders want interior pics if the property is worht over $500k. Recently 1 lender has asked for interiors on a $150k house. Thinking I should start taking interiors on all props, if not for the lender, for my own memory, as other people have suggested in this forum. I know I don't remember what a prop looks like a few days after I see it. (Unless it's "something completely different!") Can you say Monty Python :?:

 

[MARKETVALUE]

Hey Gang--

Wanted to clarify something here. I dont have this big conspiracy plan about reviews. I know that they are a neccessity, and as i said before the initial intent is pure and honest. Also, this is ONE lender i am having a problem with, just one. Either my other is not getting reviewed, or more likely it is but it is graded up to par (big assumption......).

I would like to give y'all some numbers to think about. For the January cycle of reviews, Lender sold 4,000 and something loans on market. Of those 4,000 loans, 400 and some change came back after being reviewed as unacceptable (three were ours). It would appear that roughly 10% were sent back (odd that the number would be so round). The lender then asks the original appriasers for rebuttals. Here is the money part, say the 400 loans sent back are all $100,000 loans and all had original appraisals at $100,000 ($40,000,000 total). The paper purchaser through review cuts the appraisals to $85k each. They now will offer the lender $34,000,000 ($85k x 400)for $40,000,000 of receivables. Lender rebutalls several the appraisals. But in the interest of time and the fact that they have already sold 3,600 loans at full value (at $100,000 a loan=$360,000,000 in volume), they agree to sell for $90k a loan ($36,000,000).

The paper purchser just made $4,000,000. Now magnify this to the entire market and also be fair and discount for actual risk paper and bad appraisal work. You can see this is BIG $$$$$$.

Hope this helps. Can anyone tell me the daily interest on $360,000,000. Just curious.....

Let me know what you think.

MRM

 

[Ruth Langkawel]

Just a couple of quick comments on this topic.

1. The problem with the "review" process is the prevalence of "alternative reports" being used as though they are reviews - such as BPO's and drive-by appraisals. Then when those reports use different comparables and arrive at different values, the "alternative report" is relied on, and the original appraiser is silently remanded to a black list or watch list without ever having the benefit of being notified, let alone given the opportunity to defend their report.

2. Doing reviews is the absolute best educational opportunity an appraiser can have. You learn what others do right, and do wrong. It WILL improve your own appraisal practice. I always strongly encouraged trainees and new appraisers to perform a full review of as many appraisals as they can get their hands on. Rip them apart, and be very critical - for their own educational purposes. Before turning in a review to a client, however, start over, taking exception only to items that are blatant falsehoods or that cause the report to be misleading. Then have a more experienced appraiser review your review if you feel that there are negative findings that you must report. Don't just toast someone due to superficial differences in terminology or technique.

3. A responsible review process is a necessity for our industry. I seek review work, but get very little because I charge the same to review the report as I would to do one. (A review is more work than an appraisal - not less!?) I do thorough verification of the data reported - going through the identical process as I would to perform the appraisal from get-go; and when serious falsehoods or inadequacies are found - I report them. This quickly eliminates me from being the desired reviewer for the primary "lenders".

4. Lack of regulation of the review process has caused rampant violation of appraisers right to due process. Appraisers are covertly being sanctioned based upon a very flawed "review" system. This issue as as serious a threat to our industry as any other single issue.

 

[Anonymous]

Lee has a good point with <<More education on reviews is needed. >>

The state sent me a newsletter recently that said basically, "yes we appreciate reviewers who turn in errant appraisers. However, we find a high percentage of the reviews to be errant themselves.....i.e.-find a new value conclusion without complying with Std 1 and 2....

Who reviews the reviewer?

A little ditty I now include in my narratives goes like this (with apologies to D. Miester)

Every effort has been made to produce a report that satisfies the requirements of
USPAP. However, the Appraisal Standards Board of The Appraisal Foundation has not
promulgated specific details as to exactly what constitutes a "Complete" appraisal or a
"Summary" report, and therefore, the determination as to whether or not this, or any, report
complies with USPAP cannot be considered to be an objective fact. Compliance is rather a
subjective determination which is based upon the perception and interpretation by the client and
review appraiser as to what constitutes compliance. This report is our good faith effort to comply
with both the letter and intent of USPAP.

 

[Tim Hicks (Texas)]

Terrel,

That is just the state's way of saying they can't afford the cost of rebuttals. When the "reviewed" appraiser is turned in to the state, they automatically get a lawyer and try to discredit the reviewer. It is easier to discredit the reviewer than it is to defend the report and it draw attention away from the "bad" report.

Marketvalue,

It appears you have an isloated case. It does not appear to be happening to anybody else and it is possible that lender has an axe to grind. It also appears they gave you all the inofrmation you have to soothe your "appraiser ego" and explain their situation. However, if it is so common, you would think we would hear about it from others.

Nobody is above reviews and rebuttals. I have had to to rebuttals before and no, I did not like it. It was time consuming, frustrating and extremely irritating. How dare they question my values? I came out "guns blazing" without commenting on the abilities of the reviewer. I became quite frustrated when the lender really didn't care and just filed my rebuttal away. However, I am willing to suffer through an occasional rebuttal if that is what it takes to weed out the riff raff. I really suggest you volunteer to do some field reviews for your lender, it will really open you eyes and give you a distaste for some of your peers.

 

[Anonymous]

Here's how I see reviews:

1. They don't pay well.

2. They have unrealistic turn times, especially when your busy.

3. You are exposed to crapy work by number hitters. Its not
worth my time or effort to teach them how to appraise.

4. If your critical of a report, its likely the 'other' appraiser will
slam you when he gets a review....or turn you in to the board for spite.

5. Review companies seem to feel they are doing YOU a favor by wanting
to assign you a review.

6. They don't pay well.

I don't do them
elliott

 

[Dale Smalley]

I have learned much more reviewing than any time in the field. So here is my take. Desk reviews are like grading homework. You point out out the mistakes and agree or disagree.
For local work I prefer to do my own drive by for most to see the neighborhood and see the sales and listings. Interiors for the rehabbs. This way the Lender can make their own choice as where they want to go with the risk and I don't have to deal with the rebuttle crap. No pressure to hit a number just get it done fast.
I hate getting reviewed by the moron hired by the SS that uses foreclosures and REO sales to low ball the value. This guy works for one of the largest appraisial companies and consistently appraises below the sales price. But how are you going to turn him in. The only option is a rebuttle that he is not doing a review but creating his own opinion of value by using these types of properties.

 

[Joe Birrell (NY)]

Ditto what Elliot said. Let the damn lenders do their own reviews. In the "good old days" (if there was ever such a thing), every lender had
an old timer on staff that couldn't be bullxxxxed, and god help you if they did a field review. Today, all you got is a bunch of clerks who can't even read a report.

 

[aprazer]

When doing a field review, and it is apparent it is a real stinker, it easily takes twice as much time as a standard appraisal. If you are going to say that this report stinks, you better be damn sure and produce a solid review that is above question. However, these reviews often seem to end up in the hands of someone who can't tell the difference between a good review and a crappy appraisal.

Haven't we all done the rebuttal game where you keep sending addendums responding to the incompetent appraiser and their bogus explanations? One of my favorite responses to a truly fraudulent report, was a fax of a torn out piece of a notebook page which said "this is what homes sell for in this neighborhood". Quite a defense.
The only thing more pathetic is having to supply a rebuttal.