So I asked ChatGPT a question about our profession...

[bluechip]

A few of you are missing the forest for the trees. Nobody said putting a photo next to a comment is a bad idea. That part’s fine. The problem is pretending that this restructure is for our benefit when everything about it serves the larger agenda of data mining and automation.
Let’s be real. The goal here isn’t to make the appraiser’s job easier. It’s to make our data cleaner so it can be processed faster, flagged automatically, and eventually used to justify removing us from the process altogether. If that wasn’t the case, the same energy put into data extraction would be put into protecting appraiser independence. It’s not.
As for the purpose of an appraisal, yes it’s tied to risk. But let’s stop pretending that risk is measured by the narrative. It’s measured by how well the report fits the GSE models. We all know where this is headed. And whether the value is “credible” or not, it doesn’t matter if the machine says no. That’s the reality.
So while some are busy writing love letters to the new forms, the rest of us are just trying to survive the phaseout in real time.

 

[Essexfenwick]

I really don't see why they will even need an appraiser.at some point you can just get property description inputted properly in the new form it would be easy for AI to value.

 

[George Hatch]

Because appraisals are meant to serve a front-end evaluation of the property purpose to allow a loan to proceed, or not to proceed, or proceed with a condition. An appraisal was not designed to serve as a back-end financial stop loss in the event of default.
Even though the GSE like to make it about risk management -

I think it's hard to tell a user what their own expectations and usage are for an appraisal. Especially when we say otherwise in our appraisal standards.

You can phrase your intended use comment however you like, but saying something doesn't make it accurate. What makes your explanation accurate is if it reflects what the user is actually telling you.
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The above explanation is strictly a USPAP-related observation. Not an endorsement of or agreement with the wisdom of the GSE decision making. I'd make exactly the same comment regardless of the use/user in question.

 

[Essexfenwick]

Every single information based job is in the cross hairs. Is appraisal information based?

F yes.

It's almost every white collar job that's saying and doing these same things. Doctors, Lawyers, accountants... Actuaries... Employees that sit at computers all day...

The funny thing is that the AI appraisal will be too accurate and may kill too many deals. Then they will need a human appraiser to hopefully give an inaccurate appraisal that makes it work and also provide a clueless lawsuit riddled scapegoat if things go south.

 

[George Hatch]

A few of you are missing the forest for the trees. Nobody said putting a photo next to a comment is a bad idea. That part’s fine. The problem is pretending that this restructure is for our benefit when everything about it serves the larger agenda of data mining and automation.
Let’s be real. The goal here isn’t to make the appraiser’s job easier. It’s to make our data cleaner so it can be processed faster, flagged automatically, and eventually used to justify removing us from the process altogether. If that wasn’t the case, the same energy put into data extraction would be put into protecting appraiser independence. It’s not.
As for the purpose of an appraisal, yes it’s tied to risk. But let’s stop pretending that risk is measured by the narrative. It’s measured by how well the report fits the GSE models. We all know where this is headed. And whether the value is “credible” or not, it doesn’t matter if the machine says no. That’s the reality.
So while some are busy writing love letters to the new forms, the rest of us are just trying to survive the phaseout in real time.

"None of this is for the benefit of the appraiser". No argument there. That's obviously true, and at the same time its also irrelevant to the decision making. Nobody besides appraisers has any reason to care about what would be "for the benefit of the appraiser".

Since when is making the appraiser's life better or making the appraiser's job easier among the primary criteria for establishing and promulgating internal appraisal policies? Not even the MBs ever cared about making the appraiser's life better. Nor at the lender, nor at the GSEs. "making appraiser lives better" isn't part of anyone's job description besides the individual appraiser themself.

Don't get it twisted; when the shorthand explanation amounts to "making it easier for the appraiser" the expanded longhand explanation amounts to "making it easier for the appraiser to meet our assignment requirements". They never meant nor implied that any of this was about "making it easier for appraisers to make money".

Not even the appraiser independence issue was actually about the well-being of the appraisers; leastwise not from the perspective of the GSEs (@ HVCC) or the govt (@ D-F) . The appraiser independence issue was about trying to move closer to safe/sound lending decisions via promulgating higher levels of objectivity and impartiality in the appraisals the lenders were using. It had zero to do with improving appraiser incomes.

IRL, 2030 is going to come whether appraisers (fee appraisers and staff appraisers alike) adapt to its arrival or not. 2030 isn't asking appraisers, it's telling appraisers. Appraisers have no leverage to be making demands of 2030 because appraisers are not the party who is generating the demand for services.

Complaining about the weather doesn't stop the wind from blowing or stop the rain from falling. If/when.

 

[DWiley]

"None of this is for the benefit of the appraiser". No argument there.

There is no doubt that the changes are primarily to increase the risk management ability of the GSEs. Heck, that was the fundamental driver behind the adoption of the URAR way back when and the subsequent adoption of the first UAD. Having said that, benefitting the GSEs and benefitting appraisers are not mutually exclusive things. There are lots of things in the new UAD that were added specifically to assist appraisers.

 

[J Grant]

I think it's hard to tell a user what their own expectations and usage are for an appraisal. Especially when we say otherwise in our appraisal standards.

You can phrase your intended use comment however you like, but saying something doesn't make it accurate. What makes your explanation accurate is if it reflects what the user is actually telling you.
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The above explanation is strictly a USPAP-related observation. Not an endorsement of or agreement with the wisdom of the GSE decision making. I'd make exactly the same comment regardless of the use/user in question.

The front-end users who order appraisals, the lenders or their agency AMC's use it for the intended purpose, to evaluate the property for mortgage lender decision

The back-end users are the investors, who end up with the loan if they are the unlucky ones holding the paper when the current owner defaults.
The GSE's like to talk about risk management, well that's on them, not on us. It does not signify any weakness of the appraisal as a product whatsoever ., and their other alt valuatlio products can not predict or prevent future defaults either.

 

[Terrel L. Shields]

I think it's hard to tell a user what their own expectations and usage are for an appraisal. Especially when we say otherwise in our appraisal standards.

It seems to me that to say the user necessarily dictates the scope and expectations of the report has a flaw. Especially when FIRREA dictated to the states to regulate appraisers and to the banks to use those regulated appraisers to value anything supporting origination. From that point on it seems the "users" have fought hard to simply eliminate the appraiser as unnecessary so that we can go back to the S & L days and have a huge fall out like the Great Recession and everyone claim innocence.

So, eliminate the appraiser but require that any bank that fails that all the board of directors and involved salaried employees go to jail for a minimum of 10 years and be banned from finance forever. As for F/F let the top management likewise go to jail. No fines. No slap on wrist. Jail time. Put a little skin in the game and these players might be more cautious.

 

[Essexfenwick]

There is no doubt that the changes are primarily to increase the risk management ability of the GSEs. Heck, that was the fundamental driver behind the adoption of the URAR way back when and the subsequent adoption of the first UAD. Having said that, benefitting the GSEs and benefitting appraisers are not mutually exclusive things. There are lots of things in the new UAD that were added specifically to assist appraisers.

And they used it to drastically reduce the numbers of human generated appraisals.

This is a rare chance for appraisers to fight back and refuse to implement the new UAD. with no reliable appraisal the interest rates will go up and fewer buyers of automated bundles without a reliable system.

It's the only time I can think of where appraisers have power.

 

[George Hatch]

It seems to me that to say the user necessarily dictates the scope and expectations of the report has a flaw. Especially when FIRREA dictated to the states to regulate appraisers and to the banks to use those regulated appraisers to value anything supporting origination. From that point on it seems the "users" have fought hard to simply eliminate the appraiser as unnecessary so that we can go back to the S & L days and have a huge fall out like the Great Recession and everyone claim innocence.

So, eliminate the appraiser but require that any bank that fails that all the board of directors and involved salaried employees go to jail for a minimum of 10 years and be banned from finance forever. As for F/F let the top management likewise go to jail. No fines. No slap on wrist. Jail time. Put a little skin in the game and these players might be more cautious.

You should be making the distinction the lender's expectation vs the discretion the appraiser still retains to exceed those expectations if/when they think it necessary or appropriate. The lender controls what they expect; the appraiser controls how they meet those expectations. Two different decisions being made by two separate parties to the assignment.

The other thing is that user expectations are an add-on to the minimums, not a substitute. A *required* addition to the SOW decision, not some option the appraiser has discretion with. There is no "either-or" choice for the appraiser to make because per specs the only correct answer is "both" or arguably "both+more".

All of that is separate from the judgement of what anyone thinks the lenders should be doing. The lenders as a group can be 100% wrong about how much is enough and it still wouldn't affect the appraiser's responsibility for meeting "both".