TAF and HUD make a deal...PAREA providers win

[djd09]

View attachment 89779

why do the unethical stakeholders hate the independent appraiser so much....george will explain it to me

 

[Non Sequitur]

Gonna still need a mentor after getting your license, if you want to have any knowledge.

True but will they since they aren't required too? IMO giving someone a license/certification who hasn't completed a single "live" assignment is akin to throwing kittens into traffic.

 

[Mile High Trout]

FEDERAL REGULATORS FINALIZE NEW GUIDELINES FOR CHALLENGING HOME APPRAISAL VALUES​

The new process could address a “growing gap” between appraisals and sales price, experts say.​

not much different then the mortgage broker ordering days...just hit the dang number...parea will teach them that

Hi Guys and gals on The Appraisers Forum. If I may please jump in with a few responses. There is a lot of buzz about a final rule for ROV's but if one has defensible appraisal reports, and has practiced as an appraiser for some time anyways, there was really not much new going on with that. Except institutionalizing a new form of appraiser pressure by yet again playing into the notion that if there is any disagreement on price vs value, must be the appraisers fault because everyone else in the process is immune to any operational errors or competency faults.

This above; Not even close to the most important thing to hit the appraisal industry in years. This below: CFPB final rule on AVM's, use, regulation, compliance. This is a nearly two hundred page final ruling which provides the cumulative answer for the past two decades of what is an eval, and how will avm's shape the future of the lending and regulatory landscape. Everyone should read this. Sadly, only a few dozen people wrote comment letters. You guys missed out on one of the most important pieces of rule making in decades. Where were your letters?

https://www.consumerfinance.gov/abo...-use-of-AI-and-algorithms-in-home-appraisals/

https://files.consumerfinance.gov/f/documents/cfpb_automated-valuation-models_final-rule_2024-06.pdf

Been a while since I posted links here and my customized firefox may be limiting some of the tools. Online keyword in case link does not work. Full document available from top link in the CFPB's page. Some text copy for you, and short responses in (parathesis). / Running into text overflow here, will have to break this up into several posts.

CFPB Approves Rule to Ensure Accuracy and Accountability in the Use of AI and Algorithms in Home Appraisals​

________________________________________________________

In responding to the question in the proposal about the impact on small entities, that commenter stated that AVM testing is inexpensive and can be done easily by large or small entities. In addition, the commenter stated that cascading rule sets and platforms using multiple lending grade AVMs from quality providers are readily available. For these reasons, the commenter argued that quality control standards for AVMs would not disadvantage small entities. Another commenter stated that AVM vendors already provide comprehensive information to financial institutions to demonstrate the quality control of their AVMs. The commenter further stated that financial institutions currently require AVM vendors to fill out numerous questionnaires (usually once to twice per year) to address large numbers of compliance issues and best practices, in addition to AVM developer, lender, and third-party testing. The commenter also stated that financial institutions require explanations and testing detail that documents how AVMs work, their accuracy, their multiple models, and the models’ infrastructure. The commenter stated that the predominant purpose of the questionnaires is to address concerns that the financial institution has, and that the financial institution is following a process to protect its customers and its safety and soundness. In addition, another commenter recommended that there be education and training for users of AVMs.
(they'll adjust the algorithms as necessary to get the desired results. Then will self certify safe practices twice a year. What could go wrong?)

 

[Mile High Trout]

Post 2. CFPB AVM final rule text. Continued.

In addition, one commenter suggested that the agencies facilitate further efforts to develop fair lending and fair housing testing for AVMs by making additional GSE data available to industry stakeholders, organizing hackathons and conferences, and encouraging academic research and similar engagements that leverage private sector expertise to inform ongoing guidance around AVM guidelines
(everyone except appraisers will have access to CU data. Newsflash, the entire system has likely already been breached, they just are not disclosing for PR and liability purposes. Can you imagine the embarassment if they actually opened up the CU system to white hats with documented findings? Never going to happen. Not to mention how many third parties they've already shared CU data with, and plan to increase that data sharing in the future. The FHFA and HUD sent over 10 years of CU system to several departments in several government agencies already.)

As described above, the agencies have determined that a flexible approach to implementing the quality control standards would allow the implementation of the standards to evolve along with AVM technology and reduce compliance costs. Different policies, practices, procedures, and control systems may be appropriate for institutions of different sizes with different business models and risk profiles, and a more prescriptive rule could unduly restrict institutions’ efforts to set their risk management practices accordingly. For these reasons and after considering the comments, the agencies are not issuing additional guidance at this time and recommend that institutions review and consider existing guidance when establishing and implementing appropriate polices, practices, procedures, and control systems for AVM quality control
(Throw the entire appraisal industry as we know it away. Start all over with the new tech. Reset the entire regulatory landscape as a result. Prescribe your own rules over time. So much for oversight. The question of who gets to regulate and investigate the AVM systems which prescribe home values for this whole country are answered. Nobody. Lenders will maintain proprietary access to the technology and rule sets behind it.)

The quality control standards in the final rule are applicable only to covered AVMs, which are AVMs as defined in the final rule. The final rule requires the regulated mortgage originators and secondary market issuers to adopt policies, practices, procedures, and control systems to ensure that AVMs adhere to the specified quality control standards whenever they use covered AVMs while engaging in certain credit decisions or covered securitization determinations. As a result, the final rule creates new record keeping requirements. The agencies therefore revised their current information collections related to real estate appraisals and evaluations.
(and they'll write those rules and adjust them on the go according to their needs. Lender compliance will be mandatory. They will prescribe when to use humans or avm's. The avm will be certified as a real appraisal, meeting all lending definitions of compliance. There is no longer a distinction between an eval and a full appraisal generated by a human.)

pg110 6. Any significant alternatives to the final rule that accomplish its stated objectives. As noted, the final rule implements a statutory mandate, thereby limiting the ability of
covered agencies to consider alternatives. That said, agencies did exercise authority provided by section 1125 to include the nondiscrimination quality-control factor (given continued evidence of disparities in residential property lending terms along racial and ethnic lines)
(see where this is going? Equitable market valuations have landed. Next comes the social credit scoring systems which is already clearly detailed in a myriad of FHFA, Fannie, Freddie, HUD, Corelogic First AM, JP Morgan (etc), and other patented technology that has been adopted and implemented throughout lending and portfolio management over the past five to ten years. They're just getting started. Read the patents via google patent research. Just search company names and track the patent histories, read related patents. We can know how the avm, approval, risk management, and other technological tools actually work, by reading the patents. I've spent months reading them and it's alarming. Which stereotypical borrower category do you fall into, and where? The ruse of accusing appraisers of being discriminatory was necessary to implement this system. Mission accomplished. This is why FICO scores and LTV's are taking a back seat, and they don't need or want human appraisers anymore. This also relates to FHFA's conditioning of GSE executive compensation on their ability to consistently use less human appraisers, month after month, year after year. That has been going on two or three years already. That's where all your residential work went and it's not coming back.)

pg116 Some industry commenters provided feedback on the magnitude of the estimated burden hours, which form a core part of the IRFA analysis. Two commenters provided estimates for
what they believe the burden hours will be. One of these commenters stated that a statistically- based, rigorous analytical approach would require between 100 and 400 hours a year and that, in
particular, testing AVMs for compliance with nondiscrimination laws requires building a database, cleaning data, carefully building samples, and running regression tests. The commenter noted that if a company were to outsource their validation of AVMs, then the agencies’ estimated burden hours might be adequate, but that there would be a cost to outsourcing. Another commenter stated that covered institutions would need to create some controls that would be based on statistical analysis and provided a rough estimate of 320 to 480 hours. The CFPB outlined the estimated burden hours that it uses in the IRFA analysis more explicitly in the SBREFA Panel Report: 69 hours for verifying compliance, 65 hours for drafting and developing policies, practices, procedures, and control systems, and 60 hours for training. Therefore, the total number of estimated hours in the first year is 194 and primarily includes costs for “Legal Services.” In both the SBREFA Panel Report and the IRFA, the CFPB did not assume costs for statistician services. If a small entity needs statistician services, the SBREFA analysis “anticipates that most third parties would be able to provide institution-specific … service that accompanies an AVM.” As discussed in part III.E.2 of the SUPPLEMENTARY INFORMATION, as long as institutions adopt and maintain policies, practices, procedures, and control systems to ensure that AVMs adhere to the rule’s requisite quality control standards— and consistent with the flexibility to set their quality control standards as appropriate based on pg117 the size of their institution and the risk and complexity of transactions for which they will use covered AVMs—institutions should be able to work with AVM providers to assist them with their compliance obligations under the rule
(They will investigate themselves to determine there has been no harm. Outside professional help from qualified persons will not be necessary to self assert the avm's integrity and reliability during the bi annual self certification process. Have an exec fill out a few page form, write up a rule set for responsible avm usage and rule setting nobody will actually follow, compliance achieved. Keyword from early on in the document; cascading rule sets. That's where understanding how the patented technology works, the decision making and priority element trees. Unlike appraisal with recognized methods of development. Guess what; The avm's will review their own work, and yours too.)

 

[Mile High Trout]

https://www.ASC.gov/sites/default/f...ZzB4saEL5t52HnEKGQ_aem_VnWaxOJc7cteGab5NbrV_g

40 pages of expired licenses published today. Think TAF or the Appraisal Institute will reach out to any of them or continue to push the PAREA narrative?

Link not working. Attached doc something went wrong. Research keyword; ASC.gov national registry notices. / daily update reports.

https://www.ASC.gov/national-registries/notices#

Help me understand what I'm seeing here. Why is there all these revocations in some states but not others?

 

[Non Sequitur]

Why is there all these revocations in some states but not others?

Different renewal dates, not all jurisdictions renew at the same time.

 

[Dublin ohio]

Link not working. Attached doc something went wrong. Research keyword; ASC.gov national registry notices. / daily update reports.

https://www.ASC.gov/national-registries/notices#

Help me understand what I'm seeing here. Why is there all these revocations in some states but not others?

I am not sure where you are seeing "all" of these revocations. I see a number of expirations but few revocations in any state

 

[Mile High Trout]

If there's a fix for the fee appraisers those decisions will be imposed by the govt. Nobody else. That's why I think the CFPB and/or Congress is the more logical target audience for appraiser grievances. They can lean on the FTC to change their interpretation of the C&R elements of D-F.

George. Yep. Agreed. Also in response to your other questions; What have some of the appraisers done other then complaining?

I'm not sure what else we can even do at this point. IVPI was a workable solution. The regulatory people handed special favors to industry insiders instead. It took well over ten years and many senior appraisers meeting personally with top level people all over again, multiple independent websites and commentary people, mountains of evidence, and all they have done is issued a letter writing request campaign with CFPB. And they rushed the AVM final rule through before that effort could even be considered. It does not take nostradamus to predict that they'll say it's all just too complicated, push all of this to proprietary AVM modeling instead. That's been the plan all along.

Appraisers Blogs website. Article; Lack of Fee Transparency Exposing The AMC Exploitation.

https://appraisersblogs.com/lack-of-fee-transparency-exposing-the-AMC-exploitation/

The letters were amazing. Also posted in the thread is the Federal Reserve Board letters that hundreds of appraisers wrote for the original final rule for Dodd Frank Reg Z. Those letters are as true today, as they were then. Also interesting is they looked at the appraisal industry first, then followed with a decade of other refined rule making for other financial sectors, but appraisal came first. That's because when value is manipulated, when appraiser independence is compromised, profound economic consequences were a result. Ready for the big repeat? People presume the market will crash again but that's not what's going to happen, not yet at least. By taking control of automated systems and making them mandatory, we can exist in a bubble for some time to come.

 

[Mile High Trout]

obviously the answer will be more funding!

Refreshing to observe human beings whom understand the basics of an over sized run away government.

If they catch you outside of the matrix you'll be re inserted and forced to watch syndicated media until you die all over again.

 

[Mile High Trout]

Not really, up until about five years ago, most AMC’s were relatively fine to work with. They were serving the role in which they were intended, as a middleman. Most of the times on a $600 fee to the borrower the appraiser was paid 450 and the AMC 150. these days we’re getting closer to those numbers being flipped. Notice no savings are being passed on to the borrower.

Everything goes in cycles, they spent years and a lot of money, flying around their representatives to bribe and threaten appraisal boards and legislatures to get their way, and it worked. But now certain powers are starting to pull back the reins after they become aware. These changes take time. Just like it did for them.

Trying to get my hopes up? Unless someone enforces the law... They'll continue to hoodwink the American public. I was approved down the entire TAVMA list and never once ran across an AMC that did not somehow exert pressure, conceal and hide fee distributions, lie about service performance, etc. Every last one of them seeks to place the appraiser as an employee held to specific service performance, or you don't get any work. This gives them all the cover they need to blacklist appraisers with the push of a button, just claiming they were late or what not. This is the very nature of AMC's constant high pressure high performance unrealistic expectation model; It gives them the cover to blacklist or prefer any appraiser out there for any reason what so ever.

The nature of separation from loan production is the problem. Prior to such a rule when MB's could simply comp search with an appraiser, the appraiser would be on the front end of the lending cycle. We'd provide valid and reasonable value range figures they could base loans upon. ROV's were virtually unheard of. The appraisers were able to make a decent living by having adequate time to provide a quality product. Turn times were constant in the two to four week time frames, sometimes six or eight weeks. Only people whom needed something immediately were sent on the rush avenue. Appraisers could stack work orders out and stay busy, better plan a small business.

If an appraiser is good enough to be on a lenders preferred panel of appraisers. That appraiser SHOULD get a fair share of the work assignments. Any lender or AMC whom operates otherwise is operating in an incompetent or corrupt manner. The performance metrics that actually matter for this industry are completely ignored in favor of simple metrics that can be tracked and traced with simple distribution software tech. Nobody is looking at consumer surveys, repurchases, quality of reporting, detail of reporting, claims histories, or keeping long term records for field review criticism or acceptance. The American consumer is most harmed by the automation. We live inside a housing bubble that never ends. Despite all market forces and external stimuli, prices never ever come down. That's because they get the value number they want on the front end, without any input from the appraiser. Then form the entire system downstream to pressure the appraiser to hit that number or else. AMC's the long arm of predatory lending.