TAF and USPAP - great analysis

[George Hatch]

The problem is panel management and appraiser engagement practices. The AMC's who mostly originate for GSE purposes engages the cheapest appraiser available. GSEs finding this practice acceptable and then complaining about bad appraisals is stupid.

The way I would put it is that "cheapest + effectively acceptable + the lowest available price"

Talk is cheap. They SAY they require more and we SAY we provide more; but IRL it's how the GSEs and the lenders and the AMCs and the appraisers actually act that should be considered more indicative of the IRL outcomes.

If the GSEs were previously accepting/using a 50% solution before but are transitioning to effectively accepting a 60% solution then that change is coming down from the top. It isn't the result of lowest performing appraisers volunteering to improve. IMO appraisal quality is virtually always user-driven with the appraisers responding to the client-demanded changes in quality. If a client will accept/use less-than then many (or even most) appraisers will only work to that expectation and not one step further.

 

[Joe Flacco]

The way I would put it is that "cheapest + effectively acceptable + the lowest available price"

Talk is cheap. They SAY they require more and we SAY we provide more; but IRL it's how the GSEs and the lenders and the AMCs and the appraisers actually act that should be considered more indicative of the IRL outcomes.

If the GSEs were previously accepting/using a 50% solution before but are transitioning to effectively accepting a 60% solution then that change is coming down from the top. It isn't the result of lowest performing appraisers volunteering to improve. IMO appraisal quality is virtually always user-driven with the appraisers responding to the changes in quality that the clients are paying for. If a client will accept/use less than many (or even most) appraisers to work to that expectation and not one step further.

It is their right and their choice to operate that way. But then for DW to come on here and complain about appraisal quality is ridiculous. I don't like it.

 

[djd09]

the scum bag mortgage broker appraisers do not make adjustments when they waive the appraisal...so the numbers are already skewed...just like in 2004...cant analyze fraud or waivers...

 

[Joe Flacco]

As George Hatch indicated, you can't have an incompetent appraiser completing an assignment who isn't simultaneously violating the ethics provisions we all operate under.

And it is a fantasy to believe the appraisal mills you describe can not exist today! They are more prevalent than ever.

I don't know.. I don't think it is very common these days. Much fewer number of firms in general. I think several survived from the financial crisis though. I don't think there are many new firms created after financial crisis. Only survivors and leftovers.

 

[George Hatch]

It is their right and their choice to operate that way. But then for DW to come on here and complain about appraisal quality is ridiculous. I don't like it.

I dunno. If the GSEs are saying that they have previously been accepting less-than but now want to tighten up then we could make the argument that they are acknowledging their role in the current situation. Even if only acknowledging indirectly and for the purposes of not spooking their trading partners and everyone else involved.

I daresay that if Fannie/Freddie were to suddenly go to a zero-tolerance application of their appraisal policies their pipeline would grind to a screeching halt that would negatively affect the entire mortgage lending market. Lots of disruption. The logical alternative to such market mayhem is to more slowly transition in smaller increments . Boil that frog more slowly.

 

[TerryRohrer]

My bold at the end of the paragraph. That right there is emotional.... the hottie wife (mistress?) pushes the remote control button in her Maserati to open the gates to drive into the approximate, $11 million private compound. "Whatever it takes", all cash purchases.....

MARs or any other super number crunching program is not going to accurately pinpoint the "most probable price", or price per square foot as they're emotional purchases. Sure, if you took all these Carmel oceanfront homes of similar size, quality of construction, views, etc., your program would cut a line straight through all the noise and give you a price per square foot, per bedroom, etc. However, I bet that scatter plot would have really wide variances.

It sounds to me from reading your posts about Mars, that it would be better as an AVM like Zillow or Redfin as opposed to a program to be utilized for a single residential dwelling.

Post an appraisal that was done with Mars and give us a look. Not a bunch of charts and graphs in a particular area, but an appraisal.

He has. All those clambering for more couldn't bother to read it, or were incapable. How about everyone whose reports are superior to his posting one of theirs here?

 

[Joe Flacco]

He has. All those clambering for more couldn't bother to read it, or were incapable. How about everyone whose reports are superior to his posting one of theirs here?

Where is it? I would like to see it.

 

[Joe Flacco]

I dunno. If the GSEs are saying that they have previously been accepting less-than but now want to tighten up then we could make the argument that they are acknowledging their role in the current situation. Even if only acknowledging indirectly and for the purposes of not spooking their trading partners and everyone else involved.

I daresay that if Fannie/Freddie were to suddenly go to a zero-tolerance application of their appraisal policies their pipeline would grind to a screeching halt that would negatively affect the entire mortgage lending market. Lots of disruption. The logical alternative to such market mayhem is to more slowly transition in smaller increments . Boil that frog more slowly.

I can understand that the problems predate his role at Freddie.

The issue is still AMC panel management and engagement practices which GSEs want to ignore.

The AMC model is finding less compent appraisers for cheaper and trying to make them do things they don't know how to do rather than paying appropriate fees to more competent appraisers that already know what to do.

 

[TerryRohrer]

Go look. You claim to be proficient at research.

 

[Surf Cat]

He has. All those clambering for more couldn't bother to read it, or were incapable. How about everyone whose reports are superior to his posting one of theirs here?

Oh, cool. A link to it would be great. Alls I've seen is charts and graphs and videos. I haven't seen Mars in an appraisal context. I didn't say the traditional methods were superior. I just want to see what all the talk is about, that's all. I would like to see how Mars cuts through the emotional aspect of appraising.

I would imagine that appraising a property in Carmel would be similar to appraising a property in The Flats of Beverly Hills or Holmby Hills, or beachfront on the Strand in Manhattan Beach. Extremely complex.

I use Synapse, which has been trashed here on the Forum. It's it's just "one" of the tools I use. I don't solely depend on it. If there's a better tool out there to use, I'd like to see it.