The problem with Time Adjustments

[TerryRohrer]

This is a business decision. But unfortunately, a cu5 worst rating appraisal is a disaster for the lender, it is not lendable because CU thinks you are doing it very wrongly. Sometimes they get another appraisal. And more unfortunately, CU is of no help. I recently got a cu2.6 which was .1% above safe harbour, a problem with the lender. I kinda made an educated guess, slightly changed 1 adjustment line, no affect on value. Bingo, came down to 2.o, whada. I deal with direct lenders where problems can be resolved by talking. I assume just like a value is really a range, and not a price point, that my adjustment are a range actually, with a price point being forced on us. I'm good, but any appraisal can be made to look bad, but you can't make a cu5 look any worse, it's already there.
Into the valley of death rode the cu5 can't change, my price point, adjustment, appraiser. Lenders having more appraisers than needed, i would cross you off the list, even being innocent. The perception of wrong can also get you into trouble. This post is more for the younger appraiser's thought.

Way to advocate for the needs of your client while certifying you didn’t. Prostitution has always been about servicing the client.

 

[Tom D]

Way to advocate for the needs of your client while certifying you didn’t. Prostitution has always been about servicing the client.

Pretty funny. I assume you don't carry any E&O cause your appraisals are otherly world always correct. The client was trying to help the appraiser with a horrendous CU5 score. Asking the appraiser to re consider the cu5 score is advocating for the lender. Don't ever be a review appraiser for anybody. The really bad anything comes from HUD or fannie who can beat you to death at any moment, and you still stand firm with your cu5 report. You are the appraisal don't change perfectionist, even with a bad score. I look at it like a business.

 

[TerryRohrer]

Pretty funny. I assume you don't carry any E&O cause your appraisals are otherly world always correct. The client was trying to help the appraiser with a horrendous CU5 score. Asking the appraiser to re consider the cu5 score is advocating for the lender. Don't ever be a review appraiser for anybody. The really bad anything comes from HUD or fannie who can beat you to death at any moment, and you still stand firm with your cu5 report. You are the appraisal don't change perfectionist, even with a bad score. I look at it like a business.

Were you honest and included in your report that you made a change to an unsupported adjustment without additional data or analysis solely to affect changes to the CU scoring of your appraisal? I bet not. Escorts are still hookers even when the don’t use the title.

I never have discussions about CU scores with clients because I don’t invite them, and have a spine and ethics that don’t allow the client to write my reports. It takes a real scumbag to lie in an appraisal to lower a CU score and cover it up. Only a stupid idiot without regard for any aspect of the appraisal process or USPAP or plain old honesty would crow about it publicly.

 

[Tom D]

You passive/aggressive insults speak for themselves. Thank you for letting me into your psyche, just to funny.

 

[TerryRohrer]

You passive/aggressive insults speak for themselves. Thank you for letting me into your psyche, just to funny.

Can you deduct you short skirts, heels, and knee pads on your taxes?

 

[DWiley]

But unfortunately, a cu5 worst rating appraisal is a disaster for the lender, it is not lendable because CU thinks you are doing it very wrongly. .

The assertion of "not lendable" is just not true. The GSEs purchase many loans where the risk score is 5. It is a risk score - not a certainty score.

 

[CGinMN]

A CU score of 5 does not mean the appraisal is automatically bad. It can just mean the GSEs AVM model is bad. Everyone here doing GSE work has a lot of CU scores of 5. Fannie can throw a CU score of 5 and Freddie can have a risk score of 2 for the same appraisal.

Lenders shouldn’t be asking appraisers to change their adjustments to get a CU score from 2.6 to 2.5, and appraisers shouldn’t oblige them either. What a waste of time for everyone, it’s bad business for the lender, the appraiser, and the appraiser’s competitors. The only reason they are doing this is because they get reps and warrant relief on the collateral, which means no repurchase risk. But a CU score of 2.6 isn’t going to get reviewed or repurchased anyway.

On the other hand, if a lender reaches out and says you have a CU score of 5, and based on our review we have identified some potential problems with your adjustments, please review and reconsider, there is nothing wrong with this and its not prostitution.

 

[Tom D]

So a lender does not have any right to ask the appraiser to look at it again. Ok, if yous say so.

No, a CU score of 5 does not automatically mean the appraisal is bad or incorrect. While a score of 5 represents the highest risk level and indicates significant conflicts between the appraisal and Fannie Mae's model data, it primarily signals that the loan requires enhanced due diligence rather than immediate rejection.

A high score often results from factors such as limited market data, rural locations, or unusual property types where the automated model lacks sufficient historical benchmarks to validate the appraiser's specific adjustments or comparable selections. Although a score of 5 typically triggers a desk review, field review, or a request for clarification from the appraiser, Fannie Mae explicitly states that high risk scores do not preclude the delivery of the loan if the lender can validate the value through additional analysis.

Key Implications of a Score of 5​

• Risk Assessment: It flags elevated risk based on notable differences from the model, but it is not a definitive judgment on the appraiser's accuracy.
• Lender Action: Lenders are expected to perform additional scrutiny, such as requesting more documentation or conducting a second appraisal, to verify the value.
• Outcome: The loan can still close if the lender documents that the appraisal is valid despite the automated risk flags.

But then I do understand, the lender might not know certain specific aspect of this property: A high score often results from factors such as limited market data, rural locations, or unusual property types where the automated model lacks sufficient historical benchmarks to validate the appraiser's specific adjustments or comparable selections.

 

[TerryRohrer]

On the other hand, if a lender reaches out and says you have a CU score of 5, and based on our review we have identified some potential problems with your adjustments, please review and reconsider, there is nothing wrong with this and its not prostitution.

So if an appraiser has done their job, and they have support for their adjustments, based on acceptable practices, what should their response be to questions about adjustments that are as likely as not based on a "bad AVM model"? I am all for requiring appraisers to justify and support everything they do. But once that has been done, all the second-guessing in the world is simply uninformed chaff. Now, if someone wants to actually dial up the MLS and find some comps and do some actual analysis on relevant data, then have a discussion and compare findings, I'm all for it. I would be happy for the opportunity. But someone lobbing crap from afar without any basis whatsoever doesn't warrant much attention. But my perspective is based on the fact that I do the work on the front end. I don't phone it in with the expectation that I will negotiate my opinion if anyone asks. Mistakes should be corrected, but "review and consider your adjustments" at its core means start over. I don't do that because I have done the work. But clearly, some appraisers have no basis for their adjustments or opinions and will do whatever it takes to stop the questions and get the next assignment.

 

[Tom D]

Terry, I don't disagree with you about one's work. Is your company name 'King Kong Appraisals'. I do, however, believe any lender, fannie or FHA is called Bigger King Kong than u Appraisal.
But we all fight our battles differently depending on our client relationship. And every thread here has a 50/50 opinion on every question posted.