Unintended consequence of reviews

[sputnam]

dont they have unlicensed appraisals reviewers in india or somewhere...can't be any worse then their unlicensed mortgage broker appraisers or the unlicensed home inspectors...cheap and fast

They have them in the US too. They work directly as employees and they aren't doing 'reviews' in the sense that most appraisers would. They are reviewing the appraisal reports for compliance with regulatory and Client guidelines, to make sure that there are no missing pieces, sometimes to make sure that aren't inconsistencies... like saying the exposure time is 60 days in one place and saying it's 90 somewhere else in the report. Trust me, that kind of inconsistency happens a lot.

 

[djd09]

regulatory and Client guidelines,

regulatory and client guidelines are part of the sow...which falls under USPAP...delegating TAF authority

 

[RCA]

I think that is due in large part to the certainty factor. Go to three dealers and their KBB numbers will all be the same.

On the other hand, it is not unusual at all to see real estate appraisals on the same property that vary by a huge amount. Just look at some of the lawsuits that have hit the press over the past few years for examples.

As far as I know, the appraisal organizations haven't touched on this issue. IMO, because the answer is expanding standards which requires:

1. A lot of work:
a. They don't want to spend the money, even if they had it, to hire the right people to write the standards
b. Such people don't really exist.
i) And if they did, they wouldn't have the conceptual framework (below) or
ii) The software toolset to get the job done to completion.

2. A conceptual framework to complete the circle on the standards around a total objective and logical basis for a final value conclusion.
a. How do you get past estimating adjustments for features such as condition, quality, view in a totally objective manner? It's not an easy problem to solve.

So, all we have been getting and all we are getting, by and large, is a lot of the usual BS reformulated in creatively new jargon.

 

[J Grant]

Proof please.

The proof is what happened. Third-party AMC profiteers get paid a portion out of the appraisal fee, for their management service to the lender. Third-party party non-appraiser PDC collectors get paid from the appraisal fee for doing the inspection portion, and non-appraiser people get paid for reviewing the appraisal - at this point, the appraiser has a shrinking role in a number of appraisals
(with a commensurate shrinking income )

 

[J Grant]

I think that is due in large part to the certainty factor. Go to three dealers and their KBB numbers will all be the same.

On the other hand, it is not unusual at all to see real estate appraisals on the same property that vary by a huge amount. Just look at some of the lawsuits that have hit the press over the past few years for examples.

Imo, unless there is a good reason, different apparaisls that are done competently should be within a close/reasonable range of each other- of course with a high value or complex property a variande can be wider, however if two appraisas are very far apart, one of the appraisals will be better supported than the eother ( unless they are both bad wrt a cedibly supported value )

The lawsuits wrt bias with huge differences - seems a first "lower " appraisal was engaged by the lender and the secon,d much higher appraisal was engaged by the homeowner -

 

[DWiley]

The lawsuits wrt bias with huge differences - seems a first "lower " appraisal was engaged by the lender and the secon,d much higher appraisal was engaged by the homeowner -

I am not aware of any of those suits where the higher appraisal was ordered by a homeowner. Can you share citations of such cases? All the ones I have seen have involved a lender on both ends.

 

[J Grant]

I am not aware of any of those suits where the higher appraisal was ordered by a homeowner. Can you share citations of such cases? All the ones I have seen have involved a lender on both ends.

I assumed it was ordered by a homeowner ( at least in the bias high-profile suits I am thinking of ). Because normally a lender does not order a second appraisal just because the borrower is unhappy,

Did you see both appraisals in any of the cases? If so, which did you think was better supported - the lower or the higher value?

IF the lender ordered their own second appraisal and it was a high value , then why didn't the lender loan on the higher value ?

 

[sputnam]

regulatory and client guidelines are part of the sow...which falls under USPAP...delegating TAF authority

You don't seem to get it. The TAF has no authority over non appraisers.

 

[J Grant]

You don't seem to get it. The TAF has no authority over non appraisers.

I think people get it that UPSP or the TAF has no authority over non-appraisers.
People are having a hard time with the fact that the weakness of USPAP and the organizations allowed a flood of non-appraisers to perform significant parts of an appraisal or perform functions that the appraiser used to do.

Question - if a PDC collection is not part of appraisal practice -why is the non-appraiser PDC collector paid out of an appraisal fee?

 

[sputnam]

I think people get it that UPSP or the TAF has no authority over non-appraisers.
People are having a hard time with the fact that the weakness of USPAP and the organizations allowed a flood of non-appraisers to perform significant parts of an appraisal or perform functions that the appraiser used to do.

Question - if a PDC collection is not part of appraisal practice -why is the non-appraiser PDC collector paid out of an appraisal fee?

Again... it is not a failure of USPAP. Neither USPAP nor the TAF have any control over what Lenders, or any non appraiser, means when they say 'Review'.