Unreasonable revisions

[Tom D]

i can't think of anything great, but you said the realtor sent them.
thank you for the 23 sales the realtor sent over for me to look over, please be advised that as per rules, and regulations, that this would be considered an appraisal being done for the realtor. to do this review of 23 sales please send over an order and a check in the amount of $690. the sales in that list that i used will not be charged.
you can't cure insanity, or stupidity. you can only endure it if you want to continue working for this client.

 

[Andee]

Why would you work for garbage clients like this? In this market where appraisers are in extreme shortage?

You need a better business model. Tell your client the following. BTW, I used this once about five years ago as I got rid of garbage clients.

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FNMA ML 2015-02 clearly states: "Before asking the appraiser to consider any alternative sales, it is imperative that the lender analyze the relevance of the sale and determine if the use of such sale would result in any material change to the appraisal report". Therefore, if the appraiser is requested to review any other sales after the effective date, the appraiser will only accept the order to review the sale(s) if the following two (2) conditions are met:

1) A summary submitted from the lender/client or AMC showing their analysis supporting the premise that their sales are superior to that of the sales used in this report, with the understanding that closer proximity or more recent date of the sale does not mean it is a better indicator of value, as clarified above.

2) The lender/client must agree to pay a fee of $50* per sale reviewed, plus a minimal $75* inspection trip fee, which may be greater depending on mileage and drive time incurred.

*These fees will be waived and the report will be revised to include additional sales IF they are found by the appraiser to be superior to the sales used in this report *and* their use results in a material change to the appraisal report.

https://www.fanniemae.com/content/announcement/ll1502.pdf

This is the first time they have ever done something like this. I think it's because I rated the house a C5, made the owner get a foundation inspection because the floor dips in one corner and there is substantial drywall damage that indicates foundation issues.

 

[Overimprovement]

In order to stand up to a client, you have to be willing to lose that client.

This is the crux of the matter, and one where too many appraisers I fear simply let the client have their way. If we have written a solid, well-supported report, we have every right to stand behind it. Any client who removes an appraiser from their list because of 'not meeting value' is not a client anyway. They are a pimp, and three guesses what that makes the appraiser...

Many will say--"but I have to earn a living". I get that. But one can go out and rob banks, steal from the poor, and sell their bodies or drugs on the street and 'make a living'. But if we want a career of sleeping well at night, we really have to trust in the process perhaps more than many do. If most appraisers did this, I think a lot of these ROV's would go away. Our self-esteem is worth more than a few extra assignments each month. At least it should be...

 

[Overimprovement]

This is the first time they have ever done something like this. I think it's because I rated the house a C5, made the owner get a foundation inspection because the floor dips in one corner and there is substantial drywall damage that indicates foundation issues.

Sounds like you did a good job pointing these items out. One would think both a buyer AND a lender would be very well pleased to know these things up front. Sadly, that often is not the case.

 

[Andee]

I was doing some research last night...because that's what I do when something as stupid as this comes along...and found this from FNMA.

B4-1.3-12, Quality Assurance (06/03/2020)​

Changes to the Appraised Value​

The lender is responsible for confirming that appraisal reports are complete and that any changes to the reports are made by the appraiser that originally completed the report. If the lender has concerns with any aspect of the appraisal that result in questions about the reliability of the opinion of market value, the lender must attempt to resolve its concerns with the appraiser that originally prepared the report. If the lender is unable to resolve its concerns with the appraiser, the lender must obtain a replacement report prior to making a final underwriting decision on the loan. Any request for a change in the opinion of market value must be based on material and substantive issues and must not be made solely on the basis that the opinion of market value as indicated in the appraisal report does not support the proposed loan amount. For information concerning the process lenders must follow to address a change of the opinion of market value, see Guidance on Addressing Appraisal Deficiencies in this topic.
Lenders must pay particular attention and institute extra due diligence for those loans in which the appraised value is believed to be excessive or when the value of the property has experienced significant appreciation in a short time period since the prior sale. Fannie Mae believes that one of the best ways lenders can reduce the risk associated with excessive values or rapid appreciation is by receiving accurate appraisals from knowledgeable, experienced appraisers.

​

I sent the bold portion to them verbatim in an email.

I also don't care if I lose this client, they don't give me enough work. I have better clients that don't request stuff like this.

 

[J Grant]

This is the first time they have ever done something like this. I think it's because I rated the house a C5, made the owner get a foundation inspection because the floor dips in one corner and there is substantial drywall damage that indicates foundation issues.

Many clients are okay until the day they "do something like this". A truly good client NEVER does something like this, aka they do not punish an appraiser for an honest report and sending 23 sales to review esp a month later is a form of punishment. A client that is only good as long as everything goes their way -?? This business really does suck at times because clients on res lending end with volume have an unfair balance of power but still one has to stand up to them if they abuse you or the process...

Be professional write a response , perhaps pointing out it is beyond SOW to review 23 sales and if the RE agent or client can reduce the # to what they believe are 3 or 4 viable comps you will review them.

That puts the ball in their court as up to them how to respond.

 

[J Grant]

This is the crux of the matter, and one where too many appraisers I fear simply let the client have their way. If we have written a solid, well-supported report, we have every right to stand behind it. Any client who removes an appraiser from their list because of 'not meeting value' is not a client anyway. They are a pimp, and three guesses what that makes the appraiser...

Many will say--"but I have to earn a living". I get that. But one can go out and rob banks, steal from the poor, and sell their bodies or drugs on the street and 'make a living'. But if we want a career of sleeping well at night, we really have to trust in the process perhaps more than many do. If most appraisers did this, I think a lot of these ROV's would go away. Our self-esteem is worth more than a few extra assignments each month. At least it should be...

Most clients are too slick/ smart to actually remove an appraiser from their list because that would require written notice. They instead keep appraiser on their panel but stop sending work, or reduce it to a token 1 or 2 orders a year. If you call and ask why, they say they are "slow " in your area.

 

[sputnam]

If you want to keep working for a particular Client, you will respond professionally to any ROV requests. The amount of data that you will consider is a business decision and is subject to negotiation with the Client. 23 additional sales?...(they aren't comps until you say they are)... I wouldn't address that many. Call the client and tell them that you will be glad to take a look at a reasonable amount of RELEVANT sales.. however, you aren't going to review and respond to every sale that CU throws at them.

 

[Rlong]

I have used the FNMA "Before asking the appraiser to consider any alternative sales, it is imperative that the lender analyze the relevance of the sale and determine if the use of such sale would result in any material change to the appraisal report." with some limited success.

I would likely tell them that analyzing 23 sales submitted by a contractually biased party is an unreasonable expansion of the assignment Scope of Work. If they were not an "evil" client I would probably provide a paragraph such as:

"We received a communication with numerous properties... blah blah". (you can add as much "this is BS" as one chooses here) "I made a cursory reading of these properties, it appears: some are not closed sales (and would not be significantly considered), some were in very different locations/neighborhoods, and all appear clearly superior to the subject condition. The primary consistency is that they ALL are somewhat or significantly higher prices... blah blah. Nothing that has been presented is deemed to represent the subject as well or better than the data already included in the report." If there's one or two you can point out as purely ridiculous that is always fun too ("For example 123 Main is 180% of the subject size")

And I would have actually "glanced" at them to ensure I didn't miss "the good one".

 

[Andee]

I have used the FNMA "Before asking the appraiser to consider any alternative sales, it is imperative that the lender analyze the relevance of the sale and determine if the use of such sale would result in any material change to the appraisal report." with some limited success.

I would likely tell them that analyzing 23 sales submitted by a contractually biased party is an unreasonable expansion of the assignment Scope of Work. If they were not an "evil" client I would probably provide a paragraph such as:

"We received a communication with numerous properties... blah blah". (you can add as much "this is BS" as one chooses here) "I made a cursory reading of these properties, it appears: some are not closed sales (and would not be significantly considered), some were in very different locations/neighborhoods, and all appear clearly superior to the subject condition. The primary consistency is that they ALL are somewhat or significantly higher prices... blah blah. Nothing that has been presented is deemed to represent the subject as well or better than the data already included in the report." If there's one or two you can point out as purely ridiculous that is always fun too ("For example 123 Main is 180% of the subject size")

And I would have actually "glanced" at them to ensure I didn't miss "the good one"

This was for a refinance, it wasn't even for a sale. The owner asked for a data dump of properties around a certain size in a particular subdivision that, crosses a major freeway, and decided that I needed to review everything that sold within the last year. Well, they didn't bother to do any research and sent the list over to me. I used the above FNMA language and told them I would be happy to review a some if they chose from the list but kept it at no more than 4, they came back with 3. The funny part, they were all sales that were the highest selling prices for the last 90 days, all on the opposite side of the freeway, and all in better condition. As part of the request, they sent something back stating that the property is not in bad condition and I needed to consider that the drywall repairs could be taken care of with "filler and paint", yet it wasn't done, leaving the property in the same exact condition as when I inspected it. This wasn't a "Subject To" report, it was an "As-Is" report, then maybe they should have fixed everything before I went out, oh and upgrade everything as well because 2 out of the 3 comps they chose were upgraded. I feel like sometimes the lenders need to grow a backbone and say, "Hey, here are the pictures that were submitted with the report that shows everything that the appraiser saw during the inspection. Mr Borrower, was the appraiser wrong in that these drywall cracks don't exist in the property and that the foundation cracks are purely cosmetic and not structural?", I take lots of photos of this stuff, so there is no question of if it exists or not.