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Urban comp - over 1 mile?

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Lee in L.A.

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
stop spelling HUD backwards in big red letters

:lol: Ben, I didn't realize that it was a palindrome. :lol:
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
....appraisers do not have anything to do with foreclosure.
Steve, in my area that should be writ: MANY appraisers do not have anything to do with foreclosure, and SOME appraisers have a great deal to do with foreclosure!!!!

I can think of several appraisers who turn a blind eye to roofs, foundations, holes in sewer lines, and other HUD no-no's on a regular basis... When you walk in to a HUD REO within a year of the sale, and the roof is shot (actively leaking) there are gaping holes in the exposed sewer pipes, the windows are rotten through, the basement has a high water mark in between the stellposts which slow down the collapse of the basement walls, and the carpets are moldy due to a combination of all of the above, AND you can tell that EVERYTHING had a fresh coat of paint (poorly applied) within the last year, you CANNOT state that an appraiser is not partially at fault. That surface gloss layer may determine value within the market, but it does NOT address the specific faults the VC sheet was designed to bring to light!

I get very few FHA appraisal orders, the local realtors have made VERY sure of that!
 

Paulette in Texas

Sophomore Member
Joined
Jan 24, 2002
As the appraisers are hired to establish value and obvious condition of property, if obviously deferred maintenance, or external obs., where in the world do bureaucrats get off making the appraiser responsible for BAD loan decisions. The appraiser should only be hired for determining faulty or misleading report as of THAT date in time. I actually had an idiot LO tell me UW's were expecting appraiser to appraise based on WHEN and IF they get the property back??? That's right. Or in other words, they are making CRAP loans and looking for somebody else to blame. Must be the appraiser. Couldn't be the sad sack who trashed the property after his latest series of excuses nor the LO who wrote all the excuse letters explaining WHY they should lend on this piece of crap borrower with NO record of repayment...nah, must be the appraiser who just used APPROPRIATE sales for the assignment and reported what he saw. That's right. It's the idiot appraiser who accepted the assignment from Broker. What we need is maybe something like VA. If you're good enough (and we are not on their approved list) then you get assignments. And the LO/HO and all the rest can go to he**L. Have a good one. Paulette in Houston
Rotts rule and Shih tzus doing fine.
 

Paulette in Texas

Sophomore Member
Joined
Jan 24, 2002
...'appraisers should only be fired for NOT doing their job in establishing the market value at that time OR ignorning obvious external obs. or deferred maintenance.' Of course I'm dreaming. They want scapegoat and they know appraisers are it. It comes down to: should appraiser be blaimed for LO/lender who does crap B/C/D paper deals? Looks like we are. High risk? Poor property? must be the appraisers fault for accepting it. Ooooops, the appraiser has no knowledge of anything except the property. Oh, well. He's the one we know has E&O and has a license to pull. Yeah. Paulette in Tx
Rotts rule and Shih tzus fine...go w...
 

Stephen J. Vertin MAI

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
Lee:

Read the article Frank posted. I think you will find it insightful. This is not directed to you personally so do not take it as so. In my humble opinion we, meaning society, or at least the news medium, are trying to make risk non-existent. And that goes for everything from real estate to the stock market. The fact is, it is impossible without ruining capitalism. We have become pro-litigation to the point of damage to those around us and to capitalism. We are regulating our selves to death. This is not only real estate. It is most everything in the country. And it comes directly from people trying to point fingers at everyone except themselves for their purchase decision. Life is not risk free. The banks understand this so should buyers. If they are buying a house or commercial building, they should have a home inspector or engineer examine the property. If they are relying on an appraiser as a home inspector good luck. I would not. Would you? I do not care what HUD or anyone else says. I would hire a competent professional to safeguard my investment.

Further case in point: I was contacted by a lawyer who was suing a lender, title company, appraiser and everyone and anyone tied to a loan that his client defaulted on. During the conversation it came out his client got into financial trouble. As a result he let the maintenance go and started renting to anyone who came to his door. The building quickly spiraled out of control. When he tried to sell the building he was only offered 3/4 what he paid for it. They wanted to blame everyone involved except the guilty party. The buyer.

I am also a landlord in Chicago. At one time I owed near 100 apartment units. Buildings can deteriorate in a matter of weeks in some inter-city environments. I asked him where the building was. Low and behold I was familiar with the building the attorney was talking about. It was on the same block as a 25 unit building I own. The building was nice when this guy bought it and it had good tenants. In fact at one time I approach the owner and offered slightly less than he sold the property for. This new buyer (the guy who defaulted) let the building go to hell and rented to a number of drug dealers. No one but the buyer was at fault for the buildings state. I told the lawyer this. He thanked me and said he would find someone else. I am sure he will. What ever happened to caveat emptor?

Are there appraisers who do not do their jobs? Absolutely, without question there are. Are there buyers who do not do minimum dudiligence? Without a doubt. However, no matter how many laws you pass it will never stop dishonesty and/or stupidity. The truth is a home purchase is one of the biggest investments most American's will ever make. Buyers have some responsibility in that decision. Lenders also determine ability to pay not appraisers. Most if not all defaults are due to non- payment. Most non- payment stems from the inability to come up with the money. How are appraisers in any way, form or substance involved in the determination of whether or not payments can be made? I stand by my statement.

Steve Vertin
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Steve:

I agree completely with you that FHA apraisers should not be viewed as home inspectors. I am far too aware that many buyers purchase the top 64th of an inch of a house with no knowlege or concept that what lies beneath that top layer of paint is far more important than the cosmetic appearance. And that many indivduals lack the knowlege and will to properly maintain their shoes let alone a complex system like a house. Fools and their money.... :roll:

I still stand by my statement that SOME appraisers are contributing to the default rate on SOME loans due to not performing due dilligence in my market your market may vary...

I see low end homes with a fresh coat of paint over visibly rotten wood, with so many VC fails that a reasonably competent adult with NO visual capacity could determine the 'faults'. Such a property should NOT be seucred by a governmentally guarunteed loan. :evil:

Waves of defaults on these homes which occur in certain pocket areas are common. When the market gets overburdened with the REOs in those pocket areas, then you get allegations of flips and appraiser incompetency which in some cases is entirely unjustified, and in some cases fully justified! Problem is after every crash cycle, it is near impossible to secure financing for the many well maintained homes in that area which SHOULD and do sell for more than the glossed over junk.

A cure? Appropriate review! A possibility? NOT at present. :evil:

Am I in favor of a thorough review of defaulted short ownership loans on individual properties? Let me specify by a fair and competent reviewer? You BET! :twisted:

I am not talking about the evil-minded competition next door who wants another person's business, nor am I talking about tossing blame for homeowner deferred maintainence... rather I speak to exposing obvious items which were ignored on the original appraisal! If a roof is fully curled, has missing tabs and huge areas with little or no aggregate 9 months after a sale, if there are bowed steel beams, old waterstains, huge cracks and areas of efflorescence on the basement walls, if the windows have NO real wood left and the paint is largely intact over what is left of the rotten wood: SOMEbody didn't do their job right, SOMEbody should if not be held culpable for their lack of competency then at least SOMEbody should not perform any more FHA appraisals!!!

I am not suggesting that the buyer wasn't an idiot, nor that an occasional item can pass by a competent appraiser unremarked... but if there is a huge and obvious pattern of abuse of FHA required repairs and conditions, then competency in general and FHA competency in particular is in question. I am all for firing incompetents where-ever they exist! There are too many willing and competent persons waiting on the sidelines for deserved work and compensation. :!:
 

Caterina Platt

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
New Mexico
Sooooo, what I'm seeing here is the need for more FHA review work. Hmmm. Sounds like business to me. A paultry (sp?) $200-300 or so for a review on FHA appraisals would save the tax payers money in the long run, don't you think? :lol:

All tacky attempts for expanding business aside, am I that far off base? Honestly, look at the program. FHA is the most lenient for the buyer's case. They can qualify without a reasonable credit history by merely proving a payment history with three non bureau reporting sources and a decent job history. We back the security of the mortgage with our tax dollars up to 103% (I believe that's the figure). Wouldn't more reviews be a prudent guideline????
 

EDWARD BERRY

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Arkansas
RON--Was on panel since 1980-
This is worst I ever heard_but sometimes suspected.

Please send Case # and address of subject and I will see that approiate bodies are made aware.

my FAX -479-631-9794.
ed in arkansas
 

Paulette in Texas

Sophomore Member
Joined
Jan 24, 2002
Bear in mind we have a 4 paragraph limiting condition explanation about what is readily observable. But that said, it takes a pretty brain-dead loose appraiser not to notice rotted wood just because somebody threw a fresh coat of paint on it, or a water heater that doesn't meet, or no attic ventilation, or ponding under the house, or...and the list goes on. It has to be assumed that the good guys are doing due diligence with their eyes wide open; it is the duds or the fraud guys swosssssshing through and shiping reports without noting any of the above much less giving accurate value. My word. If it's stick-built and in a major metro area with a reasonable MLS, what's the big deal. The comps in the immediate area are the market. If it is expanded market area, it's a given that none which were appropriate were ignored. Well, maybe it is ethics and a working brain. Used to be common sense. Whatever. Paulette in Tx
Rotts rule and Shih tzus fine too.
go w...
 

Leon Stewart

Member
Joined
Jan 15, 2002
I know this is a common problem with many appraisers, maybe someone here can help me.

There is a fellow appraiser in my community that will go over 1 mile out of the neighborhood to get comps to "make the deal work". This, of course, makes an honest appraiser look like they don't know what they're doing to everyone else involved.

Does anyone know where I can get documentation on the Urban/one mile rule?

Frustrated,

Ron in AR

Ron:

You didn't indicate why you were concerned about, had knowledge of, or possessed a Copy of the Report in question. Are you the Legal Reviewer of the Report, or did you get a copy of the Report from an unofficial source. Also, what would you do when you verify the information you are seeking? Keep one thing in mind, you might not be evaluating the Report properly anyway. Since you are asking such a question, it could be that you know less than the Person who did the Report. It seems as if you are working overtime to put yourself in a trick. When you criticize a Report and you end up being wrong, it reflect on you, thus causing yourself to be removed from a Lenders Roster or disciplined in some manner. I see many individuals being critical of others Appraisal Work, and all the time they don't seem to be that qualified themselves. Since you are the one being critical of the Report, you should have all the answers. You shouldn't have to look to the "Forum" to get the answer from someone else who has not even seen the Report and is just going by what you said.

Leon
 
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