Voice of Appraisal

[Zoe]

Appraisals are meaningless when the risk of default is zero.

Not to me. I focus on subject property and every party involved. I have witnessed before many federal regulators and loan officers and high officials in lending industry.

 

[Zoe]

I understand who my client is, however, I focus on public trust. I always focus on subject real property rights. MV is very unique value definition. It is not meaningless.

 

[Zoe]

Play me.

 

[glenn walker]

When I started in the early eighties we were trained on what boxes that were never to be checked because if we did the Underwriters would send it back as needing revised.

Prior to 2006 mortgage meltdown we all chocked the Stable Box and most not even increasing. The Dirty Secret was the GSEs prior to the meltdown would not purchase a loan that was in a declining market area and a report checked as declining. BUT they never said in their appraisal-- guidelines that it would result in killing the loan so they created a word salad where only the bank or lender knew if the appraiser hit the decline box the bank wouldn't fund the loan.

So the bankers trained the Underwriters to pass the word and even lied to new appraisers or ones who questioned why ? They would simply tell the appraiser that "stable " was a Fannie Mae requirement ** not that it meant they couldn't sell the loan.

Fannie and banks lied by omission of what the Underwriters and funders guidelines really were. After 2005 Fannie suddenly would purchase loans marked declining and denied they had ever not purchased loans in declining markets in the previous 40 years. It was all smoke and mirrors the appraisers had been lied to. Checking the Declining Box was a career ending decision for many newbies.

 

[Terrel L. Shields]

Appraisals are meaningless when the risk of default is zero.

The chances of being killed by a pig is never zero.

 

[glenn walker]

But the cost to save one person from being killed by one pig may be that the one person killed may have zero value to the lender or bank. It's simply more cost effective to let the pig run loose.

 

[Red Flint]

It's simply more cost effective to let the pig run loose.

Never! Could pull a hamstring!

 

[Zoe]

The chances of being killed by a pig is never zero.

No, I promise you a big pig can kill you and eat you. LOL

I have no argument. Don't want in the pen. LOL Pigs are unique. If they know you like a cat or dog, you are in good shape. However, a pig can kill you and eat you.

 

[Terrel L. Shields]

However, a pig can kill you and eat you.

I knew a fellow who was working construction and saw some feral hogs. He puttered over to see in a Gator and a boar charged flipping the Gator over and breaking his back. He was paraplegic and lived another 8 or 9 years before dying of the complications of his injury.

 

[RCA]

I don't disagree at all that there is a concerted effort to downplay the role of experience in applying recognized methodologies. I think he's spot on with that accusation.

One of the problems is not that someone can't do an accurate appraisal based on experience, but that some minority takes you to court with even an average attorney and typical judge, the judge is going realize he can't support some appraisers claim of "experience" [It's not that difficult to prove "experience" is nonsense] - and, yes I have seen this: the plaintiff brings in a highly experienced real estate agent - and the judge compromises between the real estate agent and the appraiser value - or even leans quite heavily toward the real estate agent's value. Astounding, huh?

You see the decision is between a dumb jury, a dumb attorney and a dumb judge - who likely know very little of appraisal. As far as "Expert Witness" (who is likely a dumb SRA or MAI) - he will talk about "based on experience" to argue the other claims is "absurd" or if not "absurd", then with full candor go into advanced appraisal topic involving complex logic no one can really understand because it is too detailed for an old judge to really understand. So, again, compromise is the likely outcome, -- the simple solution.

So, what do you do? That is the question needing a solution.

The answer is that for complex properties, the solution is likely going to be quite complicated, such as a MARS model involving a number of math equations. --> The best you can do is represent it with GRAPHICS. - Very good graphics. And then, you might succeed. And by the way, you may need AI to put together those advanced graphics. A good appraiser needs to be a good psychologist with a knowledge of AI and knowledge engineering.

Judith Ellen Fan | Department of Psychology

I direct the Cognitive Tools Lab (https://cogtoolslab.github.io/) at Stanford University. Our lab aims to reverse engineer the human cognitive toolkit — in particular, how people use physical representations of thought to learn, communicate, and solve problems. Towards this end, we use a...

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