Will you prepare the 1004desktop?

[J Grant]

TBH, I don't recall condition being among the reasons for most of the bad appraisals I've seen. As long as the pics you're looking at actually are of the subject property and not some other property that's in significantly superior condition then I don't think the risks of significant loss to a lender are that high if the property is actually in C3.7 condition instead of C3.0 condition. I mean, what's the cost to cure between the two? Not usually that much.

In a number of reviews of bad appraisals, the subject condition, upgrades or a site influence is often portrayed differently or adjusted for differently than more investigation showed -

All your posts are in favor of these products - if the agencies reversed course would you be arguing against them ? If appraisers wanted no inspection since it is easy and GSE wanted them to inspect lol

 

[DWiley]

That is up to every appraiser. I will NOT prepare these reports and rely on third parties for information. This is a bad plan and will lead to many foreclosures just like back in 2008-2011. They were making equity loans on tax values and drive-bys. I feel it is unprofessional to prepare these reports that not in any way credible. To each his own but I have no interest in signing my name to such a report.

Two questions for you -

1. I think you are still a certified USPAP instructor and are very familiar with its content. If you feel that inspection of the subject is so critical to credibility, over the years how many times have you asked the ASB to change USPAP to require an inspection?

2. Over the years I would say that I have had the opportunity to examine tens of thousands of appraisal reports, and I have not yet seen one that did not rely on third party data for critical information used in the appraisal analysis, including critical information about the subject property. So, do you plan to continue to use the third party data that you have always used, or are you drawing a hard line and refusing to use third party data at all?

 

[DWiley]

In a number of reviews of bad appraisals, the subject condition, upgrades or a site influence is often portrayed differently or adjusted for differently than more investigation showed -

Yes, that is true. And, ironically enough, those reviews have typically not included an inspection of the subject When I was an investigator for my state board we found such things on a regular basis, but there was not a single case where I conducted a physical inspection of the subject property. So, if a reviewer/investigator could find it without inspecting, should the appraiser not been able to also find it?

 

[George Hatch]

In a number of reviews of bad appraisals, the subject condition, upgrades or a site influence is often portrayed differently or adjusted for differently than more investigation showed -

All your posts are in favor of these products - if the agencies reversed course would you be arguing against them ? If appraisers wanted no inspection since it is easy and GSE wanted them to inspect lol

I didn't say there weren't *condition* errors, which will include upgrades. I also didn't say anything about site influences.

What I did say is that I said that such condition errors are usually not a significant factor in the outcome of a value conclusion. By which I am referring to a property being grossly overvalued that it poses a risk of loss to a lender. Which after all, is the primary reason lenders use appraisals in the first place - to help them manage their risks.

So yeah, an investigation can find such errors in a report, but there's a difference between finding a problem vs attributing the outcome to that problem. It will be far more common to use dissimilar properties as comparables.

Again, with the argument to motive. Asked and answered, so at this point I'm just repeating myself to you. My motive is for appraisers to make informed decisions as to what their risks really are and then act in what they perceive to be their own best (legitimate) interests. If you want to call me a liar when I say that then you had better be prepared to prove it. So put up or shut up.

IRL you don't get sued because there was an error in your public records feed or zoning map or because an assumption that you legitimately had reason to make didn't pan out. You get sued because you didn't actually do something you said you did.

 

[Overimprovement]

I said don't tell anyone... maybe I'll be the only one doing it...


My guess is that lenders will still be sensitive to appraisers' physical location(s) relative to the subject property locations - I know I will. That factor has absolutely zero to do with credible results, but it's the first thing agents look at when they get a 'low' appraisal. And I I can not have to deal with that argument, I'd rather not.

The only limitation i have seen from the scum AMCs is same state. I cover 2 states and have seen bids from 300 miles away.

 

[Terrel L. Shields]

high quality appraisals did little to stop the crash.

When you look at the function of an appraisal, how could it? When only the bottom line is important (i.e.- can we make the loan or not?) the value is affirmed for that one day only. An appraisal does not change with the market and once lent, the lender is at the mercy of the market. The appraisal only stops the loan before it is made. After the loan is made, it's pretty worthless.

the reason appraisals ( as a whole ) did little to stop the crash , was because loan officers/mortgage brokers could select the appraiser.

I cannot agree with that...at all. Real lenders with skin in the game sought to match the best appraiser for the job.

If you feel that inspection of the subject is so critical to credibility, over the years how many times have you asked the ASB to change USPAP to require an inspection?

False flag. Not everything is Fannie world... Inspection does not apply to an incredible array of "appraised" articles and as long as USPAP is happy to write standards for everything from stocks and intangibles to antiques and assessor mass appraisal..., then writing an "inspection" requirement is a pointless exercise in stupidity. We shouldn't be writing standards for a Queen Anne's chair when FIRREA was intended for real estate and little more.

It will be far more common to use dissimilar properties as comparables.

Is that the same as ignoring more similar properties?

Again. An appraisal is a point in time value used as a benchmark to see than you are not overlending on that day. Once the loan is made, the quality thereof is dictated by market conditions, not the appraised value. Thus there is no relationship between the appraisal and some future REO sale price. None whatsoever.

 

[J Grant]

Yes, that is true. And, ironically enough, those reviews have typically not included an inspection of the subject When I was an investigator for my state board we found such things on a regular basis, but there was not a single case where I conducted a physical inspection of the subject property. So, if a reviewer/investigator could find it without inspecting, should the appraiser not been able to also find it?

Well that is the point, a "good" appraiser, can find it most times, in a review or OA, stll, it is not knowable what escapes this appraiser in a review since they did not inspect.

And for mediocre or bad appraisers, it will be easier for them to miss things without inspection and the shorter turn times if 24 hours, will impede any appraiser finding out stuff - I ask for longer turn times in reviews , 3-4 weeks recently, ( I just do a few here and there ) because it takes so long to gather information and figure things out about a property I have never seen (though a field review will have an ext drive by, we do not go inside and some properties here are in private gated communities )

 

[DWiley]

False flag. Not everything is Fannie world... Inspection does not apply to an incredible array of "appraised" articles and as long as USPAP is happy to write standards for everything from stocks and intangibles to antiques and assessor mass appraisal..., then writing an "inspection" requirement is a pointless exercise in stupidity. We shouldn't be writing standards for a Queen Anne's chair when FIRREA was intended for real estate and little more.

Sorry, but it is NOT a false flag when those making the argument are using USPAP/credibility as the alleged support for their argument.

 

[J Grant]

It is funny to see people excusing a lower step down in appraisal practice ( no inspection by appraiser ) by using even worse examples to okay it ! Such as all the lousy appraisals done in the crash - that is the rationale for lowering a requirement ?-

As far as USPAP not requiring an inspection, is that a good thing ?> Given the problems over the years maybe they should have - however, the reasons for not inspecting in other realms of appraisal may not be the same as for OA lending work.

Will see, the decision has been made, and barring unforeseen X- having these products mass up in scale on the large market, only after X years will the outcome be known - whether using these products and cutting appraiser out of the inspection made things better, or made things worse, or made no real difference.

 

[Overimprovement]

For any residential appraisers who feel this will not affect them too much because they have a good diversified client base and/or do not rely on mortgage lending appraisals--consider this: as work starts drying up for the skippies, they will start looking for other sources of income.

They will start going after the better direct lending clients. They will start going after the estate planning deals. And if you think your client is loyal to you, wait until they have a choice with a fee that is now $150 less than what you are offering. That is where client loyalty will really begin to be tested.

This is a zero sum game. Some will exit, and some will, by necessity, be forced to expand their client base, even if marketing is uncomfortable for them. Never underestimate a hungry appraiser.