WRE bifurcated Survey

[mike32716]

As I've stated many at time before, the real danger to appraisers in doing 1004Ps is the state board investigation. Most boards require some level of investigation if a complaint is made. And given the (intentional) opacity of the lending industry in informing the consumers/Realtors about what kind of appraisal is being performed, the complaints will be many. Sure, you may well skate by, but is it worth the time spent, and risk in getting dinged by the board for (usually) something that has nothing to do with the complaint?

 

[chad hampton]

Every comp you use, you rely on unaffiliated third parties (assessor's office employees, agents and their assistants) and if you ever do 2055 reports you rely on them for the subject too. Much of the appraisal process is built on the assumption that third party data is reliable. And so far, there is zero evidence that your "license is on the line" by doing a hybrid appraisal, or maybe I am not aware of it.

You aren't appraising comps. It's a major difference when you are dealing with the unknown subject. With comps you have 3rd party photos AND a confirmed sales price (which up until recently was supported by an appraisal in most cases). Used to be fairly reliable. With a subject, you are the one determining the market value. I would think an appraiser would want the most reliable information possible before you signed your name that something was worth what you say it is.

But then again, not everyone really values their license as much as others.

 

[Andrei Fin]

And given the (intentional) opacity of the lending industry in informing the consumers/Realtors about what kind of appraisal is being performed, the complaints will be many.

This is my problem with doing a 1004P, not the third party inspection. The 1004P looks 99% like the 1004 and badly needs some conspicuous labeling as a different product.

 

[Terrel L. Shields]

do you think all of those appraisers are gone now?

well...a bunch of them have around here. Don't miss 'em much either.

The majority of appraisers don’t have and may never have had trainees

True...they were a PITA then, worse now.

I’d rather rely on an inept trainee at least under my supervision than some anonymous unknown quantity hired from help wanted ads

Exactly. I understand Fin's point, but a trainee knows there will be consequences for a sloppy job...otherwise? How do I know I can rely upon them?

These are desktop assignments for the appraiser.

I disagree. the SOW is not the same. And most importantly the clients expectations are not the same. The client (does, should) understand that a desktop means there is no inspection. But from everything I've seen the client's expectations of a hybrid is that the inspection by some cheaper 3rd party is going to be equal to that of the appraiser, who, like Fin, believes we just all slop thru with a casual attitude, and that all that inspection information is/was/can be transmitted in toto to the appraiser so that the hybrid is, for all practical purposes, a 1004. Why were the examples almost identical to the 1004 and not the 2055 or a one page summary report of old?... It's because the creators believed that hybrid = 1004 quality for a desktop price.

 

[Michigan CG]

A lot of interesting points here:

Doing a hybrid appraisal at a decent fee is still better for the profession than doing a full appraisal for a lowball fee. (hybrid with decent fee being a hypothetical scenario at this point). ............

From what I have read some (many?) of the hybrid reports are written on software provided by the AMC and are not remotely USPAP compliant without additional addenda which some of the software does not allow.

I read somewhere that the AMC limits the EAs on the report as the lenders won't accept reports that are AS-IS.

A few bad supervisors do not make up the majority....................

I personally have a hard time believing that most of the people with trainees right now know what they are doing. With the AMC fees right now I don't see how it is financially feasible to take one on.

My point is that much of this indignation about third party inspections is really just about income. If the client offered the same fee to complete just the desktop portion, appraisers would be high-fiving and popping corks, scope of work be damned.................

These products have always been about the fee. Offer $400 for these and the complaining would go away.

It is not even fathomable that appraisers should be asked to take the word of any 3rd party that another 3rd party wants to send out to do the field appraisal work.

Agree to a point. It is about Scope of Work but we have to believe what is being presented to us is credible. We know that many Realtors had their teenage kids do REO inspections back in the day; I am sure it is no different now.

Every comp you use, you rely on unaffiliated third parties (assessor's office employees, agents and their assistants) and if you ever do 2055 reports you rely on them for the subject too. Much of the appraisal process is built on the assumption that third party data is reliable. And so far, there is zero evidence that your "license is on the line" by doing a hybrid appraisal, or maybe I am not aware of it.................

Very good point. However, if the AMC wants to have the appraiser take on the risk of the information being very wrong then they should associate fee with risk. $100 is not a fee worth the risk.

 

[Michigan CG]

These are desktop assignments for the appraiser. As far as them being more likely to be "not USPAP compliant" I would say that the same appraisers who cut corners on one of these assignments are also cutting the same corners on their 1004s. It's the appraiser who makes the appraisal.

Completely agree. However, I have read somewhere that there is an AMC program that is required does not allow the appraiser to be USPAP compliant. Additionally there are some that won't allow EA's only ordinary assumptions.

 

[George Hatch]

I've always thought the fee-for-risk rationale made little/no sense. There's no practical way to price your services well enough to break even in the event of a lawsuit, whether justified or not. No matter how high we get our pricing we're still walking the tightwire without a net as far as breaking even on the whole in the event that one of the appraisals generates a complaint or a lawsuit. There's no fee high enough to significantly offset the potential loss. That's why we generally operate on the assumption that we won't get sued when operating in good faith.

 

[George Hatch]

Completely agree. However, I have read somewhere that there is an AMC program that is required does not allow the appraiser to be USPAP compliant. Additionally there are some that won't allow EA's only ordinary assumptions.

I don't know how many different programs there are out there but it's probably safe to assume that at least a few of them were designed by people who aren't savvy about such issues.

But check this out - if someone at an AMC (for example) is designing appraisal forms and promulgating an appraisal policy that appraisers are being asked to use, those are activities that could fall under the definition of Appraisal Practice, and as such would incur the applicability of the front half of USPAP - as administered by the state boards. So a complaint to a state board that an AMC or lender is attempting to get appraisers into mischief could possibly generate a response.

 

[George Hatch]

And to A-Fin's point, I completely agree that Fannie's 1004p form should be revamped so it bears no resemblence to a regular 1004 form due to the potential for some readers to conflate them as being the same thing. That's how you generate an unrealistic expectation among these readers.

 

[jay trotta]

well...a bunch of them have around here. Don't miss 'em much either.
True...they were a PITA then, worse now.
Exactly. I understand Fin's point, but a trainee knows there will be consequences for a sloppy job...otherwise? How do I know I can rely upon them?

I disagree. the SOW is not the same. And most importantly the clients expectations are not the same. The client (does, should) understand that a desktop means there is no inspection. But from everything I've seen the client's expectations of a hybrid is that the inspection by some cheaper 3rd party is going to be equal to that of the appraiser, who, like Fin, believes we just all slop thru with a casual attitude, and that all that inspection information is/was/can be transmitted in total to the appraiser so that the hybrid is, for all practical purposes, a 1004. Why were the examples almost identical to the 1004 and not the 2055 or a one page summary report of old?... It's because the creators believed that hybrid = 1004 quality for a desktop price.

Agreed