A few appraisers are reporting getting CU appraisal warning messages from AMCs. Some AMCs get the messages and and some don’t, depending on the agreement with their lender client.
I sorta believed all the “experts” who said CU would not affect appraisers much, except the many us who do not have market based adjustment support in our work files (which we should have always had). “They” said appraisers’ time for responding to AMC questions will not change. Fannie’s reviewers have been using CU for about two years. Some lenders beta tested it. They all liked it. But, I wonder if it was tested with “boots on the ground” appraisers who actually had to respond to the warnings??
In January I wrote up a long CU article for my paid Appraisal Today newsletter. In the February issue I will have another long article, focusing on the differences between the old and new CU warning messages. They are very different. AMCs with access to lender’s warning messages are sending them to appraisers, such as:
Old message (pre-CU): Condition adjustment for comparable property #<comparable number> appears excessive.
New message(CU): The condition adjustment [for comp #X] is smaller than peer and model adjustments
New (CU): The condition adjustment [for comp #X] is larger than peer and model adjustments.
There are other messages about condition ratings different that peers and model.
I don’t know how our “peers” and The Model made their adjustments or ratings and what they are. I don’t know how to respond as to why mine differ.
Now that appraisers are getting the warnings, they are asking how to respond to them. Who are these peers? What is the model? I have no idea how to respond, except to say “I don’t know who the peers are and how they determined condition or what method they used for their adjustment. I am unable to respond.” How do you know what the condition is really like for comps? There are lots of ways to estimate an adjustment for condition. You can explain what you did. But, who is right? You, peers, or model?
MLS is soo reliable (Not) for estimating comp condition. I don’t think they will like “matched paired sales” on all of your responses for the method you used for adjustments.
Looks like maybe there will have to be some webinars for appraisers, not just underwriters, explaining how to respond.
Thanks for revealing your ideas. The one thing is that scholars have an option between national student loan and a private education loan where it truly is easier to go for student loan consolidating debts than in the federal education loan.
This is my response to Q & C ratings
RESPONSE: The Quality & Condition ratings for the subject are based on an interior & exterior inspection of the subject by this appraiser and the definitions for Quality & Condition cited in the appraisal report. This appraiser has no knowledge of the ratings of his peers for Quality and or Condition for comparable sale which they may have used in the completion of their appraisal reports and or the information and support used to arrive at their conclusions. This appraiser based his rating for Quality & Condition for the comparable sales on a drive by of the properties, discussions with the Agent/Broker, comments and photos on the MLS for each property and the definitions of Quality & Condition cited in this appraisal report.
Stop doing dollar adjustments. Simply do qualitative for characteristics. That is acceptable. Will eliminate this issue.
CU is already here. And what I suspected would happen has happened. Here is a revision request received two days ago…. the underwriter received automated CU flags that were mindlessly passed along to the amc who mindlessly passed them along to the appraiser:
****UNDERWRITER REVISIONS****
Message – Comparable 3 (Collateral Underwriter)
The condition rating for comparable #3 is materially different than what has been reported by other appraisers. Please provide supporting commentary for your data on this condition.
Message – Comparable 3 (Collateral Underwriter)
The quality rating for comparable #3 is materially different than what has been reported by ot her appraisers. Please provide supporting commentary for your data on this condition.
Message – Comparable 2 (Collateral Underwriter)
The quality rating for comparable #2 is materially different than what has been reported by other appraisers. Please provide supporting commentary for your data on this condition.
How would you respond?