Reviews Archives

Lender and AMC revision requests

By Ann O'Rourke on November 5, 2014 / adjustments, AMCs, Appraisal fees, appraisal management company, appraisers, lender appraisals, Reviews / 3 Comments

Tags: adjustments, AMC, appraisal, appraisal management company, AppraisalPort, appraisers

Lender/AMC revision requests
By Steve Costello
Source: AppraisalPort monthly newsletter

My comment: www.appraisalport.com recently redid their web site and somehow their surveys got put on another page. Now, they are back. AppraisalPort has my Most Favorite Appraisal Surveys!! The current poll is about what measuring device appraisers use. Be sure to vote!! Their poll responses were typically very high, 4,000 to 6,000 responses.

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Full article below:

First, I am glad to report that the poll is back up and running on the AppraisalPort homepage. It was down for a few weeks during the transition to the new version, but you can now find it by either scrolling down a bit or by just clicking on the button that says “Weekly Poll” on the right side of the screen.

This month, I want to discuss a couple of recent polls related to lender/AMC revision requests. First we asked: “Compared to a year ago, my lender/AMC revision requests have…?” Out of the 5019 responses, nearly 40 percent went with the answer “Stayed about the same.” Unfortunately the second most popular answer of “Increased significantly,” which took 21 percent of the vote and was followed closely by “Increased somewhat” with 19 percent. These were followed by the responses of “Decreased somewhat” pulling 13 percent of the vote and finally, “Decreased significantly” with a 7 percent share. There are two ways we can look at this data: Taking a negative view, 40 percent of the appraisers are experiencing some kind of increase in revision requests. That is a big number, but looking on the positive side that means that the other 60 percent have either stayed at the same level or have experienced a decrease in revision requests.

In the second poll we asked: “On average, how much time do you spend making and delivering requested revisions on any given appraisal?” We had a total of 4870 responses to this poll. Nearly half (48%) of those chose the response of “10-30 minutes.” This would seem about right for most minor to moderate revisions. Many must be making pretty minor revisions because the second most popular response with 24 percent of the vote was “Under 10 minutes”. Another 18 percent are having to take a bit more time and went with the choice of “31-60 minutes.” A smaller group of 7 percent is having to invest some real time to make the revisions and picked the response of “Over an hour.” The final 3 percent selected the answer of “I don’t make revisions.” I’m not sure if that means they are doing an amazing job on every report and never get a request or if they just refuse to do any revisions!

My comment: these results are somewhat similar to the recent Valuation Review survey results. I keep hearing lots of complaints about revision request hassles. It is good that it seems to be stablizing. Interesting results. I hardly ever have revision requests from my estate clients, except when I have a typo on the address or client name ;> I really hate getting reviewed!! Well… maybe it would be okay if it is an experienced local appraiser who knows all about my market!! I have always wondered why lender appraisals have been regularly reviewed. I don’t know of any other profession where someone else reviews so many reports that are done. I really think this is why appraisers are so negative about other appraisers’ work. I can’t remember if I took the poll… I often don’t because I don’t do any lender work and it sorta skews the results…

What do you think? Post your comments below!!

Standardizing adjustments?

By Ann O'Rourke on October 29, 2014 / adjustments, appraisal, appraisers, lender appraisals, Reviews / 17 Comments

Tags: adjustments, appraisal

Channeling Deep Blue Versus Garry Kasparov in Home Valuations – It’s time to standardize how real estate appraisers make their adjustments

Source: Corelogic blog

Excerpts:
It might be time to reengineer the process appraisers use to make adjustments to comparable homes. The current approach does not appear to be defensible.

To investigate this issue, we obtained a set of relocation appraisals from an appraisal management company and conducted our own analysis. (As background, for relocation deals, two or more appraisals are ordered at the same time; and the two appraisers often choose an identical comparable property).

For the experiment, we:
1) Obtained a set of relocation appraisals—two appraisals on each property prepared at roughly the same date for which the appraisers choose an identical comparable.
2) Looked at the adjustments made to that comparable and noted discrepancies in the amount of the adjustments, and even the direction (positive or negative).

It’s time that we re-engineer the process so that appraisers can focus on the things that may benefit from the human element, such as defining the neighborhood and selecting comparables. But for the pieces of the puzzle that need to be standardized, like adjustments to comparables, we should be harnessing the power of our machines. Too much is at stake to maintain the status quo. Appraisers would benefit by being allowed to focus on things they do well; loan applicants would benefit from a less-costly, streamlined process; and lenders would benefit from valuations that were standardized and more reliable.

Read the full article and see how they analyzed the data, with graphs etc. at:
http://www.corelogic.com/blog/authors/michael-g.-bradley/2014/10/channeling-deep-blue-versus-garry-kasparov-in-home-valuations.aspx?WT.mc_id=crlg_131016_0OGMz#.VFERojTF8zr

My comments: of course, it would be very helpful if appraisers had access to all the Big Data being compiled by Fannie and Others. Fannie will be looking at appraiser adjustments but don’t offer any help from their Big Data to appraisers making the adjustments.

Fannie's new Collateral Underwriter to check appraisals Using Fannie's Big Data.

By Ann O'Rourke on October 22, 2014 / appraisers, Fannie, future, lender appraisals, Reviews / 6 Comments

Tags: appraisal, Fannie, Fannie forms, reviews

Fannie’s new Collateral Underwriter to check appraisals Using Fannie’s Big Data.

Another great email from Dave Towne in Washington!!

10-14 FNMA Collateral Underwriter Flyer showing info about the FNMA Collateral Underwriter process they will make available to lenders (NOT APPRAISERS) in January 2015. You should review it. It has to do with their Enhancement of Risk Controls.

This is what we know as Appraisal Quality Monitoring (AQM) …. which was announced almost 2 years ago. FNMA has already been using the ‘scope’ on your reports, but will soon allow the lenders to have access to the software so that they can do pre-submittal exams prior to uploading the loan file, and your appraisal, to FNMA.

Virtually everything is digital now in our real estate appraisal world. That makes it incredibly easy for ‘big data’ to be analyzed very quickly and efficiently. Hiding relevant property info under a rock, your clipboard [tablet?], or just ignoring it, is no longer possible. Discrepancies will be found fast, and you will be asked for explanations or corrections.

Note the examples from the flyer:
– Chain of property ownership
– Inconsistency in reported property data from your info compared to your peers (subject & comps)
– Checking adjustments made (or not made) – primarily the math
– Testing for comps in terms of location, characteristics, sales prices, etc.

FNMA’s news release about their Collateral Underwriter:
Introducing Collateral Underwriter
Collateral Underwriter™ (CU™) is a proprietary appraisal risk assessment application developed by Fannie Mae to support proactive management of appraisal quality. CU will:
– Provide additional transparency and certainty by giving lenders access to the same appraisal analytics used in Fannie Mae’s quality control process.
– Perform an automated risk assessment of appraisals submitted to the Uniform
– Collateral Data Portal® (UCDP®) and return a CU risk score, flags, and messages to the submitting lender.
– Be available at no charge so lenders can take full advantage of the application for quality control and risk management purposes.

The CU risk scores, flags, and messages will be available to all UCDP users in real-time beginning on Jan. 26, 2015 through UCDP. Find more information on the CU web page at https://www.fanniemae.com/singlefamily/collateral-underwriter?cmpid=sln102114 .

Dave Towne, AGA, MAA Owner / Educator
360-708-1196
towneappraisals@clearwire.net
www.towneappraisals.com
Mount Vernon, WA

My comments: The PDF only has three pages of the document. The other pages were not available. Real estate is location, location, location. What about the 4th approach to value: Curbside Approach. That is where you sit on the curb across the street from the subject and ask yourself: “Does this value make any sense?”

There are many appraisal review programs in use and being developed. I knew that Fannie would be using their Big Data to automate underwriting reviews of appraisals as well as monitoring appraisers.

Does this mean appraisers focus even more on making sure their appraisals pass these automated reviews rather than focusing on what counts – the value? Is this another path along the way to not focusing on what appraisers provide – reliable and accurate values? Plus, disclosure of any problems with the property?

Review appraiser liability

By Ann O'Rourke on November 23, 2013 / appraisal, appraisers, lender appraisals, Reviews / Leave a comment

Tags: appraisal, reviews

By attorney Todd F. Stevens

Excerpts:
Here’s a trend in real estate law: attorneys are waking up to the potential liability of review appraisers. Couple this with the common misunderstanding among review appraisers that their risk is less than the author of the original report, and you get a burgeoning new area of litigation. Here’s how to protect yourself.

Another big myth is that reviewers have less liability than the original appraiser. In fact, I have heard some attorneys argue that reviewers have more liability than the original appraiser since reviewers have the “last” opportunity to correct any problems with the report. While I am unaware of any case precedent specifically addressing this issue, logic dictates that the liability of a reviewer and the original appraiser are the same.

My comment: a topic that appraisers who review appraisals don’t like to think about. This article was written several years ago and refers to mortgage brokers, but it applies now. The author defends appraisers.

http://www.keenlaw.com/topics/reviewappraisals.html