Fannie Archives

How to Stay Happy as an Appraiser

By Ann O'Rourke on December 16, 2015 / AMCs, appraisal management company, forecast, future, lender appraisals, new appraisers / 1 Comment

Tags: AMC, appraisal, appraisal fees, appraisal management company, Fannie, lenders

How to Stay Happy as an Appraiser with Ann O’Rourke – Dustin Harris Podcast 12/13/15

In a recent paid Appraisal Today newsletter I wrote an article: “Staying positive with unreasonable fees and Scope Creep from AMCs”. In my article I go over many ways to be positive. These ideas are not new and have been around for many decades. I applied them to appraisers.

Whenever I do public speaking, I am much more “out there” than I am when I write. I am much more spontaneous, similar to when I am interviewed for podcasts.

I don’t think that there have ever been as many dissatisfied residential appraisers as there are now, primarily due to several factors:

– AMC and over-management of appraisers

– Low AMC fees for the work required

– Ever increasing requirements from investors and lenders

I know many long time residential appraisers who have quit appraising because they don’t want to work for AMCs. If I could only get work from AMCs, I would have quit also. But, I also know appraisers who do a lot of AMC work and they are satisfied with it. Dustin is a good example. They modified their businesses. I also know appraisers who do very little AMC work.

All successful business people have a positive attitude. Some of us are fortunate to be born that way. But, you can change your attitude.

Click here to listen

http://theappraisercoach.libsyn.com/075-how-to-stay-happy-as-an-appraiser-with-ann-orourke

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https://itunes.apple.com/us/podcast/the-appraiser-coach-podcast/id966765322

– Website – http://theappraisercoach.libsyn.com/

How many appraisals per week and how much time to complete an appraisal report?

By Ann O'Rourke on October 7, 2015 / AMCs, appraisal management company, lender appraisals / 4 Comments

Tags: AMC, appraisal, appraisal fees, appraisal management company, Fannie, lenders

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How many appraisals per week and how much time to complete an appraisal report?

Source: Steve Costello at www.fncinc.com. Published 8-4-15

This month I want to discuss three recent polls dealing with how much time it takes to complete appraisal reports and how many hours you end up working to get them all done. In the first poll, we asked “On average, how many “interior inspection” appraisals reported on a 1004 do you normally produce in a week?” This poll was very popular with 4945 responses. There was a clear winner with the response of “4-6 appraisals per week” pulling in 44 percent of the vote. The next most popular answer of “7-9 appraisals per week” took quite a drop and only pulled in 20 percent vote. The last two available answers were those at either end of the scale and they were almost tied. A few appraisers really crank out the orders because 16 percent responded that they do “10 or more” appraisals per week. On the opposite end were those representing 17 percent of the vote who only complete “1-3” appraisals per week. My guess is that many of the people in this group may be semi-retired but like to keep active in the profession while making some extra money. Of course, any individual’s volume is going to depend a great deal on their specific geographic area and general complexity of their assignments.

In the next poll we asked: “On average, how long does it take you to complete a 1004 interior inspection appraisal report including inspection time (excluding driving time)?”

This was another popular poll with 4836 responses. The winner here was “4-5 hours” with 39 percent of the vote. Not far behind was “6-7 hours” with a 29 percent share of the vote. From here the numbers dropped substantially with 13 percent of appraisers going with the response of “8-9 hours”. That is really getting to be painful when it’s taking that long to finish each assignment. The most extreme answers both received the lowest number of votes. “More than 9 hours” was the choice of 8 percent of the appraisers with the final 10 percent going for the answer of “2-3 hours”. My guess is that the appraisers in that final group really have their system down to a science and fully utilize all the available technology.

Finally, we asked, “On average, how many hours per day do you spend working on appraisals and appraisal-related business?” This poll was the most popular of the three with a total of 5451 responses. The winner was “9-10 hours” with 37 percent of the vote. The second most popular answer with 23 percent pushed the level up to “11-12 hours”. The old standard workday of “7-8 hours” came in a distant third gathering only 17 percent of the vote. Not far behind were the 15 percent who really “burn the midnight oil” working “13 or more hours” per day. Only 9 percent work “6 hours or less” each day with most of these appraisers reporting at least 5-6 hours worked per day. It’s clear, and not at all surprising, that most appraisers are working very long hours there days.

My comment: Appraisers are working long hours now because appraisal volume is way up. If you are willing to work for low AMC fees you can get as much work as you want. I would have liked to see how many hours per week. I suspect many appraisers are working 6-7 days a week. I did, during previous boom times. These polls do not include time spent on revisions. I have some data below on that. Plus, the amount of time returning update requests – answering phone calls and emails.

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How much time is spent on revisions?

From the November 2014 Appraisalport newsletter

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 A10-30 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 A31-60 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 AI to 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: Lots of appraisers complain about excessive revision requests, but this poll indicates that appraisers aren’t spending much time on them. The time may have increased since 11/14.

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How often have you received revision requests that have no contributory value to the report, or were already addressed in the report commentary?” Sept 7 poll – www.fncinc.com received 3,273 votes

Appraisal Humor

Appraisal business tips

A very, very funny appraiser video!

NOT customary and NOT reasonable fees?//TRID??

By Ann O'Rourke on September 23, 2015 / AMCs, Appraisal fees, appraisal management company, fees, lender appraisals / 10 Comments

Tags: AMC, appraisal, appraisal fees, appraisal management company, Fannie, lenders

NOT customary and NOT reasonable fees?

What is reasonable? Let me see… For example, the amount of work to produce the appraisal plus respond to request for more information, updates, etc. increases the time from 5 hours ($70 per hour) to 8 hours ($47.50 per hour), a 33% decline. Of course that is gross, not considering your expenses. You are able to get the same fee – $350. But, the fee is not reasonable. Calculate this for your typical appraisal fees.

What is customary? Somehow AMCs seem to think that “one price fits all”. Before AMCs took over, appraiser fees varied widely around the country. The Midwest was typically the lowest, around $250. The West Coast (Washington and Oregon) and some East Coast states were higher, around $450. Alaska and Hawaii were much higher. We accepted “standard” fees from our clients as we took the easy appraisals and the hard appraisals, which balanced out. I didn’t ask for a fee increase when a property took more time. If was a high end home or a rural acreage property, the lenders paid higher fees. Or, we scheduled appraisals to reduce driving time. Clients understood that they could not give us all the hard appraisals and appraisals scattered over a wide geographic area.

Now, AMCs have standard fees, but they don’t consider the factors above. Many appraisers have responded by asking for fee increases or just turning down the assignment.

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TRID vs. the current system of AMC ordering appraisals

TRID will make the method above (“one fee for all appraisals”) very difficult for AMCs. Lenders have to provide an appraisal fee within 3 days. AMCs won’t be able to spends days “shopping” for the lowest fee for a tough appraisal. AMCs won’t have time to negotiate with appraisers. Yes, there are options but they delay the loan.

Now, appraisers can quickly accept broadcast orders with the expectation of getting a fee increase. After Oct. 3, that will create problems for lenders and AMCs.

What will happen? How can AMCs tell their lenders what to charge for a specific appraisal (the full cost, including AMC fees) within a few days? Their systems assume all appraisals are the same. I doubt if they have anything set up to distinguish complex rural from a tract home. Can AMCs even quote different fees within a state? I see AMCs making less money because the appraisal fees they pay will increase. Now, they are waiting for appraisers to tell them that the fee has to be higher.

What does this mean for appraisers who work for AMCs? Higher “standard” fees to cut down on appraisers refusing fees? This cuts into AMC profits unless they can get higher fees from their lender clients. But, AMCs compete with other AMCs. Fees are a big factor when a lender selects an AMC.

I have no idea what will happen. I am glad I don’t own an AMC with lots of lender clients. Maybe they will never raise appraisal fees for difficult properties. But, who will do them?

Volume is high now and AMCs have difficulty finding appraisers to do the tough appraisals and FHA appraisals. When volume is low and appraisers need the money, the “one fee for all” is easier for AMCs to use.

The Power of Social Media and Appraisers

By Ann O'Rourke on August 26, 2015 / AMCs, appraisal management company, lender appraisals / 2 Comments

Tags: AMC, appraisal, appraisal fees, appraisal management company, Fannie, lenders

A few months ago, an AMC sent out an email to all their appraisers saying it was requiring that they include a copy of their work file with the appraisal.

Within a very short period of time after it was sent, I saw the email posted to a Facebook group. There were 356 comments posted. It soon “went viral” spreading all over the Internet. The AMC backed down.

Within the past week, another AMC sent a very rude email response to an appraiser who declined applying for a staff position at the AMC. I saw it posted on a Facebook group. It also went somewhat viral, although not as widely distributed as the workfile email.

Read more, including the original email, in the very interesting Jonathon Miller’s Housing Notes – August 21 edition.

Click here – it is near the bottom of the page.

http://us6.campaign-archive1.com/?u=47540980899c1d755b4cddc48&id=eed1f01b99&e=e758e759fb

What does this mean? In the pre-Internet days, often it would take weeks, or months, for appraisers to find out about FHA and Fannie changes, for example. Now it is available within a few minutes.

What’s the downside for appraisers? Even if you post to a group that requires approval, your postings can be obtained by others. Group members can send them to anyone. This is a definite problem if do court testimony. A while ago an attorney asked me how many appraisals I had done in the past 6 months as I had a broken ankle. How did she know about my ankle? She did not subscribe to the email-only discussion group. She asked another appraiser to check online for anything that might help her case. Other appraisers have reported similar situations.

Remember the Primary Rule, which I learned when I first browser opened the Internet to us all. At that time you assumed it could be published on the front page of the New York Times, Wall Street Journal, etc. Now, it is even worse – it can go all over the Internet. The only communication that I know of that is private is the inside of postal mail envelopes. Government agencies can track what is on the outside, but not the inside without a special court order.

Facing AMC License Denial, Coester Sues Virginia Board

By Ann O'Rourke on August 12, 2015 / AMCs, appraisal management company, lender appraisals / 4 Comments

Tags: AMC, appraisal, appraisal fees, appraisal management company, Fannie, lenders

Facing AMC License Denial, Coester Sues Virginia Board

by Isaac Peck, Editor, WorkingRE

Excerpt:

Facing denial of its license to operate an appraisal management company (AMC) in the state of Virginia, the AMC Coester VMS has filed a lawsuit against the Virginia Real Estate Appraiser Board alleging that the Board is engaged in “a conspiracy to restrain and monopolize trade” and is operating in violation of federal antitrust laws.

The suit follows Virginia’s recently passed AMC licensing laws, which set an August 18 deadline for applicants to obtain AMC licensure or cease operations in the state. The Board has issued dozens of AMC licenses but selected Coester for closer examination. On July 15, Coester attended an informal fact-finding conference and addressed several of the Board’s concerns, including Coester’s history of consent orders and settlement agreements in five other states, for alleged violations of state laws: Maryland, North Carolina, Tennessee, Louisiana, and Minnesota. The allegations against Coester in these states include: unlicensed AMC activity, false advertising, failure to pay appraisers on time, failure to pay customary and reasonable fees, failure to respond to requests within the time period specified, failure to submit biannual certification, as well as USPAP violations committed by Brian Coester himself.

Read lots more, and get links to the docouments at:

http://www.workingre.com/facing-license-denial-coester-sues-virginia-board/

For lots more info on Coester, just google Coester AMC or brian coester appraiser

My comment: Looks like various state appraisal boards are looking closer at AMCs. Coester recently got into a tiff with the Louisiana State Board, which was resolved. I am so glad California has never had an appraisal board!! (Gov. Schwartzenegger wanted to cut costs back then.) Too many possible conflicts of interest… The issues seems to be mostly about fees. I am also not comfortable about appraisal state boards regulating appraisal fees. They should focus on what is important – USPAP.

Are you or your firm planning on any hiring trainees within the next 5 years?

By Ann O'Rourke on August 5, 2015 / AMCs, appraisal management company, lender appraisals / 3 Comments

Tags: AMC, appraisal, appraisal fees, appraisal management company, Fannie, lenders

Are you or your firm planning on any hiring trainees within the next 5 years?

My comment: I wonder what the response would be if lenders allowed trainees to sign on their own… remember the mortgage broker days? I sure wish there was a survey on trainee commercial appraisers as I see lots of them where I am. I am hearing that it is back to the “old days” when fee appraisers only hired relatives (because most appraisers were staff appraisers at lenders).

AMC/lender now accepts trainees signing on appraisal reports

By Ann O'Rourke on June 23, 2015 / AMCs, appraisal management company, lender appraisals / 1 Comment

Tags: AMC, appraisal, appraisal fees, appraisal management company, Fannie, lenders

Be sure to check your state’s requirements, as they vary widely among the states.

This is the first one I know of. Maybe they have been reading my free emails where I suggest this is the only solution to the appraiser shortage, now and in the future, that can start immediately. FYI, Red Sky is owned/affilated with U.S. Bank

Excerpts from an email (Appraiser Partner News) sent to appraisers on its panel June 11, 2015

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Supervisory Appraiser Change

Upon review, Red Sky Risk Services, LLC has refined its expectations regarding the involvement of appraiser trainees. Important to note, the following change DOES NOT override specific state statute(s) or appraiser training requirements.

Effective immediately, Red Sky is no longer requiring supervisory appraisers to be physically present with trainee appraisers at all subject property inspections and driving comparable sales.

My comment: There is a short additional list of specific requirements. But, they are nothing new – Supervisor to review report, responsible for report, etc.

Appraiser shortage – for AMCs (Appraisal Management Companies), not other clients

By Ann O'Rourke on June 2, 2015 / AMCs, appraisal management company, lender appraisals / 16 Comments

Tags: AMC, appraisal, appraisal fees, appraisal management company, Fannie, lenders

Appraiser shortage – for AMCs, not other clients

There is a significant shortage of appraisers willing to work for AMCs with low fees and escalating Scope Creep.

AMCs whose business model is based on low fees to appraisers are having difficulty finding anyone willing to accept their appraisals. They keep calling and calling trying to find someone to work for their low fees.

Direct lenders or the few “good” AMCs are not experiencing an appraiser shortage. Appraisers who work for them turn down AMC work.

Comp Photos and MLS, Fannie, USPAP, etc.

By Ann O'Rourke on June 2, 2015 / appraisal, comp photos, Fannie, lender appraisals / 45 Comments

Tags: appraisal, Fannie, lenders

Appraisalport polls on comp photos from June 2015

By Steve Costello,

This month I want to discuss three recent polls dealing with comp photos. In the first poll, we asked “With the availability of MLS photos, do you still feel it is necessary to drive by and photograph every comp?” We had a total of 3819 responses and the top two answers were very close. The winner, with 40 percent of the vote, was “Sometimes, it depends on the complexity of the specific assignment.” Coming in a close second was “Yes, I always want to see any property I use in a report” with 38 percent of the vote. The final answer of “No, I would rather just use MLS photos” only scored about half the votes as the first two answers, finishing with 22 percent. This makes sense because I think most appraisers want to look at a comp before they include it in a report, especially if they aren’t already familiar with the property. I can also see where some appraisers are very familiar with the properties in their area, use many of the same comps over and over again, and don’t feel a need to drive by and photograph them every time they use them.

In the next poll, we asked “In your opinion, with MLS, Google, and other photo sources available to clients, the main reason original comp photos are required from the appraiser is:” This poll had 3986 responses and had a pretty clear winner. A full 63 percent of the appraisers chose the answer “To make sure the appraiser actually drives by the comps.” So it looks like most appraisers don’t think their clients care as much about the actual photo compared to just making sure the appraiser actually visited the comp. The answer we expected to be very popular, “To provide the client with up-to-date photos of the comps – ensuring they exist in the stated condition,” only received 22 percent of the vote. A third response of “So the clients won’t have to take the time to look up the photos from one of the sources noted above” didn’t do well, only pulling in 3 percent of the vote. Not a surprise — we didn’t really expect many appraisers to choose that answer. Finally, 13 percent of appraisers went with “Other reason” as the best choice for this question. We really don’t know if there were one or many “other reasons” or what they are.

Finally, we asked “Would you be in favor of eliminating the requirement to include an original photo of every comp as long as a recent MLS photo of the property could be included with your report?” This question was very popular with 4770 total votes. It also produced a landslide vote with 79 percent of the appraisers selecting the answer “Yes.” Only 15 percent answered “No” and would not want to use an MLS photo instead of an original if it were available. A final 6 percent were “Not sure” how they felt about this issue. So, from this poll it is clear that appraisers feel that an original photo is not a necessity to produce a quality appraisal as long as a good representative photo is available from another source like an MLS.

My comment: As we all know, a photo taken at the time of listing from the MLS is often better than one taken later and USPAP does not require comp photos. Fannie Mae certifications require that the appraiser inspect the exterior of the comp, not take a photo. What about re-using a comp photo? Why the requirement of an “original” photo? To be sure appraisers drive by the comps.

Appraisal Humor

Appraisal business tips

A very, very funny appraiser video!

What does it cost to take appraisal comp photos?(Opens in a new browser tab)

Poll – Taking comp photos?(Opens in a new browser tab)

It’s Not a Comp, It’s a Sale – Lies, Damn Lies…and FNMA 'statistics'

By Ann O'Rourke on April 28, 2015 / Collateral Underwriter, Fannie, lender appraisals / 3 Comments

Tags: appraisal, collateral underwriter, Fannie, lenders

Another “good one” by Dave Towne, Washington appraiser and commentator

Something’s been gnawing at my craw ever since January when FNMA’s wonderful CU was unleased to the world. And before that, which still continues, is the AQM process they still use to judge the work of appraisers.

No one else has written about this, or even mentioned it, so I will: It has to do with the word “Comp” which is used liberally by FNMA.

What exactly is a “Comp?”

In FNMA’s world, it’s any property that they obtain, either by their vast AVM process which examines millions of property transactions, or properties that have been extracted from appraisal reports submitted by appraisers……..yes, your work. In their fuzzy logic, it’s a “Comp” considered for your report if they say it is. It is not!

A true “Comp” is a property viewed and/or analyzed by a real living, breathing, mirror fogging appraiser who compares that sold property against the subject property in terms of multiple features, characteristics and amenities. It is not determined by an AVM or algorithm within the vast bowels of FNMA. Until the property has such analysis done by an appraiser, it is merely a SALE……it is not a “Comp.”

This FNMA lie really became evident to me on 4/20/15 when FNMA released a news release about how CU has been integrated into their on-line Desktop Underwriter software mortgage lenders use, which you can read here: http://www.fanniemae.com/portal/about-us/media/corporate-news/2015/6239.html?p=Media&s=News+Releases&from=RSS

Within that news release is this quotation from a VP at a mortgage lender: “The collateral information that CU provides is invaluable and simply staggering,” said Breck Tyler, Executive Vice President, Trustmark Mortgage Services. “CU has aided in providing important comparable data that was previously unavailable or very difficult to get. CU messages in DU will help streamline appraisal review and make the underwriting of an appraisal a much more informed process.”

Then, FNMA released info directed to Correspondent Lenders who intend to use the CU process in UCDP, but don’t intend to sell the loan to FNMA: https://www.fanniemae.com/content/fact_sheet/collateral-underwriter-non-seller-implementation-guide.pdf

That has this statement: “Fannie Mae does not instruct or suggest to lenders that they ask appraisers to address all or any of the up to 20 comparables that are provided by CU for most appraisals.”

I want to repeat what I said above…in case you missed the point: A PROPERTY IS NOT A “COMP” UNLESS YOU DETERMINE IT IS AND INCLUDE IT IN AN APPRAISAL REPORT. Otherwise it’s just a ‘sale.’

If you’re an appraiser who liberally uses the word “Comp” in place of a ‘property sale’ I would ask that you be more careful. If you receive info from a lender, AMC or anyone else who asks you to look at the “Comp” they have provided, correct them and use the words “sale property” until you have determined that it truly is a “Comp.”

I’m also asking members of appraisal organizations and associations to communicate your concern about this lie perpetrated by FNMA directly with them, and ask FNMA to change the word “Comp” used in their CU Reports, news releases, instructional materials, etc. to ‘Property Sales’ so that there is no misunderstanding about the significance of this issue.

If organizations and associations won’t do that on behalf of appraisers, then we might as well kiss the profession of residential real property appraising goodbye. Because if a list of ‘sales’ are considered “Comps” then an actual human appraiser won’t be needed to provide supportable property analysis and market value reports.

Dave Towne
dtowne@towneappraisals.com
www.towneappraisals.com
Mount Vernon, WA

My comment: I have been aware of the difference between a sale and a “comp” for a very long time. I try not to mix them up. It is very important when communicating with lenders and real estate agents, who should already know the difference. I am glad that Dave Towne points out this very big difference.

I have not found it to be an issue with non-lender clients, where I use “comparable sales” which is a much clearer term to use, since few are familiar with the term “comp”.

Posts Tagged Fannie