Collateral Underwriter warning messages and Every Increasing Scope Creep from all sources

My latest opinions and observations, as of today

Fannie does not want appraisers to receive warning messages unless a “human” has reviewed the appraisal report. They want to reassure real estate agents mostly that appraisals will not be delayed. Of course, I have no idea how many underwriters have the time to read the 30+ page report. Maybe they can search the report for what they are looking. I am sure this is/will be slowing down loans.

But, I keep thinking that even if appraisers received a few CU warning messages, it is a small, small percent of all the stips from all the review software that AMCs use. No one seems to notice that appraisals take longer the more stips that appraisers receive. Particularly, when all the stips are not sent at the same time. No one seems to notice this, or care about it, except appraisers!!

These non-CU stips are mostly from arbitrary “rules” which CU does not use. Such as: picky UAD stips, “add 2 more comps”, or please review the list of “comps” from the real estate agent or borrower. Some are still using the 15%/25% adjustment rule.

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CU – subject vs. comp data. I want the subject data!!

Fannie says that typically there are around 7 UAD records per property. However, most of them must be from appraisers who used it as a comp. Why should we be compared with appraisers who used the property as a comp?

I want access to CU property data from appraisers who did an appraisal on the subject property, not from appraisers who used it as a comp. I want CU to use this data to compare my appraisal data with “peers”. Comp data is not very reliable as it usually comes from MLS and public records. Fannie says that MLS and public records are not as reliable as data from the appraiser who appraised the property for the sale.
Maybe the appraiser had seen the interior of the comp recently, but this is very unlikely. Also, I go on the MLS tour/caravan almost ever week, but I don’t spend a lot of time at each open house. Well..I do spend more time if there is good food ;> MLS photos are subject to interpretation as they are done for sales purposes. I make brief notes on the flyers and file them in binders, going back to 1990.

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Fannie’s new Collateral Underwriter (CU) FAQs updated

Fannie’s new Collateral Underwriter (CU) FAQs updated – not dated but available on Feb. 25
Why does Fannie keep saying appraisals there will be minimal, or no effect, on appraisal turn times? The real estate agents are worried about delaying closings.
For now, since few appraisers are receiving warnings, the underwriters appear to be slowing down the processing as they are responsible for decided which, if any, warnings to send to appraisers, after reading the 30+ page appraisal reports.
These FAQs mostly clarify what they have said before, but there is some interesting new information.
The first two pages has the new FAQs updates,
Here is some of the new info:
– Fannie Mae does not instruct or suggest to lenders that they ask the appraiser to address all or any of the 20 comparables that are provided by CU for most appraisals.
– (Underwriters) Carefully review the appraisal report before seeking additional clarification from the appraiser based on CU findings.
– Fannie Mae expects lenders to use human due diligence in combination with the CU findings, and will actively follow up with lenders who are reported to be asking appraisers to change their reports based on CU findings without any further due diligence by the lender.
– Fannie Mae encourages lenders to carefully review the appraisal report – including all commentary – before seeking clarification from the appraiser. Don’t assume the appraiser is wrong just because you see a CU message. Taking messages or alternative sales at face value and simply asking your appraiser to address them is neither effective nor efficient. CU is intended to supplement a lender’s human due diligence. After completing a thorough review, lenders should be able to have constructive dialogue with appraisers to resolve specific appraisal questions or concerns. Lenders should not, however, make demands or provide
instructions to the appraiser based solely on automated feedback.
It is also available on the main CU link at www.fanniemae.com/singlefamily/collateral-underwriter

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Collateral Underwriter – appraisal access to data and CU

Should CU be transparent? Poll results
Poll results from ICAP poll – Illinois Coaltion of Appraisal Professionals, a very active appraisal political action group. www.icap.com
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Excerpt:
A few of the results of the 10 questions:
Q1 Should Fannie Mae make CU transparent?
Yes – 89%
No – 6%
Uncertain – 5%
Q3 Will CU risk scores cause Lenders and AMC clients to request appraisers to fit comps to the CU model?
Yes – 69%
No – 5%
Uncertain – 26%
Q5 Do you think the intent of CU is to
replace the appraiser?
Yes – 53%
No – 25%
Undecided – 22%
Download the results
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Online petition to allow appraisers access to CU UAD data
ICAP also has a petition to Fannie Mae that created 11/10/14. “Online Petition to allow appraiser access to data they provided through the Uniform Appraisal Dataset (UAD).”
Excerpt:
The GSE’s have mandated that all appraisals be submitted in the UAD format; however, currently there are no plans to provide appraisers access to this data.
This data needs to be provided to appraisers at the beginning of the appraisal process; ensuring transparency, and improving the process by reducing risk to lenders and the general public.
Sign the petition at http://icapweb.com/petition.php  Plus read the very interesting comments from appraisers!!
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My opinion: I support the petition asking Fannie to let appraisers get the data that we submitted!! CU transparency is more difficult, for various reasons.

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Appraisal adjustments "The Dirty Little Secret"

A Few CU Factoids
– Not all loans go to Fannie – VA, FHA, jumbo, etc.
– Fannie guidelines, including CU, are the minimum. Lenders can add their own, even keeping 15-25% adjustments.
– Lenders are not required to use CU.
– CU sends out appraisal warning messages for adjustments on: GLA, lot size, view, condition, quality, and location. For now.
– Gradual implementation of CU’s web based interface, which has the infamous “20 comps”, mapping, etc. Not available to AMCs.
A few CU comments and opinions from me:
I need a Book of Adjustments!!! Maybe a few of Fannie’s will “leak” – wiki leaks ;>
– AMCs are now asking for adjustment support from non-CU adjustments. More Scope Creep??
– Mass confusion on what gets sent from underwriter to AMC to appraiser – warnings, Risk Scores, etc.
– The recent Fannie Letter to Lenders about CU said that the intent is not to overwhelm appraisers with warning messages. But, are underwriters going to read (and understand) 30+ page appraisals? I’m glad I’m not an underwriter!!
– How to respond to warning messages – not clear.
– Requests from AMCs include CU and non-CU requests. Sometimes hard to tell where they are from.
Adjustments – the “Dirty Little Secret” of Fannie Form Appraisal Reports
I can’t think of any time a client asked me for my support on an adjustment prior to CU. They have been accepting the usual responses, which are in many boilerplates: Based on my many years… or matched paired sales… etc.

A critical issue to me is that the dollar adjustments seem to indicate that residential appraisal values are precise and very accurate, which is not correct. There are lots of factors affecting home sales as compared with income property such as apartments and commercial property.

I have asked many very experienced appraisers how they “support” adjustments. Most use “rules of thumb”, such as using a percent of price per sq.ft. for GLA. But, this number includes land. Or, they use adjustments they were given when they were new appraisers. Of course, if you only appraise conforming homes in conforming tracts built in the past 10 years, it is much, much easier.
For now, CU only sends out warning messages for these adjustments: GLA, lot size, view, condition, quality, and location. This is a very small percent of all the UAD coded data. Plus, some data is not UAD coded, such as pools. But, many state regulators expect to see support for all adjustments in your work files.
We all need a Book of Adjustments ;>
Of course, all of us have adjustments that we have accumulated over the years, or recently developed. But, with CU we are being compared to peer and model adjustments. Of course, no one tells us who or what they are. Sometimes appraisers are given this information.
Regression to support adjustments
Regression will not work for all adjustments. It works well in conforming tracts less than 10 years old. After that, it goes downhill. This has been shown many times for AVMs. I really wish I could just buy regression software and have it calculate them all for me!!
Using qualitative adjustments
I did my first SFR appraisals this week without not making any dollar adjustments when I use form reports for non-lending work. I did make time adjustments (which are very easy to support) as the effective date was June, 2014, when prices were increasing rapidly in my market.
I used plus and minus signs in the grid. I use the 2005 Fannie forms but do not use the Fannie certification or limiting conditions. I use my own.
For awhile in the late 80s or early 90s Fannie had a form with pluses and minuses, so I had some experience. Also I don’t use dollar adjustments in my 5+ unit apartments or commercial appraisals.

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CU warning messages – grrrr

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.

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Appraisers not getting access to their own data on CU

There is a petition and a letter being circulated about appraisers getting access to CU, particularly the Web interface which lists comps. This is unlikely for many reasons, which I write about in my paid newsletter.

More important (and more likely to occur) is: Why don’t appraisers get access to subject and comp physical characteristics from the CU database, which was provided by appraisers using UAD?

For example, which appraisers are able to measure their comp GLAs? Not many. This data would really help appraisers do better appraisals. We can always look at MLS interior photos and interview agents, buyers, and sellers for other information we need, such as condition. When the MLS listing says “contractor special” or “fixer” that is a good indicator of condition.

The only reason I have heard is that appraisers vary widely and there are too many differences. GLA is a good example. This has has always varied among appraisers. When I used the old CMDC appraiser database in the late 1980s, sometimes there were more than one source of GLA on a property. I have done relocation appraisals since 1986. It was very seldom that the 2 or 3 appraisers have the same GLA. The “rule of thumb” was up to a 5% difference in GLA was ok.

How many appraisers are “fudging” their dimensions to make their GLA match public records and avoid “stips”? Hopefully, CU will change this. Maybe CU will notice how many appraisers just use public records and how many use their own measurements.

I am really hoping that Fannie allows appraisers to get property characteristic information. It will help all of us – Fannie, lenders, AMCs, appraisers, reviewers, etc.

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CU – census tracts, adjustments, "bad apples", etc.

There is a lot of misinformation about CU. No one knows what will happen when CU is fully implemented. I speculate myself. I am an appraiser. I have opinions ;>

UAD is mechanical. CU is asking appraisers to think about their appraisals, not how to classify a characteristic.

For the appraisal profession, I think CU will make us better appraisers by making us take a critical look at adjustments. It will also help get rid of the “bad apples”, including appraisers that “push” values, throw anything into the form to get it out the door, need lots more training and education, etc.

I think Fannie’s main purpose of CU may be to stop appraisers from having low (or high) adjustments, inappropriate comps, using Q/C ratings, etc. to make values higher. That is what they worry about.

Only using comps from within the subject’s census tract is ridiculous and I’m sure CU will not be doing this. It is a good idea to see which census tracts match the neighborhood boundaries that you use. Or, part of Census Tracts. Then you can put the census tracts you use in your appraisal. In some areas census tracts are way out of date due to new construction, plus other problems.

To find census tracts near any property, go to http://www.huduser.org/qct/qctmap.html and type in an address.

I started my business in 1986 and had to put census tract numbers in my appraisals for the first time. I had previously worked for an assessor’s office and had never done a lender appraisal. I used Thomas Brothers Census Tract books to find them. To me, they often represented a reasonable way to delineate all, or part of, a neighborhood. Looking at the current census map for Alameda, CA, my city (population 75,000), it definitely did a good job of defining neighborhoods. However, I usually have to include more than one census tract as there is not enough data to do an appraisal otherwise. It did miss one very important neighborhood where most of Alameda’s large historic homes are located. There is a significant premium for being in this neighborhood. I very, very seldom go out of this neighborhood for comps. I suspect there are issues like this in other geographic areas. I have no idea what area Fannie would use, so I would put an explanation in my appraisal.

The problem is the forms, which were developed for use on tract homes. If you are not appraising a conforming tract home, it is like trying to put square boxes into round holes.

Every appraisal will have a risk score. A high risk score (1.0 to 5.0, where 5.0 is high risk) does not mean an appraisal is “bad”. It may be in an area of declining values or have a negative location problem. Or, not enough comps to provide a reliable value.

Remember that only certain UAD items will be considered by CU for now. If it is not UAD formatted, it will not be looked at. I don’t think Fannie’ use of census tracts will be the issue.

The Big Issue is support for adjustments. I have no idea how to support all the adjustments I make in my appraisals. I know what buyers will pay more, or less, for. But, I don’t know the exact dollar amount.

Regression is just one way to support adjustments, but it will not work for many adjustments, particularly if there are very few sales. Regression is not the only answer. There are many other methods. I will be writing about them in my paid email newsletters.

Regression works very well for time adjustments. Be sure yours are market based, not just from an MC form.

I am seriously considering not making any dollar adjustments when I use form reports for non-lending work, except time adjustments. I never make dollar adjustments on narratives and apartment form reports. My state regulator wants to see support in my files for adjustments.

Just because there is a box does not mean it has to be filled in. Qualitative adjustments are fine. There was a Fannie form developed and used for awhile in the 80s or early 90s that did not use dollar adjustments, only plus or minus signs. I worry about that a lot. The old Fannie 2-4 unit form did not have any adjustment boxes. I really hated when they changed that form to include adjustment boxes and de-emphasize the Income Approach.

No one knows how CU will work out. Will everyone turn down appraisals except for conforming tract homes? Will there be no one to do the tough appraisals and work in rural areas. When appraisers are compared, does the majority opinion win?

Will the days of 24 hour turn times and $200 fees be gone? Will AMCs stop broadcasting all appraisal orders to everyone on their fee panels? Will all appraisers be seen as the same and interchangeable? Or, will appraisers be rated on skills, education and experience? Will fees go up? Will fees be based on difficulty of the appraisal? Will lots of appraisers abandon the lender appraisal ship of fools?

Read the webinar pdfs and look at the maps from the two Fannie Webinars to see what they actually are doing. I spent lots of hours doing this, plus speaking with others about what they thought. Of course, it was for a 12-page article in my paid newsletter. Plus 18 pages of excerpts from Fannie documents and webinars. I probably would not have done it otherwise ;>

Go to www.fanniemae.com/singlefamily/collateral-underwriter and listen to Fannie’s two webinars for underwriters – very good with excellent illustrations and explanations. Plus, read the FAQs. You need to register, but it is very easy and you go directly to the webinar and can return at any time. There are lots of links on the web page for more information.

Last month’s January 2015 issue of the paid Appraisal Today newsletter had a 12-page article on CU plus 18 pages of addenda material. The February and subsequent issues will address problems such as how to make adjustments. Click the ad below for more information.

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Fannie's Collateral Underwriter (CU) will make big changes in how we do appraisals starting January 26, 2015 !!

UAD is annoying and only relates to data consistency, not appraising real estate. Collateral Underwriter, which is regression based, uses UAD data to compare your appraisals to your “peers” and Fannie’s “model”, which is regression based. It also compares the appraisal with previous appraisals you have done where the same comp was used. It compares only what is coded by UAD. In other words, it does not address pools, patios, and other non-UAD data. For example, you use $40 per sq.ft. GLA adjustment. CU compares your adjustment to your peers and to the “model” adjustment and you are different than 4 out of 5 other appraisers and the “model” has a different number.

On the plus side, now underwriters are only getting messages based on “rules”, not actual data. With CU, they will have more information to decide if something needs to be changed. I am sure that a lot of “flakey” appraisers who are not very competent, rush through appraisals too fast to get them done, etc. will be identified. More important, the really bad appraisers who may be competent but choose to use “fake” comps, change comp sales prices to get a higher value, etc. will be found out.

I am working on an article for my January 2015 newsletter on CU and am studying all the Fannie documents plus interviewing industry insiders to see what it means for you. Reading all these Fannie documents is giving me a headache!!

Go to www.fanniemae.com/singlefamily/collateral-underwriter  and listen to Fannie’s two webinars for underwriters (listed under OnDemand eLearning Courses) – very good with excellent illustrations and explanations. You need to register, but it is very easy and you go directly to the webinar and can return at any time. There are lots of links on the web page for more information.

Also listen to Jeff Bradford’s recent webinar athttps://goto.webcasts.com/viewer/event.jsp?ei=1050667 . It starts with the Big Picture of Big Data and discusses CU. It also includes information on his new Redstone report which has adjustment support and other information. Redstone can be attached as an addendum to any forms software you use. You can skip this part, if you want. But, I found it very interesting. Projected pricing is $5-$15 per report, depending on what you need. Jeff is writing an article on the Big Picture of Big Data for the February issue of the paid Appraisal Today.

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Fannie warning letters – GLA adjustments and lots more coming

Fannie warning letters-GLA adjustments

Fannie has been sending out warning letters to appraisers about variations in Q and C ratings. Now they are sending out letters about using low GLA adjustments. According to people who attended, or heard about a recent speech that Bob Parsons of Fannie Mae gave an appraisal conference, $25 per sq.ft. Seems to be used by lots of appraisers for lots of properties that vary widely in size, etc. I wasn’t at the speech and don’t know what was actually said, but $25 per sq.ft. Was used in a large number of appraisals.

A quote from a recent email I received: “A friend of mine just got a letter from Fannie Mae stating that they have been monitoring his reports for 6 months. In that time they said he used $35 Psf for gla adjustments 14 times. This is a warning. Further action may be required if this continues.” I haven’t seen any of the letters myself but have been hearing about them for a few months. This The last two sentences have been pretty common in the warning letters sent about Q and C adjustments, which are a lot more shakey to support and are much more controversial.

Hmm… In my area, the San Francisco Bay Area, with a median home price of $601,000 in October, 2014, slightly down from June as many markets have slowed down. San Franciso’s median home price is around $1,000,000. I hope no one there is using $25 per sq.ft.!! Except maybe in neighborhoods with relatively low home prices or some lower priced condos condos. In my small city of 75,000 population the median price in October 2014 was $690,000. Our prices are around the median for the area. Very few homes or condos under $300,000.

Sq.ft. is one of the easiest adjustments to support, as compared with lots of other features. For many years, it has been one of the few almost always reliable adjustments when using regression analysis. You can sometimes even use matched pairs. I have no idea why appraisers don’t try to figure out an appropriate adjustment.

This is just a start. Read info on Fannie’s UCDP Fannie Mae Appraisal Messaging Change Notification” – link below, with a list of all of the appraisal data that Fannie is looking at below.

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Dave Towne on Collateral Underwriter
Thanks to appraiser Dave Towne (again) for his Most Interesting Comments:

Appraisers……..

Many know by now that the GSE’s…primarily FannieMae……..have instituted a new ‘appraisal scoring’ procedure based on an electronic read of your reports ……….. specifically on a SFR 1004 or the Condo 1073Those are the only forms currently being analyzed by the CU process.

On Nov. 18, 2014, FNMA released a document named “UCDP Fannie Mae Appraisal Messaging Change Notification” which you can find here:  https://www.fanniemae.com/content/release_notes/ucdp-change-notification-01262015.pdf

I encourage all appraisers to actually read this document … all 11 pages.

When you do read this document, you will learn that your reports are being compared to your peer’s reports, and to your other reports, and to some unidentified ‘model’ FNMA uses.

Some of the ‘checks’ being performed by the CU process include these:

The reported GLA is materially different than what has been reported by other appraisers.

The reported lot size is materially different than what has been reported by other appraisers.

The condition rating is significantly different than what has been reported by any other appraiser.

The quality rating is significantly different than what has been reported by any other appraiser.

Here are a few that can cause real concern among appraisers:

The GLA adjustment is larger than peer and model adjustments.

The GLA adjustment is smaller than peer and model adjustments.

The view adjustment is materially different from peer and model adjustments.

And I just love this one:

The appraiser-provided comparables are materially different than themodel-selected comparables.

It’s time for appraisers to get serious about meeting your peers in person, compare notes, and develop a regional adjustment chart for all variables … much like that yellow legal pad paper you were handed when you got in this business …. that paper with the ‘required’ adjustment amounts on it for almost all items.

Oh … and when you get that knuckle slapping letter from FNMA saying your adjustments or comparables don’t match the ‘model’ be sure to get the specifics and pass on ‘model info’ to your peers.

Yep, appraising real property and developing an opinio

My comment: Fannie, please send me all my adjustments. Then I won’t get questioned by my state regulator (hopefully), underwriters, reviewers, etc. I would really like to know what adjustment to be made for all the unusual features in the homes I typically appraise – most built before 1930 and many built before 1910 with all types of additions, remodeling, etc. Even tract homes have stuff like converted garages, original kitchen and baths, inlaw units in rear, views, etc. Of course, I have been using regression since the 1970s on homes and very few adjustments are very reliable. I wonder how Fannie is going to do it.

I remember commercial appraisers used to talk about getting cap rates from bottom of a stone monument ;> Maybe we are still looking for that darn piece of stone!!

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Dave Towne on Big Data, Hedonic Regression, etc.

Appraisers………

The new Collateral Underwriter electronic review process developed by FannieMae has many appraisers on edge. This will become the ‘ultimate authority’ or gold standard for reviewing appraisal reports as of January 26, 2015 …. at least as far as FNMA is concerned. Your reports will either ‘pass’ or ‘fail’, depending on many factors. Some of those factors are outside your immediate control.

“Big Data” is one giant pile of stuff that is being put into the CU pot, stirred together like a stew. Except there is no master chef involved that ‘we’ can interact with. Instead we have a bunch of secret sous chefs each contributing a chunk of meat, a bit of spice, some chopped carrots, and a few potatoes. None of them, or us, really knows the actual CU recipe, because part of what’s in the stew is a ‘model’ of something unknown. But some of that Big Data in the CU stew could be yours … or it might be data provided by your peer appraisers who work in your area – that your reports will be compared against. Not too tasty you say? Just add more pepper.

An aspect of this Big Data stew is Census Tract home price analysis, which is compared against your appraised property value. As an exercise, everyone reading this immediately write the neighborhood description using N, S, E & W directionals for the census tract in which your home residence is located. What? You don’t know the boundaries of your census tract? For shame! Some people using the CU stew might think you are deficient because you don’t know price trends in the exact census tract of the appraised property.

Then we have Hedonic Regression. It’s not a bad thing. But it’s becoming the buzz words of our appraisal adjustment process. It’s a ‘background component’ in the CU process, moving farther forward, faster than some might expect.

Bet you didn’t know that the adjustment grid is a form of Hedonic Regression! It’s a way a certain property’s components of value are itemized separately. By using Hedonic Regression, the individual value of the adjustable components can be calculated and plugged into the adjustment grid. In theory, this can lead to a more accurate property value.

The folks at Bradford Software were among the first to begin promoting use of regression techniques by appraisers. In other ways, the other appraisal software companies and some independent developers have been working on individual processes to make “Regression” more palatable and useful to appraisers. Bradford, and the independent developers, have either report software, or separate spreadsheets, that can help calculate property adjustable components, which in turn can lead to a more credible and supportable opinion of value for the appraised property.

The days of “I’ve been an appraiser for 27 years, so I know what this house is worth” are rapidly coming to an end. The Big Data CU stew is overtaking appraising like the snow avalanches that have closed State Highway 20 in north Washington State in the Cascade Mountain range, not far from where I sit in my cozy bathrobe and bunny slippers.

My observation in this process is that appraisers, as a group, are not statisticians by training and are somewhat scared of that term – even though ‘we’ deal with lots of statistics and data. Thus, appraisers don’t have a clear understanding of what “Regression” is, or does. As a result, ‘we’ have been reluctant to embrace this ‘actually old’ technology in modern appraisal reports. And ‘we’ certainly are skittish about FNMA’s soon to be released (to lenders only) Collateral Underwriter which will analyze reports using “Regression.”

Another perspective on this topic is from this blog: http://www.housingwire.com/blogs/1-rewired/post/32165-does-fannie-mae-support-appraisers  This one is written by one of the regression spreadsheet developers, currently available to appraisers.

And for info on Hedonic Regression: http://en.wikipedia.org/wiki/Hedonic_regression

My comment: When I first started doing residential lender appraisals in 1986, we used census tract maps to find the code. Later, the codes were available on computers and we did not use maps. However, I found that they were very good for defining neighborhoods. I guess we all forgot about them since few, if any, appraisers look at the maps. I still have my old census tract books.

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