Dear Real Estate Appraisers of America,
To date, each of you have invested years of your life and tens of thousands of dollars to create your real estate appraisal career. No small feat. You have sacrificed greatly to get to where you are. And, now you are feeling as if everything you have worked so hard for is being stolen away from you.
Tragically, over the last 5 years there has been a whirlwind of events that has resulted in a very frustrating situation for appraisers. AMCs who have been permitted to increase profits by driving down appraiser fees and constantly push for dangerous turnaround times, have largely taken control. Lenders, Fannie Mae, and the like continue to creep up the assignment requirements to dizzying levels.
In spite of this awful situation, there seemed to be no one on the offensive to directly attack the harmful onslaught. Who is out there making real moves to bring appraisers the changes they so desperately need? (more…)
Many of you know I scan various sources for appraiser/appraisal related info, and send out items I think are important.
Well, today Collateral Underwriter (the extraordinarily SECRET process developed by FNMA and given ONLY to LENDERS for report review) started.
As predicted by many appraisers, it already generated responses appraisers are forced to deal with, primarily because the reporting appraiser’s data (in the report) is different from “peer” reports.
As a poster to one of the forums said:
FNMA’s CU is causing a BIG industry ruckus. Opinions are fragmented, being posted across multiple message boards and blogs. Please complete the attached survey created by ICAP member Keith Wolf, SRA, AI-RRS so we can tabulate the responses and distribute to all. We are reaching out across the country, so please feel free to forward the survey. The survey will remain open until January 31, 2015.
The Appraisal Industry as a consolidated group thanks everyone for their participation in completing the survey. (more…)
Fannie Mae’s new “tool” for lenders is the Collateral Underwriter (CU). This is a review program available to lenders so that they can compare the work of an appraiser on a property to other work the appraiser has done and to what other appraisers have done on appraisals of the subject property. This program compares your report to others. Comparing your work to all of the information they have in their database, using data from other appraisers to evaluate your work.
DON’T PANIC! Remember when the UAD came out and there was great angst among residential appraisers? Yet when the dust cleared, life went on and we adjusted. The same will happen with the CU. Many of you may not know that there has been review system called an AQM or Appraisal Quality Management that was designed to look at you through an Appraisal Management Company. The AQM is a software system that compares reports to industry standards and requirements. It has been in place for several years.
The CU (more…)
Normally, I like Dave Biggers. I think a la mode—like other appraisal software companies—has always been (and will likely always be) an advocate for appraisers. I am not saying any of that has changed, but I feel like Mr. Biggers owes me, and all appraisers, an apology.
Ever since I first heard of Collateral Underwriting (CU), I have been a bit—and at times, much—overwhelmed at what it might mean to me and my peers. Frankly, there have been times that I have been downright scared of what CU might do to my thriving appraisal business. Don’t get me wrong, I think I run a tight ship and am proud of the quality of my appraisals. However, I work a very rural market and providing iron-clad support for adjustments is not always possible. Let’s just say, the horror stories I have been hearing about paired-sales and regression tools has caused me a little bit of anxiety. The only solace I have had is learning that Fannie Mae will be looking to my peers for adjustment models. I am pretty sure my peers will have no easier time providing rock-solid adjustment evidence than do I. (more…)
Not so long ago I had multiple clients. They would call me if they needed my professional services and trusted me to perform a satisfactory service. I’m a streetwalker. I drive and walk the streets looking at houses and photographing them from the street (outcalls) and sometimes going inside to determine condition (in calls).
This worked well for many years until the Federal Government got involved in the late 1980s. The Feds discovered that a few streetwalkers had exaggerated their claims of professionalism and service and declared in the 1989 DIARRHEA that all streetwalkers must be licensed and regulated by the state in which they operate. The states got together and formulated a set of rules for streetwalkers they called USCRAP that outlined in minute detail how streetwalkers were to do business.
Well, we studied USCRAP, passed the tests and got our state certifications and went back to walking the streets like before. Unfortunately (more…)
I’ve always said that I think it’s insane that everyone has access to appraiser-provided data EXCEPT the appraisers who generated the appraisals in the first place. That needs to be fixed. So, we’re creating a system enabling you to seamlessly share comps among yourselves. You’ll have the same data that’s being used to judge you.
We’re confident it will be effective: a la mode users alone generate enough appraisals per day to cover the entire market with high quality subject and comp data. With just the existing TOTAL and Aurora users joining in, tens of millions of comps will be available, exactly like in Fannie’s system – in high-quality UAD format.
How do we know that? (more…)
The Mortgage Bankers Association tracks applications and publishes info weekly. There has been an incredible jump in applications by +49%! Huge! Means we’ll start getting busy in about a week or so. Click here for more info.
For appraisers who do FHA assignments, it’s likely that those assignments will be fewer now through January 25. On the 26th, the Mortgage Insurance Premium cost applying to FHA backed loans will drop significantly. This will allow more borrowers to qualify for FHA loans. With this change, FHA has allowed lenders to ‘drop’ (more…)
Network of State Appraisal Orgainzation’s letter to FHFA Director Watt Regarding Fannie Mae Collateral Underwriter (CU) Program3
For over the past couple of months, VaCAP has participated with 18 other State Appraiser Coalitions in drafting an unified response to Fannie Mae’s Collateral Underwriter Program. Their letter to FHFA Director Watt briefly outlines their concerns, offers recommended solutions, as well as asking for a meeting to discuss the issue for the benefit of all vested parties.
Please take a few minutes to peruse the letter below:
Dear Director Watt:
On behalf of the independent state professional appraiser organizations signing below, I invite your attention to concerns expressed by the majority of real estate appraisers regarding Fannie Mae’s announcement making their Collateral Underwriter (CU) program available to lenders and their third party affiliates (but not to appraisers). (more…)
I received a copy of Ken Harney’s recent CU article today via email. The article was sent from an old appraiser contact that remembered me from the fight that I was leading to boycott AMCs from 2009 to 2010. Ken Harney is undoubtedly the best friend an appraiser could ever have in the national media as he was the only syndicated columnist willing to cover the injustice of HVCC. He and I exchanged several emails during those days. I found no ground breaking news within his article. However, I was grateful for the fact that he continues to play the part of the old guard in his attempts to warn both consumers and real estate professionals about the latest government screw up that will rattle their world. The golden nugget that caught my eye with regard to CU was in fact located within the reader comment section below the article. The comment from Jared Michel best describes the coming CU fiasco and how it will affect appraisers who have never faced this type of situation. Here are Jared’s comments:
The latest ‘buzz word’ in our profession is an indication from Fannie Mae that as of Jan. 26, 2015, their Collateral Underwriter electronic review software (made available only to Lenders/AMC’s for 1004 and 1073 reports) will be able to compare your report info to other property reports and data narrowed down to a local CENSUS TRACT.
In my previous messages, I’ve asked a basic question:
When’s the last time you actually researched comparable sales or other property info based around local CENSUS TRACTS?
I would guess for the vast majority of (residential) appraisers you never have!
I would also bet that most appraisers never have seen (or even cared about!) (more…)
A few days ago, I watched the FNMA eLearning webinar “Introduction to CU” video showing how their new Collateral Underwriter will be implemented, starting on Jan. 26, 2015, applying to 1004 and 1073 Reports (initially).
You really should watch this also! CU applies to FANNIE MAE only; FreddieMac, VA, FHA, USDA are not involved at this time.
Click this link, and you’ll find the link to the video ½ way down on the left: https://www.fanniemae.com/singlefamily/collateral-underwriter
I captured a few screen shots of their presentation to help explain what will happen, and have added comments below:
Appraisers and report reviewers,
FannieMae issued an update to their Selling Guide on 12/16/14. It contains this pretty major change to their guidelines:
Adjustments to Comparable Sales
As a result of an analysis of Uniform Appraisal Dataset data specific to comparable adjustments, Fannie Mae has eliminated the 15% net and 25% gross adjustment guidelines and has provided clarification with respect to Fannie Mae’s expectations for the appraiser to analyze the market for competitive properties and provide appropriate market based adjustments without regard to limits on the size of the adjustments.
The Appraiser Qualifications Board of The Appraisal Foundation on Dec. 2 released a new exposure draft of proposed revisions to the 2015 Real Property Appraiser Qualification Criteria. Among the revisions is a requirement that all applicants for real property appraiser credentials have a background that does not call into question public trust.
To meet that requirement, applicants must provide state appraiser regulatory agencies with all information and documentation necessary for a jurisdiction to determine an applicant’s fitness for licensure. An applicant will not be eligible for an appraiser credential if they have been convicted of or pleaded guilty or nolo contendere to a crime that would call into question the applicant’s fitness for licensure.
As currently proposed, (more…)
A federal judge said he will not unseal files related to an alleged appraisal rigging scheme that Washington Mutual launched in an effort to favor mortgage lenders just before the 2008 market crash, Courthouse News Service reported Dec. 3.
The case involves a federal class action suit launched in 2008 in San Jose, California, by Felton Spears Jr. and Sidney Sholl who claimed that Washington Mutual, Lender’s Service Inc. and appraisal management firm First American eAppraiseIT colluded in 2006 to create inflated mortgage-loan appraisals that allowed the bank to sell aggregated security interests in the properties at inflated prices.
At Washington Mutual’s direction, eAppraiseIT and Lender’s Service hired former bank employees as appraisal business managers (more…)