VREAB to Discuss Hybrid Appraisals

VaCAP Board

VaCAP Board

Coalition of Appraisers in Virginia at Virginia Coalition of Appraiser Professionals
Coalition of individual appraisers working together to unite, promote and protect the collective interests of all appraisal professionals in Virginia; to promote needed changes in laws, rules, regulations, policies and standards affecting all appraisers in Virginia; to observe and report the actions of regulatory, legislative, oversight, and standards-setting entities of the Commonwealth.
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VREAB to Discuss Concerns Surrounding Hybrid Appraisals…concerns on the negative impact on the real estate market…

The Virginia Real Estate Appraisal Board Committee on Hybrid Appraisals will meet on Wednesday November 28th @1:00 PM. We ask that all appraisers attend and share your comments on these products. If you are unable to attend we ask that you submit your comments to the VREAB to be shared with the committee.

Concerns on if these products comply with:

  • 54.1-2011 which states any assistance by an unlicensed person must be directly supervised by a licensed appraiser.
  • 54.1-2009 Definition of an appraisal which states an appraisal is an opinion, analysis or conclusion relating to the nature, quality, value or utility of a specified interest in, or aspects of identified real estate or identified real property.
    • When an unlicensed person does the property inspection and determines the  condition, quality and utility of a property are they performing an appraisal?
    • Is the public being protected with an unlicensed person entering homes with no training, experience, or qualifications? Is the person performing the inspection on the Sex Offenders Registry? Just released from prison? Convicted child molester? Do they have the skills and training on what appraisers look for when observing the property?
    • Is the licensed appraiser completing the analysis geographically competent? Are they local or do they reside several states away? Have they ever been to the neighborhood? Been anywhere in Virginia? Are they familiar with each neighborhood nuisances?
    • With the licensing of AMCs, there are many appraisers that are employees of AMC’s throughout the country. Many hold a Virginia Real Estate Appraiser License. Are they the ones completing the appraisal reports? Do they have the proper geographic knowledge?

Ask borrowers and homeowners what they think of these products. Our response has not been positive. Real Estate Agents also have great concerns on the negative impact on the real estate market.

Do these products really save time and money as those promoting them claim? Where is the proof of this?

These products have a lot of unanswered questions around them. Please attend this meeting and share your comments and concerns with the committee. Let’s continue to protect the public!

We also wanted to share with you an article written by Ken Harney comparing an AVM to an actual appraiser. This is another great story in a line of pro-consumer articles written by Ken. Please take this article, and post it on all your social media accounts. Every consumer needs to understand the difference. See the article titled “The Nation’s Housing: Which is better at valuing your home – you or a computer program?”.

Image credit flickr - Véronique Debord-Lazaro
VaCAP Board

VaCAP Board

Coalition of individual appraisers working together to unite, promote and protect the collective interests of all appraisal professionals in Virginia; to promote needed changes in laws, rules, regulations, policies and standards affecting all appraisers in Virginia; to observe and report the actions of regulatory, legislative, oversight, and standards-setting entities of the Commonwealth.

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21 Responses

  1. Vincent R Simon on Facebook Vincent R Simon on Facebook says:

    Not to rain on your parade of convicts, molesters and bad people inspecting properties. My understanding the inspection is done by appraisers, Realtors with a license . In my research with a few companies, they asked if I was interested in the inspection process or report. I really hammered the issues of inspection and my answer was always an appraiser or Realtor. Yes I would have concern if it was jobob off the street. I do think they need to spend more time on this issue since more and more larger lenders are exploring and using Hybrids

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    • Koma says:

      If a different appraiser is doing the property observations then what’s the point? Sounds shady to me. I don’t know of any appraiser in my orbit that would waste their time taking pictures for chump change.

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    • Mike says:

      Vincent, i am not sure where you got your information from, but, there are many employment ads out there for property inspectors with no experience. Further, if appraisers are doing the inspection, where is the benefit of splitting the process? Oh and agents think every home is a 2 story, just look in MLS, so there are issues with agents completing these . Lets not forget about the conflict of interest with agents providing the property inspections. There are simply too many unknowns around these products and many shades of gray with them in State Statutes and USPAP.

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      • EJ says:

        It appears that all the homes in my area are in “excellent” condition as per MLS/realtor. Then if you ever come in below contract the realtors complain that the comps are not in as good of condition as the subject. So, what’s better than excellent? I tell them, well, the MLS says their all excellent and that’s what I go by.

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      • Vincent R Simon on Facebook Vincent R Simon on Facebook says:

        Have you applied ? First prerequisite is a license . I’ve done some research

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    • Bill Johnson says:

      Considering the signing appraiser gets no name or license from the person who did the inspection (you say, they say, they are appraisers or realtors), why after all of the false promises to the appraisal profession over the past 10 years (HVCC, Dodd Frank, C&R fees, UAD, PIWs, etc.), would anyone blindly accept their word about the inspector, sign the report, and take the same liability for $50 (Hybrid), versus say a VA assignment ($600)?

      Seek the truth.

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      • Vincent R Simon on Facebook Vincent R Simon on Facebook says:

        actually the names and license is noted on the report. I inquired and researched a few companies when this came out. So what your saying is false. Check out some companies and get a sample report that they use to explain the process . When these reports started coming out , I had the same questions that keep popping up on this feed . I did research and tried to find out the answers of the legality, who’s using these reports and the whole process. Well I found out numerous large lenders use these , more lenders are interested, and Fannie approved them . Why else are we talking about this today if it’s not affecting appraisers around the country. $400 or $125. All I have to say now is I think they are coming to stay and will soon be an option for more types of loans . As I found out recently is they are for good credit, low LTV and used in house not sold in batch to secondary . So I’m at the end of my career and semi retired but I really feel for the younger appraisers. (Residential).

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        • Bill Johnson says:

          The robo call I just received Vincent (we can lower your credit card percentage), the same call I’ve received hundreds of times over the years, as they always do, they used a one time unique local number to hide their true identify, and true intentions (spoofing). In this industry, even with a random name and license #, one should never be surprised as to the lengths many individuals and companies go through to violate public trust while making a dollar (or billions), off the appraisers back.

          Seek the truth.

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          • Baggins Baggins says:

            Still fighting robo callers & spoofing? You know, I don’t really have that problem on my made in the USA analog landline Bell phone and a simple piece of owned, non leased, analog blocking technology… ‘SENTRY V1.0 Dual Mode Call Blocker’, only $39 dollars on Amazon. 10,000 number capacity. Every time the phone rings once and then hangs up, we say, dang, love that call blocker. Nomorobo, pay to block lists, real time integrated blockers, all that is silly compared to simple analog tech. If they abuse even once, just press block, it’s permanent. If they try from a new number, simply block that too. It just seems they’re using one time numbers, they really have a few hundred but it’s finite. Block enough of them, the problem simply goes away. Just split the line with a t, one side phone, other side blocker, never use whitelist, and only use the reject button after you hang up. A charming piece of modern technology. Simple tech is good tech.

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      • Vincent R Simon on Facebook Vincent R Simon on Facebook says:

        I am pleased to announce that the new (blahhbusiness removed) platform has a planned release date of January 1, 2019.

        The new platform, along with our new forms, will have a different appearance but will follow the same basic process as before. And the completed reports will look very similar to how they appear today.

        Other Beneficial Enhancements:
        UAD Formatting – we have added UAD formatting to certain fields in an effort to make the appearance uniform to clients, processors, bankers, etc. and to make inputting and changing data simpler for our appraisers already using UAD formatting when completing traditional appraisals.
        Keystroke Data Source – we have incorporated a data source that will lessen the number of keystrokes for appraisers when entering comparable information.

        How it Works:
        When an appraiser begins entering a comparable address, if data of the sale being entered exists within our platform (could be assessor data or MLS data), the appraiser has the option of confirming and using said data instead of typing all data manually.

        This enhancement is strictly to make entering data faster and easier to the appraiser. It should not be construed in any way of suggesting comps and can be easily overridden by ignoring the prompt and continuing to enter in the comparable address.

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        • Baggins Baggins says:

          Reconcile with this… Pepsi challenge.

          A4-2.1-02: Property Inspection Vendor Management and Oversight (11/12/2014)

          “Property inspection vendor management and oversight;

          The servicer must…

          Not enter into or participate in any arrangement with property inspection vendors for which the servicer receives a direct benefit for Fannie Mae mortgage loans or acquired properties that is not passed through to Fannie Mae, or that is influenced by an actual or perceived conflict of interest (particularly those arrangements with affiliates).

          Use the most cost-effective and efficient vendors for property inspections related to any Fannie Mae mortgage loans or acquired properties without regard to arrangements that could provide a financial benefit directly to servicers.”

          To the Preservation Matrix Guide with them! Betcha a Dr Pepper well over half of all appraisers have never read this and far fewer amc’s have. If third party inspectors for hybrids and realty bpo inspectors even know this exist, it would be a true miracle. If you do reo, you should know this for sure though. Applicable to the hybrid argument, I think, magic 8 ball says, possibly, yes.

          Property Preservation Matrix and Reference Guide August 2018

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          • Baggins Baggins says:

            To be fair, the first link is perhaps too clever, the source is here;

            D2-2-10: Requirements for Performing Property Inspections (11/14/2018)

            But the primary point remains the same and one can see how these lines between what can be offered for mortgage lending vs default management will become cloudy and indistinguishable, despite these written guidance points, when amc’s offer hybrids.

            Now correct me if I’m wrong because not much reo work in CO for many years now, but haven’t a few major amc’s captured the majority of reo appraisal work and two part question, are they using hybrid service in lieu of traditional full reo inspections? If so, smoking gun in your lap, there is the guidance showing that should not be happening.

            Do you think amc’s care about the rules? That’s why I took it upon myself to personally rewrite essential language in FIRREA which had previously been formed prior to the formation of the amc industry as we currently know it. attached.

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    • Dawn Aubrey on Facebook Dawn Aubrey on Facebook says:

      Real estate agents are not bound by USPAP. Nor are they familiar with appraisal requirements, much less UAD definitions of quality and condition.

      Since agents always look on the bright side with a view of getting the maximal sales price for their clients, agents are inherently biased. Even if they are not representing the buyer or seller in a transaction, they are not **appraisers**.

      I understand banks are looking for short cuts. But short cuts are what cause economic crashes. Appraisers exist to protect the public AND the lenders. You cannot short cut what appraisers do without endangering the public, pure and simple.

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  2. Advocate says:

    Vincent R Simon is not listed as an appraiser on the ASC Registry.. He must be one of those AMC trolls. It is truly pathetic he has no clue what it means to be a licensed professional.

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    • Baggins Baggins says:

      No. Stop with that please. Took me all of 2 minutes to find him, a fellow Colorado appraiser. And a commendable fellow at that, actually is doing some challenging time consuming research on the matter.

      Bill, don’t miss this one on waivers and situational examples when they are or are not appropriate for a lender to use. Hot off the press.

      It reads to me like a lender should only offer a PIW if they would otherwise be willing to lend on that property without knowing anything about the property value. In layman’s terms I think that means if they would not qualify for a signatory cash loan of the same amount without utilizing real estate collateral, a waiver should not be extended.

      Frequently Asked Questions on the Appraisal Regulations and the Interagency Appraisal and Evaluation Guidelines

      Vincent, you’ve hurt my feelings with all this talk of auto text and hybrids… But seriously, still seeking answers on total volume of hybrids yearly as well as answers if they’re dropped into the CU database or not. Other essential questions include standard consumer fee’s, which ones use realty inspection vs the other random inspectors, who reviews them, how the value is qualified in the end, what the limitations are, etc. What ever happened to a good old PIR if the lender is qualifying based primarily on ability to pay and not the home value? Insight why they’d go through all this trouble with hybrids instead?

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  3. Taunya Richards on Facebook Taunya Richards on Facebook says:

    I do think it’s on the appraiser to understand who is doing these inspections. I know the company I’ve done a few for they are insurance inspectors, they are trained and they are background checked. It is on the appraiser to determine if the information received is reliable. And any appraiser who just takes a third party saying it is a Q4 or a C3 is not doing their job. It is no different than what we do with comparables. We rely on the agents data to be correct. We make assumptions. We determine the quality and condition.

    These are not going away. The lenders will just petition they be done by agents and others they train who won’t be held to USPAP.

    A VA appraisal holds a lot more liability and they require more work.

    What I don’t understand is that FNMA will allow third party inspector /desktops but won’t allow a supervisor to send a trainee to do the inspection.

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    • Baggins Baggins says:

      That’s changed now. You can use a runner… Be careful what you wish for, wish granted.

      How do you think the big ramp up for hybrids was possible, a magic wand? Keep up.

      Selling Guide Announcement SEL-2017-01

      I disagree with the premise we can determine if the information is reliable, without first understanding and making basic measurements and judgments regarding the qualifications of the person inspecting. Updated FNMA forms should have specific entries for who inspected, when, where, specific names, if any third party services were used, when where, specific names, etc. I agree with Vincent though, we don’t need to be all alarmist about bad people doing it, but the focus should remain on is this information even reliable. Yet again, referring to the clear val what is a hybrid article sequence, Mr Ford clearly discovered duplicated information and fraud, also in-turn uncovering the fact that state regulatory bodies can not figure out who actually regulates interstate hybrid inspection style appraisal work. Don’t miss this one.

      What IS a “ClearVal Appraisal”?

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      • Taunya Richards on Facebook Taunya Richards on Facebook says:

        Thank you for the information. I was talking about trainees (like me) who have been supervised and licensed and are capable of completing a property inspection and neighborhood market analysis without the supervisor.

        It was more of a rhetorical question/statement. That if an insurance person was good enough to gather data in the field for an appraiser, a licensed trainee should be good enough.

        I am still on the fence about hybrids. I know the reason the industry wants them, especially HELOCs. Lending needs more than two options: a full analysis or none at all. It’s just trying to find what is going to be the best for the public.

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  4. Johnny Q says:

    Agents doing the inspection? Hopefully not the selling agents. Realtors are professionals but ultimately are marketeers and may just describe everything as either needing a little TLC or wonderful with too many features to mention.

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VREAB to Discuss Hybrid Appraisals

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