Category: Collateral Underwriter

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Collateral Underwriter, What’s Under the Hood?

Collateral Underwriter – Garbage In, Garbage Out (GIGO) FNMA has a fascination for first patenting garbage, & then implementing it as policy! FNMA simply LIED! Collateral Underwriter IS an automated ‘appraisal review’ despite disclaimers. It was never intended as anything else. Read the patent application below. Before I get into the details, I want to ask each reader to forward this to every appraiser you know. This concerns FNMA’s patent of the seriously flawed techniques and underlying support for their Collateral Underwriter (CU) Risk Rating “System”. It’s time for appraisers to take action against the unreliable system which is unfairly...

Urban or Suburban 8

Urban… or Suburban?

Difference between Urban and Suburban locations Appraisers, Last week, I asked your input regarding why in many cases appraisers check suburban in the Neighborhood Characteristics when often the subject’s location is actually an Urban area (at least from the definitions perspective below). The example I used was from an actual report. The subject property is located within a city of 90,000 population. It has typical urban services, including police and fire protection, utility water deliver and sewer service. It is surrounded by competing subdivisions, nearby shopping, colleges, city administrative offices and business buildings. It is also close to Interstate 5,...

Reality check for appraisers 6

A Reality Check for Appraisers

I am not selling road-apples to my fellow appraisers… Appraisers as a group DO NOT PAY ATTENTION to what is going on within the profession OR seemingly unrelated areas that affect the profession. FNMA & Freddie ALREADY HAVE authority to fund loans without appraisals. This is in anticipation of an appraiser shortage. AI has appointed itself the ‘voice of all appraisers’ in America. They actually made the statement at the California TAF meeting in June that they speak for all appraisers interests AND that they put those interests of the entire profession above their own. (source-live meeting; TAF/ASB Redondo Beach...

Adjustment Values, Frequency & Dollar Amount 18

Adjustment Values, Frequency & Dollar Amount

Ever wondered what other appraisers are doing with adjustment values? Appraisers, Have you ever wondered what other appraisers are doing with adjustments in their reports? CoreLogic has done research over the past 3 years, using 1.3 MILLION+ reports, and has produced the graph attached here.  You may want to print this for reference. This graph shows the percentage of time a certain feature is adjusted, and the average dollar amount of the adjustment for each of those. It’s rather interesting. The highest amount of adjustment, approximately $14,000, is for the Quality Rating. Not really surprising as to the amount, but the percentage...

Dreaded Fannie Mae Certified Letter Regarding Condition Ratings - Imagecredit Flickr - Mehta12 32

Dreaded FNMA Letter RE Condition Ratings

Certified Letter From Fannie Mae Regarding Condition Ratings And then it happens, the moment we all know is coming – the dreaded certified letter from Fannie Mae. My door bell rings and the mailman is standing on my porch with pen in hand.  Now don’t get me wrong, we have all been warned. They have the super computer comparing all of us and if you are the outlier you’re getting notified!  If a majority of Appraisers give a specific house a certain rating and you disagree, you must be wrong – BOOM – letter.  I assume this is the case as I...

A Contrary Response to The Future of Valuation - Imagecredit Flickr - Simon Cunningham 6

A Contrary Response to The Future of Valuation

Recently an article appeared in WorkingRE about the Future of Valuation. The author is the President of a large and highly respected Appraiser  Peer and Educational Organization.  My own contrary response was either too lengthy, or deemed too critical of a big advertiser for publication in WorkingRE. I thank the hosts of this blog for granting the space. My concern with the author’s views starts with the description of our Real Estate Appraisal profession as ‘valuation.’ The concern is more than mere quibbling over semantics. Valuation is the phrase preferred by the Business Valuation community. They have long been dominated...

Free Enterprise an Appraisal Myth 40

Free Enterprise an Appraisal Myth?

Is THAT free enterprise? I’m surprised anyone in the business today sees any minimum pricing proposal as being anti-free enterprise. Contrary to popular belief we have not had free enterprise in the GSE appraisal process since HVCC first reared its ugly head. AMCs ‘telling’ us to pick a number from $250 to $350, or that ‘THEY pay’ $325 per 1004 is NOT free enterprise. I’m an old timer (1986) that was brought up on what used to be AIREA (now the AI) & SREA (now gone) positions that free enterprise and the Sherman Anti-Trust Act prohibited us from ‘even discussing’...

The Realities of Regression - Imagecredit Flickr - Walfer X 6

The Realities of Regression

The use of Fannie Mae’s Collateral Underwriter (CU) tool by lenders has created some “hot topics” for appraisers. Durbin is encouraged by the use of CU and thinks it will be a good thing for the appraisal profession. One of these topics is the discussion around how to clearly show the methodology the appraiser used to arrive at the adjustment values. In this presentation Durbin proposes the use of “Regression Analysis” (RA) as a solution to this problem.
Durbin lamented there is a perception that appraisers make subjective, anecdotal, arbitrary, and unscientific adjustments. Now that CU will be looking at adjustments…

AMC's “My Way or the Highway” Attitude 47

AMC’s “My Way or the Highway” Attitude

Apparent appraiser abuse by AMC’s… As Chairman of the American Guild of Appraisers (AGA) National Appraiser Peer Review Committee, I have had the opportunity to see and hear directly about many cases involving alleged, as well as apparent appraiser abuse by AMC’s. These cases ranged geographically from California, Arizona, Michigan, Illinois, Florida, North Carolina, Louisiana, New Jersey, Virginia, New York, Maryland, and District of Columbia. As a QC consultant to a smaller appraiser owned AMC, I have also seen low fee spreadsheets from a variety of lenders that had 90% listed at the SAME APPRAISER fees: $495.00 (which INCLUDED the AMC...

Enhancements to Collateral Underwriter (CU) Are Coming - Imagecredit Flickr - Alan Levine 4

CU “Enhancements” Are Coming

CU risk score, flags and messages Appraisers, In about 6 weeks, Fannie Mae will make available to LENDERS only, and probably by default indirectly, to their AMC agents, enhancements or improvements (in their opinion) to the Collateral Underwriter electronic review process. None of the Collateral Underwriter background info,  especially about Fannie Mae’s ‘additional comps’ selection process, is shared directly with appraisers.  But when these are returned to appraisers in the form of a Quality Assurance request from the lender or AMC, appraisers are expected to drop everything and immediately review those for applicability in the appraisal report. Pay attention to the...

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