Liability Risks of Hybrid Appraisals
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“Hybrid Appraisals” – Speaking about the Liability Risks to Appraisers and Others at The Appraisal Foundation’s Joint Council Meeting
“Hybrid appraisal” liability? I am looking forward to speaking about the subject at a joint meeting of The Appraisal Foundation’s two advisory councils — The Appraisal Foundation Advisory Council (composed of 60 non-profits and government agencies) and the Industry Advisory Council (composed of 35 business entities with interests in valuation). “Hybrid appraisals” (which provide a desktop value opinion from a licensed/certified appraiser relying on a physical inspection of the property by a third party) are being marketed by AMCs and technology companies as a big part of the future of residential real estate valuation. Examples of these products include Accurate Group’s ValueNet and HouseCanary’s AgileAppraisal.
What liability risks do we see?
Here’s an obvious hint about where the most risk awaits: use of hybrids for originating loans, as opposed to valuing REOs or collateral for existing loans. Appraisers / AMCs / inspectors providing hybrids for loan origination are the canaries in the coal mine. Of course, I’ll be addressing a number other issues too.
The joint TAFAC and IAC meeting takes place on June 7 in Arlington, VA. Here is a link to the event.