…and the issue is what? C2 C3 are artificial UAD absolute ratings based on canned criteria. They often fail to reflect actual market perceptions.

It is the appraiser’s job to reflect and adjust to actual market perceptions, regardless of FNMA or Freddie’s phony UAD rating system.

Respectfully, (following is not directed at you)

Its unfortunate lazy appraisers (too lazy to explain differences as well as adjustments as they are required to do) adopt this misleading jargon rather than explaining actual market-perceived differences and adjustments that go along with the magical UAD ratings.

It is perfectly acceptable to have adjustments inside the same categorical rating (C# etc). It’s more unusual to see a -0- between a so-called C3 and C2 but it’s certainly plausible. The C2 could be perceived in the market as very good condition (& quality) whereas the comparable sale technically UAD rated lower could be in superior condition as perceived by the market (excellent condition-though much older age & better original quality or even design appeal).

You simply said they were C2 and C3 without indicating condition, quality or both.

I just saw an appraisal where the subject is a C2 and all the comps are C-3, But the C3s are all adjusted from $0 to $25,000 on a $375,000 sales price.

STIP! The borrower is not appropriately qualified and therefore we need the appraiser to provide additional reporting to safeguard our lending position. Ooops! That message was not intended for the appraiser. The message we intended to send the appraiser is that the appraisal report is deficient and we demand these items be corrected or payment for services will be with held and complaints will be filed.

If appraisers feel like they just can’t do the job right no matter how much effort they invest into a quality report, this is most often the case why. Unless they’re using outsourced services, then it’s probably the lack of attention to detail in the first place which is raising these auto review flags. Haggar is the king of litigation specialty, and the posters here should have been nicer to him when he submitted articles in the past.

Sure I could have done that. Then she would have turned right back around, applied pressure again to the non licensed panel manager (which is how she got through in the first place), and I would have lost the 650 flat rate client I was enjoying at the time in the middle of the rush. This is why I continue to advocate for and float the suggestion that only actively currently licensed appraisers are qualified to manage day to day senior administrative activities of appraisal panels.They are literally the only ones an appraiser can hold accountable, which is why lenders are adverse to hiring them for that position.

Currently I’m taking a slight haircut on every order because the panel manager is an actual appraiser.  He’s there when I need him with qualified advisement, a rare benefit which is increasingly difficult to substitute. Everyone and their mother seems to be an appraisal panel manager these days. Good luck finding one whom understands the regulatory structure in a similar capacity as a licensed individual.

My new job venture is to become a doctoral and educational qualifications manager. Surely I could provide that service for a much lower cost. One presumes that if non qualified persons can manage qualified persons in real estate appraisal, the same would be true in other licensing based industries right?

Baggs, should have turned HER into the state. She performed an appraisal review of your work AND a report-while claiming state regulatory authority? IF she really did work for state, shes not the kind of person that should. If she didn’t then misrepresenting herself as a government official is a no no in most states.

One time a mother of a borrower injected herself into the process to challenge my value. Oh boy, the dude’s mother in law is on the phone telling me how she’s a senior appraiser who handles litigation work for my state and works with the regulatory office. She proceeded to pick apart the appraisal, being apparently unaware of the limitations to UAD coding, and made all these demands. I told her in the final revised report to take it up with FNMA and there was nothing I could do about the UAD coding data entry restrictions. Wonders never cease in this industry.

OK to be fair I watched the entire video.

PLEASE use this method! I need the review work AND my state would likely LOVE to nail everyone that uses this garbage. I can’t think of a faster way to cut appraiser competition down from 75,000 appraisers nationally to whatever population chooses NOT to use this system.

Don’t forget the certification disclosure and requirement to name the hundreds of appraisers (peers) whose adjustments you relied on to develop (and support) your own specific adjustments (which are an AVERAGE of PEER adjustments)…unknown if those are the same peers that populated the fatally flawed FNMA CU database but since it is corelamode offering this my guess is it is at least partially the same database.

JUST FOR FUN WATCH the video all the way through to the 1004MC auto filler and note grid 4th to 6th month activity (42) dropping down to 4.5 and then being marked stable! There is SO much wrong with this it is hard to decide where to start.

My state expects that your report can be replicated from your work file AND that all the conclusions and elements be supported by the data in the work file.

I suspect workfile requirements would not find an explanation that the adjustment is based on Corelamodes new analytics program that MAY or may not have used regression, paired sales or voodoo for any specific adjustment to be adequate.

In fairness though the retired idiot that used to be the former Head of Enforcement in my state also wrote that asking two local brokers (named with telephone numbers) their cited opinions of current market trends in a specific sub market, was inappropriate procedure and technique…so what they find acceptable or not is anybody’s guess!

Your expectations of your state regulators should not be overly high. Almost NONE are actual peers; some aren’t even appraisers, and many like my state’s morons still think FNMA website published ‘guidelines’ are the same as USPAP requirements!

My best guess is that the number of state regulators that are actual appraisers and that have also done a UAD report (ever) is an extremely small population.

Josephine Richard Hagar offers a class through OREP WorkingRE (I think website is http://www.orep/education or similar).

Anyway he has a great class  called “avoiding FNMA Fails”. As he says in advance, it may anger you but don’t shoot the messenger. His task in class is only toward teaching those who continue to do GSE work in surviving it.

Eye opening and educational. Price is reasonable too. Can take it as a package deal for around $269 or $289 unless you have further discounts.

This is not to say others classes are not as good. I haven’t seen others classes. Just Hagars.

Bill, I read the original FNMA patent application for CU prior to it’s implementation in January 2015. The system was designed by seven folks that did not have one active appraiser license among them thugh it appeared three had expired less than certified licenses previously.

When  CU was first foisted on the lending and appraising world FNMA made absolute denials that the system was intended to do anything other than rate collateral risk. A 1-4 system was established where a 1 had the lowest suitability risk and 5 had the greatest risk.

As originally used, scores over 3.5 were treated as “dead stops” by lenders, though FNMA claimed they would still accept a 4 with adequate explanation. When no lender recourse programs were established for scores of 2.5 or below, lender pressure on appraisers was greatly increased to make sure the score were kep low. This could be done by modifying data to include  one or more of the FNMA ‘suggested’ model com parables…though those com parables may have been much larger or smaller or even as old as two years prior to the effective date. Modifying certain adjustments to ‘fit’ within the so called (but non existent) “peer range” of market adjustments could also produce a lower score. ( I say non existent peer adjustments because FNMA also admitted in February 2015 that adjustments up to then had been driven by their own guidelines rather than market perceptions (See FNMA LL 02-2015).

In completing a recent course by Richard Hagar on avoiding FNMA Fails, I learned many new iterations of FNMA have since been developed. Iterations with greatly expanded uses and measurable factors…including appraiser performance.

Previously unknown, FNMA loans now have a 100% appraisal review rate. That’s right. Virtually ALL FNMA appraisals undergo Quality Control reviews. Most are fully automated ‘reviews’ with those considered grossly out of range referred for human review or at least screening. The reviewer has all prior appraisals performed for loans on that property (we believe since 2011 when the database was purportedly originated). They also have access to all the appraisals or at least scores for all the appraisals done by the appraiser. (From a former insider, FNMA Reviewer). While the thrust is to ‘make the loan’ for reviews conducted proximate to the loan being processed, post purchase audit reviews take on a different slant and focus altogether. THESE are the reviews that may result in forced buy backs.

In the newer, updated CU system, if 10 other appraisers have rated a property ‘C4’ and you are at C3 (perhaps due to a recent renovation) the computer will see you as the outlier. There are also cases where the same comp has been used multiple times by the same appraiser and other people in his or her office and may be incorrectly listed as C2. You come along and competently analyze and rate it as C3. Again, YOU are the outlier and may get the letter.

THIS is why it is absolutely critical to respond to every single one of these letters. Whether generated by computer or not, you need to push back and go on record as objecting to the alleged ‘deficiencies’ being attributed to your work.

FNMA shouldn’t be sending such letters in the first place, without a human review, but regulators or conservators sadly have been notoriously lax when it comes to retiring GSEs act in either a professional OR competent manner where appraisals are concerned.

It’s not rocket science but the UAD condition ratings exhibit parses it down quite a bit. C1 only for new. C2 only for like new recently finished or absolutely completely renovated. C3 for all reasonable updates. C4 in a logical relationship for dated units which track at notably lower pricing. C5 rarely used since lenders defied FNMA and said they will not loan on C5’s and units must have C4 to get insurability status. But you can tag in a C5 for a hud reo ripped down but still technically insurable. C6 if they have condition issues. Despite the guidance which says C6 if any subject to, it’s better to avoid auto review firing to just give it the hypothetical as if repaired C rating if you use the subject to box. Use the reports within 1 mile auto pop up feature when you’re creating a template. Then take the time to print the relevant 10 pages or so from previous reports within a mile, within 2 or 3 years, and track and somewhat mirror your adjustments and ratings. Appraisers get identified as being inconsistent if they do not refer to previous reports of similar properties within a year or so, applying notably varied adjustments. The purpose of the Collateral Underwriter remains the same although the premise will never stop being absurd, to substitute data comparisons through massive databases among the peer model and then identify who’s juggling numbers to make deals work or just being plainly inconsistent. It’s not an effective approach because the tech programmers who write and run these programs no matter how hard they try, will never have the same logical perspective regarding limited scope appraisal analysis and comp selection as a human appraiser with experience. Micro vs macro. Macro on the fnma side, micro on the appraisers side. Limited selections. Congruent approaches. Logical C ratings for matching housing per price relationships. Easy.

Appraisers are in for a cold surprise if they trust programs like data genie and typing master or whatever to fill the forms and relevant data entry for them. If they’re not typing unique informative relevant language they might as well let someone else sign the reports as well. What is the benefit of proof reading anothers non qualified work again? I’ve always felt typing services were more like paying for a trainee to complete the report for you. The relevant question is; who’s typing it and what is their accreditation? The answer is more simple than that, plagiarism. Re applying text from other appraisers reports they submit as samples, always tricking the new subscriber into thinking the language is written by a qualified person. However, details matter. I don’t communicate with robots so if I ever get that letter, I’ll ignore it until a human becomes involved.

Like any traditional genie, it involves finding a brass lamp and rubbing it. A computer or cyber-lanp will suffice.

IF you have rubbed the lamp properly, a cloud of blue smoke will appear (magically!)

All that remains is to simply contact your client and blow the blue smoke up their arse!

So, if I use this product then get called in front of my state board and they start asking me a ton of questions about my 1004mc data which filters into the rest of my report. Is someone from A la Mode going to be there with me? lol This is like a Desktop where my signature relies on some unknown to provide me with information I can’t verify (don’t do them anyway). Also, where are they getting the info when the local MLS can not obtain most of it and the county, by law, does not give it out to the public? And if they say our appraisals well I’ll say we have a lot of cash sales with no appraisals being completed. So, again where is the information coming from?

NO THANKS! My signature is worth more to me than saving <15 mins of my time.

I responded with a letter and called. They basically said the computer sends out the letters. I can’t believe they are still doing that! I recommend doing your best work and keep a good file. Fannie doesn’t even use appraisals on their (our since we own them) REO properties in my state so I would say we know where this is going.

Can I ask how did the situation turn out?

My take is exactly like yours. Most properties ARE C3 condition based on their definition!!! Not sure what I should do differently.

If I should go take some classes or deal with them some how, please advise.

Did you hear the one about FNMA selling notes to hedge funds, without the borrowers being aware?

What about FNMA giving steep discounts to investor purchasers who evict existing mortgagee residents, but the residents are denied principal reductions?

So don’t forget that FNMA although federally chartered, is still a private corporation. If they could have successfully fulfilled their charter, they would have a very long time ago.  Be a smart consumer, and get a mortgage loan held in house at credit union instead. FNMA sure does cast a lot of judgements on hard working appraisers, despite the fact that FNMA should have been shut down a long time ago. Get the government out of lending and watch the value of valuation professionals boost up dramatically. People care about quality valuation services, when they’re lending their own money.

You tell me if FNMA is following their charter, given the above disclosures from the two linked articles…

so, does this program actually work, or is it another hyped up piece of junk like Smart Address? always love it when you Alamode guys put out something new that doesnt have all the bugs worked out, and we are stuck many months after its release hearing nothing but excuses about why it isnt fixed yet.

1:23 to 2:33 sums it up for residential appraisers quite well.  Thank you Larry The Liquidator for your summary of the profession.

No one will care until it hits the lenders in the face (wallets). The first loan that is approved without a physical appraisal is the end of our economy! Count down til retirement!