In a million dollar mortgage fraud scheme Appraisers, An appraiser in NY state has been convicted of a FELONY for incorrectly reporting the last sale date of a subject property in an appraisal report, which was used to defraud a lender in a million dollar mortgage fraud scheme. You can read the full story here. Per the info in the story: “Essig is the owner and operator of Essig Appraisals, an appraisal company that specialized in residential appraisals. According to statements made in Court today during Essig’s plea, Essig admitted that he made a false entry in an appraisal that...
GLA in your appraisal reports being questioned Appraisers, today (4/30/15), Freddie Mac released a document showing Warning and Fatal codes that will trigger if certain items are found in your reports sent to Freddie Mac through the Uniform Collateral Data Portal (UCDP), as of June 30, 2015. In 25 pages of codes, only 4 are ‘fatal’ and those are for items you should not be overlooking. See the PDF below and take a moment to look over the document. The very first ‘warning’ code is this one, which has two variations: FRE1001 The gross living area for the subject property ([GLA] sf)...
It is merely a SALE… Appraisers, Something’s been gnawing at my craw ever since January when FNMA’s wonderful Collateral Underwriter (CU) was unleashed to the world. And before that, when FNMA’s Appraiser Quality Monitoring (AQM) process was introduced to judge the work of appraisers. No one else has written about this. No one has even mentioned it. So I will: It has to do with the word “Comp” which is used liberally by Fannie Mae (FNMA). What exactly is a “Comp?” In FNMA’s world, it’s any property that they obtain, either by their vast AVM process which examines millions of...
Thank you Wall Street, your mothers must be very proud of you! I’m not sure when it happened, but sometime in my lifetime the family home stopped being where you chose to live to raise your family and put down roots and became an investment asset. It seems this transformation began when investment bankers on Wall Street first realized residential mortgage lending represented a potential source of huge profits. Prior to the Great Depression, a typical mortgage loan was for 50% of the cost of a home, was interest only, was for 5 years with a balloon payment due at...
Last Fall I had the pleasure of attending the annual conference presented by the Seattle Chapter of the Appraisal Institute. I was able to sit in on some interesting educational sessions. With all the conversation in industry surrounding CU and other initiatives directly impacting appraisers, I felt highlights from the educational sessions would be beneficial. The following information is from a presentation by Clark Dickson with HomeStreet Bank called, “Appraising for Lenders in Today’s World.” Mr. Dickson’s presentation was about appraisal quality and what it takes to have your appraisal be acceptable in today’s lending environment. He said that everything...
I Did Not Quit when HVCC, UAD and CU Came Along. I Do Not Quit, Not Ever! I do not quit. Not ever. I have a different perspective based on lifelong lessons from my father. I did not quit when a lost helmet in the last play of the season made it painful to block during high school football. That effort got me my school letter despite being 3 quarters short. It was worth the headache. I did not quit Boot Camp in 1969 when at 129 pounds and six feet, very few thought I’d make it. To this day I...
I am quite familiar with the reasoning for providing confirmation of each section and detail within the original report… It appears that we, as an industry, have finally reached that all time high of stupidity in action. I was recently instructed by an appraisal management company to provide additional MLS sales on a grid to demonstrate market support for my opinion of value because I agreed with the origination appraisal. Had this been something other than a typical residential subdivision where the appraisal used sales from the same development, perhaps I would understand this requirement. Still, one wonders at what...
Training admits that CU use of CENSUS BLOCK GROUPS Appraisers, FNMA has released a new training video that helps lenders understand how to PROPERLY use Collateral Underwriter, which in some cases has not been happening since Jan. 26, 2015. By reviewing this info, you can learn how to write reports that pass the CU evaluations, and make your reports more complete and accurate. But keep reading. One thing I find interesting is CU assigns a unique ‘appraiser number’ for every appraiser who has reports submitted by Lenders to the CU. They don’t just use the appraiser’s license number by itself. Secondly, this...
Whether you believe Fannie Mae’s comprehensive rollout of Collateral Underwriter will finally weed out the lazy form-fillers or it will end up euthanizing the aging residential leg of the profession once and for all, is not the subject of this article. There are plenty of blogs, articles, and seminars that are wrestling with the efficacy of CU and its long-term impact. To be sure, the profession has entered the new age of big data. Residential appraisers will need to navigate regression analysis, heat maps, trend lines, oblique aerial images, and especially how to tie it all together into something meaningful. From...
I recently received an AMC update and reminder about the need for and why actual comparable photos are necessary. My reply: Original Comparable Photographs: Scope of Work Point 3: Inspection of the comparable sales from at least the street. This requirement does not tie the appraiser to a specific time for that inspection. Geographical competence would have the appraiser in the area of the comparables many times, and depending on the appraiser’s experience, for many years. Taking a comparable photo a month, six months, a year or more after the sale, does not represent the sale’s condition at the time...
