Class Valuation Maximizing ROV Conversion Rates
Recently, Class Valuation took to social media to boast about their Reconsideration of Value’s process (ROVs), claiming higher conversion rates and urging clients to choose them for a confident closing. Any company that is touting they have the highest ROV conversion rates should raise some red flags. The process of ROVs is meant to be a last resort when there are legitimate concerns or discrepancies in an appraisal report. It should not be used as a tool to manipulate the original report or influence the appraiser’s findings. So, the question begs: what conversations are being had behind the scenes to achieve such high conversion rates? Are appraisers being pressured to change their reports to meet the needs of the lender or other parties involved?
And let’s not forget about the appraisers themselves. What kind of appraisers are being awarded Class Valuation’s “proposals” on a regular basis? It is not uncommon for certain appraisers to consistently receive work from a specific appraisal management company. However, if these appraisers require a significant number of ROVs to clarify their original reports, it raises concerns about their competency and the quality of their work. It also raises the question of why they continue to be awarded work when it requires so much additional effort to clarify their reports.
It is also worth considering if certain appraisers are being awarded more work due to their willingness to comply with Class Valuation’s requests, and if this compromises the integrity of their appraisals. Are they only giving work to appraisers who are willing to play along and inflate the value of properties? Is there a pattern of awarding work to appraisers who may not have the necessary skills or experience to produce accurate reports? Appraisers should be chosen based on their qualifications and expertise, not on their willingness to comply with the demands of an appraisal management company.
It’s truly mind-boggling that a company would brag about their higher ROV conversion rates for the ROV process as if it’s some kind of badge of honor. At least Class Valuation is honest about their priorities – money over accuracy. So next time you’re in the market for a wildly overpriced property, just remember to thank Class Valuation for their contribution. After all, who needs integrity when you can have higher conversion rates?
Tired of ROVs derailing your loan closings?
Most AMCs just pass them on to appraisers like a hot potato. But at Class Valuation, we do things differently.
Here’s why lenders choose Class for ROVs:
- Meaningful discussions: Our experienced team talks to appraisers, not just at them.
- Nationwide competency: Acquisitions across the US ensure local expertise.
- Higher conversion rates: More ROVs resolved, more loans closed.
Don’t let ROVs hold you back. Choose Class and close with confidence.
Reach out to sales@classvaluation.com or call 248.955.9580 to learn more.
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When we deliver a “short” appraisal, you can bet it is after great deliberation. ROV’s are typically DOA as we have already gone above and beyond normal course of business. The ROV process should still help close the deal though, just at a new sales price.
What it means: ROV?
Reconsideration of value. When the appraisal comes in below/above either contract price or the value the owner believes the property is worth,
Don’t forget. Class Valuation also controls 30% of their volume with their own staff appraisers.
Spot on about the “class of appraisers “ they’re using.
Sorry but it’s the ones that don’t know what they don’t know!!
That’s why they are cheap.
That’s why the AMCs are hiding this from their own clients
Just happened to get a ROV today after reposting/sharing this article.
Appraisers have to spend more time without compensation- there should be a fee associated with ROV
Include your ROV fee in your ebgagement conytact.
Nationwide competency? So many extremely qualified, well educated, experiences and competent appraisers refuse to work for Class and other similar companies. Their “ad” really begs the question, why are they not being investigated? Possible AIR violations and strong arming appraisers? Or incompetent appraisers? Also, they have staff appraisers, and that alone is a conflict of interest, well, to anyone with at least half of a functioning brain.
For what its worth, I have permission from a peer to provide the following comments and to offer them for public use.
POST SUBMITTAL RECONSIDERATION OF VALUE (ROV) REQUESTS:
Post submittal requests for market value reconsiderations should put an emphasis on closed sales (non active / pending) from within the subjects previously detailed neighborhood boundaries. These comparables should meet the client specific guidelines, and meet the standards established and disclosed within this report. Although individual properties do assist in establishing overall market trends, singular properties by themselves will be compared to the greater collection of data for the subjects given market area. Singular properties will be weighted accordingly, and will thus often times have limited to no impact in moving the subjects overall final market value. If a ROV is requested, an explanation is required from the supplying party/parties as to why the new sales are superior to the appraisers comps. This explanation should accompany the ROV request. Additionally, sales provided should in part lower + upper bracket and or equal the subjects features (GLA, condition, etc.) versus just being a collection of superior characteristic sales. Of note, supplying sales simply based on price searching in an attempt to meet a predetermined value outcome should be avoided.
COLLATERAL UNDERWRITER (CU):
If the lender / client uses such a platform, the following applies.
In the event of varying CU data from the appraisal, it should be noted that the appraiser has provided independent analysis / results relating to any and all market adjustments that specifically relate to a single property (the subject), for a specific day (effective date of this appraisal), and has done so without influence from any known CU results.
Considering in part, both lenders and lender agents acting on lenders behalf are prohibited from distributing the CU print report or the submission summary report (SSR), making demands of, or providing instruction to AMCs/appraisers based solely on the CU automated output, or using CU to interfere with the independent judgment of the appraiser, per this scope of work, if asked for post submittal, the appraiser will provide no clarification relating to any provided variances, and will reference this paragraph for review.
Although a bit of a word salad, by way of including them in the report prior to any formal requests (ROV, why didn’t you use these CU sales, etc.) it gives the appraiser a backboard to push back.
Seek the truth.
Bill Johnson – is there a verifiable source for the comment ” If a ROV is requested, an explanation is required from the supplying party/parties as to why the new sales are superior to the appraisers comps?” It is logical, appropriate, and we have “used” such a comment as a personal requirement from our little firm for years, but it sounds like you have found a printed source for this and if so I would appreciate the source. Thank you. If it is somewhere in Fannie Mae guidelines would like to be able to quote it.
Regarding a source DGK, the below link was used in part for the CU comment. There is no source for the ROV information, but rather it was defined and updated over the years.
https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B4-Underwriting-Property/Chapter-B4-1-Appraisal-Requirements/2522571271/FAQs-Collateral-Underwriter-Jun-2022.htm
Seek the truth.
Bill Johnson:
Thanks for the follow up. What I am trying to support is that the entity asking for the consideration of alternative comparable sales is……”the entity requesting the consideration of alternative or additional sales [MUST PROVIDE THE APPRAISER WITH EXPLANATION AS TO WHY THE REQUESTER FEELS THE SUGGESTED SALES ARE AT LEAST AS / MORE COMPARABLE THAN THOSE ALREADY IN THE ORIGINALLY SUBMITTED REPORT] “. It would seem HUGE to be able to quote an industry accepted source that agrees that the client MUST PROVIDE the appraiser with explanation if they honestly expect the appraiser to include sales already considered and rejected, or that are NOT otherwise as comparable as those in the submitted report, at no charge within hours of the request…… without any reasonable explanation. Can’t seem to glean that from the Fannie Mae excerpt you sent. Any assistance?
I would say DKG that YOU are the local professional expert and thus YOU are the industry accepted source. That being said, see link below for VA ROV.
For those clients who really get it, if you include such comments in advance and have a tight report, most often their hands will be tied in supplying you with better sales (No ROV requests).
For those parties who don’t care (most), do not be afraid to push back post receipt of the ROV. I ask for the best three sales, a line-by-line analysis, and a final reconciliation.
From a VA perspective, please note the following ROV requirements.
https://benefits.va.gov/RODENVER/docs/ReconsiderationofValueRequestSOP.pdf
Seek the truth.
AS NOTED IN BILL’S REPLY: “If a ROV is requested, an explanation is required from the supplying party/parties as to why the new sales are superior to the appraisers comps.”
LET US NOT FORGET THIS. Do not reply to ROV’s unless this is included by the lender.
Totally agree, they have less experienced Apprasiers WHO will also make the numbers work for the AMC. Pressure or Not…..we are not supposed to FOLD like this! If you did your job right the first time the ROV is a waste of your time and all you need to say is my value is supported, your comps are not comparble and my value remains unchanged!
Sure every once in a blue moon you might miss something but for CLASS (Who I never work for) to post such a thing out there. All that tells people is that Appraisers can be bought! They are defaming all the good Appraisers Reputations.
I URGE ALL OF YOU TO GO ON THEIR SOCIAL MEDIA PAGE AND SPEAK YOUR MIND UNDER THEIR POST! I PLAN TO!
https://www.facebook.com/classvaluation
Say it ain’t so!!!
“ It is also worth considering if certain appraisers are being awarded more work due to their willingness to comply with Class Valuation’s requests, and if this compromises the integrity of their appraisals”
Why would I believe this is a common practice or problem. It’s not ignore or forget that this also includes lowball fees.
So……follow them on Facebook. Put ANGRY signs on their crazy posts.
Do something. Anything.
Unless………………they pay big for advertising on here?
https://www.facebook.com/classvaluation
“Unless………………they pay big for advertising on here?”
Did you mean on AppraisersBlogs? This couldn’t ben further from the truth!
The idea that AppraisersBlogs is paid by AMCs to advertise their services is completely false. In fact, the opposite is true. Most of the articles published on this blog are critical of AMCs. We do not receive any financial compensation from AMCs for advertising on our site. Instead, we use Google Adsense to cover some of the expenses of running this blog. As a result, we have no control over the advertisements that are displayed on our site. It is important to clarify this misconception. Our content is not influenced by any outside parties. We are dedicated to providing unbiased and informative content for the appraisal industry.
AB T Thank you!
Good. And THANK YOU!
If we don’t ask the questions….we don’t know the answers.
I have included such a statement in each and every report for the past 8-9 years or so regarding my requirement for advance explanation if the client / AMC asks me to ‘include’ extra comps at their discretion. In addition, we always include a one-line survey print-out of all potential comparable sales and listings within the described search parameters. If the “requested” additional comps are on the survey list exhibit in the report, then we have already considered and rejected those sales from analysis. If that is the case then we advise them in advance that there will be an additional charge for each such “additional comparable” along with an explanation in the report that these additional sales were a direct request from the client to include sales that have been previously considered and rejected. Sounds a little pushy, but it is the client making the unsupported request and personally I would rather make the effort to confront them rather than lay down and let them have their way. Obviously, if the client can make a statement as to why they think their choice is better than mine then I will graciously consider and accommodate. If all they did was MLS search and send me addresses, then there is a fee for the service. I have lost two (2) AMC clients over this attitude, but have gained additional respect from a dozen others, so the offset is my reward.
One can view this a number of ways. I choose to see this as undue influence on an appraiser to try and badger them into submission. I’m sure there are subtle threats that accompany their reports. This to me borders on illegal and taken out of context. The opportunistic morons are out here and going strong. One thing of concern to me is the word “comps” (and any derivative thereof) is used too lightly. Comp or comparable would suggest they have been reviewed to advance to that status. Anytime something is provided to me I refer to as a “sale” until it can be determined to be comparable. I only say this because if the author of a report is referring to an additional sale provided as comparable before reviewing it can be perceived that the appraiser has already made the determination it is comparable and could be called out if found it is not a comparable and not used.
I cannot imagine anyone on the 100% page does any work with Class Valuation so to us, this is no surprise. And the appraisers who DO work with Class Valuation will never admit it.
Pay for play.
not surprising the unjust confidence some of these AMC’s conduct business. I never get that call from Nationwide Property & Appraisal Services or others that I work with on a regular basis.
The fact that the article’s author misuses the term “begs the question” multiple times doesn’t inspire confidence.
Stephen Reynolds I’m for anyone that sheds light. Do you work for an AMC?
Steppping over a $100 to pickup a penny. The blog is sound and tooo the point.
Seek the truth.
Find a banker(s) who goes with class valuation that also knows a person that is an appraiser and knows what the company and other AMC companies that do the same thing ie strip our fees, ROV themselves with endearing themselves to “their” clients and bust the AMC model from the inside out
Marjorie, it’s a complicated network. Many people have this idea that there is some sort of dedicated agreement between lenders and amc’s. Not the case. Lenders whom use amc’s often do so opportunistically, drop and replace amc’s on a moments notice, all replaceable. The whip never stops cracking in the amc world.
Research keywords; approved amc list wholesale /
https://ease.uwm.com/Lending/Appraisals/Index
https://www.newrezwholesale.com/media/1560448/approved-amc-list.pdf
https://www.carringtonwholesale.com/partner-center/credit-vendors/appraisal-management-companies/
This one is interesting. A three column list of lenders which one singular amc has engaged with. Highlighting how many lenders an amc may eventually acquire access to.
https://www.nationwideamc.com/resources/approved-wholesale-lenders
https://assets-global.website-files.com/61a4ed5ee5650951c5639aab/65ba8a188e65f7696a3d8c34_Approved_Wholesale_Lender_List%20(1-30).pdf
Then take note of the bottom block. That’s the escape to direct assignment, complete with reference to which assignment platform they’re using.
Escaping amc’s is as simple as marketing to lenders directly. Where as if lenders determine those appraisers are subscribing to the amc model, the lenders choice is clear that offloading the cost to the appraiser via the amc model can continue.
Appraisers collectively are the primary market force, because only licensed appraisers can complete the assignments. Enter substitutions, waivers, value acceptance, property data collectors, and disproportionate assignment volume to only a limited set of appraisers, as well as hiring amc staff appraisers, as the amc industries and amc industry preferring lenders, desperate side step to get ahead of the dramatic reduction of appraisers still willing to accept the amc model.
(XLS file viewer online, in case you don’t buy Word products)
https://products.aspose.app/cells/viewer/xlsx
Missing the IVPI proposal yet?
https://www.workingre.com/wp-content/uploads/2013/08/IVPI-Proposalfinal.pdf
A ROV which causes a value to change either means there was a mistake in the appraisal or appraiser was pressured to change it. Either situation is not good. Of course there’s no way to know if what Class said is true or not.
I see this as a clear violation of appraisers independence, Dodd Frank, USPAP; etc
They are discretely promising that they WILL GET your number
Seems that Class needs to be investigated, swiftly. AMCs get away with far too much and have insufficient oversight. An AMC having staff appraisers is also a clear conflict of interest to anyone with a brain.
When all you bottom feeder appraisers quit accepting work from AMC’s, then maybe they will disappear.
Until then, please don’t whine.
Bottom feeders? Really? What hubris! Although I have a diverse array of clients, I also accept assignments from AMC’s. I have four appraisers to feed, and the work comes from multiple sources. This “bottom feeder” made $200k last year (a down year I admit,) so I’m not sure where you get your high and mighty attitude. You sound very dumb and entitled.
A half rate fee. Split in half again. Driving the competition out of the market space. Bragging about disproportionate income, calling those impoverished by your approach to gaming the system as dumb and entitled. Hubris? If so, where is the hero?
Let’s start with the obvious question; Do you get equivalent compensation for amc orders as you do for non amc orders, on a consistent basis?
https://www.merriam-webster.com/dictionary/hubris
I saw the original post from Class Valuation and was so disgusted I just kept my mouth shut. With this post and the additional insights provided, I can’t help myself.
I find it very odd that an AMC would choose to advertise they have experience with what appears to be volumes of ROVs. Perhaps this is due to the cheapest and fastest “proposal” model being used to engage those doing appraisals for them.
I’m of the opinion that most ROV’s can be avoided by producing a bulletproof appraisal. I believe most ROV requests stem from insufficient research and a significant lack of explanation, or what I call lazy appraising. If you’re being paid $350 (and lower in some cases of late) for an appraisal, you have to do two to three times the work to make ends meet and put food on the table. Many (not all) who have elected to place themselves in this situation have to cut corners to keep up with the orders. So…the result is insufficient research and a significant lack of explanation, because they are time consuming.
God knows those of us unwilling to play the cheaper and faster game don’t have that problem right now. But we don’t have an ROV problem either, and many of us never have. In my close to 22 years in this profession, I have received four (4) ROV requests. Of the four, one was legitimate as I did in fact miss a sale that would impact the value opinion. Not bad; one legitimate ROV in nearly 22 years!
Bottom Line: If you have a large number of ROV you have to deal with, you also have an appraiser problem. And if you have an appraiser problem like this, you have a compliance problem.
Not necessarily an appraisal problem. Often times it is an uneducated client / UW / agent / seller / buyer problem. Those ALL play factors in the # of ROV requests, despite how well an appraisal is written.
Ok, I’ll accept that!
But I do think there is a higher potential for an ROV request when the assignment goes to the cheapest and fastest.
EXACTLY!!!
Not always a compliance problem on the appraisers end. As one comment earlier said it is more of an educational or understanding of the process versus compliance. Not all requests that come through on the letter of engagement or the define scope of work fall within or comply with guidelines set by GSE’s or USPAP. Sometimes ROVs are issued from the AMC because they are acting as an advocate. Additionally, this type of practice is part of the AMC, believing that they are truly doing their job.
ROV of what essentially? The answer is not the listing agents pricing strategy and the buyers agents buying strategy. The lender will go through the appraisal with a microscope, while ignoring the fact the initial BPO and CMA which led to the listed price the contract was formed around; inadequate.
.
The amc’s primary purpose is to provide a control mechanism to pressure the appraiser, as they have no control upstream of the valuation analysis process to effect price listings or negotiation strategy.
The lender and the amc could have applied that veto to the sales agents. They choose not to, rather bow to pressure from the commission based interests. The amc’s goal is to flip volume for increased and sustained lender patronage.
Sorting appraisers is simple; The pliable appraisers willing to provide a thing of value do so in the form of a discounted fee. That’s step one. Among those appraisers whom signal they are willing to provide a thing of value, any appraiser whom does not play ball with hitting the numbers is cut off and loses volume assignments. That’s step two. Who’s still buying this?
For those looking for guidance on ROV requests, let me provide the following link (See below / VA policy on ROV). I know some appraisers who include nearly the entire document in their original report as doing so really puts the emphasis on them to meet YOUR predetermined standards. Keep in mind, nearly all of these loan officers and lenders issue VA loans so they are most likely already familiar with these standards.
Lastly, we should all know that AMC’s are a puppet of the lender, meaning they are never going to vet the ROV request but rather they are the ones who just put the pressure on.
https://benefits.va.gov/RODENVER/docs/ReconsiderationofValueRequestSOP.pdf
Seek the truth.
The truth of the matter is that with all forms of commission based sales and lending, there will be a ‘preference bias’ with everyone involved. This is where the appraiser comes into play as the only non advocate in the process. The only party whom gets paid for the work, irregardless of the outcome. Everyone else is advocating with a financial interest in making deals work, irregardless if the deals are appropriately aligned with market values. Hence the appraisers mantra; ‘Price is not the same thing as value.’
To routinely issue ROV requests whenever appraisers signal the agents did not line up deals in fair alignment with existing market values is a clear indicator that whomever is issuing the ROV request either does not understand the appraisers appropriate position as a check to the balance, an independent party, or alternatively does not respect the concept and importance of non advocacy and the concept of appraiser independence.
This is the saving grace of the VA model, they take control of assignment trends and do not allow lenders or appraisal management companies to send disproportionate volume to only a limited set of appraisers. This also highlights the failure of the technical industry and even the FHFA conservator, to understand the core nature of why a full service human appraiser is vital to the process of checks and balances. How everyone involved on the lending side, be that amc personnel, to salesmen, to avm automation system programmers, will be subjected to the forces of operational bias and preference falsification, most through the fact they are employees or franchisee subscribers, rather than true independents.
The GSE’s collectively have the financial security of this country in their hands, they handle hundreds of billions of loan volume annually. Now with CRT’s! The lid will eventually blow off.
The entire body of regulated lending could have gone with something similar to the VA model or IVPI proposal. Instead we’re still talking about answering to commission based agencies, still pushing and pressuring the appraisers around two decades later.
What really bothers me is that an ROV is due to the lender or the Realtor or the borrower thinking that the value is “low” (below sales price, etc), never when the value comes in HIGHER than expectations or Sales price! Why not? Such a joke.
THE above parties ARE NOT THE APPRAISER! This is the tail wagging the dog! Where is their license and continuing education to show that they have a clue as to what the value should be for their home. Why do people not get the fact that the lender, the Realtor and the Borrower all have financial vested interests in the deal closing. WE Don’t! YET everyone is letting them dictate how things are done. I hate this for Appraisers. Why do we let them do this to us??? WE are the only profession that allows everyone who are Not our Peers to dictate what we should do and worse yet allow them to SUE us if they don’t like our numbers using BIAS as the reason for attacking what we do. WE are so F…’d it is depressing. Used to be proud to be a Real Estate Appraiser…..not any more!
Found this online earlier, and could not help but to save the image.
‘Life cycle of a bureaucracy.’ Remind you of anything? We appear to be in the final stage cycle.
Oh how ironic this is! Our profession in final stage for sure.
In Fannie Mae’s Lender Letter LL-2015-02, it states, “The risk analysis performed by CU is for the exclusive use by the lender in their analysis of the appraisal report. After completing a thorough review, a lender should be able to have constructive dialogue with the appraiser to resolve specific appraisal questions or concerns.” Also, “Fannie Mae expects the lender to use human due diligence in combination with the CU feedback, and will actively follow up with lenders who are reported to be asking appraisers to change their reports based on CU feedback without any further due diligence…It is imperative that the lender analyze the relevance of the sale and determine if the use of such sale would result in any material change to the appraisal report. If the lender determines that there would be no material change, then they should not ask the appraiser to make revisions. Fannie Mae expects CU to enable lenders to accept appraisals “as is” with greater confidence.”