Hybrid Inspectors Offering Appraisal Opinions

Clear Capital Admitting Hybrid Inspectors Are Offering Appraisal Opinions

Clear Capital admission:

  1. This is an admission that inspector were previously offering appraisal opinions re Q&C.
  2. There remain many other areas in hybrids that also are appraisal opinion being provided by non appraisers.

I have written many blog posts here, mainly for the consumer to read and understand what is actually happening in the world of Real Estate Valuations. My blogs range from being overcharged for appraisals so the middle man (the appraisal management company or AMC) can make money, lenders still pressuring appraisers to hit a value, and now having untrained and unlicensed people perform inspections (see my last blog entitled “Deception”).

Well. This blog is for the Appraiser as well as the consumer. I hope you read it and understand the extreme importance.

Recently, as we all know, the new “Hybrid appraisal” has come onto the market. Fannie Mae has developed the 1004P form. Lenders and AMCs have developed their own products as well, with false information claiming appraiser shortages, claiming they will be faster and better, and claiming they can still be done accurately saving consumers hundreds of dollars. First thing, we all know that there is no shortage. Secondly, there is no proof that these are faster and better products, and thirdly, where is the proof it’s saving them money?

There is proof all over that AMCs are charging consumers outrageous amounts of money for a full appraisal, only to find the cheapest appraiser so they can make a bigger profit and pad their pockets. (Read my blog entitled “What’s Not In Your Wallet”). Who’s to say they aren’t charging the consumer the same or close to the same fees for these so-called faster Hybrid products?

If you are still in your basement or even have no internet access, then you should know what this product is. If not, here is a quick synopsis. The definition of Hybrid: A thing made by combining two DIFFERENT elements.

Elements of a Hybrid Appraisal:

1) An inspector to gather data, take pictures and measure a home

2) A licensed or certified appraiser to complete the valuation

So what’s the problem here, you might ask? Well, let’s just point out the main issues.

1) Using an unlicensed and or untrained person to collect the data, measure the home and pretend to act like an appraiser. Appraisers have had to endure years of training under a supervisor, pass state tests, take continuing education, and make sure they abide by USPAP and state laws. The non-appraiser inspector?…a couple hours of training, if that! Hell, they don’t even have to be background-checked or carry any type of insurance. Seriously? Lenders, AMCs and the Government are ok with having just anyone out there with a heartbeat come to your home and gather data, and take pictures. (Yes. Appraisers have ethics and rules they’re bound by, so you never know what these unlicensed and non-background checked people will be taking pictures of and putting all over the internet.) Maybe it’s worse. Maybe the non-appraiser person who comes to your home just got out of jail, maybe he/she is a pedophile, or worse, maybe a rapist or paroled felon. Are you okay with this?

2) Appraisers are in place to ENSURE THE PUBLIC TRUST!!!! TO PROTECT THE CONSUMER. This isn’t something that just happens overnight. Years of training and supervision plus education and tests have to be overcome to gain the title of Certified Appraiser. Appraisers have the experience to note that a home has polybutylene plumbing…that “salt” on the block basement walls is a sure sign of past or current water intrusion issues, the ability and knowledge to look for things NO ONE else would even think to look for, to correctly measure the home for proper livable square footage and basement square footage per correct standards, to correctly judge the quality and condition of the subject by observing all aspects of a home upon inspection, and in the end be able to combine that inspection knowledge with market data to accurately value your home. Appraisers have to follow USPAP (Uniform Standards of Professional Appraisal Practice), which if you don’t know what that is, it’s pretty much the Bible and laws for appraisers.

The non-appraiser inspectors: Well, they don’t have any rules to follow, they aren’t trained to see the things appraisers are, they don’t have to have the extensive education or practical on-site knowledge and training. They just get paid to take pictures, take notes, and check off boxes on a sheet. Do they know the different types of plumbing? The differences between a bi-level home or a split level? What is considered a basement and what is not? The different types of home siding? The quality or condition of a house in its current state? If I had to bet, I’d say no.

All this leads me to this point: Recently, an AMC named Clear Capital, who has already been known to put out a bad Hybrid or desktop product, sent an email to appraisers on their panel. I have seen where an investor bought a townhome in Atlanta Georgia based on the output of this particular product. The appraiser was licensed in Georgia, however resided in a different state some distance from Georgia, and a third party non-appraiser inspector visited the property. Upon refinancing this home, a real, true and detailed appraisal was done by an appraiser who valued the home way lower than the Clear Capital Clear Val Hybrid desktop appraisal result. We won’t talk specific value, but it came in WAY less. Reasons? The Clear Val comparable sales used had been very inaccurate. Comp 1 sold as a 3-unit block, Comp 2 sold as a 4-unit block and comp 3 sold as a 2-unit block. To value a townhome. This was never addressed in the Desktop appraisal. Well, needless to say the buyer got a terrible, over-valued product that he relied upon.

Ok so where am I going…HERE. Clear Capital recently sent an email to appraisers on their panel. Go ahead and read it….

There’s a new post up on the Clear Capital Connection! Check out the intro below and click the link to read more.

1004P Appraisal – Mismo XML Updates
Posted: Jun. 13, 2019 01:08 PM PT

Happy Thursday!

For all of our Appraisers who have been so diligently and closely working with us on the 1004P, we wanted to pass along some recent updates we made to the MISMO XML that you import into your appraisal template:

Quality (Q) and Condition (C) Ratings

  • These have been removed from the MISMO XML, and they will no longer be visible in the Inspection PDF. This will allow you to more accurately make your own quality and condition Read more…

Clear Capital hybrid email

Back? I hope you read what I just did. Clear Capital is NOW telling appraisers that the Quality and Condition ratings, WHICH ARE TWO VERY IMPORTANT ASPECTS of an appraisal, will now be left out by the inspector so that the appraiser can make their own judgement. Wait. What? The appraiser should make his/her own judgement on pictures that may or may not be taken properly & an observation by Johnny Superstar Inspector who may have missed many things due to having no training or knowledge?

But wait there is more…

Additional Features Section

  • This section has been improved so that it will now list each feature with the agent’s description (i.e. “Inground pool;Not fenced”)

Improved logic around identifying and properly labeling basements

  • The new logic is based on whether the level is indicated as below grade, rather than the level name. This will help better identify and separate below grade square footage.

The clarifying certification language has been removed from the MISMO as a result of updates to the 1004P form itself. It has been removed as a requirement from the Letter of Engagement as well.

  • If you still feel as though want this language in you template, please consider the following:

Clarification on Scope of Inspection: Per the scope of work identified, the interior and exterior inspection was not completed by the appraiser, however, was completed by the above named inspector who collected the information through an interior and exterior inspection. the information provided is deemed sufficient to comply with the requirements of the scope of work.

We are confident these most recent changes will improve the functionality and efficiency of the import and overall appraiser experience.

  1. This is an admission that inspector were previously offering appraisal opinions re Q&C.
  2. There remain many other areas in hybrids that also are appraisal opinion being provided by non appraisers.
  3. Clear Capital hybrid email to appraisers

The AMC goes out of their way to have you consider language they came up with for your report. First they have determined the scope of work for you. Secondly you are agreeing to this scope of work and that the third party inspector is sufficient enough to collect the data to comply with the Scope of work. HUH?

Now Clear Capital has also admitted here that these inspectors were previously offering appraisal opinions via Quality and Condition ratings. Say what? They also state that there are many other areas within these reports that are also appraiser opinions that are being given by non appraisers. Makes sense right?

What purpose does this serve for the Consumer? Seriously. I know I am sick and tired of these AMCs and lenders taking advantage and spewing out garbage to pad their pockets. As a consumer, I would be livid if I found out that the person in my home is NOT qualified to do what they’re doing. The person in my home has no knowledge, training or even a background check. The person in my home measured it incorrectly. All of which adds up and can lead to major valuation issues. Sure, the appraiser is there in the end and doing the valuation on your home, however if they get bad data from these so-called inspectors, then that data is going to lead to a bad valuation of your home. Just to save a couple bucks on your biggest asset. What a shame.

So consumers, be aware of what you are getting into and make sure to find out if a licensed expert is coming to your home and not Johnny Superstar Inspector. Make sure you get all the details and make sure they do things properly.

Appraisers, one word: LIABILITY. Inspectors have 0% while you have 100%. Can you really afford to risk your career over $50-$100??

Of note, this how I see this playing out.

Consumer: “You valued my house wrong as you stated it was in below average to average condition.”

Appraiser: “Based on the information I had, that is what I determined.”

Consumer: “Well you weren’t here and didn’t see everything and have no idea what the quality and condition are.”

Appraiser: “Correct. I based it on the information and photos the inspector sent me.”

Consumer: “Well it’s incorrect and I will be filing a complaint with your state board and possibly looking to sue you!”

In the end…Crickets… Can’t blame the unaccountable inspector since, well, they have 0 liability. Sorry, real estate appraiser. You’d better hope your E&O will cover you.

Mark Skapinetz
Latest posts by Mark Skapinetz (see all)
Mark Skapinetz

Mark Skapinetz

Mark Skapinetz is a Real Estate Appraiser in Marietta GA with extensive knowledge in Residential Appraising.  He is President for the American Guild of Appraisers (AGA). Featured on Podcasts as well as published interviews in Valuation Review. He is the creator of the 100% Real Estate Appraiser Group, Skap The Appraiser and co-creator of Appraisal Forum & Festival (AppraiserFest).

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34 Responses

  1. Great article Mark. Well written.

  2. Shaun Murphy Jr. on Facebook Shaun Murphy Jr. on Facebook says:

    The whole hybrid appraisal deal is a disaster waiting to happen.. but if investors are still willing to buy the FNMA loans based on valuations from hybrid appraisals, then I just don’t see how there is a whole lot we can do about it…

    Appraisers will never be able to dictate how they run their daily business operations…

    In a nutshell – If they don’t need us, they won’t use us.. and it sounds like they don’t need us… so if they are in a position to take that risk, then unfortunately, that is their prerogative.

  3. Shaun Murphy Jr. on Facebook Shaun Murphy Jr. on Facebook says:

    Appraisers aren’t the only industry threatened by technological advancement..

    It’s just a bummer that our demise may be sooner then later

  4. David Samnick on Facebook David Samnick on Facebook says:

    Collectively, we could do something about this. The unification of appraisers would be an ideal start similar to the NAR. I encourage each and every reader to become a member of the AGA. It’s time for all of us to be truly concerned about the future of OUR industry. Time to grab the reins, scream whoa LOUDLY. I like being an appraiser. I don’t want to become someones errand boy this late in my life.

  5. Donna Corrado on Facebook Donna Corrado on Facebook says:

    Say NO to signing off on a HYBRID. Simple solution

  6. Ross Grannan on Facebook Ross Grannan on Facebook says:

    Don’t work for Klear Kapital

  7. Avatar Koma says:

    Hmmm… who’s bottom is on the line for any report? Only the APPRAISER that signs the report! WAKE UP!

  8. Avatar Michael Curtis, SRA, AI-RRS says:

    I fired these bastards months ago. Caught them changing my values and commentary in reports and reviews, then electronically signing my name to them. Embarrassing to admit that I ever did any work for them. Stupid on my part, but never again. Someone needs to take them down. I have reached the age where I don’t have the time or the money to do so; don’t need the hassle any more. All I can do now is warn others to steer clear of them.

    • Avatar CJK says:

      It is very easy to remove a signature from a report. Appraisal Port does it with every appraisal.

      This is what I have in my reports.

      The lender/client xxxxxxx has directed that the appraiser transmit the content of this report via AppraisalPort. Pursuant to its user agreement, FNC/AppraisalPort has disclaimed any warranty that AppraisalPort will be error free, has advised that information reported to and by AppraisalPort may be subject to transmission errors, and has indicated that use of AppraisalPort is at the user’s sole risk. Accordingly, the lender/client should make its own determination as to the accuracy and reliability of AppraisalPort for its use. The appraiser makes no representations and specifically disclaims any warranty regarding the accuracy or portrayal of content transmitted via AppraisalPort or its reliability. The appraiser uses such technology at the specific direction and sole risk of the lender/client xxxxxx. At its request, the lender/client may obtain a true copy of the original report directly from the appraiser via email (PDF), mail or other means.

      Appraisal Port is not an AMC, I do not work for AMCs.

    • Mike, those are the kind of things that need to be reported to Jim Park at ASC as well as your state. No one but you has evidence of that type of fraud and forgery. That goes beyond bad business practice to outright criminal fraud on their part. Please don’t let them get away with it.

      PS – don’t be embarrassed. We can’t know how bad something really is until we investigate it. I hope others will learn from your experience.

  9. Elizabeth Morse Rhodes on Facebook Elizabeth Morse Rhodes on Facebook says:

    Wow, I didn’t know that these “inspectors” were actually measuring houses. It takes a good 2 years as a trainee to master it. I can’t imagine them doing it accurately. Some houses look like the architect was on drugs designing the floor plan. It’s going to be one pissed-off homeowner that is going to sink Clear Capital. Just wait.

    • Avatar CJK says:

      If I recall I was also a trainee for about two years (full time back in the 1980s) before I could go and do my own inspections. Even today after 36 years I sometimes get the property that makes me say: “what the hell is that.”

  10. Shaun Murphy Jr. on Facebook Shaun Murphy Jr. on Facebook says:

    How do we call for a NATIONWIDE APPRAISAL STRIKE ?? LOL..

  11. Donna Corrado on Facebook Donna Corrado on Facebook says:

    Time for a protest. Boycott all AMC’s for one day. And if that doesn’t work, we go to two. It’s sort of like raising the tariffs! lol And if an appraiser has evidence of AMC’s being out of compliance, file with the Department of Business and Professional Regulation in their state

    • Baggins Baggins says:

      The fact you’re still working for amc’s at all, means you support this. Learn to say no. Learn to market past the third party clerks. Dear someone, please save me from my own appraisal client business decisions!

    • Bobby Jones on Facebook Bobby Jones on Facebook says:

      Donna Corrado people are to chicken shit to do that. We should do it for a month

      • Donna Corrado on Facebook Donna Corrado on Facebook says:

        Bobby Jones best thing I did was go after private work and community banks. No more AMC’s. Less work but more money

  12. Avatar Certresid says:

    “I fired these bastards months ago. Caught them changing my values and commentary in reports and reviews, then electronically signing my name to them”


    • Baggins Baggins says:

      Although I’m holding the smoking gun that can result in severe penalties for this amc, which could affect their licensing status nationally, I’m not going to do anything about it… They share lists and I still want to work with the next amc instead.

      Clearly, another appraiser intimidated by amc’s.

  13. Shaun Murphy Jr on Facebook Shaun Murphy Jr on Facebook says:

    So based on what I’ve read – it appears that a traditional appraisal will be FNMA’s option of last resort…

    If an appraisal ‘waiver’ is not granted, they will then go to a 1004p, via a PDC (property data collector)..

    If neither of those work, then the option would be to order a traditional appraisal..

    So from what I gather here – Even if it got to the point to where FNMA required a traditional appraisal, it would already be predisposed / labeled as being a ‘High Risk’ by the time an order even got to us…. Which would set us up for more scrutiny & headaches….

    If FNMA is truly going in this direction, origination work as we know it is HISTORY

    • Baggins Baggins says:

      That’s right. If appraisal requirements do not pass 3 gates of risk management, only then will a full appraisal be ordered. If they think we’re going to offer standard rates for only high risk high dollar work over 400k, it’s a pipe dream. The end is very near. Without the bread and butter work 9 out of 10 independent mortgage lending appraisers will fall. We all thought it could not get any worse, but it did, exponentially worse.

      Meanwhile, there are appraisers still wondering if they should perhaps try and get away from unnecessary third party order clerks. One might doubt their ability to provide meaningful independent analysis in the face of existing market uncertainty, when they can’t even manage to get away from a check to check lifestyle or say no to unlicensed process clerks. Next!

  14. Avatar CJK says:

    I just looked at a single-wide manufactured home with a newer addition going FHA. I called for an engineer’s inspection for the foundation system (typical inspection for FHA) I also called for the engineer to inspect the newer addition to insure structural integrity (also required by FHA). I took photos of the HUD tag, Data plate and foundation system. I also checked with the County Building Department and the Town Hall for any permits. Are these new kids going to do that?

  15. Avatar Jack Of All Trades says:

    I encourage more of you guys to step up and make the only intelligent decision regarding your appraiser’s license. There are careers out there and each of you deserve a better life than the one you are leading as a residential appraiser.

  16. Avatar Mark SKAP says:

    AMCs have morphed into so much more than what they were supposed to be. And no one has stopped them. They don’t care about the consumer or anything more than padding their pockets. Then one day they will go POOF LIKE COESTER and others. Or they will be like Class appraisals thinking they are smarter and better than the rest. Just stop it already. I look forward to all the reviews and more I will be doing down the road due to shitty hybrids and these AMCS needing rush orders or the consumer needing an appraisal done to combat this garbage. Nothing will make me more satisfied than taking down the big AMCs that put out this garbage and more.

    • Baggins Baggins says:

      Someone should develop and share a list of lenders whom do not use amc’s, free of charge…

      It’s important to support the good guys.

  17. Avatar CJK says:

    Caliber Home Loans

    $600 for CV, $650 for FHA, 10 day turn time, paid within 30 days. $150 for Final Inspection, 3 day turn time, they use AppraisalPort (not an AMC). LO and Processors cannot talk to the appraiser. Appraiser must inspect, take photos and sign report.

    * One time a listing broker was all over me about the value. I told the lender, they sent the broker an email telling him to desist, if he did not they would file a complaint with the state.


    $600 for CV, $650 for FHA, 5 day turn time (can have more time if you just ask), paid within 14 days. $150 – $200 for Final Inspection, 3 day turn time, they use Mercury Network. LO and Processors cannot talk to the appraiser. Appraiser must inspect, take photos and sign report.

    *They detest AMCs, if the approved appraisers are busy, they will pay more just so they do not have to deal with AMCs. They have had nothing but problems with them in the past.

    • Baggins Baggins says:

      For appraisers without a clue, get a clue immediately. Learn to market or get out and make room for appraisers whom understand how marketing and sales work. n case you missed it, as an appraiser, you’re in the marketing and sales industry. If you can’t get past low level amc process clerks, you may not be properly equipped to deal with licensed people. Stand up or step aside. Identifying direct lenders is as simple as marketing down the lists of lenders in your area, keeping proper notes and client files, and refusing all amc engagements.

      “When your company stops using amc’s, please keep my information, because I’ll be available.”

      We’ve paved the way, now will the rest of you please get with the program? One day you’ll need a home loan too, and wouldn’t it be remarkable and disconcerting, if an unlicensed hybrid runner was sent to your property? Here are a few I no longer work with, you can have them, they’re better than amc’s but really, not that hot to work with and neither outfit hires a qualified panel manager. Still beats amc’s though. Leads for days, all you need is a list of lenders by volume and a telephone. Have at it. CJK, can’t believe you answered the call… NEXT in line please. Who else can share?



  18. Avatar Alex says:

    I think this is a new strategy by lenders to collapse the real estate market again as it was in 2008-12.

  19. Shaun Murphy Jr. on Facebook Shaun Murphy Jr. on Facebook says:

    I still have a hard time believing any RADICAL change will be taking place in the very near future…

    If the GSE’s want to bypass traditional appraisals, who will they blame when it crashes again?

    Their computers?? confused crying fed up

  20. Bobby Jones on Facebook Bobby Jones on Facebook says:

    They are a joke


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Hybrid Inspectors Offering Appraisal Opinions

by Mark Skapinetz time to read: 8 min