Sorry, I’m a bit late to the party and I just caught up with your post. But I see Mike covered everything!

Hey Mike, this was not my observations but someone else’s. Just follow the link I provided for more info.

The Facebook forum would label you as a conspiracy nut right behind mine for being the author of this ridiculous drivel.

Then again, THAT is from somebody that been certified for all of four years; and someone else with a name that sounds the same as the former owner of ACI. If so, he MAY be a tad upset and biased after the Conflict of Interest article I wrote. I consider the sources.

While you cannot write FNMA direct about a high CU, you CAN write them about a lender and or AMC that violates the license agreement. It is THAT lender that is supposed to request an over ride to the CU for adequately explained exceptions.

But, even then the CU score remains the same. Six months after loan closing FNMA MAY come back to the lender and require them to repurchase the loan OR renegotiate the discount (loan origination) fee.

Folks, THIS is why I ask you to join me. (1); I’m getting to a  point where I need the help logistically. OPEIU can get our foot in doors and lobbying help but it can’t analyze appraisal policies for us. THAT requires trained appraisers (us) doing it, as members (2) Too often ‘humorists’ among us negate the impact of serious problems, or refute serious issues merely for the sake of a funny post; OR (3) NON appraiser are posting DEFENDING the acts of bad AMCs and  regulators.

Bill, outstanding observations.

By the way, ALL APPRAISERS  SHOULD TAKE THE FNMA CU course. NOT just the ones for appraisers, but the actual lender courses. You ARE allowed to do so. Sign up with your email address; and state how long you have been “in the mortgage industry” (I’ve been ‘in” it for over 30 years; first as an agent then as an appraiser; and even as a consultant).
User Interface Basic Training- CU

If link does not work its under the FNMA site under eLearning courses (CU has basic and advanced)

Bill, THIS course will answer all the questions you have; EXCEPT WHY the AMCs are not obeying their license agreement with FNMA for use of CU. BTW-I don’t know of ANY lender that is obeying the license agreement.

FNMA states that even a 4.0 or a 5.0 can still have the loan purchased as long as the CU concerns are adequately addressed but LENDERS read this to mean “just to be safe, we are not going to fund anything with a CU score over 3.5. They are deathly afraid of post purchase audits (PPAs).

When I took the course, FNMA had 21 canned messages of which 17 apply to appraisal. NOT ONE of these is allowed to be transmitted by the lender to the appraiser under the CU license agreement. The issues they deal with are supposed to be researched and then paraphrased if contact with the appraiser is required.

FNMAs “alternate comps” are NOTHING MORE THAN all sales within 2 or 3 years within the same census tract area. Period. THAT parameter can be over ridden by the lender-licensee to search a broader area; for example a radius that THEY determine. It has NOTHING to do with the defined neighborhood or competitive market area identified by the appraiser.

The license agreement PROHIBITS licensees (lenders) from merely sending us a list of comps and telling us to explain why they were not used. The lender is instead REQUIRED to  (1) review and determine if they are even relevant FIRST; and to then (2) If determined to be relevant whether they would have had an impact on value IF used; and (3) ONLY  THEN the licensee is to communicate the specific reasons they APPEAR to be more relevant to the appraiser and ask for further explanations.

That is how FNMA CLAIMS the system works.

In practice they simply send the FULLY AUTOMATED SSR to the to the lender/AMC through the portal who may or may not also have been provided with the actual CU results from the lender. You get a copy and paste inquiry to explain why you didn’t use these 5 to 20 “better comps”.

The banks are NOT paying AMCs additional money to ‘review’ the file to see if these issues were addressed in advance by the appraiser (as required by FNMA). THEY have already paid the AMC their one size fits all gross fee of $495 to $550; taken their $50 to $75 kick back for using that AMC and the AMC has an additional direct overhead of $100+ leaving only $345 to $400 for the appraiser and any “review”. THAT is assuming the AMC is not interested in ALSO having something that’s called “profit.”

THERE IS NO MONEY in the contract for USPAP compliant appraisal review! NONE. (I know this from personal experience) the AMC is EXPECTED to eat the costs of any review! Like THAT is going to happen!

…and yes Bill, eventually FNMA WILL expand the CU UCDP system to flag appraisers with ‘too many’ high scores and monitor or disbar them.

By the time a qualified, trained human being is involved, you have already been fatally stabbed to death. Rest In Peace!

or join the AGA and FIGHT this bullshit!

Ken, I would ask you to review my comments/situation below and see what you think.

Ken, first off thank you for taking the time to review it so carefully (sincerely). So many valid observations that stand on their own merit, I don’t need to try to add to them. The ONE comment I would add to is the ‘cant find any document saying FNMA is required to comply with USPAP.’

1. FNMA is a regulated GSE under conservatorship because of how poorly they operated prior to TARP and how the Federal Regulators have an ongoing concern that they will or could again become the cause of further economic instability.

2. FIRREA is pretty clear that transactions intended for use by and in federally regulated transactions are required to comply with USPAP. When you think about it, ALL clients in federally regulated transactions must comply with USPAP. Being our client does not excuse them from that.

Lastly, not only have they ILLEGALLY culled and compiled OUR collective appraisal data, it appears that they are using it for unintended and unauthorized purposes in a manner that is misleading.

I would ask you Tom, do you have access to this information on the reports that you complete (UCDP SSR (from FNM)? Heck, I will ask anyone who posts here if they have access to this information? Unless you can review this information as I can, then I would hold your thoughts as to whether or not I should find a new trade. With KNOWN flawed collected data, limitations on the ability of the system (does not read comments) and NO ability to dispute the findings, WE should all be worried about how the CU system rates our work. Again, this was a cookie cutter property with a comp on the same street (required a single adj.) What rating are you receiving Tom on those complex assignments? What is the lenders risk score when we take those assignments that don’t easily fit into the AMC’s or lenders checkboxes? If the point of the article was to indicate the CU platform should done away with, changed, or opened up for appraisers eyes, then I would say changes need to be done ASAP to lesson the unfounded exposure and liability that WE ARE ALL CURRENTLY UNDER.

ehh, 3.8.  you better learn another trade.  if you get some more higher cu ratings fannie can put you on a watch list.  that means every appraisal you do has to be looked at.  what amc/lender is going to go thru that.  if this is the only one then don’t worry.  there is nothing you can do, well you could do fha for now.  ti’s pretty nerve racking to get that rating just once.  then again nothing may happen, except you will get bad nerves.  try to figure the system, write to the system.  resistance is futile. much thanks for sharing.

I have a client who under their documents section provides a copy of what they call UCDP SSR (from FNM) for all completed appraisals (hundreds of assignments). Although generally two pages long, the information contained is scary and results in a guilty verdict with no way to appeal. I should know as I devoted a few days to try and voice my concern and appeal the findings but the system appears closed (They don’t want to hear from us).

My latest appraisal contained the following information.

(1) The Collateral underwriter Risk Score is 3.8 on a scale of 1 to 5 where 5 indicates highest potential collateral risk. A score of 999 indicates no Collateral underwriter Risk Score available.

(2) There is a heightened risk of appraisal quality issues.

(3) The location rating for comparable #2 is materially different than what has been reported by other appraisers.

(4) The appraiser-provided comparables are materially different than the model-selected comparables.

(5) At least one of the “subject to” boxes is checked. The lender must obtain a certificate of completion, stating the nature of the “subject to” issue has been resolved before loan delivery.
 
(1) As it relates to providing the lender a risk score of 3.8 out of 5, how does the government or the lender interpret this? Will I be subjected to additional government scrutiny or receive a letter in the mail? Will the lender use this score to determine future assignments? Again, no such appeal process is in place for the appraiser to disagree with or dispute.

(2) Why am I guilty of heightened appraisal quality issues? Will this label stick with the lender thus denying me future appraisal opportunities (no way to appeal)? The CU system does not have the ability to read my comments but yet has determined the quality of my report.  If quality was determined solely on the sales comparison approach grid section and there monitored categories, then again how is my score being calculated and do I have the ability to disagree? This assignment is a cookie cutter property where ALL aspects of the subject are bracketed, gross adjustments are less than 8%, net adjustments are less than 7%, 3 closed sales are within 90 days, one comp is on the same street, and my 2 pending listings have now closed escrow supporting my original conclusions. Where are the quality issues?

(3) What appeal process is there for the appraiser to reinforce his conclusions on indicating a comparable sale has an adverse location? The system does not read my statements concerning location, but assumes I’m the guilty party based on other appraisers. I would love to provide them the proof that I lived on this busy road for 8 years and have a full understanding of the daily happenings. I would love to show them the backed up traffic in the morning for blocks as the double yellow line road feeds into a stop light that takes way to long. I would love to walk them to the elementary school 1 block away from the comp. Again, I’m guilty.

(4) Although the document in question does not provide me with the 20 comparables that the CU supposedly provides the lender, an additional document titled “Underwriter Assist” is 5 pages long and does have a section called Supplemental Sales Data where 5 comps are provided for comparison.  Although technically some are closer in proximity, their characteristics are inferior (4 out of 5 have inferior bedrooms) and 3 if adjusted out support my conclusions. The other 2 comps have sales prices 25% lower than the subject’s contract price while noting the subject was only on the market for 13 days.  Again, how does this data get interpreted by my lender client (I use materially different comps / wrong comps) and will this impact my opportunities for future work?

Although I may be in the unusual circumstance to monitor my performance, all of the readers here should know they are being judged without the ability to appeal.

1 – Here is the main problem that has this writer up in arms. Per Uspap Standard 3, only appraisers should be reviewing other appraisers for substantial factors such as quality of work and reasonableness of value conclusions. This is NOT happening with CU, which, according to this patent application, generates “a rating score […] for the property appraisal based on the number and severity of messages and the valuation impact.” 
Fannie has long claimed that the CU was never meant to replace human appraisers, yet that is exactly what is happening every business day. Fannie does have some human staff review appraisers who presumably supplement CU with technical reviews and serve on their “review panels/management committees.” But the vast majority of daily appraisal work is funneled through CU with no human input as required by USPAP when the substantive quality of an appraisal is being evaluated. What’s the mix of automation and human review? Do they have local competency? How qualified and experienced are they? How are appeals handled?
At this point, it is reasonable to ask, is Fannie even required to comply with USPAP? We appraisers tend to think the answer is an obvious and resounding ‘yes’ because Fannie engages in federally-related transactions every day. But is this true from a legal standpoint? Its actually a murky question; even the AI isn’t so sure. Link here http://appraisalinstitutedc.org/…/AI…
I haven’t found legal documentation to conclusively say Fannie itself must comply with USPAP, although I think we’d all agree that, at minimum, Fannie is an appraisal client who requires USPAP compliance for its transactional purposes. This much is clearly stated on their web site: “Lenders (or their agents) [must] use appraisers that are state-licensed or state-certified (in accordance with the provisions of Title XI of FIRREA and all applicable state laws.” And certainly Fannie’s human review appraisers must comply with USPAP as a condition of retaining their appraisal licenses (regardless of who they work for). 
Yet CU is obviously not human and it is apparently performing appraisal review work without a license. Now Fannie wants to patent its system to do just that. Such a situation would be a violation of various federal laws, including the FIRREA Title X of 1989 which states, “Title XI’s purpose is to provide that Federal financial and public policy interests in real estate transactions will be protected by requiring that real estate appraisals utilized in connection with federally related transactions are performed in writing, in accordance with uniform standards, by individuals whose competency has been demonstrated and whose professional conduct will be subject to effective supervision,” Perhaps I should add here another thing that seems obvious to us appraisers but which may not be so to non-appraisers, namely that Appraisal Review Is An Appraisal, too!
2- There are other concerns, too. The writer is inflamed over the reality that our livelihoods are at risk because we are being judged and juried by a secret computer system that we are not allowed to even view, let alone independently validate the methods, data, statistical models or assumptions by which our work is being deemed good or poor. These complaints aren’t new, of course, but the inherent unfairness of this reality isn’t lessoned by the mere passage of time since its inception.
3 – None of this even touches what has long been my biggest concern about CU, which is the dubious legality of culling confidential appraiser-created data without permission from either appraisers (USPAP scope of work rule) or our clients.

Lol! Bubba, per our discussion, please read it over carefully with a very critical eye. Its one thing for ME to think they have violated law; its another for others to think the same thing. If there is a consensus, then the next step will be to submit this to the state coalitions and potentially friendly attorneys for their opinions.

Originally I thought we could initiate a Qui Tam suit, but in studying the criteria for that, it doesn’t seem applicable to this. This seems more like SECCs equivalent type of case. The “harm” to the public is added bailout exposure the bundling of loans where collateral risk (and value) has been based on or affected by this system. The ‘fraud’ (if any) would likely be overstating the value and under stating risk associated with loans processed using this system.

Potential options are:

Suit for punitive damages; THAT would necessarily be HUGE considering the volume of loans FNMA packages for sale to investors.

Suit to enforce compliance with FIRREA and USPAP; Cease and desist with respect to the patented CU system.

Seek settlement so that CU would be made fully available to appraisers BEFORE their work is submitted to clients so that they could identify and address any ‘discrepancies’ BEFORE reports are submitted and USPAP “violations” occur.

Seek federal administrative or legislative redress either through ASC; FFIEC and or CFPB or Congress.

I’d like to see a few more views and opinions from other appraisers and then possibly forward links to this article to each of the state coalitions in the country for their views and suggestions / support in developing a unified plan to address this.

laws are made to govern the minions. the government is exempt and rarely held accountable for breaking their own laws. Hillary is a great example of that.

(DOH!  did i just say that out loud?)  🙂

definition of minion: A minion is nothing more than a yes-man, a nameless faceless servant. It is a negative term implying that your only importance is from the person who orders you around. Corporate presidents may have minions to do their dirty work such as firing employees who have made a mistake. If a celebrity comes to town, minions will come ahead of time to make sure that everything is to the celebrity’s liking.

sounds VERY familiar.

the bleeding continues . . . . .

It IS a wee bit lengthy and topically way out ‘in the woods’, but it is something that affects every single residential appraiser in the country, doing work for FNMA. MY head hurt reading an analyzing the patent too. All I can ask is that it be forwarded to all the appraisers you know with a request to bite the bullet and read it all.

THEN we need to decide what to do about it! Maybe a Qui Tem suit by one of those experienced in them. FNMA has used this system for BILLIONS of dollars in loans and then made representations to Wall Street about the quality of the securities being bundled for sale to them, have they not?

Any other ideas? Anyone?