Desktops Are Being Done WRONG!
Appraisers, back in April, I was notified by someone “close to the action” of appraisal report submittals to the GSE’s, that many Desktops are being submitted back to lenders TOTALLY WRONG by the assigned appraisers! These reports are being captured and evaluated in the current Desktop observation and testing phase of the UCDP evaluations.
Lenders use the UCDP as an initial report Quality Control check so that any problems can be identified, and sent back to the appraiser for correction, before the last submittal is used for the loan. The UCDP ‘sees’ every report for a particular property address, and keeps track of individual appraisers assigned on reports to that address. Multiple uploads to the UCDP can be done until the lender is satisfied that the report will be accepted for GSE loan purchase requirements.
Based on the recent Desktops submitted and observed, basic trends have been discovered:
- Appraisers have not carefully read over the Desktop Scope of Work, Assumptions and Limiting Conditions, and Certifications on the Desktop form, and appraisal protocols from Fannie Mae or Freddie Mac for Desktop assignments. Read the protocol from either one because those apply to both GSE’s. See PDF here.
- Appraisers are ‘cloning’ a “traditional” full inspection report, and using those for a Desktop report assignment! The Certifications and other verbiage in the “traditional” report forms contain comments that the appraiser has made a property inspection, which is not the case with Desktops. Some appraisers are adding a second Certification page with verbiage that contradicts the original ‘cloned’ report. This can get the appraiser in deep doo-doo if the report winds up at the State Appraiser Regulatory Agency.
- Reports are being submitted with incomplete, or insufficient, property data, floorplan, etc., which is required before any Desktop assignment can be done. If you cannot obtain this data, request that the assignment be converted to a “traditional” full appraisal. Lenders have been informed that this is a possibility. Don’t let any AMC ‘clerk’ brow-beat you into doing the assignment. With Desktop assignments, you CANNOT rely on any form of assumption (other than a required inspection where you believe a repair or alteration is unnecessary). You must have actual data about the subject to use with which to formulate your decisions and value statement.
It is really distressing to me that quite a few appraisers are not attentive to their responsibilities, and are making totally erroneous decisions about how to do these new Desktop assignments.
Suggestions:
- Never clone a prior report, unless it is a true Desktop report, done on the 1004 Desktop, or 70D form.
- Rather than clone, build a Desktop Template report, and use that to start any new Desktop report.
- Correctly verify all data used for the subject property; make no assumptions about anything.
- Make sure the Floor Plan is a correct diagram; exterior wall dimensions and interior wall placements (and room labels) must be included.
- Read all verbiage in the report to be sure nothing is stated about you making a personal inspection!!
- Don’t be afraid to say ‘NO’ to the client; if you cannot obtain necessary property data, photos, floor plan, and other info, ask that the assignment be CONVERTED to a full traditional 1004 report, or else decline.
Quite frankly, after doing research on these Desktops, they are far more complicated to do than a traditional full inspection assignment we are all used to doing. Don’t kid yourself believing otherwise. So be darn careful about what you are doing if you choose to do Desktop assignments.
Dave Towne on e-AppraisersDirectory.com
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How much is the appraiser paid for a desktop these days ?
$100 if they’re lucky.
Jim, They only want to pay $30/hr…..insane amount considering the liability…..Who would be that stupid….ANSWER… .Only newly created Appraiser Dens with new certified appraisers….LOL Think about the profit margin for these dogs who could less.
Sounds fair. I’ll work for $30 an hour, while the plumber is fixing the sink in my house for $75 an hour.
That’s $130 an hour and rising in Colorado.
Imagine that…
Scott Taylor lol right
gee, what a surprise. The optimist in me wants to think this whole rollout of Desktop/Hybrid is a master plan to weed out the crappy/incompetent appraisers, anyone that would do these assignments puts a target on thier own back, idiots!
The whole concept is ridiculous.
Amen! Who ever came up with the idea to do these widespread has no idea what it is to appraise. Do floor plans include bad smells? You think borrowers take photos to show all damage? I gain too much from a site visit to drop them. I have no interest in anyone being my eyes and ears, unless I trained them. I even hesitate to do most drive-bys.
When all is said and done, it does not matter who was eyes and ears, typing up or providing analytical information or whatever, only the signatory parties are committed to contractual engagements. Which is why I have refused outsourced services since the very first appraisal I signed all by myself. The appraisal report is a legally binding document. Those in liability free punch in punch out positions often are unable to get their minds around this concept of 1099 worker liability. Their attitudes means nothing to the independent workers. This is a game of attrition and it’s launching off again right now. I’m primed to hang on but it’s still entertaining to go with the flow. One can only imagine what types of desperate email requests are being sent to panel managers right now. To those people I say get out while the getting is good, you’ve done enough damage and shouldered enough liability exposure to last a lifetime already, just hope it does not blow back at you. Good luck, you’re going to need it.
Not sure why any appraiser would accept those. Just say no.
End these…. Say NO… we are the only ones that will have to defend ourselves.
Bottom feeder work yields bottom feeder product.
Blake Kernea
Don’t forget
If you sign the report you and you ALONE own that report!
Oh and guess what the lenders are already telling appraisers that we are doing less work so what is going to be your reduced fee
A signature, that’s the only reason they need us for this junk.
Exactly Koma! If they could do them without us they would. They also want the signature of who they will blame when it goes sideways.
Pat is right! Whether you got paid $1.00 or $1,000.00 you sign it, you own it! I guarantee the state will not listen to the excuse “but I only got paid $75!”
“Oh and guess what the lenders are already telling appraisers that we are doing less work so what is going to be your reduced fee”
Yeah, how about no….
Ask them if the AMC is reducing their fee.
Ask them if they’ve put gas in their car, bought milk, or paid their E & O this year.
I’m not reducing anything.
Why must appraisers always be the one to bend at the knee?
Made ourselves easy targets by bending……..a knee in the past. I’ve been at this 29+ years and have been amazed at the lack of support for one another. Once you give up all control and become a commodity it’s over. We did it to ourselves by letting others set our fees and turn times. Try that at the lawyer’s office!!!
It’s a perspective issue sort of consideration.
When you’re working for the man and your only responsibility is to shore up liability and increase production, punch in punch out, these proposals make sense, if one presumes the independent vendors have an unlimited protection coverage like you do as a non accountable non licensed employee. That perspective is common as the majority of corporate and government employees have never experienced the challenges and risk management which ride along 1099 status and independent liability insurance procurement.
When you’re the independent worker dealing with asinine changes which dump the near entirety of corporate companies liability exposure on your independent 1099 insurance programs, it’s sort of a different story.
You get what you pay for! ;{p
Although I have not completed any, from what I have read, it is up the Client to send you all of the necessary items to complete your report. That is no different then a full report. Let them do their job – don’t do it for them. Set your parameters and live by them! ABC Appraisal requires blah blah blah prior to STARTING the process. Place it on hold until the Client or AMC sends you EVERYTHING you need to complete your report competently. Your turn time starts when you do. The AMC or client might hold it up for weeks – that is where this time savings part comes in. Now about the fee – that is set by you and your business – remember? The rule of holes states if you are in one stop digging!!!
USPAP, something somewhere…
Defining the scope of work.
Despite popular opinion, that is the appraisers sole responsibility.
If they say take it or leave it means nothing in terms of end of the line liability exposure.
Because if you agree, you may as well have formed that SOW from scratch yourself.
Well, reading mortgage news is sort of different this year…
https://papereconomy.substack.com/p/jumbo-loans-jumbo-problems
https://papereconomy.substack.com/p/forecasting-the-coming-housing-collapse
https://www.zerohedge.com/markets/loandepot-fire-another-2000-workers-mortgage-market-implodes
https://www.forbes.com/sites/davidwestenhaver/2022/06/23/mortgage-layoffs-surge-as-rising-rates-crush-lending-activity/
https://therealdeal.com/2022/07/07/bloodbath-mortgage-industry-keeps-cutting-staff/
https://therealdeal.com/2022/07/11/deal-or-no-deal-home-buyers-increasingly-canceling-contracts/
Looks like they’re easing back on the rising rates, hopefully that helps.
https://www.mortgagenewsdaily.com/mortgage-rates/mnd
I do love to read but – can you give us the overall synopsis?!! Maybe 2 to 3 sentences for each article? Asking for a friend. 🙂
Sure Bryan. It’s all in the title lines you know. Mortgage lay offs, projected housing collapse time frame, more layoffs, increased contract cancel rates in June due to rising rates, traditional relationships to jumbo rates are nonsensical. Just a lot of concern. Not sure how many mortgage department total layoffs there are but could be in the tens of thousands. Jobs satisfaction boards have seen quite a few resentful reviews from those laid off. So basically a lot of people are out of jobs and the projection is substantial lasting reductions to refinance activity. Personally I think agents are less responsive with their optimistic outlooks. Lenders pessimism is tangible, they really did shrink entire mortgage departments.
I’ve read mortgage layoff news for several months, it’s not getting better and the stories are although slightly different, all the same. Now is not the right time to fiddle around with alternative appraisal products and try to run the more production for less compensation program. Be careful.
Thanks!! I read through a bunch of them and then poured a drink. Doesn’t matter – they make up paperwork and skip the Appraisal anyway! Sound familiar? The more things change……
I’m like… Hoping for some good news. Instead that is what I keep getting.
For every 3% the lending rate rises, buyers face approximately $200 more per month, per $100k borrowed.
Ran out of whiskey last night. I’m running out of everything. It’s over, I’m cooked. Does anyone know how much it costs to get into lawn mower racing? I’m also going to need a sponsor, and a decent ride along to get started.
Do they have sidecars?
All of this in the name of expediency? Why help out the lender for $125?
How about not cutting our own throats and opening ourselves up to this additional liability? I won’t complete 2055’s, and it’s not about a lesser fee.
This is definitely not the ‘FinTech’ they said would benefit the appraisal industry.
You think appraisers have a mess now, wait until the new 1004 is unleashed….
If only it was $125. Most offers I’ve seen are for $75-$100. Hard pass.
At least 50 bucks more than you charge for a “full”. Increased liability and speed cost $$$$$$$$$$!
The first round of amc hybrid requests were $35-$50 dollars. While charging consumers upwards of $250-$350. Early discoveries on remote inspection and ancillary services have been bonafied documented as sourced from acm’s to delivery drivers at $10 a pop. What’s new?
Those of us whom have lingered on will never forget that TAVMA and REVAA represent nothing less than vulture capitalism and ruthless independent worker exploitation while simultaneously spending millions on lobbyists to stop opposing side unionization and effective organization efforts. With friends like that who needs enemies?
https://ml-implode.com/ keep an eye on it.
I would argue that most full appraisals are being completed wrong from the recent reviews I’ve done lately….
Bill, half the appraisers in this country have no idea how to appraiser real estate. I saw it for myself for 5 years, and I know FHA and conventional reviewers.
The reason why I have not ever had 0 appraisals on my desk
Sad !!!
It’s not rocket surgery!
Brain science.
I’ve been appraisering real estate for a few years now. The appraisers simply don’t know what they’re doing. Well, so much for industry reform. Better to throw this whole thing away.
New approach, everyone should give up on their appraisal and lawn mowing dreams, just throw it all away. Nobody knows how to run these things or train others to run them either. The situation is hopeless. Now, on to language revision requests.
Absolutely. Why bother. Just let the borrowers tell you how much they need. The lenders are just lending YOUR money anyway and then have no responsibility because YOUR GSEs take it all.
FYI, I was making fun of the incorrect use of the word; appraiser.
Now I see it! That’s hilarious!
One of the more interesting aspects of these assignments is the need for a floor plan. Every other aspect of these assignments seem to use a minimalist approach, but a floorplan seems to be over the top. I realize they aren’t asking us to do them, but they must be paying someone to draw floorplans. I have a sneaking hunch they will require floorplans for full appraisals before long. Who’s going to pay for them? I’m doing a nearly 10,000 sf home right now with tons of angles. Might take 1/2 a day to measure, maybe even a full day if it was a floor plan. I’m hiring a fellow employee to accompany me with an HD camera. Additional cost is $400 and you can bet I’m charging for it, even though we’ll be in and out in less than 2 hours.
The floorplan request is rediculousness. It makes you wonder who thinks this stuff up. So there is a room full of the top brains in the industry sitting around trying to figure out how to save time and money and they all agree (or at least a majority) that this is the best plan??!! 5 of us could get together and “fix” this process in an hour (unless you are part of the 50% that have no idea what you are doing according to some). It is being made more difficult intentionally. Designed for absolute failure.
Jim, I think I saw any big box hardware store will go out and do a floor plan for $150? Again, won’t touch these just to give them someone to lay the blame on. Enjoy (others) taking that money. Hope you’re putting some aside when eventually they come after you.
Interesting Koma. Didn’t know that. I kind of doubt they would do a complete floor plan on a three level 10,000 sf home for $150. I’ll bet that price is based on something more like a 1,000 sf ranch style home, but I’m not sure.
Jim,
Yeah, I couldn’t rember the exact amount or style house. It was enclosed with a listing I had reviewed some months before. At that time I thought it was crazy the seller had that done.
The important part is (should someone decide to perform these reports) is that they insist the floorplan is sent WITH THE ORDER. Do not make this part of our responsibility!!!! Orders come in short information all of the time. Our office Manager spends valuable time trying to get people to take on their own responsibilities. Some AMC orders come in with a list of items they expect you to do that is absolutely their responsibility to provide (can you say Condo Questionnaires). Stop being everyone’s whipping person. No wonder we can’t get respect.
If you’ve never reviewed UCDP user guides, that would be a good place to start.
https://singlefamily.fanniemae.com/media/9371/display
https://singlefamily.fanniemae.com/media/5696/display
This from 2013, this is what was supposed to happen with UCDP… And just wait, things have ran smoothly for a decade but now it’s getting shaky again. The lending and investment industry tends to ride along to get along like everyone else. Then when shtf, that’s when forensic review jobs pop up. Remember the suspensions and revocations threads? We’re going to start seeing that again and all these dudes getting ahead with discounts and outsourcing, volume based approaches are going to learn some important lessons about personal liability and their failures to take it seriously. These companies are not going to stand up for appraisers. When and if repurchase demands outpace capital supply, someone from the top will step in and say; we’ll take it from here. The axe will fall.
https://blogs.claconnect.com/residentialmortgage/fannie-mae-issues-quality-control-self-assessment-tool/
https://appraisersforum.com/forums/threads/suspensions-and-revocations.88400/page-210
Absolutely correct Bryan!!
Follow the money. Who benefits from using the floor plans? Cubicasa and other programs will make more money than the appraiser is being offered for the entire report. Yet the appraiser is liable for third party who is nameless and for what we never viewed ourselves. I will never do a desktop. Too much liability.
This topic seems to be drawing the most comments ever
I have read or seen where 86%+\- have stated that they will not do these desktops (us appraisers).
I have a theory regarding all this dumbass B S.
I think there has been so much generational turnover at the GSEs that the punks now running the henhouse feel either they can walk on water or that they don’t need to learn from history. Don’t forget it’s been 15 +/- years since the last debacle. These youngsters are too arrogant to think “oh it can’t happen to us, and even if it does we’ll still keep our jobs and collect our bonuses!!
Or Too Big to Fail all over again????
The question is, “are they finding enough appraisers to do them?” Sadly, the answer is probably yes.
Absolutely correct Pat! Can we ask what happened to Wells Fargo last month when they manufactured paperwork to get appraisal waivers? I e mailed Fannie and HUD to ask if they were affected and if we appraisers could be expecting retrospective reports being ordered. HUD said “If anything is found they might do an investigation”. Nothing from Fannie. Wells Fargo admitted wrong doing!!! They don’t give a sh*t. What’s worse – we do nothing. This should be on the front page and on national news. That organization has done this over and over! I ramble but yes – same things happening as before.
Speak of the devil. They will pay me $75 if I can do this desktop on the sale of a $700,000 home. That might make me the single lowest paid entity in the mortgage transaction. Looks like they need it back in less than 8 hours. Hard pass!
Maybe they missed a decimal?
There were a flurry of fees but I recall just processing an avm cost me like 150, several hundred per each party involved, hundreds for some simple paperwork deals, it all added up. Again, unless you know what the borrower was charged for the service…
I don’t understand how any appraiser could continue to even accept communications from a company like that. Because regardless if you pick up your type of order, you’re still encouraging the persistence of their methods, by preferring to provide service to them over more ethical less predatory companies. All appraisers have a choice so why would you continue to give two thumbs up in promotion and support of the amc industry instead of simply finding alternative clients?
Here, one of the easiest marketing tools you’ll ever run across. The HUD lender list. Cold roll down the line and eventually you’ll run across any of the dozens of direct assignment lenders servicing your area. Take careful client notes, create folders, such marketing efforts can materialize years after the initial solicitation, others can hit right away. Deny all lenders whom redirect you to amc’s and inform them when they stop using amc’s you’ll be available and hold on to your info. The only mistake you can make is marketing too much and they all hit at once. As they used to say in this industry before the destructive forces of unnecessary amc middle management; all it takes to make an appraisal business is a fax, a flyer, and one good client.
https://www.hud.gov/program_offices/housing/sfh/lender/lenderlist
I do agree and enjoy our non- amc clients the most, we do have a few AMCs that pay us the fees we set and are respectful. Again – a few. It’s all business but this “New Deal” is off the charts rediculousness. A bunch of people trying to disrupt an industry they do not understand. And that isn’t the real problem!
Well I’ve been out of the amc game for many years. Have any of them engaged with cost plus billing, where the incentive to drive the appraisers fee down to pocket the difference has been successfully removed? I read a few articles recently which pointed to a few amc’s whom may operate that way. Despite me being in a difficult to assign area with high appraiser demand I still was never comfortable with amc’s, even if I was getting a C&R fee rate (same as if an amc was not involved). And that’s because I can never get past the ethical implications of my fee causing harm to appraisers in low demand areas elsewhere, because that’s where the amc recovers their margin. The problem with mass appraisal distribution on scale is the pooled funds, the departure from traditional simple straight forward billing relationships where the consumers appraisal fee was the appraisers entire fee. They think about appraisal fees differently now in the hundreds of thousands, millions, even billions. Some of the largest amc companies have yearly compliance costs as well as operational software subscription overhead and labor costs which they’re saying run into the tens and tens of millions every single year. If anyone wonders where the market potential for the appraisers dissipated to… How many quality appraisers are now absent whom never materialized?
“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”
And I have another one I’m having a hard time finding but it goes something like this; The socialists are most damaging because of how they deny us the things which never materialize. Surely as a robber in the night taking our goods and possessions, so does the socialists programs result in even greater harm, as our posterity which would have created jobs and wealth never materializes in our lives. Anyone know who that quote is attributed to?
Had we all said NO a long time ago….
HVCC read well and initially I supported that. The conditions have changed though, when HVCC came out there were requirements for amc’s and lenders to put into writing why any appraiser was to be removed from their panel, (tackling rampant blacklist problems which Corelogic has now codified into regular tech distribution process under the radar as normal allowable activity with Mercury and Scope platforms) and C&R provisions were in the works as that was the normal status quo expectation at the time. (When amc’s occupied 15% or less of the lending space.)
Funny how the TAF applied certain ethical principals to appraisers but for 14 years has failed to apply a similar standard to the now regulated amc industry.
https://www.appraisalinstitute.org/AMCCompetenceFeeIssuesDebatedinLatestASBQA/
“Disclosure of fees, commissions, or things of value connected to the procurement of an assignment must appear in the certification and in any transmittal letter in which conclusions are stated”
Except if you’re an amc, then you can skim as much as you want unbeknownst to consumers and appraisers, sack borrowers and appraisers with indemnity and fee confidentiality agreements except in the few states this is prohibited, etc, etc.
You know for honest people, if even one state passes a new rule detailing a higher ethic, they just blanket apply that across the whole spectrum, because they believe in ethical principals. That can not be said about the amc industry. They only comply where it is required and otherwise consistently exploit all possible avenues available. The complex network of regulatory compliance allowance merely raises their overhead expenses, which they take from appraisers, and morph into even greater profit margins.
It is just deserts that appraisers whom still subscribe to the amc model get to deal with the hybrid and desktop offerings. The rest of us are by and large not dealing with that. It’s never too late to subscribe to the higher ethic and demand by your own working efforts a better reform. Amc’s did not stop contacting me because of my appeals to them, but rather because I went over their heads and made those ethical principal appeals to their lender clients. A few of those had been direct assignment resources for many years after too. It’s no coincidence that amc’s used to occupy 80% of the ML spaces and now that’s reportedly down to 2/3rds. I’m not the only one but few dare admit what everyone knows to be true.
Time to thin heard; as Appraisers accept and provide this service; there will be formal complaints including those of being “biased”. Once the word is out on the street that State Boards have taken action against those that have completed “desktop / hybrid” reports; the heard would be thinned down. I do not wish it on anyone; however that is the reality of what we do. If an Appraiser is chasing the dollar and ignoring or lowering their standard towards professional Risk Management; all they have to do is look at themselves in the mirror to answer the proverbial question “why & how did this happen to me?”
It’s hard for me to argue there isn’t a possibility of an mistake to happen because of a desk top appraisal. But we could argue that because of builders now having consistent standards throughout cities because of building codes. The need for in person appraisals are changing.
Suggestion # 7 – Don’t do Desktops
Johnny.. You are 100% correct
Pretty easy business decision for myself – I have never completed nor am I planning on completing any desktop product and that included the Covid days. If I even received a Covid desktop product I had it changed to a full appraisal.
So glad I’m out of the profession. A race to the bottom for fees for many doing loan work.
So many different desktops. It may help to note for this article, it appears it is in reference to the new piece of crap full 1004 desktops.