Hybrid Appraisal Products & Public Trust
Are busy appraisers doing Hybrid Appraisal products?
The article titled First American launches new appraisal solutions technology popped in my system Tuesday early morning as I was getting ready to park my slippers.
This article touts another ‘major’ company’s effort to design and implement a new version of what’s become to be known as a Hybrid Appraisal product.
These products are designed to have a real estate sales person do the on-site property observation and photos, which are then provided to an appraiser, who completes a USPAP compliant ‘desktop’ appraisal. The whole point of these Hybrid appraisal products is less cost and more SPEED to get a valuation back to the lender faster.
This got me to thinking: Who’s doing these Hybrid appraisal products? Are the on-site observations being done by busy real estate agents – the ones with well-known reputations and years working in their region? Probably not. That leaves lesser experienced agents with fewer transactions to be the ground pounder. Then, once the on-site observations are done, are busy appraisers finishing the Hybrid appraisal report? Probably not. Busy appraisers are typically those who also have years in the business and work with a variety of clients, and are already time-committed to those clients to produce a better documented appraisal.
The bottom line of Hybrid appraisal products: the race to the bottom involving SPEED is incorporating lesser skilled people who may not have the desire or ability to really analyze and incorporate their responsibility to protect Public Trust. Public Trust is a key element of USPAP, and is incorporated in the writings of The Appraisal Foundation, the Appraisal Subcommittee, and the Appraiser Qualifications Board, plus federal and state laws involving accurate property valuations.
And as so often happens at various events and conferences, the blame game against appraisers just won’t quit – primarily because “we” have NO centralized and consistent representation by any one appraiser organization to help defend appraisers, and appraisers most often won’t join those organizations who do defend “us.” So “we” are kicked to the curb constantly, as is pointed out by this statement in the article:
“In fact, at a housing summit in November hosted by Urban Institute and CoreLogic, several speakers including Quicken Loans CEO Bill Emerson said that closing times for loans could be much quicker than they are now.
So what’s keeping lenders from closing a loan in a week and a half instead of a month and a half? Appraisers.”
If you’re an appraiser, you will have to decide whether or not to do Hybrid Appraisal products.
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Hybrid Appraisals, Hybrid Risks because we do not know what the ramifications will be until these types of appraisals break the bank so to say. Don’t remember the name, but wasn’t about two years ago they came out with a report that was said not to be an appraisal but wanted a value? Didn’t do those either. I’ll let others take the risks and the fall out you know that will come their way.
Clear Capital is spitting these offers out $100 a pop for Chase and they are being gobbled up. I say shame on you appraisers in Central Ohio that are accepting these orders and are still accepting full 1004s for $350. There is too much work in Ohio over the last three years to keep low balling. You appraisers are ilk of the profession. You keep letting the AMCs win. Stand your ground. There is a ton of work. Get paid. Quit bring my income down with yours.
“Public Trust” is nothing more than a feel good justification for any federal or state legislature or regulatory agency to justify whatever OPPOSITE effect policies they want to adopt for the convenience of the moment; or benefit of their donors.
“Public Trust” was the excuse for HVCC.
“Public Trust” was the reason Dodd Frank paid unenforceable lip service to Reasonable and Customary Fees.
“Public Trust” is why the Uniform Standards of Professional Appraisal Practice were adopted as the minimum acceptable standards for federally regulated transactions,
“Public Trust” is why the GSEs were created.
“Public Trust” is what most state regulatory agencies claim to be protecting when THEY perform their non USPAP compliant “reviews” to unspecified standards that fall far short of USPAP in order to judge OUR USPAP compliance! “Public Trust” preservation is how state regulators (like those in Oregon, California, Minnesota or Maryland) that routinely jump to violation settlement stipulations and consent agreements for newly re-interpreted (by them) USPAP requirements that ASB knows nothing about.
“Public Trust” is as meaningless as “I’m from the government and I’m here to help.”
I wouldn’t touch this, in our area your lucky if the realtor can measure the square footage. The honest of brokers VS appraisers on photos, no way would we take the risk. Lets face it when the deal goes sour they will be looking for the appraiser. No Thanks
According to the NAR survey, typical appraisers are dissatisfied with the direction of automation driven valuation models at a ratio of 2 to 1. 67.3% of respondents were unhappy with automation models. Even more than were unhappy with amc modeling. Double the dissatisfaction numbers I would say, because most appraisers don’t even bother to voice an opinion these days. Their opinions have been summarily ignored for a decade now as amc’s steer the industry instead of appraisers.
Think it’s a coincidence that when the fees go upward consistently for the first time in a decade, fnma suddenly allows the use of trainees? Think again.
NAR Appraiser Trends Study 03/2017
I spoke with a machinery and equipment appraiser from ASA the other day. HIS business is still challenging and exciting like ours used to be. His clients routinely send him out of state for large M&E assignments.
I think I’ll talk to ASA again soon. Same with NACVA for business valuation. Check YOUR state and see who licenses or regulates them! (no one). There are professional peers who may judge your work but that’s nothing like the fiasco they turned RE appraisal into.
There is no way its USPAP compliant as these companies state. USPAP says you must do a physical inspection of the property. I ask the lenders this “would you sign your name to another loan officers work not knowing weather its a bad loan or not?“ The answer is no! Why would I use a brokers information with out inspections the property? The broker is in this to make a sale and a commission, just as the loan officer is. The only one is this not making a commission and looking out for the house as advocate is the appraiser. Good Bad or INDIFFERENT