If you don’t have it already, I would start by asking for the most recent formal lease agreement, and any and all past lease cancelations. If they can’t produce a basic lease agreement with dates prior to the effective date of the report, then you have your answer. If you truly want to seek the truth, ask for financials that show rent was received during the month of your inspection.

Cooperate by putting the burden of proof on them.

Seek the truth.

That’s why I look at market data thoroughly, with logic, ‘from the shoes of a buyer’, or sometimes even the seller. Then when I’ve got a good feel and such I often hit at the top of the adjusted value range. If it was my property, believe that, that’s where I would demand that to be and if there is a single buyer out there, that’s what I’m going to get. Under all auspices of strict fairness and above board ethic of course. I just ruined my own argument.

Also, rule of thumb. Never take a photo of yourself in the mirror. Instant deal killer. Who’s that guy? Oh no! lol.

Sure I get it, completely. Sometimes talking numbers is best for everyone though. It’s not advocacy to help them get to the finish line with hypothetical, if coincidentally a health and safety shortcoming may be what’s holding them back. If I could just talk to qualified people directly, we could all work together in an ethical upstanding way to form solutions for the individual challenges at hand, ahead of that point where calamity ensues because deals are not working. There are no easy answers but dang, if only there was rotational distribution, they’d be able to sort it out and would develop more meaningful routine methods and approaches to do so, rather than just saying use the next appraiser forever instead. It is what it is, and we appraisers don’t change that. They’re still selling rainbows, and surprisingly, consumers keep buying that. If one was to ponder institutional memory, consumers are actually much more to blame than lenders. How many times and how many centuries of a similar but slightly different process of money changers burning citizens does it take before people get a clue? Greed I guess… Caveat Emptor. The number is not even the half of it.

I don’t know. Sometimes it’s better for everyone if it’s not all mixed up in excess. As long as the terms are fair and you’re dealing with fellow citizens with equal application of the law… There are no easy answers but dang, someone is finally suing facebook. Good news. I tried to re read the article but stupid ad block denial. I’ll catch it somewhere else as it develops.

Baggs, that would make too much sense. We now work in an appraisal world where absolutes are expected rather than common sense. For example.

IF our (preliminary) concluded value range is $200k to $210K and for whatever inconsequential reason our ‘reconciliation is at $200k vs anywhere else (perhaps no more than rounding), and a SP OR refi 80% LTV requires $201,999 who has been served by this ‘absolute’ conclusion? A less than 1% variance is not statistically determinable in any credible across the board scenario. In a common sense world, the property would be appraised at $202,000; $205,000 or even $210,000.

Honest appraisers are not going to bump or reconcile to unsupported numbers. The above scenario is not getting reconciled to $215,000; or any other number out of the credible range. Why should deals be killed and licenses put in jeopardy (state complaints) for these kind of variants?

Otoh, if the top of my adjusted range is “X” and the price is “X+1”, then THAT deal is getting killed because I cannot reasonably reconcile outside my own concluded range. Our regulators desire to think absolutes are even possible actually causes more harm to consumers and taxpayers than bad lending policies do.

This isn’t really much different that inclusion of verboten pictures in reports. Appraisers don’t even consider religious icons or racial characteristics in a picture. Yet regulators decided we “might”. Therefore an absolute prohibition is decreed.

I’m trying to keep an open mind on this and be prepared to believe it is only bad programming. On the other hand, we’ve known for years that inclusion of census tract racial; age, and socio-economic & marital status data in appraisal reports (under the innocuous census tract number), this was bound to happen.

We can’t include a human’s picture or their family photos in any of our property appraisal pictures, but the bank, underwriters, insurers, and investors ALL can determine racial composition of an appraised property with ease …from the mandatory information, we are required to give.

We already know FB and other internet super corporations routinely censor data about issues they don’t themselves embrace.

The burden of FB or any lender’s compliance should be a high one, given the social ramifications of redlining.

https://www.washingtonpost.com/business/2019/03/28/hud-charges-facebook-with-housing-discrimination/

Targeted advertising is not only problematic, but downright simply annoying. This is why I still subscribe to paper, you get far less targeted marketing.

It’s not that complicated, when I am talking to the owner or the broker (if they even show up), I never say “I think your property will appraise for …….” The numbers are in my report, and the report is completed for the client, which will most likely be the lender.

The icing on the cake would be a follow up finishing effort where the lender then requests the appraiser provide a signed AIR compliance document. Even though the appraiser is incapable of intimidating themselves, with holding work from themselves, all of that.

My take on these issues of value expectations is that it would be good if we always talked about the number and ltv’s needed. Then we could provide more effective consultation to both borrowers, brokers, and agents, so everyone could work as a team to accomplish what needs to be accomplished to help move the borrower to the finish line.

It’s not advocacy to clearly and accurately describe why the expectations are falling short of the requirements. Cheers.

But if you never talk numbers, how do you get an appraisal report done? You must at least think about and report on them. This is confusing by design.

Mark, another great article. Thanks dude.

Hey Jon. Thanks for showing up on the blogs dude, I think you have some very interesting insight. The ‘direction’ towards the appraiser is inherently built in. We do after all, always have access to some database which actually has, like, numbers and stuff which indicate the direction of price and value and consumer trends. Shoot, I could still pull off a valid appraisal even if working with only the comps provided by a lender. I would however, most likely not be able to provide the requested underwriting bracketing. LOL! This is confusing by design. There is a very important reason the industry went with separation from loan production over forced round robin or clearinghouse as suggested by the IVPI proposal… It’s because the lenders wrote the damned rules. Aka; regulatory capture.

Talking about a numerical figure does not make me susceptible to lender pressure. Comp searching is a thing of the past which is what those rules were intended to squelch. Something about having a duty to not just the lender, but also the public trust. It is however, more proper to have that conversation with the borrower and not the lender. With the borrower we do have authority of license. With the lender we are forced to be subservient to their interests due to lack of fair and evenly balanced order distribution approaches. As long as we’re not getting pushed around, I think we should know all of the details, including being privy to the home inspection reports and buyers ltv. I never did need protection from lender pressure in the first place and a far better action to take instead of separation from loan production would have been a strict round robin assignment system.

To date, I don’t think anyone has ever tracked appraisers or individual persons involved with origination by how many defaulted loans they were involved with and issued any publicly available data on that. Although I clearly understand the premise of the article and the points at hand, I’ve always held a begrudging resistance because without adequate data, how can anyone make truly informed decisions about what’s really drawing up default rates and risk? Hell what does the number even matter anyways, we’re not doing cash equivalent analysis based on the rate at the time and the cost of money to one borrower is not the same as the cost of money to the next borrower. It’s just all so complicated and detailed attentive appraisers serve other important functions, it’s not just all about numbers and value. I do strongly agree with the intimidation rules, just not the separation rules. That agent though, he’s breaking the rules so that’s like still very article worthy, the blatant disregard.

Remember the story when the appraiser pressure hotline opened up for like 2 days or something then went offline immediately? MB’s were sending every failed deal to the hotline, and appraisers could not even get through. Why should they care, it’s the taxpayers money anyways.

Respectfully Jon, yes you are wrong. Direction, instruction and or inducement are all wrong and each is a synonym for “push” the value in the LOs direction to the owner.

Agree we can and DO still say no, but the point is lenders routinely violate DF. This is a more mild violation…just like direction to file false complaints against appraisers when we say “no”. Not direct retaliation…but just as intimidating to others.

Thank you. I appreciate it.

Thank you Mike. I appreciate this a lot.

Pssst!
Excellent job Mark!

However, federal law puts limits on how that may be communicated, including the amount needed. You and I are not trusted to know the loan amount or LTV because we’d be able to calculate the “amount needed” .We also are assumed to have the same low level of integrity most bankers have. Cant trust us with that secret knowledge or we will obviously cheat.

Except in a sale. There we can be trusted.

Except if the value doesnt meet contract price. Then we arent trusted again.

Marks outstanding article points to how brazen (& ignorant) lenders have become. These examples didnt include the usual threats that go along with such directions….and AGA has more than a few written samples of those.

Dodd Frank is ignored 100%. From reasonable fees to appraiser independence. The new Chair of the House F inancial Services Comm needs to revisit and address this.