I’ve had to turn down a few of the rarer refinance requests lately. The people are often wildly over valued from only a few years prior. Serial financiers have it the worst. Because nobody ever tells them no. When it comes to actually try to sell those homes, they’ll be lucky to get out with their shirts still on.

Smart appraisers are not going to be the only 1099 whom tells them how corrupt the system is after they’ve been run through avm’s and value acceptance waivers for the last half dozen rounds until their risk profile grew so substantial, they had to actually deal with a live human appraiser again. Talk about a setup.

Massive projects running on auto pilot. Until the music stops.

I wish all ROVs were handled in this manner. I recently completed an appraisal on a duplex and got an ROV within days. Three of the four “new” comps were already in the report, and the fourth was a fourplex. This ROV should never have been sent to me, but I had to waste my time on it anyway.

Yea, “well judge, we would like to submit a reconsideration of guilty” Here are some cases that we believe are relevant and support a verdict of not guilty”….oh, that’s right, that’s an appeal. Difference is the original judge does not need to take time out of his busy day and it can be rejected right out of the gate.

The guidelines limit them to 5 “comps”.

Post language correction; Look at an avm’s technical details; etc. Not amc’s, sorry.

Interesting changes in the avm’s market values and predictive behaviors happen if one looks into details at the right moment in time. Before the list (mass appraisal results averages.) During the list (predictive software turns off as the list is treated as bonafide sales data, aka hits the number every time and no longer predicts, incorporates this new data into area averages.) And after sale closing / recording (New data which effects everything else surrounding and leaves previous predictions as nill.)

The avm systems are instantly responsive to listing data, treating them just like sales. Theoretically if an entity holding multiple properties lists several at unusually higher figures, this drives up the values of their other properties, no actual sale required.

Ask the question why all avm’s out there appear to have consistent figures. You’d think at least one of them would recognize incorporation of outlier skewed data or coordinated activity which may not be valid sales data, straw listings. One speculates if the avm’s are using their own ai systems to borrow, copy, self correct, and check their data conclusions against other avm’s and other ai systems. That seems to be the case, which is how their data output appears consistent across the board against supposedly independent competition from other avm systems. The illusion of intelligent design; avm’s and ai systems. Systemic unavoidable deficiencies in data reliability is the result. Control the market.

This also happens at the ground level with individuals. One time a tech savvy person somehow was able to enter a fake sale on Zillow and that made it all the way to me as an ROV. Got past the lender and everything. The sale never existed outside of Zillow. I was the only person to take the time to validate the data. Called the county to verify the recording was not somehow delayed. I wrote Zillow and they never removed the false data indicator. Drove averages up for the whole neighborhood.

The event happened because the lender gave instructions on requesting an ROV to every borrower. As is inevitable in any financial system; someone got the bright idea for a new way to scam the system to get more for themselves. Appraisal modernization! Central planning never works.

In the real world all amc’s function as advocates of the lender in order to maintain the order request volume in the over saturated market of appraisal management companies. The chain of communication and established trust between the licensed mortgage loan officer and the licensed appraiser becomes severed by the presence of unnecessary for profit amc middle management companies. In the end it is the consumer whom is most harmed. As the best appraisers refuse to work for amc’s, and all parties essentially advocate for the seller, as important independent checks and balance safe guards are systematically dismantled at the institutional level. aka; appraisal modernization.

Viewing contractual figures is essential for appraisers. Always comp search first or you’re driving blind. How realty sales representation works in the real world; Agent to seller; List with me and I’ll get you the highest possible number. Seller; Do you really think we can get that much? Agent; We’ll put the number out there and see if anyone bites. Sign the listing agreement and I will be your personal market advocate. We’re going to win. And we’re going to win big. Seller; What if the appraisal comes in low? Agent; That’s some one elses problem.

Only on paper in the bureaucrats minds can honesty be regulated with executive decrees, an endless procession of guidance updates and written instructions. Independent checks and balances are what makes the world turn. Appraisal is not all that complicated; The appraiser is the independent non advocate in the chain of lending. The last check and balance. When the safe guard of checks and balances is removed, that’s when systems break and people are taken advantage of.

Avm’s like Zillow are populated with unreliable data, as tech savvy people double list, manipulate data, the illusion of a higher market ceiling. Open source community driven content. Look at an amc’s technical details; Property goes up for list, the avm calculation turns off, that price asking figure is treated as a sale. Until closing, then the adjusted number and ensuing averages changes again. Price is not the same thing as value.

Dave,
Thank you for the kind words. Yes, the UCDP was used inappropriately at the outset and there are occasions where they still get abu…..used. As to your other point….. maybe I should have been more clear. It is the announcement that I don’t have much of a problem with… The supposed required training of UWs to be able to determine correctness of the ROV is of course a concern, but that is more than they are required to do now and they are the ones passing the ROVs currently, so at least they are getting some “training”. However, I can definitely see the abuse of the system by just wanting to bypass the original appraiser and order a 2nd appraisal through the bias pathway which only takes the LO telling the borrower to claim bias even if it does not exist to get a free 2nd appraisal. There should be a checks and balances internally before that 2nd appraisal gets ordered, maybe a Field review or at the very least a desk review by an appraiser, maybe even a two party verification request so that 2 UWs have to validate the concern and sign off on a 2nd appraisal request. Yes 2 UWs can both be bad actors, but it is it least some sort of an additional hurdle to jump over. Maybe I just have too much glass half full faith.

Appraiser who start out with a blank canvas (so to speak), with no asking price information provided to them, — obtaining data only by available visual information and records of the property and improvements itself, to work up the estimate and appropriate comps. This would force values to be individual and not by a preconceived $$ to be matched oor exceeded. The fraud we experienced would have been less likely to have happened as well, if the appraiser had to use only the physical property being evaluated– and appropriate comps.

Exactly. However, the norm is the ROVI with sales that to be downward adjusted to prove the sales contract. This practice is not allowed either.

Not trying to be a butt. Reality is those comps could actually be good but sad news is the value is reduced. Everyone always thinks new comps means a higher value. They don’t.

Yeah, I did just that once, not to be a butt but because those comps where mislabeled and where more appropriate than two of the comps I had.

No need to apologize. It’s a great example of people that suck at their job. Then we get punished for it.

Oh, sorry. It seems fraud never gets into the mix of discussions. This one started with a manufactured home dealer who took a ‘for salvage’ mh structure and used the void documents he had available to him, to perpetrate a real property scam, mortgage fraud. It was further concealed by less than professional work of local agent failures.

It is currently in litigation, and we have heard the first of its kind in the nation (USA).