Majority of Reviewers Had Very Limited Field Experience

Majority of Reviewers Had Very Limited Field Experience

It was my experience that the majority of reviewers, FNMA included, had very limited field experience. Which is painfully obvious when they request baseless revisions for “more or better comps”. 

I’m a Certified General Appraiser that started appraising in 1984, almost 40 years ago! Spent the majority of my career appraising both residential and commercial properties in a major metropolitan market. I had my own appraisal firm for a number of years, prior to the AMC model which dissolved years of relationship building with clients large and small, almost overnight! Like most of you, I really enjoyed appraising and was proud of my profession. AMC’s changed the game and appraiser’s had no say in the paradigm shift. Of course there are those that say they no longer do originations work or agency work but the reality is, in most markets it’s near impossible to make a living exclusively with private clients. I personally, don’t know anyone that can.

I’ve spent the past 15+/- years doing review work, one year for an AMC and 14 years split between two of the largest lenders in the US. An eye opening experience is an understatement! It was my experience that the majority of reviewers, FNMA included, had very limited field experience. Which is painfully obvious when they request baseless revisions for “more or better comps”. As the OP so eloquently states “As anyone who has been an appraiser for more than five seconds can attest, you use the best comps available. There were no “better comps” to be used.” To make matters worse, they almost universally are delusional in thinking they know everything about every market in the US! Appalling, actually as well as insulting to the local boots on the ground appraiser.

When CU (Collateral Underwriter – pet peeve, use of abbreviations without explaining them in the first use!) was first introduced, as reviewers, we had access to it. Unfortunately, appraisers did not. Many reviewers just copy/pasted the “rules” that fired and sent them to the appraiser as a revision request. The appraiser’s response, often times, was not important, the reviewer was justifying their existence. Statistics were kept on how many revisions as a percent of total reviews completed, were used in your annual performance review. CU had access to FNMA’s entire database of appraisals performed for sales and refi’s. So when an appraiser uses a comp that has been used before in another appraisal, CU flags any and all differences in ratings, which is a direct result of revision requests that question condition, quality, room count, GLA etc. Market conditions adjustments were FNMA voodoo, varying wildly between comps used by the appraiser and the FNMA model adjustment with no rationale provided – Paradoxically, they didn’t have to support their model adjustment!

I was laid off this past February as the rising interest rate environment was having a significant impact on mortgage application/appraisal volume. I’m 63 and many around me were saying this is a great opportunity to retire. The problem was that, it was not my decision or on my terms. In addition to being a Certified General, I also hold an MBA in Banking and Finance. I say this not to impress, because that and $3 will get you a Starbucks, rather to make the point that layoffs are indiscriminate. A great deal of reflection and soul searching has ensued. I’m no longer proud to say I’m an appraiser. After reading the OPs ordeal as well as many similar tales, I really don’t think I want to be an appraiser anymore. When it affects those around you and your own health, it’s time to move on. Life is truly too short to be answering misdirected, unqualified and meaningless questions from someone that’s not qualified to lick your measuring tape!

Cheers to appraiser’s mental and physical health!

By Tom, Certified General Appraiser
Image credit flickr - A Disappearing Act

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22 Responses

  1. Avatar Dana O'Hara Smith says:

    Thanks for your honesty. This makes perfect sense. I don’t think any boots on the ground appraisers are surprised. I hope you find something new to do for work that inspires you! Your’e to young to retire.

  2. Avatar Dave says:

    Most of that FANNIE review is machine driven based on obsolete dated AVM algorithms. I mean seriously, when comparing truly similar data who in their right mind would use an either or binary quality/condition rating – Insane! Oh, I almost forgot – “Don’t forget your dumb A** match pairs” remarks.

  3. Avatar Diana N. says:

    I couldn’t have said it better myself and I have 12 years more in the business and am also a certified review appraiser. I have gotten the stupidest requests from “reviewers”and generally my response was Read the Report, what you are questioning is in there.

    Over the years I’ve seen some very good report, and some very bad reports. I remember one that the only honest information was the property address and the owners name, everything else was a lie. I turned the “appraiser” into the state and he lost his license.

    The profession isn’t what it used to be, AI will be taking over soon . To bad, I really enjoyed what I was doing.

  4. Avatar Dave says:

    I’ve thought about this – AI is our friend! Let me show you how. Run a AVM data spreadsheet and select the best 2-5 comparables. Over time AI will figure out WHY you picked the best, maybe – LOL!

    • Avatar John M Crane says:

      AI is just another tool of the trade. Before starting as an appraiser I was in construction for several years, became a RE salesperson then a broker, then combination broker & appraiser, all before licensing. Licensing removed the broker part of the equation. Understanding the “anatomy of a sale” has been removed from most appraiser’s work and analysis. Asking a broker or buyer “what was the motivation to make an offer in this house” is probably the most important question an appraiser can ask, the second question would be “what other properties did you look at”. It provides a strong basis for an appraiser’s analysis. AI , AVMs will never have that information. Remember – each sale is unique.

  5. Avatar John Dorie says:

    Like Tom I am an old-timer being 78 and working part time to justify my existence on our planet. Also, like Tom I have been a review appraiser for several years for a major lender. During that time I learned a few things that I recommend in my IN-PERSON CE classes:
    1) Number the lines on your comments pages (every software provider can tell you how to do this). When a reviewer bounces back a report with a question, your response should be – SEE PAGE 12, LINE 32 – or read the report!

  6. Avatar Kenneth says:

    I am similar age and experience as you. My sister worked for FNMA and told me what a joke the entire process is. She was constantly training reviewers that have no clue what they are doing. FNMA has and is destroying our profession.

    I am going to deliver pizzas for a living now. It will takes years for the Feds to start lowering interest rates. The entire Real Estate market is and will continue to be destroyed.

    The best thing I have done with my life was to tell my kids NOT to be an appraiser. My wife of 18 years now thinks I am a lazy bum because I have no work and wants to leave me. Maybe when I start delivering pizzas 24/7, she will reconsider.

  7. Avatar Mark Hastert, ASA says:

    Ironic that so much time is wasted on baseless revision requests but we are criticized for the time it takes to complete a report. This won’t stop until some entity with clout starts pushing back.

  8. Avatar Dave says:

    I haven’t been proud to say I’m an appraiser for many many years. Been at this since 1986 after I graduated college and haven’t done anything else. Both my kids went to college and I’m so glad they decided to do a meaningful career.

    I’m only 59 and not sure I can hold on another 5 more years.

    But changing careers at this age is not easy. I predicted that this would happen though. When everyone refi’s at 2 percent, it doesn’t take a genius to know what will happen when rates go up. But I guess we all were lucky to have a pretty good run the past 20 years. But the party is over. For at least a few years.

    • Avatar Mark Hastert, ASA says:

      We may get a little bump when rates start to come down. I started a year before you and remember how folks were refinancing every time rates dropped a percent or more. I recall appraising one home three times in three years…good times.

      • Baggins Baggins says:

        Refried refi’s. They’re trying to recreate the event. Don’t get your hopes up for low rates anytime soon though. First we’ll need a credit squeeze to lift a substantial portion of citizens out of those low rate loans, or at least tag them with higher interest credit to accommodate a better debt recapture balance.

        As far as the article, there are many paradoxical considerations. CU could have been better utilized to identify redundancies across a broad spectrum, like identifying appraisers whom flipped unreasonable volume, who’s reports contained all this static repeated content, ie the appraisers whom used typing services and comps sharing, whom flipped unreasonable amc volume and even hosted seminars and classes online how to select comps in thirty seconds. When half of the content in those appraisal reports was basically just identical. That’s what CU system should have been flagging for probationary status.

        The CU system could have been a tool for good to bring better balance to an industry rife for exploitation by third party companies and tech firms. Instead the system applied an in the blind expectation where appraisers were held to a peer standard based on the majority group data. Sure, read well on paper but in the real world that data base which was a supposed reflection of the peer standard was constantly eroding in data quality due to the excess imbalance where a small group of aggressive appraisers whom used these tools to produce excess reporting volume, created systemic data deficiencies.

        When the volume based appraisers deposited ten CU bound reports for a certain area, if there was a data quality issue, the system inferred that the next appraiser whom provided varied data had to be wrong, being only a single instance of data differential. When three out of four appraisers nationally refuse to provide such volume, and one in two appraisers nationally refuse to even enter data into the CU system.

        The best appraisers whom actually performed quality data validation and manually assembled higher quality reporting metrics, were constantly hounded by the mistakes of the appraiser amc flipper volume crowd. CU had potential, but that potential was immediately lost by the GSE’s inability to promote manually orientated higher quality appraisal development efforts, and instead they promoted the amc cost efficient high volume model which rendered the data comparisons to be basically worthless.

        They could have parsed data better and the group model could have had weighted differential where any appraiser whom flipped volume would have not had as much influence in the peer model effects. But then they’d have to reconcile those volume appraisers getting constant alert notices, and would have had to actually do something about the amc industry to correct the gross imbalance of appraisal time efforts, compensation, and incredible appraisal request volume disparity.

        Big data. Big joke. Qualifying and validating data for real property and the unique situation represented in every loan origination and selling term is far more important than they realized. Attempts to automate the process to create higher quality outcomes will continue to fail. But then again, they don’t mind. Because the goal was never to actually have a higher quality data disposition, but rather to gain control of the mechanisms by which approval can happen, in order to assure a consistently higher quantity of origination. Make real estate morel ike the stock market? Mission accomplished. Checks and balances alongside fair dealings and an honest pay for an honest days work are yesterdays news, a more ‘modern’ approach is being installed.

        • Avatar Pat Turner says:


          Best piece you ever produced!!!

          Thank you

          • Baggins Baggins says:

            Wow, thanks. What are you doing on these old threads? Other posters not as happy with me lately though, I’m going to slow down on the long form posting. Check out this shocking set of data.


            This old comment you responded to, now takes on new meaning…

            Especially since FHFA just made the complete CU appraisal repository available to hud and the department of justice. Help me understand what’s going on here, because this seems incredibly alarming. But perhaps I’m not interpreting the issue accurately.

  9. Avatar Virgil R Gleason says:

    Well said Tom, I started the same time you did, and I am 120% with you. They have taken humanity out of it, and a lot of our fee as well. Remember walking into a clients office and hand delivering a report?

  10. Avatar Scott says:

    I will say reviewing appraisals is a great way for a green horn to learn. You have to be patient with them. I did it but will not do them now. It is a headache and the inspection is the best part of the job.

  11. Avatar DAVE says:

    John, please get serious!! Firewalls prohibit communicating with the buyer (very iffy) and any discussions with the broker probably are also inappropriate. While I get your point, and in fact agree that we are predicting behavior during periods of uncertainty; your background blinds you from compromising your impartial perceived role in the transaction. NOT A GOOD IDEA!

    • Avatar Scott says:

      Dave, ignorance is not a virtue. I laugh at appraisers with no street smarts. Just because you seek as many facts as you can dig up does not make you a crook.

    • Avatar John M Crane says:

      How Is it being impartial or bias by not taking the time to ask questions, consider all aspects of the transaction , the data, isn’t this in line with USPAP ? otherwise just do an AVM.

  12. Avatar Dave says:

    Scott – did you go to college, bet you didn’t graduate – Street Smart huh! The noble prize was won under the premise that some decisions are made during moments of uncertainty and as a result – ONE SALE – does not make a market!

  13. Avatar Pat Turner says:

    And ONE robin doesn’t make it Springtime either.

    I love it now that these dumb asses are back asking if these are the best comps I could find.

    I love telling them “hell no, I’m saving the best ones for my grandchildren!!!”

    • Baggins Baggins says:

      Checklist review methodology. Also indicative of internal programs at the specific lender, if they give reviewers enough time to read reports to answer the checklist exception statements required to submit to the CU system, or if they have to process so many reports they just kick everything which is auto flagged back to the appraiser to show they’ve done something.

  14. Avatar Dave says:

    Hey John – Fiduciary – client is not asking you to interview the buyer – I mean think about it – why not ask him/her what the value is! LOL Todd Frank – FIREWALL.


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Majority of Reviewers Had Very Limited Field Experience

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