Seen many changes, interest rates were changing upward to 6% from the mid 4%s, There had been a short depreciation form the booming 1950’s. The west coast didn’t have large money markets and the local’s had to go the Chicago or further for small shopping development. The farmers – sellers had to carry the local builders with all kinds of Notes, financing, the local banks, etc. went for sharesies with one another (until they realized final responsibility).

What will come, will government inter-venation diminish, will private lending come back, will tax gimmicks predominate??? Will WALL STREET dictate Real Estate finance or will local lenders come back.

Congratulations Jonathon Your mention in the WSJ must have enhanced your pricing list.

The HOME MORTGAGE LOAN MANUEL from the American Bankers Association published 1943 mentioned that the residential market began weakening in 1925-1926. This preceding the trend by 3 or 4 years.

Watch out!!!

“Compliant-able” is the operative word. In my personal experience I’ve not found any of the AMC’s allowing the appraiser sufficient control over the on-line form to become, in my opinion, “compliant”.

I did see one specific company change their form verbiage to read, and I paraphrase: “We sent an inspector out to the property and provided the appraiser with that report. However, it’s the appraiser’s responsibility to verify any conclusions relied upon for purposes of this report”. Brilliant!

It was my determination they don’t pay enough for the time it takes to make the form USPAP Compliant, much less complete a credible and supportable appraisal. Unquestionably, these type reports aren’t going away anytime soon. This is a business decision and I don’t necessarily fault anyone who chooses to conduct this work if they firmly believe they’ve met all their professional responsibilities to include USPAP Compliance. As for me and my business, low pay and unrealistic expectations aside, I choose to forego the potential peril.

Happy New Year Don (and all else for that matter),

My response was basically predicated upon typical appraisals for lending purposes and how bi****cated appraisals relate to those. All bets are off when your client isn’t attempting to conform to GSE Guidelines. And I’d bet my last dollar you’ve never had a client not attempting to comport with GSE requirements specifically request you complete a “bi****cated appraisal”.

I’ve been buying and brokering paper since 1985. Lucrative would be an understatement. The industry has undergone dramatic changes over the past 3+ decades, and especially circa 2009+ where GSE’s realized it was more economically prudent to sell the paper as opposed to going through the foreclosure process. In my experience 100% of performing assets and 99% of non-performing assets purchases require only a drive-by appraisal. In all instances I’m aware of, and certainly in those where I’m the buyer, the appraiser is expected to conduct the inspection. The appraisal in these instances is more of a formality to ensure the collateral exists, given it’s primarily a financial decision and “guesstimated” condition is factored into anticipated ROI and yield.

I agree independent contractors need a metaphorical “Swiss Army Knife”. This doesn’t mean you shouldn’t specialize nor accept assignments you aren’t competent to complete, but it does open the door to higher paying assignments compared to “cookie cutter” work.

A some time client is the paper buyer, the Trust Deed (note) buyer frequently has no access, and may not want the Vested owner to know that the paper is being sold. This note buyer wants the best he can have with some secrecy. There are all kinds of ways to verify info, the best is among principles facing one another, looking at utility connections, looking at MLS’s have limits.

Buying discount paper is a profitable enterprise. getting a 14-16% return on an older property, maybe 25% return on a questionable ownership beets bank rates. Experienced appraisers have the expertise.

You are correct most lenders want the most, private lenders, those who NEED timing, to make a deal may feel pressed. It is a basis for pricing or for extending the time to do the job. Independent contractors need all the levers.

Happy New year haven’t had any drink thus far but plan on it later

In theory they may be acceptable. The reality is many amcs have their own forms in which the appraise is unable to add to or change. That is where the USPAP issues lies. The other issue is quality of information and fees. Appraisers are in fact being disciplined by state boards for non USPAP compliance because of the lacking work files, and short cuts that are being taken.

The only way any type of bifurcated product works is when the inspector is under direct supervision of the appraiser as in a trainee or coworker in an office.

Hey Don,

Appears based upon where this post is located a little “Yuletide Cheer” may be involved. Regardless, I wish you the best for the Holidays!

As far as the matter at hand and, speaking solely from personal experience and with the sole exception of pre-foreclosure work, I’ve never completed a report on a 2-4 family dwelling where the client would accept anything short of the appraiser’s full inspection of each and every unit. I’m not quite sure what a “mortgage agent” is but, as you’ve stated, opinions vary and the sole opinion typically sought is that of the appraiser.

I can’t remotely fathom support for establishing a fee predicated upon rental information, condition and/or occupant (tenant) interviews and, as for me, I establish fees based upon my knowledge of the market and degree of complexity of the specific subject assignment.

I’m guessing this response is intended to relate to fee negotiation(s) in general, but it’s totally lost on bi****ated assignments.

USPAP 2020-20201 Advisory Opinion 2 directly addresses this. Hybrids are indeed compliant-able. Hope this helps.

I have negotiated fees for four-plex’s, and other apartments based on the managers rental information, and condition v. occupants individual interviews. Many apartments are difficult to inspect during all hours, several lenders accept partial inspections or the managers judgement for conditions, repairs, occupancy. The agent, the apartment manager, the mortgage agent, the owner, and the buyer may all have different opinions. The appraisers also may have varied opinions, but with explanations.

I’ve stated on more than one occasion that the most prudent way to “nip these in the bud” is enhanced insurance fees for the inherent risk(s). Not sure where that’s at but, like all shared risks, do I really want part of my E&O to cover reports of this nature? Rhetorical.

http://appraisersblogs.com/clearval-value-hybrid-appraisal

Ehhhh…. Could dig into it again but there is so much good content in the above link.

You can’t find ways to make an outright fraud, not a fraud. There are people whom flip those in volume. There are verified instances of fraudulent activity. There are verified examples of improperly assembled data.

State boards is just the half of it. What information that is lacking to make better informed decisions is how many do not use lists appraisers may be on, how many instances of claims are out there total, how much is paid out and how frequently, as well as attributable to any given individual appraiser, how many and whom specifically has been issued warnings or denial of service through fnma cu systems. If you pay more EO insurance than someone brand new signing up that same day, you’re on the wrong side of the coin.

FOIA for FNMA CU data! EO insurers have yet to react to the hybrid issue. The accountability train in this industry can take ten years or longer to finally roll around.

We each travel the road which works for us. I’ve made and will continue to make things ethically and compliantly work for me if possible. These are not the bulk of my work And likely will not become the bulk of anyone’s work but I do think it will have its place.

I’m not surprised 70% of our colleagues said they would not. Every week is a new doom and gloom article about our profession. I felt like that early on THEN I decided to see for myself. I’ve seen, I understand what needs to be done to be in compliance and I’m good with my decision. Good day

Fear is healthy. And I rarely, if ever speak hypothetically and, when doing so, make it perfectly clear up front. However, any and all comments I’ve ever made are based in reality and solely upon actual personal experience(s). If you “CAN” do all you say, you must be working for the only client and/or AMC that no one else on this board is aware of. Do tell as, in my personal and not hypothetical experience, they don’t exist. Maybe I’m just too old (or what I prefer to call experienced) to go chasing rainbows and unicorns.

Maybe they “aren’t going away”, but FNMA’s fumbling right now and they clearly aren’t “prime time” yet. Approximately 70% of your peers in a recent survey said they wouldn’t touch them and I’d bet my last dollar their response wasn’t solely grounded in “fear”. 24 hour or same day turns, even on weekends? Get a life! One of these “bif***ated” reports pays approximately 2% to 3% of the fee I’m receiving for the report I’m currently working on. It’s a complex report that also isn’t going away any time soon and will take approximately 4 to 5 days to complete. Using conservative numbers, I’d need to complete at least 35 bifurs per week to generate similar income and expose myself to, at minimum, at least 35 potential revision requests that never should have happened in the first place. Aside from my “fear, fear, fear” of this alone, there simply isn’t that kind of consistent volume in the predominantly rural areas I cover.

This is an obvious business decision everyone qualified can and should make and I chose to base mine on first-hand knowledge and not hearsay and/or someone else’s experience(s). In the end and, at least for the time being, I’ve chosen to, in the immortal words of Nancy Reagan, “Just Say No”.

Actually, as I think further about this, maybe my decision was based on fear. After a couple months of calculation on the fess earned for this type work based upon the volume of acceptable assignments across 3 AMC’s conducting this type work, it appeared I was on track to gross approximately $30k a year. I have a very healthy fear of not eating, so I digress. “Just Say Hell No!”

Your replies are from fear, fear, fear. You all have not had success and are speaking from fear and hypotheticals that may never come to pass. Every course I’ve taken, it appears that there is very little the appraiser gets right–from their workfile, to methodologies…just constant fear mongering of the state boards. Then when you research, you find very few actual complaints and sanctions of appraisers. If that’s how you wish to work it, then do. But I know You CAN negotiate fees. You CAN write as much as you need to to cover your but in your scope of work. You CAN include whatever additional certifications you need to include. At the end of the day, if you cannot successfully figure out how to make it compliant, then don’t do them. But they aren’t going away.

Hear Hear Merv,

Obviously, Vaughn has never attempted to negotiate a bif***ated report fee. I’ll save my breath (type) on that one.

“Verify, verify, verify”? To the extent allowable as well as anticipated in the extraordinary assumptions employed in the report. However, when you’re provided with an inspection report the client (at least AMC in their capacity as an engaging entity) anticipates you accept as verifiable (verified?) information, yet it’s blatantly inaccurate on its face as cited above, how do you “verify, verify, verify”? You going to inspect the subject even though it’s a desktop? Or simply go back to using public records like an “old school” DA (which obviously irks the AMC) or, as I do, decline the assignment after wasting significant time analyzing public records vs. the inspection report for no fee.

I disagree a DA can’ be made compliant, and I’d gladly go to court (kangaroo or otherwise) with a form and scope of work I’m in total control over. But I disagree to a degree again that a bif***ated report is a 2nd cousin. This is a red-headed stepchild that doesn’t deserve to see the light of day and the sooner E&O companies get it and won’t cover and/or charge appropriate premiums for those willing to take those risks, the better off our industry as a whole will be.

Vaugn, “fees are negotiable” is patent nonsense. Get over it. One finds this sentence in AI, State regs, lawbooks, conversations, econ 101, and its complete bullshit, meant to stifle the mind. Fees emerge from custom, historical context, ‘feelings’ and are NEVER negotiated, only SET. Think about it.

Verify. OK. but here’s a better approach: if the report had to be defended in court (and a State Hearing is a court with the judge, jury, executioner all rolled up in one), could it? would you be able to defend it? This is what I tried to instill in my appraisers.

DA’s can be made compliant? NEVER. EVER. As I mentioned to Donna at the head of this column, don’t even try to bring a desktop to court; or its 2nd cousin, the Bifurcated BS Rpt. You will have just earned jail and no more insurance.