#YangGang

TbT-You have already LOST whatever good client they used to be.

I simply don’t accept computer reviews of my work. Period. Now, if they want to have a USPAP SR3/4 compliant appraisal review performed I’ll happily cooperate. THAT is the minimum acceptable standard for an appraisal review. No matter how they try to parse it by calling it something else.

Tell them that they can either stop that practice; pay more money to put up with the BS OR just say goodbye.

THEN turn their asses in to the state regulators for failing to comply with FIRREA and Dodd Frank and sit back and watch.

Greg, bad appraisals happen, but they do not predominate. It may be difficult for reviewers to accept that but consider this;

Most reviewers tend to receive review work from the same general clients. Those clients, in turn, tend to use the same appraisers repeatedly. They may also be the discounted or bargain-basement fee appraisers either lacking in experience or in too much of a hurry to meet ridiculous client turn time requirements to do good work (no excuses-just an explanation). End result? Poor work quality.

I frequently run or check AVMs of property I have personally appraised or other competent appraisers have appraised. In many dozens of samples, I’ve found ONE that was credibly accurate (IF the house had actually been as small as public records indicated).

Another notable example (done for litigation work) was in Van Nuys. Remodeled house ‘with issues’. AVM range was from $450k to $790K and the ‘middle’ one was $675k. The appraised value was $600,000.

I’m fortunate enough to read appraisals from all over America. You’ve read my posts enough to know I can nitpick, but seriously most of what I’ve seen were credible real estate appraisals performed by conscientious professionals. Not perfect, but pretty good and in the Ted Whitmer vein of USPAP compliance, they were mostly solid.

The ‘exceptions’ to this were in all cases except one, receptive to improving their own work quality. They had simply never been taught better; and testing for certification didn’t pick up on their shortcomings. THAT is TAFs fault!

While AVMs, bifurcation, and waivers may allow FNMA to maximize the mortgage money pump for a while; right after the next economic disaster people will once again ask “How did this happen?”

I studied the original FNMA CU patent application and process. I also carefully read and studied the FHFA White Paper on the comparative use of AVMs; regression (hedonic and forest methodology) and human appraisers. NEITHER demonstrate an ability to produce consistently credible results.

FNMA and current GSEs may well convince themselves and their investors that “The Emperors New Clothes” are indeed a wonderful new suit of magnificence, but those who are honest with themselves will see they fail to cover the naked truth.

I’ve already focused my personal business on complex assignments or litigation work where I don’t have to deal with FNMAs silliness or deception. I’m guessing that’s about 40% to 60% of all potential appraisal work in the future…with a high probability of increased litigation work once the intended users of bad valuations start using the lenders and brokers involved in their transactions.

I appreciate that you are only the messenger, bringing unwelcome news for many. I don’t think full automation will happen, but the handwriting is certainly on the wall.

Scott Taylor sadly some appraisers have sold out the profession and the lenders that want more risk analysis know that. Perhaps, just perhaps, a quality AVM could be better. Food for thought

so true, you can review some appraiser’s work and feel bad for the buyer or owner that actually paid $500-$600 to the AMC for an appraisal of nothing. Canned comments, no real thoughts on the area or state of market values. And the appraiser feels he or she is not getting paid enough to do produce a credible report. There are too many hands that want a piece of the pie (appraisal fee). Too many hands wanting that pie make for a pie made with bad ingredients and has little taste.