Richard Hagar (and another highly respected appraiser)  have a 1, 2 or 3 part package course related to avoiding adverse ratings from CU. Its actually a very good course. Im only half way through it right now and can attest it gives very detailed explanation of how the current versions of CU plus impending versions actually work. Its changed a lot since the first version I studied …though its still built on a fundamentally flawed database. Be forewarned parts of the course will make you angry (at ourselves as a profession) …even as you reluctantly admit the information is correct. ALL GOOD ADVICE IN IT!

Read most recent online WorkingRE article / promo or go to OREP site and look for the courses…well worth the money and you get CE credit. Range is $119 to $267 depending on what you select. If you are an OREP member you get $20 discount.

Again, inspired solutions. Is that how it used to work, seriously? Shared agency? These days there is a rule of thumb for most scenarios; The senior more experienced agent has the listing and the jr agent runs buyers agency, the buyer is therefore always at a disadvantage. It’s a back scratching event. But Mark, it’s not just the agents driving up housing prices, it’s a fed rate tied to fiat instead of savings… 

Mike you are a regulatory solution genius.

Try this idea on: Mirror the FHA case assignment approach for all FNMA orders.

The order does not happen until the assignment is made and the appraiser officially tied in. This would provide more challenges to insta swapping for intended results. Also what you said about back end submission.

When people abuse what are supposed to be honest processes, that’s when they deserve additional and permanent scrutiny and oversight.

Still hoping for the IVPI proposal, these companies can not be trusted to manage the distribution process any longer. There are a few good ones, but the bad players elevated risk ends up in the same pool of packaged loans in the end. They’re ruining it for everyone.

IVPI Proposal

Mark, most states did just that. The elimination of dual agency by many states was supposed to stop exactly what you describe. Listing agents could press market, but buyer agents were the gatekeeper for their clients.

The flaw in that system is it diminishes the concept of fiduciary responsibility to all parties. It became a case of “not my job” that’s the buyers agent responsibility. In the era of offers via Mongofax and other impersonal presentations or even held back offers there was no back and forth negotiation between buyers and sellers via BOTH agents sitting at the table with the seller to present, negotiate and counter any offer. ‘Negotiation’ gave way to auction style ‘submit highest and best’; and selling agents routinely lied about multiple offers so fearful buyers overpaid and continue to overpay. Nothing changed. It was still easier for buyer agent to collect commission when they made no waves.

Go back to dual agency representation where agents know BOTH sides of transactions instead of being only buyer or only seller agents; and hold ALL parties responsible for fiduciary obligation to deal honestly with each other.

In commercial real estate (including appraisal) we learn early on that no one will insult our intelligence by telling us the truth right off. It is truly a buyer beware environment. Residential RE is NOT supposed to operate that way.

‘Low’ appraisal comes in to AMC. They “know” by prior agreement NOT to submit to CU for an SSR until they clear it with correspondent loan officer that originated the loan application. THAT is how they can shop appraisers without FNMA ever being any wiser. The alternative method where they submit to CU for an SSR does create a record for FNMA.

That is precisely why CL and so many others do a bogus desktop ‘review’ by out of state hacks in order to ‘find’ some technical or even outright imagined flaw which in turn allows the lender to legally decline to use the appraisal they argue is non compliant with USPAP and not credible. As long as that paper trail is clean FNMA can then accept the second appraisal without even a hiccup. Of course the original appraiser must be thrown under the bus for flawed work and either submitted to state boards or even FinCEN for loan fraud (misleading report).

It would be incredibly easy to stop this. Simply REQUIRE copies of the CU score (HUD,VA and Freddie Mac all have different names for their scores but they are still part of an SSR); all comments and the Submission Summary Report (SSR) to be given directly to the appraiser before ANY request for ANY kind of revision can be made. Even a simple typo could not be corrected without the SSR as proof the appraisal is not being concealed..

Baggs any expertise I have is on FNMAs original version of CU and all subsequent versions have incorporated that same flawed database. The original version was built around mined data from appraisals performed from 2011 through 2014.

In early 2015 FNMA admitted data was seriously flawed because they felt it necessary to formally eliminate any and all adjustment guidelines as percentages. It means the bulk of appraisals they input into it were appraisals adjusted to old and even imagined guidelines rather than market conditions.

Now supposedly they have been culling data ever since but what reassurance is there that the majority of subsequent appraisals were not also performed mostly to the old guidelines…out of habit?

So, DU and fast track guaranteed or “certainty” loans with CU scores of 2.5 are STILL built on a flawed foundation!

The belief that slow incremental interest rates over the next year will keep us from a repeat of the last fiasco is hubris. As soon as the rate hits the traditional 7% to just below 8% necessary for non government subsidized or non guaranteed loans bought by international investors, the system collapses all over again.

Property values have simply increased by too much for most Americans (or even adequate numbers) to afford 7 1/2% rates on $500,000 mortgages… probably not even on $300,000 mortgages. The ONLY thing propping up high and increasing values today are the 4% to 4 1/2% mortgage rates.

All true. Then they score appraisers based on faulty CRs.

Kathy, it hasn’t been a secret, they’ve been collecting all of the appraisal form field data for years now. 

Their intent was to use that data to target the sloppy appraisers who just change, make up or report inconstant information in order for their reports to pass, quickly, because they have 5 more reports to get done before 5pm. 

Soo far I think they’ve done is use the data to create ridiculous condition requests for the better appraisers because the computer isn’t able to read and understand the narrative comments. Once the CU finds data in your report that some other appraiser has previously reported differently, your report is scored and rejected back to the lender with CU conditions to approve. This is the point in time where someone, the lender, is actually supposed to read through your comments. Lenders have the ability to approve most CU condition requests depending on the severity and resubmit the report without going back to the appraiser, but many lenders just send all of the CU warnings to back to the appraiser to address instead of reading the report.

DU home page

https://www.fanniemae.com/singlefamily/desktop-underwriter

Well if appraisers deal with mystery stips for no apparent good reason, it’s the blindfolded argument again then. Related faq for fnma 2.5 measuring point for cu du. And if you want to learn more, go to the source, du home page second link. Google the issue as if you were an underwriter. fnma cu trigger points, collateral underwriter report, etc. So much info, pointless to try and link much of it. Give the top link at least a quick review, you’ll understand why in some areas it seems like you just can’t catch a break.

Certainty on Appraised Value Frequently Asked Questions

Baggs, you are absolutely right. IF the concern was about producing credible reports they would give us their recommended default setting version of CU without our ability to alter it (like lenders can) so that we could self check for obvious issues. Instead, we are expected to achieve perfection with blindfolds on.

As bad as CU is for the uses it is being put to, it would and still could be a great tool for appraisers to use before and after appraisal inspections; prior to report writing OR as a checks and balance afterward.

It’s clear the intent is not to produce better appraisals. The intent is to cull the herd.

True.

Chris I appreciate the view and don’t mean to infer no back bone to you.

Im taking an online class from a former E&O provider right now. Nationally respected instructor points out how the newer versions of CU ARE tagging more and more appraisers AND lenders. As much as I despise CU as it is currently used and abused, it WILL start catching more and more people like the guy in question.

Right now FNMA says we have about 40,000 appraisers doing work on FNMA loans. I sense a scenario in the offing where getting rid of man appraisers will be used as support for even more PIWs and hybrids.

Either we police ourselves or it will be done for and to us. Even the nit picking stuff will or could become cause for censure by state authorities.

Too late. Fannie has already data mined all the reports that came through the UDCP. They admitted it!

Welcome to the “brave” new world where rights trump responsibility and cowardice and laziness trumps what is right.

I would report the appraiser in a minute. Done it before and would do it again. It might cause some hassle on your part but is absolutely worth it to know you helped to keep your profession clean and have integrity.

Who knows, the lender can cert the condition in numerous ways. It’s just we’re so used to all of that landing on our insurance via signature and form filling requests. It’s when fictitious paperwork is filed that’s when the line is crossed. A few lenders had for a while, tried the audit approach for appraisal reporting. I’d get these letters asking me to verify that my report was valid and not adulterated or audited, asked to review a copy of my report from a while ago. However that trend seemed to have vanished as quickly as it appeared. What exactly is the audit for, client confidentiality, etc. So having a private company do that was not really helpful. I appreciated it but it did bring up some challenging client and intended user questions.

If we want to stop adulteration of our work products, we must be given at least limited access to the FNMA CU database and we should be able to review past work, verify it’s not altered, verify no fraudulent activity like finals we did not approve or signature theft for reports we did not complete. Can you imagine if it’s true, what Ford said, rampant abuse of fictitious paperwork. FNMA should really be running some audit program of some sort.

No absolutely not. I understand your reasoning. However it’s important to be there, to be present, to provide resistance, to be able to argue real time experience and issues. Stepping out of the way is defeat for all of the millions of home owners whom still have to engage the lending system, and hope to do so in an ethical manner. There are good people whom need protecting with sound process corrections here. The power of the pen. We do not give an inch on liberty, or they will take a mile. We do not step back, we step forward and draw the line.