USPAP Compliance & Hybrid Appraisals

Subject Inspection for Hybrid Appraisals & USPAP ComplianceWHO does the SUBJECT INSPECTION?


Some appraisers have questioned the name ‘Hybrid Appraisal’ because the requesting client WON’T USE THAT NAME for the product.

When they call or email you, they’ll say something like “We have a really fast appraisal for you to do that you can do on your desktop without leaving your office.”, or “Can you do an exterior appraisal for us?” or they might identify it by the ‘name’ that client uses for the product.

The FIRST question you need to ask is simple: WHO does the SUBJECT INSPECTION?

If they say ‘someone else does that’… then you need to “think twice” about doing the assignment.

You need to be extraordinarily cautious and ‘think twice’ about completing Hybrid Appraisals (HA’s) – the kind of reports being promoted by multiple suppliers who claim these are a way to make ‘easy money’ while doing them dressed in your bathrobe and bunny slippers. The primary selling point is you don’t need to leave your office.

YOUR Compliance with USPAP is a critical factor at play with these HA’s. No ‘form’ complies 100% with USPAP.

Compliance with USPAP is square on the back of the appraiser… no one else. So these new HA’s have been developed and promoted by lenders and their AMC’s as a way to ‘speed up the appraisal process and spend less money’ to arrive at an appraiser’s stated value conclusion for a certain property – without any real regard for the appraiser’s mandatory compliance with USPAP.

I’ve had the recent pleasure to ‘discuss’ these kinds of reports with a state regulator.

HA’s involve a two-step process.

  • Step 1 is the subject inspection – done by someone other than the signing appraiser. This is far different than the SOW on the GSE Exterior-only report forms where the appraiser does everything. This “inspection” is done by an unidentified person called a ‘Field Inspector.’ Inspection info is uploaded to the client web site, and made available to the appraiser.
  • Step 2 is the appraiser obtaining the subject inspection data (done by someone you don’t know), agreeing to the validity and accuracy of that data (per the SOW & EA on the form), then pulling comps from your local MLS, gridding those into the report, making adjustments (if required), stating a value, then signing and delivering the completed HA back to the client.

There are two principal USPAP compliance issues with these HA’s:

  1. the person acting as the ‘field inspector’ is actually performing Appraisal Practice as defined by USPAP. Some may dispute that statement. But without the field inspector’s inspection data, no actual Appraisal can be completed by the Appraiser – because the appraiser is not engaged as the ‘field inspector.’ It’s my guess that the majority of ‘field inspectors’ ARE NOT licensed appraisers. As such, an Appraiser who allows some unidentified person to perform Appraisal Practice in the preparation of a report is in violation of USPAP. (I know about an appraiser who had to forfeit his license back to the state for this very reason.)
  2. Having someone besides the licensed appraiser contribute Significant Appraisal Assistance, without identifying that individual in the report, is also a USPAP violation charged back to the appraiser who signed the report. Significant Appraisal Assistance is discussed in FAQ #248 in USPAP 2016-17. INSPECTING the subject property IS considered to be an action that provides Significant Appraisal Assistance.

Don’t let the salespeople and others promoting these HA products try to persuade you otherwise… just because you can do these in your bathrobe, bunny slippers, in your basement for $50-$75 a pop.

Your compliance with USPAP is absolutely paramount in YOUR conduct.

Dave Towne
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on

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62 Responses

  1. Avatar JM2C says:

    So all this time, lenders were not okay for our trainees to inspect on their own. How many times were we told that as supervisors we needed to inspect the subject property with the trainees? Now suddenly they hire non-appraisers to inspect? @@

  2. Avatar marion says:

    Actually no.

    The first question you should ask is not who is inspecting, but rather…

    WHY IS AN INTERIOR INSPECTION AVAILABLE TO ANYONE WHO IS NOT THE APPRAISER?  HAS THE CLIENT LIMITED YOUR SCOPE OF THE WORK, which could create a bias in your opinion, or would impact the credibility of your report,


    this is a big and,

    FOR A LENDING APPRAISAL, DOES THE EXISTING REGULATIONS/APPRAISER GUIDELINES RULES AND LAWS provide an option for the appraiser to accept unverifiable information from the client, that is a key factor in determining market value, while claiming lots of EAs to hide behind.

    Not that I have found.  Even evaluations as outlined in the IAEG don’t allow evaluators to make assumptions about condition.

    Think long and hard.

  3. Avatar realrose says:

    every time someone invents a new product that cuts out the licensed appraiser, they are undermining the appraisal process. It is a process that can’t be chopped up into bits with others involved; it is our opinion, based on what we saw, researched, confirmed and analyzed. We alone are responsible. Those who have no license are capitalizing on our education, training, professional standards and ethics and giving banks what their lobbyists want; free reign over their borrowers. We should not accept any assignment when an unlicensed person, under our supervision and who has no responsibility, expense (other than gas and photos), and therefore provides a foundation under which our opinion is resting.

    • Baggins Baggins says:

      Broken record time. The root cause of the problems in this industry is monetization of the appraisal distribution services. When people say we’ve lost control of our industry they are specifically talking about how monetization of distribution has eroded ethical principals. Demonetize it and force the complete hud1 appraisal fee to the appraiser. The major problems will be solved instantly. Think there would be any sensible financial analysis which justified increased risk without a profit dollar behind it?  We’re no longer appraisers, we’re customers.

    • You are 100% correct RR.

      The trend today is nothing more than a new twist on a very old sales technique to overcome any / all objections. Its being used on and by federal regulators and those investors that should know better.

      1. Identify the objection

      2. Isolate the objection

      3. Reduce the objection to the ridiculous

      4. Overwhelm the objection with the proposed benefits

      Does that pesky USPAP thingy really matter if we can come up with a system that is just as good” “IF we could come up with such a system that was just as reliable or nearly as reliable and that is faster and cheaper for consumers wouldn’t that be a good thing?”

      “Besides, most loan appraising these days is little more than form filling! The appraisers use automated software for most of it; automated software also selects the best comparables. “Leveraged” Big Data tells the appraiser’s how much to adjust for. 

      Under UAD ‘we’ (FNMA) have already told the appraisers how to compare properties so that nearly any typist-capable monkey can now do it.So all the appraiser is really doing is measuring the house and we can get that data from public records. When the monkeys make a mistake, our software will catch it!

      …and using FNMAs new super-dooper, failsafe, SCIENTIFIC methods “leveraged” with forty year old data the risk is next to non existent!

      Ummm, but just in case, lets keep these government backstopped AIG insured loans, ok?

      Every appraiser that buys in to the use of these non-appraiser 3rd party services; or that allows their data to be high jacked “into the cloud” for perfect preservation by Alamode’s Titan or ACI’s versions promotes ongoing captive audience appraisal software service rentals…instead of owned and appraiser controlled software.

      IF you retired next year, do you really want to have to pay annual service fees (rent) to some third party software company for the five years data storage  following your last appraisal?

      • Baggins Baggins says:

        It’s also important to de emphasise the key difference which can not be matched.  Advocacy.  Appraisers provide unbiased services by law.  Leveraged big data can be structured any way you like it, always managed and implemented by an advocate of some one or some major company.  No pesky regulation forcing the users of data to deal with non advocates or apply such strategy to their own decision making and data sourcing process. I think that continues to be the most important take away.  Any and all proposals away from non advocate sourcing should be immediately countered with a question regarding who paid for this and who suggested this.  The answer will always be someone demonstrating some sort of advocacy.

    • Absolutely agree Rose. Two years ago when it may have done some good, appraisers could not send out their own trainees WHEN WE DEEMED them to be ready to inspect property.

      Now, hybrids with pre printed text claim third party inspections “We deem to be reliable and credible” are perfectly acceptable.

      All along the real problem has been that USPAP compliance is not convenient. It’s pretense can’t be abandoned outright though. TAF needs to preserve the illusion that it still means something.

  4. Avatar Teri R says:

    So – they are turning Appraisers in for not driving by the Comparables to get a shot for every season of the year (can’t have snow on a comparable that sold in Feb & is being used in a report in April), but they are now enticing uninformed Appraisers to not inspect the Subject and violate USPAP?  Am I missing something?

    • Avatar marion says:

      What you’re missing is that not trainees, but anybody with a camera can be hired to shoot the interior photos of the subject and the comps, and the appraiser gets to call that the interior inspection they did not participate in, yet, formed an opinion of value for a lending transaction, based on the photos of someone, who all the appraiser knows about them is their name.

      And appraiers think this is a good idea, because they can do 1 in an hour for $50, and AMCs think this is good because they can pay the appraiser $50 and pay the photo taker $30-50 and pocket the rest of the appraisal fee.

      • Baggins Baggins says:

        And a thought, does this also circumvent existing rule sets which requires disclosure of fees? I continue to ask for the consumers total appraisal fee statement to be disclosed in the appraisal orders.

  5. Avatar Xpert says:

    Take back control of this profession and your livelihood and just say no!

  6. Avatar Jack Of All Trades says:

    How can any appraiser work for scraps at $50 to $75 a pop ……WOW

    • Jack, I agree but that is part of the ‘capture’ process. Seduce by volume and easy work promises (ie 10 a day at an average of 30 minutes each…or less) = $750 a day. “As much as you can handle!”…until someone else is willing to do it for $40 a pop.

      It’s a tried and proven method by AMCs. If appraisers dont want to do them, then ‘due to the shortage’ BPOs will be used.

      • Avatar Jack Of All Trades says:

        Ditto mike ford and like you said before they’ll just blame us again when the market crashes and they will say it’s our fault and then offer $25 for one of these.

  7. Avatar Juliana Homstead says:

    I was contacted by a company (I can’t remember which one) that wanted me to complete what they referred to as a “desk top appraisal.” They were offering $75 and told me it would take approx 30 to 45 min. I knew that I would decline the assignments, but I admit to being curious as to how this could possibly be true. It takes me 30 to 45 minutes just to research market conditions. I was told that no MC form was necessary. I then questioned how one could form an opinion of value without knowing the market conditions. After a period of silence, I was told that they could pay me up to $150 per “desk top appraisal.” I was told that a real estate agent would do the inspection, take pictures, and could comment on the market, I did not have to make any adjustments, and only needed to put in 3 sold comparables. “it’s really easy money,” they said. I replied, it sounds like you just need a BPO, so why not just get the real estate agent to do one? – Silence again. “Oh right, you need my E&O Insurance to cover your a** if this goes bad. No thanks, not interested.

  8. In 1989 Congress passed FIRREA to ‘protect the American Public’ and insert more than a mere illusion of  integrity into a corrupt lending system. Chapter XI required appraisers to be licensed, toward that end. States were charged with assuring compliance ‘to protect the public.’

    Whenever ANY appraiser is charged in a complaint, protection of the public is paramount among the reasons complaints are formalized and prosecuted by State’s Attorney Generals. Protection of the public is supposed to be a pretty big deal.

    So WHERE exactly are all the regulators on these inherently flawed, non USPAP compliant, misleading products? Products they already KNOW at their core will always be misleading?

    Oh, they’ll cite USPAP ad nauseum pointing out the things YOU & I must do to be USPAP compliant, but why do they refuse to confront these products, that are fraudulent at their very heart?

    Jim Park of ASC acted when First American/ACI tried to pawn their PACE PRO product off as being a USPAP compliant product. Why are they not doing the same with hybrids and all the other euphemistically misnamed fraud forms and formats?

    AT A MINIMUM  Jim Park at ASC; David Bunton at TAF and whoever is leading that central circus of national misinformation at AARO need to quit dodging the issue and come right out and either go on record citing (what we already know) that it is up to the appraiser to make these USPAP compliant; and to refute the probability that these will every LIKELY be compliant.

    Form designers think they side step their obligations by including small print saying ‘the appraiser has the right’ to augment the report if they think it is necessary…all for a $50 to $150 fee?

    Has everyone involved in designing the forms; service and monitoring them for probable compliance simply ignored the admonitions against preparing misleading reports?

    Are ‘protection of the People’ and minimal protection of taxpayers no longer more than euphemisms that are only trotted out when an appraiser offends the cupcake sensibilities of the powers that be, and there are no other sustainable violations? (Oregon, Maryland and California the latter is directed specifically to you!)

    Maybe the Appraisal Institute was right. Maybe FIRREA; ASC and TAF have ALL outlived their usefulness. Maybe they have become the problem, more than the solution after 30 years of tinkering and unnecessary modifications to both basic standards, and their own mandates.

    As it stands right now, the ONLY ones bound by any principles, standards and laws are licensed appraisers.

    Unlicensed folks can inspect and opine on local market & property conditions (subject) since it appears comps wont ever be actually inspected. Lenders are allowed to label what are nothing more than written ‘comp checks’ as being ‘almost as good’ or even ‘better than’ more costly appraisals.

    Americans have long accepted that Congress Members are collectively liars, but most of us maintained the erroneous belief that folks like federal regulators were still honest and conscientious.

    Sort of like the FBI.

    If anyone seriously wants to fix the lending, commissioned loan officer and appraisal ‘integrity’ issues stop ‘leveraging’ Big Data, and break out the tar and feathers.

  9. Baggins Baggins says:

    I’m all about bunny slippers. This might be the selling point which actually takes me to the finish line with this type of engagement. Betcha a pepsi the ‘inspector’ will not be identified in your work order. Well, write Mercury a letter, write value links software a letter, write FNC appraisal port a letter. They’re facilitating this by allowing the products to pass through their portal. I keep on saying if distributor persons had to be individually licensed there would be much more accountability. Irony that the person tasked with sourcing unbiased legally defined non advocates is allowed to say and do anything to get the orders placed?

  10. Avatar marion says:

    Does anybody actually read USPAP anymore?

    An appraiser must not allow assignment conditions to limit the scope of work to such a degree that the assignment results are not credible in the context of the intended use.


    If relevant information is not available because of assignment conditions that limit
    research opportunities (such as conditions that place limitations on inspection or information gathering), an appraiser must withdraw from the assignment unless the appraiser can:

    • modify the assignment conditions to expand the scope of work to include gathering the information; or;

    use an extraordinary assumption about such information, if credible assignment results can still be developed.

    An appraiser must not allow the intended use of an assignment or a client’s objectives to cause the assignment results to be biased.

    Sad fact for appraisers.  The Lender/Client/AMC is/are an interested party(s) with a bias.  (That’s why AMCs are AGENTS of lenders).

    There is no way to say these assignment results are credible, based on the information the biased party provided to you, concerning the interior, and did not let you go and inspect for yourself.  You have been specifically limited to only the information they want you to have.

    Simply because reps and warrants have been released for the lenders, does not also mean appraisers will hold no liability for producing biased reports when it all rolls down hill again.

    The only thing you can do is say no thank you, have a nice day, order a BPO.


    and just as a point of fact,

    A BPO that is being used as an evaluation can not make assumptions about the interior condition.  But you with your E&O, you go right ahead and make a handful of EAs, see how credible that is.

    • Agree with Marion. As always the lender/clients fine print passes the buck back to the appraiser.

      COULD these be made to be USPAP compliant? Theoretically yes. Even TAF thinks so. They too (Evaluations anyway) will sell you a $39 webinar on how to do it.

      I think the amount of extra work needed to achieve USPAP required disclosures, limiting conditions and scope statements that eliminate the misleading aspects in the clients inherently deceptive custom forms is just not worth the effort for the fees offered.

      1. Before the next crash all parties will swear these are HUGELY beneficial cost & time savings to consumers with no real risk.

      2. AFTER the next crash, it will be “The greedy appraisers wanted to do ten of these $75 jobs a day so they could earn big bucks… and chose to ignore their obligations under USPAP.”

      Congress needs to cut the GSEs completely loose with the admonition that neither they, NOR their insurers or reinsurers will ever get bailed out again. SEC needs to start actively investigating what these hucksters are trying to pawn off on the public and investors!

  11. Avatar Bill Johnson says:

    Of course Dustin Harris, has just written a blog that in part says “It is my contention that the outlined scenario does not violate USPAP” I see a money making seminar and a booth at Valuation Expo in your future Dustin.

    Seek the truth.

  12. Avatar realrose says:

    Great discussion. We do need to organize to oppose these ridiculous encroachments upon our profession. I came up during the 1980s when MBAs were big; they made wild assumptions resulting in the 1989 S & L Bailout.

    Since this is my second bailout with hindsight, I have concluded that lenders will continue to lobby congress and as long as they are in a mode to disassemble what has been normal and mostly ethical appraisals, and the realtors also want to muddy the waters with their fake ‘designations”.

    We need a union, and to go on strike. Drama needs to happen or the public will not listen to us. If we are all too busy to participate we can kiss our careers goodbye.

  13. Baggins Baggins says:

    Rose, a sincere thanks for participating here more often.  Stabbing at solutions?  I say; go with the pro’s.


  14. Realrose, read any appraisers blog or facebook group. There is not enough unity of concerns to strike. It’s foolish to seriously consider it as a viable option. A majority (from impressions of posts read) would see it as an opportunity to increase their work while others would be striking. Its the same with those that continue to accept the insultingly low fees AMCs offer.

    That’s coming FROM the American Guild of Appraisers, #44 OPEIU AFL-CIO…or in other words a union.

    There are things that can and are being done across the USA. At the same time, there is (in my opinion) and unhealthy relationship growing increasingly apparent between our regulators (at all levels) and the special interests most prominent in undermining appraisers reputations and our profession as a whole.

    If you feel strongly about it, email me, or and we’ll let you know what we are doing; what  we are trying to do, and how you can help.

    • Baggins Baggins says:

      Actually, I tried to fold on my ‘strike’ against this v vets amc, as I was hoping to focus in on some easy access reo work for a while.  To my surprise, their KC office is shutting down.  Per managers email.  So in response I immediately same day marketed the default management companies whom I know they are working with instead.  It’s not that I don’t like amc’s or don’t like working with the staff.  It’s that they’re only providing an access point which is otherwise easier to obtain without their presence in the first place.  Not to mention the increased headaches from meaningless technical overlays, grading, and the most painful must play nice guy to the unqualified staff to be a preferred vendor deal.  “The strike” per se, is merely a natural reaction from industry professionals whom like Ford stated, are tired of being undermined.  Some of us push back on this front, others in a different capacity.  Each one of our individual actions has cumulative influence and effect.

  15. Avatar realrose says:


    Don’t bother me with your libertarian bull. I have listened to the good doctor who helped start nothing but a take-over of the GOP because people like Koch Brothers worship the money they earn from polluting.  If you want to talk about appraisal, fine, I agree with you on some of your comments but I absolutely am sick to death of those who have infiltrated the GOP and who support trump, he is an asshole and you know it.

    Kick me off this site if you want, but when you ask me to watch a video from a libertarian, tea party jerk, that’s when I will fight back. Rand Paul is a piece of shit just like his failed politician dad. I wouldn’t waste 25 minutes watching a Ron Paul video from the past. When republicans elected George Bush the first, republicans were called “mean spirited”; with competition and the money of so called libertarians they have evolved to be the most inhumane assholes who obviously need to make villans out of poor people on food stamps when it is less than 1% of the national budget while the military gets 57% and the military industrial complex is way more dangerous.

    I am completely serious and we need to work with some people who  understand how appraisal is a key element in our banking industry being safer. There are crooks everywhere in this world; I have been to 31 countries and I know about the greed and corruption in my country is looking more like them.

    • Baggins Baggins says:

      Politicians are like appraisers, you don’t have to like them in order to work well with them, they just need to know what they’re doing better than the next guy to maintain credibility.  Ron Paul, the only politician in his day whom refused to accept lobbyist money through the course of his career.  It’s a rare participant whom won’t take the money.  I vote to have all these guys wear nascar style outfits so we know who sponsors them.  We The People.  First rule, don’t take politics personally. Obviously you do not watch the videos or you would not be quite so upset about what is really just another political message. The influence of weaponized media is not imaginary, it’s real.

      • Baggins Baggins says:

        Also I would add that I post these messages via firefox w/ multiple blockers on.  I just post a link and it turns into a vid link box although I would prefer it if that was just a link.  It does not auto play on my side, and if it does auto play through other devices, sorry about that.  I would never try and use digital tools to force someone to listen to something they don’t want to.  Liberty is here for all of us to be able to make our own independent decisions.

    • Realrose no one ever gets kicked from this site for posting their honest feelings (barring a really mean spirited personal attack maybe, but I dont think you hit that benchmark). Baggs IS a libertarian in his views but in many other areas concerning appraisals he is on the mark.

      This isn’t ABuzz where you get censored for disagreement.

      We are a mixed bag participating in this blog. Mostly we try to take apolitical perspectives, but sometimes we all slip across that line. Try to look beyond the personal political views (or any others) for the grains of truth that are our collective mainstay.

  16. Avatar marion says:

    How many want to place a bet, that not too long from now, the homeowner will do their own inspection and just send the appraisers the photos?

    Why should the AMC pay a photo taker when owners will do it for free?

    • Baggins Baggins says:

      That’s sort of how flat rate realty is shaping up. If I was a consumer I know I’d be stoked to have one single lender handle everything at once and I would not have to do anything challenging. I can trust those guys right? I’m not libertarian, I’m a conservative and primarily votes with his wallet. One does not have to be a libertarian to prioritize liberty first and actively participate in driving free markets without the assistance of the government.

    • Not far fetched at all. FNMA has already said they take the lenders word for ht evalue on PIWs. Not much of a stretch for them to give borrowers a questionnaire asking if house is (a) perfect, (b) near perfect (c) reasonably close to perfect, or (d) just a bit better than average, (e) OHER; “will be near perfect once we get the loan for the remodel.”

  17. Good point. No difference in credibility between some stranger and owner.

  18. Avatar realrose says:

    Hey guys, to make things more efficient, they could propose next that the owner submit an affidavit that the value of their home is $X,xxx,000, and their realtor can submit their affidavit saying the home is worth $X,xxx.000; then they can require the mortgage broker or agent of the bank to come and take photos, then they won’t need an appraisal, or an AVM, or picture takers taking up all their profit.  All this to avoid those “exhorbitant appraisal fees”/ and they can cut out the new pimp (AMC) and solve the whole mess.

    Better yet, the federal government can assume all liability for what banks, stock exchanges, corporations and politicians do to harm the public.  Then send them to arbitration with a bunch of “rent a lawyer or judge” and those rights to go to court when a bank screws you, or wall street company screws you…..

    Oh, woops, I thought we were talking about real estate appraisal and that it is a NECESSITY when greedy, monied people can’t get satisfied making huge profits using technology to get ” ill-gotten gains”.  These people would be called former politicians who act as lobbyists who play both ends against the middle and represent narrow interests of corporations or just about 1% of the population.

    Is there a law that the US Government can go bankrupt?

    Asking for a friend.

    My friend is an “interested party” in the struggle to maintain complete objectivity and the highest ethics in appraising real estate, and refers to herself as a “third party”.

    The added benefit is we can cancel all those appraisers’ licenses and dissolve the state offices governing those licensees and those AMCs.

    Oh, then we’d have to get rid of the ASC and TAF. Oh my, now I am getting to the heart of the matter.

    When these two boards were formed, they are not given any power to solve problems or make the process fairer for homeowners or lenders; they have only advisory and monitoring power; The AQB would be dissolved immediately and then what would all those people do for a living?

    I am sure they wouldn’t pick doing appraisal then or now! Being an appraiser today is like working on the keyboard with your hands tied behind your back by regulation because political winds caused a defective idea in order to replace the Appraisal Institute. Yet, Fannie and Freddie have been allowed to demand our appraisals include this and that and take away the appraiser’s judgement and training; USPAP says we are to decide scope, form of the report, etc., yet we had to learn how to speak to a computer so they can manipulate the report. I have had AMCs ask me for my signature, to pay an upload fee for my work and they profit off my license, experience, expenses for E&O and Data, then they steal it and the AMC never tells us what they got on top of what I charged. This is fundamentally wrong.
    Does the AI care? I don’t know yet.

    If we are to stay alive as a profession, we will have to join this union. Not the end of the world folks; I’d rather give them my money than endless political contributions that corrupt the process.

    I was a regulator in the late 80s; I am not a trump supporter. This movement to choose people who are unqualified to run the government and have power over those who don’t know the first thing about what they are regulating has caused a situation where our hands are tied. The current administration wants to take away all regulations.

    I remember that, historically, this policy has caused problems in the financial security of many Americans. The last recession was nearly a Great Depression. The lax regulation of the 1920s caused the big one.

    If you think the banks are safe today as a result of Dodd-Frank, with respect to appraisal I would say a resoundly NO! Remember Lehman Bros. was big, and they sucked in a lot of good appraisers who sometimes compromised themselves to make a buck. Then they had to recreate themselves to get new work. Some of them got into the high tech, new shiny objects that seduced them into thinking they were on the cutting edge.

    I realized that if we all decided to strike today and didn’t bid on any job, who would even care? Nobody, they would use AVMs on the Big Data they have accumulated by dismantling the appraisal process and eliminating the human element. Then again, corporations are not people! How many appraisers have an LLC, and what happened to allowing knowledgable people provide a service for a fair professional fee? Oh, I forgot, sometimes an appraiser comes in low and the loan falls through. Or the owner wants a no-doc loan, the bank doesn’t care because they have no skin in the game! They just hire an appraiser for the file and their liability insurance.

  19. Federal and state regulators have done their jobs admirably. They include the phrase for protection or to protect the public” in the headings of nearly all officious communications.

    Job done.

  20. Avatar marion says:

    AMCs are 3rd parties, that’s why they are agents of the lender.

    Appraisers on the other hand ARE NOT PARTIES to anything.

    That’s why Congress mandated you be independent.

    Too much kool aid over too many years.

    • Baggins Baggins says:

      Minimum Requirements for Appraisal Management Companies

      Oldies but goodies. Not really, shenanigans have been ongoing, the above letter 2014. So wait, they’re not agents of the lender? I though the cfpb had the final rule on that? Above; multi state organizations group letter. They called them agents of the lender I think.

      FAQs ML Appraiser Independence

      Now, who could blame me for being confused? You know, if these guys don’t have to read and follow rules… The above; The much anticipated and infinitely disappointing FHA rule on sharing appraisal fees. When this came out many appraisers shouted hallelujah. But apparently the most effective way to bypass regulation in this industry, is to simply ignore it.

      Rules and Regulations. Federal Register. 44493. Vol. 82, No.

      The 25 yearly per appraiser on amc panel.

      Anyways, how does one acquire those cushy work from home remote review and remote underwriting gigs?

  21. Avatar realrose says:

    I don’t know who marion is but I came up in this business as being referred to as an “independent third party”.

  22. Avatar marion says:

    Black’s Law Dictionary, which they made us buy here, when taking Real Estate Law classes for both appraising and broker’s license.

    Maybe back in the day you were a party to the transaction, but then Congress decided you should be independent.


  23. RealRose, Marion is and was extremely active in the political arena trying to help appraisers get Dodd Frank passed and other abuses curbed. If you guys gave each other the chance, I suspect you’d both be good friends.


  24. Avatar marion says:

    Always happy to meet new friends here.

    Thanks for the kind words Mike.

    • Meant them sincerely Marion. Same for RealRose.

      Our world is too small not to take advantage of and benefit from each others help as much as we can.

      • Baggins Baggins says:

        One emerging issue is the way some ‘direct lenders’ are outpacing and directly competing with amc’s. Because they built up a department for compliant in house ordering distribution, they were able to immediately monetize that and compete directly with amc’s. They sourced other lenders and charge them to distribute and manage appraisal orders. As I mentioned previously, it’s hard to tell the difference these days. What about the not amc’s whom act function and rake just like amc’s? It’s been many years since I’ve seen a single instance of my appraisers fee aligning exactly with the consumer appraisal fee. It’s a miracle if you can land a client whom does not take a minimum of 100 dollars. They’re not amc’s see, because they are working directly with the lender in a lenders subsidiary office. They’re not amc’s because although they do everything exactly like am amc, they’re not because they are agents of the lender? Marion chime in on that one please.

        • Avatar marion says:

          You know I love ya, but you’re confusing me.

          AMCs are agents of the lender as mandated by decree of the banking regulators (OCC, FDIC, blah, blah, blah).
          The AMC Final Rule states;
          If these regulated financial institutions use an AMC to engage appraisers on their behalf, the AMC must be acting as an agent for these institutions

          If lenders are servicing other lenders as AMCs, there is no regulation against that; and being their business is “lending” they are not going to be subject to the AMC final rule as implemented by states – if they are Federally Regulated banking institutions. It is an interesting scenario though, what you post about this, as lenders should be in competition with each other for borrowers, not servicing their competitions accessory needs.  Almost makes me wonder if there isn’t any competing lenders involved in this and maybe it is something the FTC should look into?

          • Baggins Baggins says:

            The conversation with them goes down exactly as it would with an amc. Some lenders pay more, others less. There is separation from loan production technically, if you call lender employees in the office down the hall from the origination staff separation. People need to understand the distribution head positions are mainly populated by people who could not get jobs elsewhere. In the past few years I’ve worked with ‘panel managers’ whom; previously lost their appraisers and/or mb licenses, could not qualify for mb licenses, did not pass licensing testing, persons whom would otherwise be in HR positions, and others whom would call a move to some other part of the company a promotion. All these rules of separation are complete fails. I want to call the lender mb’s up directly, nobody else comes close to their level of expertise. If you call them you’re told they have no control at all and are basically directed by the company owners. As if the company owner will make less biased decisions than the origination staff. If we’re to keep up this farce which is separation from loan production we should move to the ivpi proposal for a government clearinghouse, force all distributors to have licenses themselves, or simply remove this errantly applied criteria. The reason nobody hires the obviously qualified person for distribution positions, the appraiser, is because they don’t want it to run correctly, they don’t want actual compliance, just the illusion of it.

  25. Avatar marion says:

    I got an email today from GOT appraisal to do a desktop review.

    HA HA HA

    But really.

    If the appraiser did not go inside, and the reviewer did not go inside, and the original report relied upon the photos the “client” sent to the appraiser…. Do we see a problem here that could wipe out a good portion of appraisers in the not too distant future?  Never mind that such “verification” review work will tell Wall Street that all is happy and good for much longer than the numbers should indicate.  Never mind that a photo taker, a desktop appraiser, and a desktop reviewer can all be paid for less than the fee of a single appraiser who completes their own interior inspection.

    The industry needs to make noise in the national and online publications that reach “the public”.

    • Baggins Baggins says:

      Too add to that, wouldn’t it be interesting if in the process of subbing what is supposed to be the appraisers duties out to other people, the lender captures business expense write offs instead of the appraiser. Perhaps that’s why appraisers are not allowed to know who’s performing these other ancillary duties, we might not respond so well when we learned the persons picking comps, taking photos, and inspecting houses are underqualified employees of the lender. Cut to the chase then; Is it allowable for the appraiser to rely on information from advocates of the client? Also, because it gets better, how much additional write off margin do you think lenders could capture if each 700 consumer appraiser fee only paid less than a hundred to the appraiser, and instead resulted in 600 dollars worth of employee write off expenses? Call some of the ‘direct’ assignment people, you’ll find out they’re on average less qualified than many amc employees. I’m putting my bunny slippers back on, this industry is rife with unethical conduct and piss poor business decisions on all sides. If one thought hollywood attracted bad people they must never have spent a day in real estate. American values and the golden rule seem to be absent in this industry, what a shame. I continue to advise people to own homes completely and get out of mortgage lending at their earliest possible opportunity.

    • Did you receive a request for a desktop review of a hybrid desk top appraisal???

      Or, am I misreading your post?

  26. Avatar K says:

    I have completed thousands of these reports.  In 10 years I have received 5 complaints, only one complaint was dropped and it was dropped BEFORE I turned in my work file: the one complaint for the one hybrid report where someone else did the inspection.  They are really good money.  I did eventually get sick of the quality of inspection elements and insisted on doing the inspections myself which raised my pay from $90 to $135.  I also refuse to do them on anyone else’s software.

    I regrettably don’t do them at all anymore because there is so much data in the market I am in that the client no longer orders those report types and anyone else who orders them requires I use their software.  No thanks.

    I think most of you need to question what you think you know about USPAP and give it a real read again.  Break out USPAP and read it along side your report.  Standards 1 and 2 actually outline a 1004, 1073, 2055, 1075, if you can believe it.  Aside from scope of work requirements and disclaimers and disclosures these forms are actually sufficient to achieve USPAP compliance.  What you are doing wrong, and therefore what you are ALLOWING your regulators and clients to do wrong is reading USPAP through poop stained goggles. You read it like “Can it be said the appraiser DIDN’T do this?” When instead you should be reading it like “Can it be said the appraiser DID do this?”

    So many people fail to understand that it is the nature of humanity to be exclusionary, discriminatory, and judgmental because it is the nature of our egos – which are designed to protect us and set us higher than and apart from the rest – that causes us to be this way.  This is why letting go of the ego is enlightenment.  Can you let go of your egos long enough to read USPAP for what it is?  A simple set of guidelines rather than a mythologized, hocus pocus, misinterpreted, waking nightmare of some failed church lady or accountant – aka an underwriter.

    • Baggins Baggins says:

      Ego radar alert;  what if the ‘inspector’ is an ex con or someone whom could not get a real job?  Who gets a driving job only taking pictures that pays well?  If that job is available I want to do that instead of appraisal.  The spirit of ethic is universal, to maintain a high level of trust.  Keeping secrets about the details from the professionals we engage with is typically not a trustworthy action.  Data validation and confirmation lines appear throughout all fnma forms.  Justify the secrecy behind lenders not sharing data for their own exclusive not to be named publicly ‘inspectors’.  Also, per my above, cover the advocacy question as well.  Parsing the language of living documents is different than following the intended spirit of ethic.  Some people justify dishonest practice, others stare it down and don’t care what a tough to reach detailed interpretation of the book says.  If you can’t explain compliance simply you’re doing it wrong.  An appraiser should never be asked to rely on an unnamed inspector for volume desktop products.  That’s clearly an unethical approach unless you can specifically justify the need for such informational with holding.  The burden falls on the client, not the appraiser.  Game over.

    • K, USPAP IS pretty clear. It doesn’t take reading any way other than it is printed to understand.

      Its NOT the AMC or so called “UW” that is the concern. It is the ever increasing number of state regulators that don’t know the difference between a FNMA Guideline and a USPAP standard Rule.

      USPAP says perfection is not possible – nor expected. Regulators do not (universally) agree. Show imperfection and you are also automatically violating ethics provision and competency requirement.

      Look at Oregon – fail to deliver report on time and coerced consent to multiple violations results. Oregons Board is reportedly not lead by an appraiser.

      USPAP says that the sole measure of USPAP compliance is what ones peers would do in similar circumstance, and reports are to be considered in the context of the clients intended use.

      Show me ONE state that uses qualified peers to review complaints. I SUSPECT New York and New Jersey follow USPAP; Virginia MAY but I simply don’t know. Maryland does NOT. Reports are that Illinois does not – though my mind is open on that one still. Minnesota does not, and further uses incompetent reviewers in house. As noted above, Oregon doesn’t even know USPAP let alone follow it. The same with California. (That ASC rates them excellent after many years of failing ratings indicates systemic rating deficiencies at ASC – not that they are competent in Cali.

      In fact, California BREA tolerates outright perjury by senior state investigators in sworn testimony (names and dates available on request).

      K, their is systemic corruption of FIRREA/USPAP and Regulatory compliance processes. Not primarily the integrity kind of corruption, but rather the whittling away of sound practices over too many years to adequately perform the functions as originally envisioned by Congress.

      Then of course, there is the other more insidious corruption on state levels among far too many states to say the People are being protected anymore. As a percentage of the whole, I bet there are far more corrupt, dishonest and or incompetent  regulators than there are appraisers.

      …and THAT is unacceptable.

  27. Baggins Baggins says:

    I’m eager to do desktops and want to sit at the desk churning quality analysis all day, that’s my strength as an appraiser.  How about one appraiser does the driving, the other appraiser does the comp selection, the other appraiser does the analysis? Hybrids are still waiting to be a major hit, if only someone without biased intention would structure the engagement in a clearly and simply ethically compliant manner.  In order to do hybrids all myself and I suspect the majority of other appraisers require is;  An itemized breakdown from consumer fee to driver to comp selection to form filler fee, simple, standard, easy.  These are simple and standard normally expected ethical compliance points.  If they want to change the model and split the fee among various parties for better efficiency that’s fine, it’s not a nuclear project that requires top secret clearance.  Unless of course, they’re putting someone somewhere at risk with unscrupulous practice which is the first thing to come to mind when such a simple product carries a mountain of secrecy behind it.  Under judicial rules that information is not a secret.  Deal with that because we’re not going to be blindsided by someone elses unethical practice.  That is what this comes down to in the end, trust in the people we work with, it’s a two way street.

  28. Avatar Darrell says:

    Ok ignoring the USPAP lemmings… Now before I start, I do not do Hybrid Appraisals, hell I won’t even do Drive By’s except for FNMA and a law firm (who does work for FNMA) on retro assignments. Now to this entire bunch of garbage. With two extraordinary assumption any appraiser that is even remotely competent (which cuts the # down to about 10% of certified appraisers nationally) could easily do a HA or desktop appraisal if they are in a medium to large market (obviously rural doesn’t count so don’t bring that up) with the sheer amount of data available and be within 10% pretty easily. Do you pull comps BEFORE you go do the inspection? I bet you do. Well guess what, you could literally stop right there. For YEARS we were told “pencil searches” or whatever they are called are “appraisals” and you had to follow the all the rules for an appraisal when you did one. Well ok so now folks are doing them within the rules. There is nothing in USPAP requiring you to inspect a property. With the two “extraordinary assumptions” (which IS in USPAP and valid) that the quality and condition is typical for the market (generally that means Q4 and C4, but in nicer neighborhoods could easily mean C3 and Q3, that’s where competent comes in so you know the difference) and that the public records data is accurate (measuring the last 500 or so houses in my market, public records has been off by a significant amount I can count on one hand) you can easily come to a reasonable, supportable and credible conclusion. Again I do not do these, because frankly it’s not financially viable to me, but these HACKS out there screaming its a violation of this or that or they aren’t legal or valid are just that HACKS who should be doing something else for a living, in my opinion, which isn’t almost everything everyone says really just their opinion?

    • Darrell you can come to a reasonable ‘comp check’ guesstimate. If that’s all the clients need, then lets call them by that name instead of “appraisals.” In Los Angeles County, fully 40% (or more) properties will not be suited to this.

      Supported or credible? Not happening.

      • Avatar Darrell says:

        Then Los Angeles county has an exceptionally high number of incompetent appraisers if that’s the case. IMO

        • Darrell now you are just talking out your ass.

          I used to reject 38% of all drive by requests because their was simply insufficient data. Add anther 10%+- after the driveby confirmed improvements were not even visible.

          Anytime you want to discuss competency, you be sure to let me know.

          I have to assume you aren’t an appraiser or you’d never make such an asinine statement to begin with. No wonder you think USPAP advocates are mere lemmings.

    • Avatar Marion says:

      Darrell, What are the two Extraordinary Assumptions you are using, to make these products “USPAP Compliant”? I ask because EAs can only be used if they are credible, and Credibility requires support, either by relevant evidence or logic, so I’m trying to figure out how credible an EA is that takes information from an interested party, the client, and applies that information without any ability to verify that information, or have a logical reason for why you did not inspect the interior, when anybody who wasn’t you was engaged to inspect the interior. And still, you can find USPAP compliance with not turning down the report that limited your scope of work to such an extent as to impact that credibility.

      So short story, What are the two EAs you use?

  29. Avatar Darrell says:

    Next January will be 30 years.

  30. Avatar Frodo the Wise says:

    There will be those ‘appraisers’ that do these. FNMA is even talking about this type of product.  Yeah, that will go well for them.   



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USPAP Compliance & Hybrid Appraisals

by Dave Towne time to read: 2 min