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Uncovering Flaws in FHA Appraisal & Loan Review Process

AppraisersBlogs — Mon, 15 Jul 2024 12:30:32 +0000

The story of this single mother’s harrowing experience with a defective home purchase and HUD’s negligent oversight exposes deep flaws in the FHA appraisal and loan review process. After sacrificing for years to rebuild her credit and earn the right to become a homeowner, this borrower found her dream home in the country – or so she thought. During the home inspection, several issues were flagged. The seller, an investor who had purchased the home in an estate sale, was unaware of the septic system’s location. The seller agreed to have the tanks pumped so the location could be determined....

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Desktop Appraisals: Has The Devil Infiltrated The Public Trust?

Mark Skapinetz — Thu, 10 Feb 2022 13:30:41 +0000

Are desktop appraisals with third-party inspectors protecting the public, or are these products about to destroy the very profession I love so much. The Uniform Standards Professional of Appraisal Practice (USPAP) are the key to maintaining public trust in real estate transactions. USPAP is pretty much the equivalent to the Bible, but it MUST be followed for appraisers. Created by the Appraisal Foundation, USPAP set forth the guidelines for how appraisers should perform their work. By following these standards, appraisers ensure that they act in a professional and unbiased manner. To expand, even more, USPAP states, “While USPAP does not...

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HUD Dismisses Claims Alleging Racism

Michael Ford — Thu, 02 Dec 2021 13:30:59 +0000

…white America (government) keeps trying to ‘fix’ Black People who are not broken in the first place! We’ve all heard of redlining. No one doubts it existed and MAY still exist, among private lenders. It’s hard to accept major national banking corps would risk it but it IS possible. Having said that, there is ZERO percentage or benefit for any appraiser to engage in it. None. Another appraiser in Los Angeles, who is a great researcher, posted addresses of the properties involved in half a dozen complaints alleging racism by appraisers and so-called ‘white washing’ of the houses producing subsequent...

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Why Appraisers Say NO to Hybrids

AppraisersBlogs — Mon, 20 Sep 2021 12:30:52 +0000

Could this be another reason why so many real estate appraisers refuse to do bifurcated hybrid appraisals? Recently, a Mueller Services ‘inspector’ posted a comment on the article titled “Mueller Sample Report. You Decide!“. Could this be another reason why so many real estate appraisers refuse to do bifurcated hybrid appraisals? It goes without saying that bifurcated hybrid appraisals are uniformly performed by very low paid, with third grade level writing skills, untrained property ‘inspectors’ using a checklist – but with no appraisal training and skill. Tbhiitsch: Ah yes, Ive worked for Mueller services. It’s an easy job kind of,...

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Can an AMC Tell Appraisers How to Dress?

Dustin Harris — Wed, 09 Dec 2020 13:30:04 +0000

I recently saw a Facebook post where an appraiser was quite upset and offended that an AMC asked him to dress professionally for an appraisal walkthrough. Now, this was a request that was made up front as one of the conditions for accepting the order. Reading the post, it sounded like this appraiser was upset for two reasons. One, he was offended that the AMC was implying that he does not take his job seriously enough or dress professionally enough. Two, he felt like the AMC did not have a right to tell him how to do his job (i.e....

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Why is Only One Side of This Story Being Told?

Guest Author — Tue, 20 Oct 2020 12:30:03 +0000

There are always two sides to every story; however, understanding is a three-edged sword: your side, their side, and the truth in the middle. Recently there has been a wave of news stories about racism in the appraisal profession brought on by a couple in Jacksonville, Florida. That couple, Abena Horton, a black woman, and her husband Alex Horton, a white male, made claims that an appraiser who first appraised their home came in low on the appraisal due to her race. You can read one of the numerous stories here. Before anyone here accuses me of being racist etc.,...

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Photos in Gated Communities Can be Tricky

Dustin Harris — Fri, 09 Oct 2020 12:30:36 +0000

Let’s talk about assignments in private neighborhoods, gated communities, or secure communities. Rich folks buy, sell, and refinance their homes, too, so they need appraisals. You have an assignment in a security community. There is security at the entrances, you must be on security’s authorized visitor list to get in, and your permission to enter this private community extends solely to visit your subject. So, here is the question: while inside this gated, secure community, do you also drive around and take photos of the comps? Now, even though you are reading this, I can see you looking at me...

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Is a Model Home Considered Occupied?

Dustin Harris — Thu, 17 Sep 2020 12:30:26 +0000

Two days later the underwriter emails you ordering you to change “vacant” to “occupied” since there is clearly furniture in the house… Here’s a situation you’ll run into once or twice in your career. There is a new subdivision. Now, new subdivisions sometimes have model homes. Model homes typically have furniture, fixtures, and equipment – usually upgraded. The subdivision has completed its sales program and the developer is now selling the model(s). Your job is to appraise one of the models, since the developer has it under contract to a retail buyer. You do your inspection thing, take pictures of...

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Skipping Comp Photos, Suicidal Shortcuts

Michael Ford — Wed, 02 Oct 2019 12:30:17 +0000

I refuse to undermine my own profession by pretending that time saving shortcuts are always acceptable just because they are ‘more modern and progressive’. I know how long it takes to produce USPAP compliant, credible appraisal results. I charge accordingly for my time. I make no effort to compete on fees with half assed hybrids, evaluations, or single approach partially performed field work. Respectfully, neither should anyone else. Please stop undermining our own profession…. Recently The Appraiser Coach posted an article and links to a podcast suggesting its no longer necessary to photograph our comparable sales. I wrote a counter...

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Appraisers, did you Shoot yourself in the Foot?

Guest Author — Mon, 30 Sep 2019 12:30:23 +0000

When I explain the rules many of the appraisers start complaining: “An MLS photograph depicts the house at the time it sold so it’s more accurate than my photograph would be”… There’s a lot of yelling and screaming about bifurcated appraisals. Unfortunately, appraisers may have shot themselves in the foot when it comes to this issue. Allow me to provide an analogy to help explain the issue. I’m not sure if this happens in other areas of the country but in Seattle there is a strange “left leaning” way they do things: State and Federal governments perform numerous traffic studies, to...

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Can We Stop Taking Comp Photos?

Dustin Harris — Fri, 27 Sep 2019 12:30:40 +0000

I personally do not think that appraisers should be required to take comp photos… First, before the hate mail starts rolling in, let me assure you that I understand the requirements surrounding comparable photos, and I do take them as an appraiser. I am not here to debate what the policies are, but I am here to question if those policies should be in place. I personally do not think that appraisers should be required to take comp photos. Modern technology has provided appraisers with a way to know as much about a property from the comfort of their own...

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Didja Know… Zillow is Better than Eyes!

Dave Towne — Tue, 09 Jul 2019 12:30:53 +0000

How in the heck is Zillow supposed to discern QUALITY of these homes, and then magically produce a presumed value, when there is no actual data upon which to base a decision? Maybe it’s done with smoke and mirrors, rather than eyes? Appraisers, I was busy churning out reports, and didn’t have time to send out this bit of news about Zillow earlier: Zillow is watching: New algorithm uses photos of your home to check quality and curb appeal. Zillow is now claiming “it” can discern QUALITY of a home, just by looking at various photos they obtain from various sources! They...

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Hybrid Inspectors Offering Appraisal Opinions

Mark Skapinetz — Mon, 17 Jun 2019 12:30:03 +0000

Clear Capital admission: This is an admission that inspector were previously offering appraisal opinions re Q&C. There remain many other areas in hybrids that also are appraisal opinion being provided by non appraisers. I have written many blog posts here, mainly for the consumer to read and understand what is actually happening in the world of Real Estate Valuations. My blogs range from being overcharged for appraisals so the middle man (the appraisal management company or AMC) can make money, lenders still pressuring appraisers to hit a value, and now having untrained and unlicensed people perform inspections (see my last...

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Verisite Photo Appraisal

VaCAP Board — Tue, 19 Mar 2019 12:30:42 +0000

Appraisal Photo Report for use on loans, pick and choose pictures… Is the Welcome Mat Down and the Door Opened Wide for Fraud? “What Appraisers Need to Know about Property Data Collection” is a topic of discussion in the latest Fannie Mae Newsletter. The article describes how property data is being collected and being sent to Fannie Mae to determine the type of valuation that is needed on a property. It discusses Appraisal Modernization, Desktop appraisals, Scope of Work and USPAP. It even references The Appraisal Foundation Video on Inspections & Hybrid Appraisal Assignments. Well, Fannie Mae is the last entity that should be discussing...

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Hybrid Assignments, the Consequences

IDFPR Board — Thu, 07 Feb 2019 13:30:33 +0000

The concept of a third party providing one or more functions in an appraisal assignment is nothing new. Back in the 1970s and 1980s there were plenty of appraisers who used somebody else to do the sketch or to take the pictures or to pull comps. The “appraiser” put all of the pieces together and signed the report. Then came USPAP in 1989. Licensing followed shortly thereafter. Today, there are a number of lenders and AMCs who believe that they’ve invented something no one else has ever considered. The bifurcated or hybrid appraisal process. To be clear, we’re not talking...

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Expert Wants to “Eliminate” Appraisers

Abdur Abdul-Malik — Mon, 07 Jan 2019 13:30:29 +0000

Mortgage Industry Expert Wants to “Eliminate” Appraisers – A Response The National Mortgage News website just published an interview with an industry expert who openly stated she wants to “eliminate” the appraisal profession. No subtlety, no nuance — she wants us gone! Given the name of the website, I didn’t expect to find too many pro-appraiser viewpoints. I ran a search for the term “appraiser” on the website’s internal search engine and many of the articles that came up were about eliminating the profession or the current state of appraisal waivers.…to “eliminate” the appraisal profession… Rather than read the article...

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Inspections Can Sometimes Be Embarrassing

Dustin Harris — Wed, 19 Dec 2018 13:30:47 +0000

Inspections can occasionally get embarrassing, right? It happens to all of us. That’s just part of the appraisal business. But that does not make things any easier or less embarrassing, does it. Let me tell you three stories. First is the house with the unique basement. It’s your typical single-family residence on the ground floor; nothing out of the ordinary, nothing embarrassing. Then I tell the owner I need to go into the basement to inspect it. He hesitantly says OK, so into the basement we go. It was not your typical basement. It looked like some kind of department...

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Can You Believe That? Hybrid Appraisal Part 4

George Dell — Wed, 31 Oct 2018 12:30:01 +0000

…non-appraiser inspector must not provide any significant appraisal assistance… This is Part Four in a series on Hybrid Appraisal. Be sure to read Part One, Part Two and Part Three. The term “hybrid appraisal” (as it’s currently used), means that the appraiser sits at a desk, while someone else (not an appraiser) looks at the property. It appears that the non-appraiser may or may not inspect the interior, measure the improvements – but always takes a front photo, similar to what can be found in MLS listings, or Google Earth street pictures. The basic claim is that the overall process is cheaper and faster, and...

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Fast, Faster and Really Fast…

VaCAP Board — Mon, 15 Oct 2018 12:30:25 +0000

Appraiser must be comfortable valuing a property in 5-15 minutes using pictures… Fast, Faster and Really Fast… Take a look at the ad for an in-house appraiser in the Atlanta area. How many of your are good enough to apply for this job? Job description We are looking for Real Estate Appraisers (licensed in GA) to work remotely on an independent contractor basis.. Appraiser will primarily be responsible for valuing properties which are on foreclosure list. Appraiser must be comfortable valuing a property in 5-15 minutes using pictures from field report. The ideal candidate will have experience with valuing distressed...

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Did That Guy Just Take a Picture of My Kids?

Dustin Harris — Tue, 08 May 2018 12:30:24 +0000

Looking at the tricky question of taking photo of comps when people are present… I want to talk to you today about something most of us appraisers do on a daily basis – taking comparable photos. Now, I don’t want to get into the whole “Are comps a waste of time? Do they actually serve any purpose?” debate. That’s gone on long enough and it isn’t going to stop any time soon. Instead, I want to try and clear up what is and isn’t actually required from your FHA comps; specifically, we’re going to be looking at the tricky question...

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