Listening to Appraisers

David Brauner
Latest posts by David Brauner (see all)

WRE Surveyed Appraisers Say NO to the Bifurcated Model

…appraisers believe that the bifurcated model and the use of unlicensed, untrained and unaccountable contractors for key elements of collateral assessment will adversely affect the health and welfare of the housing finance system, increase their own liability and damage the public trust…

It is the goal of the Federal Financing Housing Agency (FHFA) to ensure the health and welfare of the housing finance system. FHFA oversees Fannie Mae and Freddie Mac and has, for the time being, paused the testing and development of bifurcated appraisals that bypass the participation of licensed appraisers (FHFA Puts Brakes on Fannie’s Bifurcated Program). I hope that this time the policymakers will try something they rarely seem willing to do: ask the experts. By experts I mean of course boots-on-the-ground appraisers.

OREP/WRE’s Bifurcated Appraisal Survey has over 4,000 responses to date. It’s still open and you’re welcome to participate.

Nearly half of those who completed the 3-minute survey were compelled enough to leave comments after completing the survey- you can find a link to the comments below. The commentary overwhelmingly suggests that appraisers believe that the bifurcated model and the use of unlicensed, untrained and unaccountable contractors for key elements of collateral assessment will adversely affect the health and welfare of the housing finance system, increase their own liability and damage the public trust. The vast majority of appraisers taking the survey say they don’t want any part of it. If you’d like a good representation of how and why, pick up the current print edition of Working RE (Winter 2020), which mails to most appraisers nationwide and to very OREP insured. Author Richard Hagar, SRA summarizes his test of bifurcated appraising and shows how, in his experiment, it lead to unreliable results (Why Hybrid Appraisals Don’t Work). It’s worth a read.

According to the survey 89% believe that appraisers who do not visit neighborhoods/properties are in danger of losing their ability to produce credible reports over time due to a loss of familiarity with markets, neighborhood influences and/or other factors. Most appraisers taking the survey say they won’t accept either part of the bifurcated assignment- property inspection or analysis- because of the increased liability and low fees. This comment is indicative: “I had the opportunity to later inspect a home I recently completed the valuation on in a bifurcated assignment. The inspector had failed to tell me the stairs to the second story lead into the roof peak to where you had to duck down as you climbed the stairs, the top step ending at only a 4? height. They also failed to identify that the home was only 3? away from the commercial building behind it—a zoning compliance issue in an area of 10? minimum set-backs. Also failed to report mold growth and water stained ceilings. My second appraisal, after personally inspecting the home two months after the bi-furcated appraisal, came in 25% lower!”

According to appraisers, the solution regulators are testing for updating appraising will weaken the process with no discernable benefit to the consumer in speed or cost. We’ll publish the entire results soon.

Take the Survey and Read Appraiser Comments.

Visit OREP E&O Insurance for low premiums, fast quoting and free Continuing Education (14 Hours).

Image credit flickr - Arthit Suriyawongkul
David Brauner

David Brauner

Senior Insurance Broker for, a leading provider of E&O Insurance for appraisers, inspectors, and other real estate professionals in 50 states. Publisher of Working RE magazine. He has been involved in providing E&O coverage for appraisers for over 25 years. He can be contacted at or (888) 347-5273.

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18 Responses

  1. Avatar Bill Johnson says:

    Wow, a bunch of running their mouths, name calling, complaining, do nothing appraisers who are calling out the scam that doesn’t serve their interests nor the public interest. Who would of thought that seeking the truth (boots on the ground/in office analysis), spreading the truth (letting anyone and everyone know formally & informally), and calling something what it is (garbage), could have such a positive influence to such a negative product.

    On a side note Mark, be sure to check those past due AMC invoices.

    “InHouse Solutions, the AMC division of Get Connexions Inc. is closing for business effective Feb 28,2020. Concurrent with ceasing to carry on its AMC operations, Solutions will eliminate its appraiser panel entirely. All appraisers will be removed from the InHouse Solutions panel effective Feb 28, 2020. Portal access will continue to be available for the following 90 days in case of conditions or clarification on previously completed orders. Invoicing and payment will follow the regular process for completed orders. Thank you for your past business and support. We wish you all the best for continued success in your future endeavors! For any additional questions or concerns please contact“.

    Seek the truth, tell the truth, spread the truth, and ignore others who want to shoot the messenger. Bill Johnson approved this message.

  2. Avatar Jeff Weeks says:

    Standing up to irresponsible practices in our profession can make a profound difference in our profession. I am so glad the majority said no thanks. This pilot program was short lived and hope it doesnt raise its ugly head again, Stop the non sense and greed of banks and AMCs and poof problem solved.

    • Avatar Bill Johnson says:

      Although its important Jeff for professionals to disclose such toxic practices among ourselves, being in a room with like minded, or perhaps should be like minded people, at times serve a limited purpose.

      In my example from yesterday, what happens when 50,000 appraisers, do 50,000 inspections a day (or 4 to 9), and meet 50,000 strangers who know nothing of the negative underbelly of the appraisal world (tell them people)?


      I’ve learned more from those who disagree with me, than from those who agree with me (Bill Johnson / 2015).

      Seek the truth.

    • It wont die easily…not without being replaced by something just as cheap. FreddieMac reached out to some AMCs this past week trying in desperation to find an AMC willing and able to do 500 desktop appraisals per day at a gross fee of $150 each.

      They will not give up on the idea of pre priced unreasonably low fee products. AMCs will demand $75 to 100 per order leaving only $50 to $75 per order for the desktop appraisal.

      They DO NOT CARE that even desktop appraisals still take 2 to 4 hours to comply with SR1 and SR2.

      • Avatar ej says:

        Well said, Mike. $50.00 -$75.00 laughable. Wonder if Danny Wiley had a say in these prices. The former price-fixing guru from Service link still hasn’t paid for his crimes.

        • Avatar Jack Of All Trades says:

          I think the same Danny Wiley who thinks he is a god on the appraiser forum, very condescending individual

        • I don’t know that he had any specific influence on these particular low fees. Certainly, his past efforts at the suppression of C&R fees has contributed to the overall belief among AMCs that they don’t have to pay any attention to the Federal Law set by the Dodd-Frank Act to pay reasonable and customary fees.

          About as much attention as they pay to appraiser independence. Whereas before we had commission loan officers asserting undue influence, now we have corporate-owned AMCs that can’t afford to lose million-dollar month plus clients doing the undue influence exerting for them.

      • Avatar don says:

        Does BIFURCATION mean that; ALL share liability, does regular E&O cover the issues of the totals and/ or the separated parts of splitting of the values to various entities.

        When a demo contractor gives an appraiser a written sum and the appraiser uses that sum as a part of his estimate, both have some liability, how much, limited to their inputs?? all arguable by different insurers?

        • Don-ultimately it depends on the state. Basically ONLY the signing appraiser bears responsibility.

          Technically the AMC has responsibility under state law to provide USPAP compliant reports when they claim that is what they are doing or in covered transactions. The lenders have direct accountability to the feds for assuring appraisal reports they submit in support of loans are USPAP compliant.

          The problem is that BAD WORK still needs to be turned in by someone. Harder to do on bifurcated since most of them are cloud-based reports that don’t filter out into the appraiser community as often as other work has.

          • Avatar don says:

            Thanks Mike, Things are changing rapidly. Went to an REAA meeting last after noon, diminishing attendance, across table discussions (if you don’t do it their way you won’t get work) this from the reviewers, who are not appraisers. CE was about “proving your adjustment”, the agreements were to use the stuff on your soft ware, and not bother with Excel. What about Knowing and understanding, does the patented software publish the ALGORITHMS?.

            Excel can do all the MC work, make it absolutely custom to the subject just thru sorting,& counting. Graphing will illustrate all of the simple stuff.

            • Don was this REAA of Northern CA or REVAA? IF REAA then as a member I am extremely concerned.

              Appraisers do not and cannot ‘prove’ their adjustments. All we can do is support them as being credible. There is a huge difference. Any reviewer that believes they are ‘facts to be proven’ doesn’t know their ass from a hole in the wall.

              Your credibly supported adjustments may not match my own credibly supported adjustments. Unless new textbooks have tossed aside over 70 years of accepted appraisal practice there has always been the recognition that variance among appraiser’s interpretation of data is expected and normal; and that claims of exact measurements of imperfect market reactions are pure hubris.

              Those that think the art part of appraising is dead are grossly mistaken. The science part cannot accurately account for imperfect market conditions by imperfect market participants where we then try to apply market reactions to a hypothetical most probable buyer.

              THAT requires more art and skill than a science.

  3. Avatar ej says:

    He’s not only condescending. He’s corrupt. He sounds more like a used car salesman than an appraiser. No wonder he has been able to climb the corporate ladder.

  4. Baggins Baggins says:

    Let’s get to the root of the problem. In terms of ratios, how many lenders are pushing the bifurcated process without amc’s, and how many with the use of amc’s? It is my understanding amc’s represent the far majority of all bifurcated requests.

    Amc’s are the catalyst for all manner of fraud. That’s because individuals working at amc’s are not individually licensed or individually regulated. It’s a great cover.

  5. Avatar Cotton says:

    Let’s be honest bifurcation is a complete money making scam. There is no real benefit to any parties other than to the AMC who now offers the appraiser 1/5 of the market rate. The AMC pays the unlicensed individual $25 to complete the inspection. The data collector has no risk in the appraisal assignment and is held to no standard. The AMC retains over 75% of the fee charged to the borrower. The bifurcation process is 100% flawed. The appraiser is forced to rely of data collected by a non-appraiser. The bifurcated appraisals that I have personally reviewed were so flawed (incorrect measurements, incorrect room count, missing photos, blurred photos, photos that do not show enough of the room to ascertain data, inclusion of unheated areas included in the GLA). I have reviewed over 20+ appraisal completed by this company called valunet where the signing appraiser is not even located in the subject’s state. There were 5 examples where the signing appraiser was located over 1000 miles away from the subject. The government needs to complete a full investigation into Valunet as they are clearly undermining the entire housing industry. I am in shock that there are appraisers willing to assume so much risk with minimal compensation. I personally have received orders to appraise properties where the bifurcated appraisal could not be relied upon. Let me tell you the borrowers were so pissed off! The director of Fannie Mae’s collateral policy should be removed from his position as he clearly is not able to ascertain collateral risk! When the market takes a down turn it will ultimately be the consumer, the investor and tax payer who takes the biggest hit!

    • Avatar Bill Johnson says:

      I agree with you Cotton, but unfortunately many appraisers outsource even the bifurcation process (Philippines anybody), in an attempt to turn a profit, or at a minimum they do them to remain active on the AMC’s general appraisal panel.

      Seek the truth.

    • Baggins Baggins says:

      There is real benefit to some groups of people… A post I made from today:

      Requesting ASC data and filtration options on the ASC Find An Appraiser search screen; for appraisers licensed in 3 or more states. One understands 2 states may be common place, especially for towns near state borders. Licensing in 3, 4, 5, or more states? Obvious is obvious.

      Requesting that EO providers develop new risk rating and associated insurance fee tables to better mitigate and distribute costs of risk. Requesting specific questions if appraisers perform hybrids, if appraisers outsource any developmental tasks (with specific additional forms with detailed checkbox options if yes), and requesting insurers require answering of how many appraisals a specific appraiser completed in that past year. Insurers could mitigate this right now without any government intervention, or perhaps they don’t see any risk to evals? What else explains their inaction?

      Guys whom flip dozens a day should pay for more for insurance than appraisers whom flip a mere few a week. I really don’t care what the other guy does. It is when I am on the hook for that liability of no fault of my own that it becomes an issue. Now well over a decade claim free but yet my insurance keeps rising by the 25, the 50, even a 100 a year sometimes.

    • Valuenet and Clear Capital; along with any other BF hucksters calling their products USPAP compliant appraisal reports.


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Listening to Appraisers

by David Brauner time to read: 2 min