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Actually our theory ( the loan officer and I) is that he came in a good bit higher and got nailed by the QC dept...which we know held the appraisal a couple of days.
What this stuff needs is transparency. We should see the whole record from the time the guy puts together his initial view until it is fully blessed and published. Also help us all understand the role of the Appraiser versus QC dept. There is definitely a real chance that the QC department has influenced and is influencing the Appraiser's adjustments and opinion of value.
I don't see any particular ethics issues with this stuff. I do however see value being manipulated for reasons dealing with appearing "conservative and careful"...kind of a reactions to the 2004 runup...Any value can be discounted 5% just to be safe.
According to your theory, it would be Appraiser pressure. This is what I gather from your post, and according to the theory. I see ethic issues and I see Appraiser Independence issues with that. The Quality Control (QC) department may have pressured the Appraiser.
QC = Quality Control. The QC department is a function and arm of the lending industry. The public needs to know that Appraisal Management Companies (AMCs) is not the Appraiser and is not a Real Estate Appraisal Company. Also, the QC is partially of the AMC.
If the theory is true, which can be very likely, the activity should to be turned into the authorities that over see the regulation of AMCs and Appraiser Independence -- Appraiser State Boards, the Federal Reserve, and there is another agency that takes complaints such as these, but I can't remember or think of its name right now. There should be a hot line implemented soon, according to the Federal Appraiser Independence Laws, where the public can submit this type of stuff.
"...What this stuff needs is transparency. We should see the whole record from the time the guy puts together his initial view until it is fully blessed and published."You are right. The borrower should be able to -- they are the ones who are important. The loan officer has been exiled, per say, from the Appraisal process. So, it is important for the general public to get motivated and involved. The Appraiser who receives requests from the AMC still have a fear of reporting this type of behavior, because they can be black listed, or they won't receive any more work. Pressure still exists, and it is hurting the real estate market, thus the economy.
There are fights brewing as we speak, between Independent Appraisers and Appraisal Management Companies/Banks.
EDITED TO ADD: I looked over the prior (and quoted) post very quickly -- I missed when Olecapt said, "Actually our theory ( the loan officer and I)." I am going to clarify my post to conform to this part of the post, in which I read over, quite quickly. The first and third paragraph is edited to reflect my statements after fully understanding the first sentence of Olecapt's prior post, which is quoted in this post. I read the first paragraph too quickly, and then I responded as if it was a fact, and not a theory; I have corrected my statement.
Last edited by Greeenback; 05-19-2011 at 02:01 PM..
My mistake - BELOW the average. But if the most important sale indicates the low end of the adjusted range, it was probably appropriate to fall BELOW the average indication of values.
You have no basis for your argument based upon the information you've posted.
My mistake - BELOW the average. But if the most important sale indicates the low end of the adjusted range, it was probably appropriate to fall BELOW the average indication of values.
You have no basis for your argument based upon the information you've posted.
Read the thread again. YOu don't know what you are saying and you are discrediting appraisers. If they are that lacking in understanding it is no wonder they can't handle their job.
I said it was the most important comp...because it was thrown in to justify the low number. The appraiser drew no differentiation between the comps.
Read the thread again. YOu don't know what you are saying and you are discrediting appraisers. If they are that lacking in understanding it is no wonder they can't handle their job.
I said it was the most important comp...because it was thrown in to justify the low number. The appraiser drew no differentiation between the comps.
As an appraiser for 28 years, and as a reviewer for many years for a number of federal agencies, I would beg to differ. Obviously you have no clue about appraisals though.
You yourself said the low comp was the most important one, and the only one within the same subdivision. You are wanting the appraiser to average or reconcile near the upper end of the range, and that serves your purpose. The reconciled value falls comfortably within the range of value indicated by the three sales, and slightly towards the most "important" sale indication. It's not necessary that the appraiser justify it further.
Again, you have no argument here, but you obviously do like to whine.
Go ahead and turn it in to the authorities but you will be wasting their time. But you might give them a good laugh.
As an appraiser for 28 years, and as a reviewer for many years for a number of federal agencies, I would beg to differ. Obviously you have no clue about appraisals though.
You yourself said the low comp was the most important one, and the only one within the same subdivision. You are wanting the appraiser to average or reconcile near the upper end of the range, and that serves your purpose. The reconciled value falls comfortably within the range of value indicated by the three sales, and slightly towards the most "important" sale indication. It's not necessary that the appraiser justify it further.
Again, you have no argument here, but you obviously do like to whine.
Go ahead and turn it in to the authorities but you will be wasting their time. But you might give them a good laugh.
No the comp for the tract was the $140,000 one and there were two more comps from within the same subdivision that the appraiser went over. The appraiser rejected comps within the neighborhood and went out of neighborhood to pick the low one.
Olecapt is pointing out the ridiculousness of using that comp as being important.
There are three fresh last week in April sales of the same house in the same tract. All REOs, all FHA loans.
The first comp is one of the three from the tract.
The second Comp is a 6 room 3 bedroom 2100 SF in the next tract which is gated and very different in style.
The third is an 8/5 from the next tract past that which is also gated and different in style.
The in tract comps would have been $140K, $126K, and $142K.
But we end up with a $130K appraisal.
How did that happen?
Note we expected a light appraisal...but probably $5k higher than the one we got.
The appraisal also vanished for a while...apparently tied up in some sort of a QC hassle. The mortgage broker thinks the QC forced the appraisal down hence the odd selection of comps.
Interesting.
This is Olecapt's posting on the first page of the thread. This indicates which sales are which (initially), in which the Appraier used. It looks as though the first comparable used was within the subject property's tract. And, the other two comparable sales used are in adjacent tracts. Olecapt noted that the importance of the comparable in a later posting was the fact that it held the lowest estimate of all the comparable property's used.
ETex2 is implying if that particular sale is the "most important," or the most similar, then the current opinion of value looks to be credible.
I think you had a difficult time in expressing what you had meant by saying, "most important." He took it as if you were implying that it was the most similar.
If I had wished to quote the appraiser as to the importance of the various comps I know how to do that. I did not. You misunderstood the plain english and we straightened that out in the following messages. ETex2 obviously is unable or unwilling to follow any of that.
Quote:
I don't speak for ETex2 by any means, but I believe he is now correcting the mistake, and then reaffirmed what he attempted to say, before the thread took off beyond that point.
Read his last again. He continue to assert his complete misunderstanding of the situation and he is sufficiently unaware he does not know it.
Quote:
Where is the Appraisal right now?
It is in the system and accepted. You don't fix such appraisals. You work around them or kill the transaction.
It is in the system and accepted. You don't fix such appraisals. You work around them or kill the transaction.
Well, there can be a review or a second Appraisal can be done. If some one wishes to cancel the loan altogether, that would be up to the laws or rules that would apply.
Well, there can be a review or a second Appraisal can be done. If some one wishes to cancel the loan altogether, that would be up to the laws or rules that would apply.
Are you the borrower or are RE Broker?
I am the buyers agent.
In general this is a very fast and quite cut-throat market. We are in fact trying to steal this one from a $130K cash offer. We did not expect it to fly at the agreed price but we did expect it to come in 5 or 6K below that...which would have worked perfectly.
We have no option of appealing...and I don't think in recent years I have seen a deal where we could appeal the appraisal. We almost lost this one simply because of the time it took to do any appraisal. And note the 1 mile circle of this place probably contains 15 comps within the last 90 days. Virtually all are REOs and the vast majority are FHA. You don't get much simpler appraisals yet it took almost 14 days. We would normally expect 5.
And note the lenders are not a lot of help. We worked out the appraisal and other stuff over last weekend and the lender was supposedly ready to go on Monday. Here it is Thursday and escrow still awaits docs. Everything is done but the lender can't execute.
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