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OREP/Working RE’s Collateral Underwriter Talkback Blog

OREP/Working RE’s Collateral Underwriter Talkback Blog

A free idea exchange designed to help appraisers share their experiences and solutions to issues related to Fannie Mae’s new Collateral Underwriter (CU). Post your experiences and solutions here!  Please note that regulators, government officials, lenders, fellow appraisers and other decision makers will be reading these posts for insight and guidance. Please be thoughtful and constructive with your comments (and remember to spell check!).

8 Responses to OREP/Working RE’s Collateral Underwriter Talkback Blog

  1. Tammie says:

    Mike Ford…..YES!! Exactly!

    Instead of FannieMae listening and considering issues brought about by discussions relating to the CU, they are arrogantly putting out the second FannieMae Letter dated 02/04/2015 that basically states that none of the concerns appraisers are voicing have any validity.

    Link to see the entire letter (may need to use a browser other than IE)
    https://www.fanniemae.com/content/announcement/ll1502.pdf

    Most of the letter appears to me to be saying the same thing that the FannieMae website and webinars are saying. But one of the first things that caught my eye was this paragraph on page 2:

    ” Fannie Mae does not instruct or suggest to lenders that they ask the appraiser to address all or any of the 20 comparables that are provided by CU for most appraisals. It is also not Fannie Mae’s expectation that appraisals should contain only CU’s top-ranked comparable sales. In the majority of cases, there may be no material difference between comparable sales utilized by the appraiser and those identified by CU. Before asking the appraiser to consider any alternative sales, it is imperative that the lender analyze the relevance of the sale and determine if the use of such sale would result in any material change to the appraisal report. If the lender determines that there would be no material change, then they should not ask the appraiser to make revisions. Fannie Mae expects CU to enable lenders to accept appraisals “as is” with greater confidence.”

    ?How can “the lender analyze the relevance of the sale and determine if the use of such sale would result in any material change to the appraisal report” if they are NOT appraisers?? Isn’t this EXACTLY what we as appraisers do when engaged by a client to perform a REVIEW of another appraisal report?

  2. Kevin Litchke says:

    Once an appraisal is submitted to the collateral underwriter, is it ok to substitute comparables in the original report, with suggested or new comparables that may be considered more suitable to the subject that were possibly over looked? or after further review, were considered more similar?

  3. Ronald Wright says:

    I agree 100% with Mike Ford and his analysis of what Fannie Mae’s latest attempt to impress its government supervisors is. Not bad for a bankrupt institution!

  4. Marcella Rodgers says:

    Well done! For so long the GSEs have been hammering the point that everything must be documented, transparent and verified, but now they insist they have the right to criticize the work of appraisers with a cloak and dagger approach. Perhaps this is a good response in order to point out that we are not mushrooms (being kept in the dark and fed bull****), worrying more over trying to second guess what might be the “correct” path to take in valuing a property rather than providing a fair and honest appraisal. Crazy and stressful profession these days – I am trying to find ways to do valuations without mortgage work.

  5. Annemieke Roell says:

    Right on Mike Ford! I urge any Oklahoma appraisers to join the AGA as well.

  6. Mike Ford says:

    To those that think CU is not a threat: AMC owner / Appraiser friend of mine jus received following text statement re report he turned in. The ‘score’ was a 2 (which is considered acceptable. “Appraiser to explain why adjustments exceed those of his peers.”

    Coincidentally this is an appraiser that usually does not make large GLA or site adjustments; a point he and I frequently ‘debate’.

    Problem?

    1. At the very least this requires a response from him, although all of his adjustments AND how they were derived is explained within his appraisal report.

    2. At some level, he is now rated at less than perfect without explanation. This can affect his future work volume.

    3. “Peers?” Really? Data compiled and utilized in an undefined regression system with undefined boundaries, from undefined experience level appraisers does not constitute “Peer” comparison at any valid level.

    4. The CU results communication DOES constitute an appraisal review report by FNMA’s CU. It is one that fails to meet any USPAP requirements; does not appear to have been signed by an appraiser, does NOT meet MY states’s (California) requirements for a review appraisal, and does not provide a meaningful explanation of the criticism being communicated; OR support for that criticism.

    Should I ever receive such a communication my response is going to be “I respond appropriately to any USPAP compliant appraisal review performed by an appraiser licensed and qualified to perform appraisals in my state. I do NOT respond to fallacious hocus pocus software driven or originated reviews performed by unqualified software programs.”

    “Peer review is performed by human beings with comparable qualifications, reviewing the specific property, market, and appraisal that I performed.”

    If anyone else shares my thoughts on this, I urge you to join the American Guild of Appraisers (AGA) of OPEIU/ AFL-CIO and demand that CU either be revised to be USPAP compliant or prohibited from being used as an appraisal review in any form.

    http://www.appraisersguild.org 1-800-660-1835, or call me direct on my cell if you have any questions at all. (714) 366 9404. My personal background is at http://www.mfford.com

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