Appraisal. Appraising…
Valuation technology, opinion, daily practice and an industry have just found an event horizon.
The valuation industry is forever changed and the processes we thought were "wrote" have become nothing less than a fallacy. Why? Mother – or Fannie Mae, has developed Collateral Underwriter.
Social media has been nuts the last couple of weeks with some appraisers seemingly clamoring for more information on multiple regression analysis (MRA). So what is the big deal? Fannie Mae has decided to implement a new analytics application, Collateral Underwriter (CU), available to assist lenders in making sure that appraisal quality is maintained by the lenders . You cannot scroll through some of the groups without seeing some new post asking for copies of regression spreadsheets or long threads debating the topic. There have been many of us touting the benefits of using it for years. It can be a very useful tool. I very much believe it is a tool that every residential appraiser needs to know about and be able to utilize at some competent level. But there is always a catch to anything worth doing, and MRA is no exception. Learning regression is a process and is not something one should tread into lightly.
"My, oh, my, the sky is falling. I must run and tell the others," said Chicken Little.
Drones Doing Appraisal Inspections?
"Yes Ma’am, that is correct. Next Tuesday at 9:30 AM. Our drone will be at your door at that time to do the visual inspection. Typically, it will fly around the exterior of the home first to measure and take photos. After it is done, the drone will need access to fly through each of the rooms in your home taking video and still shots of what it sees. Someone will need to be available for a few questions before the drone leaves. Will that work for you?"
I was at an industry sponsored Holiday luncheon the other day. A member of our State Appraiser Coalition was giving us an update on the petition that was distributed and delivered to Fannie Mae regarding Collateral Underwriter. To paraphrase, our coalition member said: Fannie Mae called because the Illinois Appraisers are Rabble Rousing again.
The Uniform Standards of Professional Appraisal Practice Standards Rule 3-6 requires each appraisal to contain a signed certification. To summarize portions of that certification, it states:
Here is what I want for Christmas. I want to hear from you.
This article was originally run in the Wall Street Journal. Make sure to read the story and watch the special interview with the author AnnaMaria Andriotis HERE.
As review appraisers, one of the issues that we see all the time is the failure to analyze highest and best use for a market value opinion related to mortgage lending appraisals. This makes sense to a large degree, because many appraisers believe that providing the "yes" answer relieves them of further analysis and communication. We wanted to address this topic and offer some insight as to why one may want to rethink their approach to this common issue.
As many in the appraisal industry know The Appraisal Standards Board (ASB) has officially released the Third Exposure Draft of proposed changes to USPAP. There are several major revisions that could drastically change how you preform your appraisals. If you haven't seen it yet you can view the document HERE. One of the major concerns to many appraisers is in reference to the requirement for draft reports.
While never one for New Year resolutions, I do love this time of year to reflect about where our industry has been; it's current state and what needs to happen to move forward.
