UAD absolute vs relative
Another good commentary from Washington appraiser Dave Towne!!
Why is it so many appraisers have trouble with UAD and the CU (Collateral Underwriter), and how to apply the Quality and Condition rating between the Subject and Comps?
Not long after the UAD was implemented/mandated by FNMA (in 2011), and then the CU evaluation system came along, FNMA began discovering that many appraisers were improperly Rating the comps Quality and Condition AGAINST the Subject in the grid. And they began telling appraisers what they were finding. FNMA also discovered, and revealed, that many appraisers were using the same Comps over and over again in different reports, but were using DIFFERENT rating 'numbers' for those properties - depending on the Quality and Condition they applied to the SUBJECT.
Applying an 'opinion' of the difference for the Quality and Condition is not how we are supposed to do appraisals. Although many appraisers were taught to do that years ago by their mentors, who were also doing it wrong. Unfortunately, FNMA never really said much about it then....until the CU process started. So bad habits started, and were transferred from one appraiser to another, and down the line.
Everything on the grid pages is ABSOLUTE to those properties. The Address, the Site size, View, Design, Actual Age, GLA size, Garage & Carport spaces, etc. Everything. As I like to say - "It is what it is, where it is, when it is."
Yet many appraisers still think the Rating for Quality and Condition for Comps should be applied Relative-to the Subject. Uh....NO! The Comps are rated what they are, based on the Quality and Condition Rating Definitions that apply with UAD. (And so is the Subject.)
Over the years, I've read countless laments by appraisers who say the 'UAD definitions' are hard to understand, and don't have 'steps' between the numbers so appraisers can try to engineer precise differences in the ratings and resulting adjustments. That line of thinking is basically hogwash. (If you think you need to make more precise adjustments, you can do so on the extra grid lines...such as 'Add'l Qual Adj.' or the same for Cond.
Why do I believe this is so? Let me ask you who believe UAD definitions are so difficult: Before UAD came along, did you ever include definitions of the 'rating words' we used back in the dark ages - in your reports? That can be answered 100% no (except by some very elite appraisers). Another question: Where did those 'rating words' come from, and can you quickly pull out your reference guide to bring up the definitions for those?. Again, probably 100% no. Before you whine, send me your definitions of Average(+) and Excellent(-), for both Quality and Condition - that you used prior to UAD.
So now we have UAD and the basically easy to use and understand definitions. These, by the way, should be included in every appraisal report - all the software vendors have definition pages to add into reports. Not including these in reports means you have produced a report that is NOT CREDIBLE per USPAP because without those, the reader(s) won't know what the rating numbers and other codes mean.
Be sure to check out the many comments at:
My comment: I thought this had been figured out by most appraisers many years ago. But, change can be difficult, especially something you have been doing for many years .Of course, if you don't do work requiring UAD, you can do what you have always done - relative. I love relative!!
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What Your Street Grid Reveals About Your City
The surprising ways size and shape can impact a place's economic productivity and walkability.
Excerpts: New York, of course, is not the only city built on a grid. Similar schemes could be found as far back as ancient Greece and Rome. But Manhattan's design was the exemplar for what became the default pattern of American cities.
Still, not all grids are created equal. Some shape a walking-friendly streetscape. Others, not so much. Over at the Strong Towns blog, Andrew Price, a software developer by day who blogs about urbanism, has been writing about the math of the grid and what it reveals about a city's economic productivity and walkability.
My comment: Very interesting article on street grids: math, different layouts, what the patterns mean...
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Nonbank Lenders' Market Share is at a Two-Decade High. Here's Why
Excerpt: Depositories still dominate home lending, but nondepositories' market share is the highest it has been in at least two decades.
The nonbank share of total mortgage originations was 42% in 2014, according to an analysis of Home Mortgage Disclosure Act data by ComplianceTech and its LendingPatterns.com tool. Just five years before that, in 2010, nonbanks held only a 27% market share.
One reason for this is that banks' attraction to mortgages tends to be opportunistic.
"Banks have historically been very fickle about the mortgage lending market," said Maurice Jordain-Earl, managing director and co-founder of ComplianceTech.
My comment: Ever heard of Quicken Loans? My loan is with them. Lots of appraisers work for their AMC. For appraisers, this means fewer lenders that don't use AMCs. The non-banks use AMCs.
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Another interesting article on non banks: Why Nonbank Lenders Are the Future of Mortgages
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In San Francisco, a Tilting Skyscraper and a Deepening Dispute
Excerpts:
SAN FRANCISCO - The developers of the luxurious Millennium Tower laid out the risks and potential defects of the 58-story building in minute detail when its apartments went on sale seven years ago.
The Milennium Tower, which its developers say is the largest reinforced concrete building in the western United States, has now sunk about 16 inches and is leaning six inches toward a neighboring skyscraper.
The color and texture of the marble and granite hallways "may not be completely uniform," said a disclosure statement given to potential buyers. The streets below the tower could be "congested and noisy," and the landscaping in the common areas could change, subject to availability of certain species of plants.
But the 21-page disclosure document left out what owners of units in the buildings now say was a crucial detail: that the building had already sunk more than eight inches into the soft soil by the time it was completed in 2009, much more than engineers had anticipated.
