7 out of 1000! Appraisal Waivers and Nasty People!

​Welcome back to the real value podcast, the podcast about business, life, success; about finding value in anything and everything and about creating absolutely as much of it as you can with the time we have! Good morning my friends, my name is Blaine Feyen and I am your host for this and every episode of the Real Value Podcast! As most of my listeners know, this is a podcast primarily for my appraiser brothers and sisters because that too is what I do on this journey through life, but the topics, lessons, ideas, and the tactical and practical we talk about each week are just as relevant if you are in the car business, the real estate or mortgage business, the food service industry or a hair styling business. How do I know this? Well, several ways. One, I get messages on facebook and LinkedIN fairly frequently from people in other industries who have found or been referred to the podcast who say thanks for insights, the tactical and practical, the suggestions, and the message. Two, my beautiful partner Jolene runs a successful styling business that has been growing by leaps and bounds every year for the past 2 or 3 years. We have been collaborating together over that time to help her implement many of these same ideas into her business and if she was on the podcast with us today she would tell just how big of an impact the ideas and practices have made in her business. 

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​Of course, much of her success has to be credited to her attitude and vision because, without that, none of this stuff makes much sense. Without the right attitude and vision, it can be very difficult to see opportunity, much less actually create your own opportunities where there may not seem to be any. And by the way, as I always say, you MUST be looking outside of your industry to beg, borrow, and steal best practices, ideas, and systems. I have gained some great insight into the minds of human beings, about great client service, about giving your clients an experience, and just about business by watching Jolene build, not only her styling business and blow the other stylists in the salon completely out of the water business wise, but also a coaching business for other stylists and salon owners. It’s been a beautiful and educational ride for both of us because we are both consummate learners and researchers and we’re both always asking questions about how to be better, how to offer more, how to add more value, how to increase profitability, how to work less and make more without sacrificing quality or service, and how to simply live a more fulfilling life and help others do the same, which includes your clients. Hopefully, at some point here in the near future I will have Jolene on the podcast so that she can share some of her insights on all of this as well. She obviously sees how I run my business and the impact it has on our company and clients and she has borrowed from my business and our industry to benefit hers. It cannot be left unsaid that some of what she has taken from our industry is how NOT to do things or treat clients. Sad that I have to say it but hearing it from another person’s perspective in a different industry on just how poorly some of our fellow appraisers do business and treat others brings even greater clarity to a well known issue within our industry.
 
On that point, I’d like to share with you all a brief story regarding something that happened recently that some of you may be familiar with. If you are on one of the largest social media forums for appraisers, the 100% appraiser facebook forum, you may have seen a recent post where an appraiser posted a screen shot of a mortgage brokers own facebook post. In the mortgage brokers facebook post, which was actually a post to his personal and professional realtor friends and colleagues that somehow got in the hands of this appraiser who posted it to the forum. The montage brokers facebook post was basically a marketing post whereby he said that he has the ability now to determine whether a property is eligible for an appraisal waiver or not, thus saving them some time and potentially money. Keep in mind as you listen to this that, thus far, I am only trying to describe the facts of this particular post. I am not giving you my feelings about it yet or whether I agree or disagree with the mortgage guy or the whole appraisal waiver issue, I’ll do that in just a moment. So the mortgage guys marketing post is shared to our appraiser forum and down the negativity rabbit hole we go. I just happened to pop in late that night to see what had gone on in the social media world and saw this particular thread. What I saw was not atypical, especially given this particular topic, and especially given how some of our brothers and sisters feel about the mortgage and real estate industries. Nevertheless, what I saw was, once again, a relatively small group of very nasty individuals berating anybody and everybody who didn’t agree with their point of view. Anybody who even attempted to comment reasonably or offer some other point of view, or god forbid, defend the mortgage guy’s post as simply something they do, was ripped to shreds by a vicious pack of dogs. What I saw was a disgusting display of what I consider to be some of humanities worst aspects. A relatively small group of individuals, ironically they were mostly women, but we’ve seen it at least as much or more with the larger demographic of men in groups like that, just being as vile and disgusting as a human being can be without doing great bodily harm. Tearing down their fellow industry professionals for having the audacity to try and express a different view on the topic. I’ll tell you that it lead to me unfriending the original poster, who was one of the most vile and venomous in the thread, and I also had to remove her from a private facebook group I run where she was a member. What also happened was, of course, one of the only times appraisers can come together and work as a unit is when they are ripping another human being to shreds so a few heroes went on to the mortgage guy’s facebook page and ripped him a new one for having the audacity to post his screed. And of course, how dare he delete the nasty posts on his own facebook page, which just fired up the foaming mass of pitchfork carrying Appraiser mercenaries to further harass this guy on social media.
 
Now, the reason I mention all of this is to talk a little bit about what happened after this whole thing. And by the way, many of you know me and that I don’t spend much time on social media and for a variety of reasons. I spend as much time on it as necessary to promote my businesses, do some coaching and problem solving for related and complimentary industries, and basically just take advantage of the benefits of social media and what it has to offer for business purposes while staying out of the fray and the distraction from the personal bull shit that social media is so famous for promoting. You’ll never see me posting pictures of my dinner, my drink, or my family. You’ll rarely see a post from me checking in somewhere, unless its related to my business and there’s a message in it, and you’ll just never see me post personal stuff on social media. I’ll do a whole podcast on the hows and whys of that and how to use it for business only so I don’t want to take up time talking about it here. Nevertheless, I just happened to see this particular post and the comment thread and I want to share with you my brief thoughts on appraisal waivers, my thought process as I was reading the thread, and then I’ll share with you the aftermath and outcome of my own actions related to this post. So the mortgage guy’s post, as a recap, was simply a typical post and message from somebody in that industry doing what they do to get business from Realtors. The post read like this: “Realtor Friends, I now have the ability to determine if a property is eligible for an appraisal waiver before a buyer applies or the loan is ran through automated underwriting. Make your buyers offer stronger by waiving the appraisal. Promote your new listing knowing an appraisal is not needed. This is new and -insert mortgage company- is the first and currently only lender to have this right now. Get ahold of me to discuss details. It is a very simple process. This could be huge in a competitive market with multiple offers”
 
Ok, now before you close down your mind I want you to pause the podcast and do a scan of your body and your mind. I want you to listen to the exact verbiage of the mortgage guy’s post again and then pause the podcast to scan your body and your mind to see what emotions that has evoked for you. Are you pissed off? Are you raging inside and want to find out who this financial hooligan is so you too can rip him a new one as you give him a piece of your appraiser mind? Do you feel like he’s one of the reasons the appraiser is being removed from the transaction? Do you feel like he is trying to take the place of the appraiser himself and pull the wool over the buyer’s eyes? Do you feel like he is in cahoots with the realtors to just fleece the buying public and sell things at whatever price they can fetch with no credible valuation of the real estate and, thus, taking food off of your table? Do that now, go ahead and pause the podcast and really take an inventory of how you feel about that guys post, I’ll wait…. Ok, welcome back if you did the exercise. If you didn’t, that’s ok too because you probably already know how you feel about it and don’t need to scan your body for the emotion. So lets breakdown what the mortgage guy’s post was saying and what it was not saying. The opening line, after announcing the demographic he is targeting, is “I now have the ability to determine if a property is eligible for an appraisal waiver before a buyer applies or the loan is run through automated underwriting”. Those are his exact words. He didn’t say don’t get an appraisal. He didn’t say overpay for a property. He didn’t say appraisers are nasty, vile, venomous creatures that need to be removed from the transaction. He didn’t say ‘let me determine the value of the home you’d like to buy.’ He didn’t say the value of the home you want to buy doesn’t matter. He didn’t say to pay whatever you want for the home you like because you deserve to have nice things. He didn’t say I now have the ability to determine if you should buy a home without getting an appraisal. What he said was that he now has the ability, which connotes that he has been given some kind of authority or maybe has some new technology, to determine if a particular property is eligible for an appraisal waiver. Did he make the property eligible for the appraisal waiver? No, who did? Fannie and Freddie and the 29 million appraisal reports they have in their database determined whether or not a particular address is eligible for an appraisal waiver. He simply has access to that particular database. He didn’t say lets get your buyer pre-approved to have all appraisals on all homes your buyer wants to buy waived from now into perpetuity. He said ‘I have the ability to see if a particular address is eligible based on Fannie and Freddie’s list of eligible homes. He didn’t make the list, he’s just reading from it. If 123 Main Street is eligible for an appraisal waiver, its eligible for the waiver whether this mortgage guy, that buyer, your memaw or gram gram, or your 3 legged schnauzer poodle mix is alive or not. If he doesn’t process that loan application on that particular address, some other mortgage broker will and they will get a notification that that particular address is either eligible or not eligible for an appraisal waiver.
 
Are you following me at this point? I am not agreeing or disagreeing with the appraisal waiver process, this mortgage guy, which, I should note, lives and does business in my city, as does the nasty venomous appraiser who originally posted this post to the appraiser forum and ripped fellow appraisers to shreds for suggesting a different thought than she had. I don’t know this guy before I see this post so I cant speak to his character yet, his business practices, his client base, his knowledge base, his work history or reputation in my town, etc. All I know is that its all from my city. I see realtor clients and friends of mine commenting positively on his post, which is an indication that they know him and like his idea and that his marketing tactic will potentially work in getting some realtors to try him first to see if the property their buyer wants to buy is eligible for an appraisal waiver. I can feel whatever I want about all of this but its happening and there is nothing I can do about it at this point. We didn’t create the appraisal waiver system, Fannie and Freddie did it with our help. Now, I want to take this a step further and ask you if you know anything about the appraisal waiver process and what it entails? Do you? Do you know all the parameters of the process and how a property qualifies for an appraisal waiver? Should Realtors and loan providers be lambasted for being notified by Fannie and Freddie of a property that may be eligible for an appraisal waiver based on Fannie and Freddie’s algorithms? Remember, they didn’t create the program, Fannie and Freddie did and our appraisals are the very things that help them determine a particular property’s eligibility. And to understand the system a little better, a system we unwittingly helped to create, a system that has been in place for years by the way, lets chat briefly about the process. Any loan being submitted to collateral underwriter or the ACE system, which is Freddie Mac’s Automated Collateral Evaluation system, the whole loan, borrower, collateral, finances, credit eligibility and several other factors have to be reviewed for the loan itself to even qualify for an appraisal waiver. Do you understand what the means? That means that even if a particular address may be eligible for an appraisal waiver, a particular buyer or loan type may not be eligible for an appraisal waiver. In fact, its one of the things that keeps most appraisal waivers from being offered or issued, right after buyer’s, loan officers, and realtors requesting an appraisal anyway. Are you with me? Out of the limited number of properties being eligible for an appraisal waiver because an appraisal on that address is already in the system, fewer still are eligible for the waiver because the buyer or the loan doesn’t qualify. If you’re wondering what the appraisal requirements for eligibility are, basically, If a property has an appraisal in the system that is more than 120 days old and less than 6 years old, that appraisal is then assessed to determine the appraisals quality. Do you know what happens in 90% of the cases where an appraisal on that address exists? That’s right my friends, it doesn’t pass the smell test for quality and the property is then ineligible for an appraisal waiver.
 
I bet you’ve never been so happy to have the form filling skippies in our industry than you have now because you have them to thank for properties that have appraisals on file but don’t pass the quality test. Who knows, maybe some of the appraisals from nasty appraiser who made the original post are the poor quality ones that will disqualify some of the properties from getting a waiver. Cool, good work. You have nothing to be upset about because there are so many shitty appraisals out there that most of them don’t even qualify a property to be waived and Fannie and Freddie then require a full new appraisal on that address. Nevertheless, when you actually do some research and read what the requirements are, as well as the statistics on how many of the appraisal waivers are actually being chosen by the buyers, you’d likely add years to your life because you have no reason to be so upset. Again, I am not saying I agree or disagree with the waiver process, whether its right or wrong, or whether its taking food off your table or not. It simply is. It exists and its something we have to deal with and learning what it entails instead of going off the damn rails and making fools of yourselves on a mortgage guys facebook page would be a highly suggested activity at this point. Does anybody wonder why most appraisers are disliked by mortgage people and realtors? It’s not just because they kill their deals, although that does happen, its because so many of them are assholes! They’re nasty individuals who would rather jump onto the facebook page of another human being trying to make a living and spam the shit out of his page and threaten to turn him in to some unknown entity instead of learning what the program entails, learn how this guy can determine the eligibility of a property for a waiver, learn what he suggests at that point, and then learn how many people actually take advantage of the waiver. And understand my friends, Fannie and Freddie are guaranteeing the loan and putting up the money for the purchase. They are the ones buying back the tranches of loans from the originators who make the initial loan and guaranteeing them so if they want to waive an appraisal on a house that they may have to take back and remarket, what the hell do you care. It’s their loan! They have to deal with that property when the loan fails, you don’t. And if it fails, we get to appraise is when it does or when it sells next. If you have so little business that the few appraisal waivers that get issued are digging that much into your volume, I’d suggest you start cultivating a different type of appraisal business and look toward the private sector. And if you’re one of the appraisers who jumped onto this guys facebook page to teach him a lesson, I’d suggest you get out of the business in the next month or so before you have a heart attack. You’re an angry unhappy individual who takes pleasure in making other human beings miserable and you’ll only pay a bigger price as a result. It’s poison in your own body and will decay you faster than the average person. Get out of the business for your own good! If you choose to stay in the business though, then I thank you because you make it that much easier for people like me and the rest of the 1%ers to stand out from the crowd and scoop out the market of realtors and lenders who just want a decent human being to interact with on their transactions.
 
The epilogue to this story: As I mentioned to you all, this mortgage guy is located in my town and I saw that we had some mutual clients. As I was reading the thread in the 100%er group I was thinking to myself, there is a huge opportunity here. Of course, I am always thinking that which is why I am typically fighting off opportunities and offers in my business instead of searching for them, but I was seeing an opportunity to reach out to this guy and learn something in the process. I wanted to know what ability he has to determine if a property is eligible for a waiver, what that means to him and his realtor clients, what he does with that waiver, what he suggests to his buyers, etc. I also saw an opportunity to dig my own well and see if this is somebody I might be able to educate and level up in some way and, I the process, determine if it’s somebody we want to business with or somebody to steer away from. What did I do? I friended him on facebook and LinkedIn, I reached out to him via private message and I said I’d love to chat with him to learn more about this great product and process that he has. He wasted no time in accepting my friend request and responding to me very positively. Within an hour of my message we were on the phone chatting together and here’s what I learned from that conversation and my own investigation. He has been in the mortgage business for 27 years, has a very respectable reputation amongst his peers and realtor clients, and what he was offering was simply a new tool that his company has that allows them to type in an address and get a yes or a no on waiver eligibility. That’s it. A simple button that was given to him to promote being potentially chosen over all of his competitors to have the opportunity to work to get that loan to closing. That’s it folks. A button. He doesn’t want to be an appraiser. His best friend is an appraiser. He values the appraisal and suggests his clients get one. And he said that of the 20 addresses he ran last month, 2 of them were eligible. That simply means the address had a prior appraisal on file with Fannie and Freddie but that a specific buyer and loan package would then have to be approved for that address, which very few do. So out of the 2 addresses that qualified for the waiver, it may take another 20 or more buyers being run through the system before the perfect buyer with the right loan is connected with that address and they qualify for the waiver. What has to happen next is that the buyer has to choose whether or not they take the waiver. And on that point I will share with you the stats directly from Fannie Mae from 2018: Fannie Mae offered appraisal waivers on approximately 10% of the mortgages submitted for purchase. Lenders exercised the waiver on 7% of those offers with the remaining 93% of the offers being turned down by the lender and getting an appraisal done on the property. Let me do the math for you so you don’t have to burn any calories thinking about this anymore. If 1000 mortgage applications were submitted, 100 of those were eligible for appraisal waivers. Of those 100 eligible waivers, lenders only took 7 of the waivers! It didn’t say 70% of those eligible, it said 10% of the mortgages were eligible, that’s 100 loans, and then it said only 7% of those eligible were exercised. That means 7% of the hundred addresses and loans eligible for a waiver, which is 7, actually exercised their option to waive the appraisal.
 
The vile venomous appraiser who tried to incite a riot on this mortgage guy’s social media page for posting a marketing gimmick that less than 7 people out of 1000 will actually even accept is, to me, wholly unacceptable and makes my stomach turn thinking about. And all of those who jumped on the bandwagon with this lady and tried to shut down this guys social media, shame on you! Like petulant children not happy with just picking up their toys and going home when they don’t get their way, they decide instead to try to harm everybody else in the sandbox. This is unacceptable behavior from adults my friends. I know none of the listeners of this podcast are like this but I encourage you to be on the lookout for it and chastise it when you see it. I know lots of people who will say, ‘if we’re ever going to come together as an industry’, I don’t really care about a whole industry nor do I have the power to save it. I do have the power to make lemons out of lemonade though and create opportunities for myself, my family, my employers, my colleagues, and my clients. We will never come together as an industry but we can come together as 1%ers, as Value Syndicate members, as human beings who seek to help, educate, and lift up others, and those who simply want to be the best at what we do. Please, my friends, do not participate in this type of behavior against another human being. If you see somebody from a related industry doing or saying something you don’t agree with, first get educated. Step back from the situation and try to learn something about what it is they’re actually doing or offering before jumping to wild ass conclusions based on your own ignorance. Second, look for the opportunity in all of it and reach out. You never know when a collaboration may ignite between you and that person. You may have the opportunity educate them in a positive way, become friends, maybe do a podcast together or a video collaboration, and potentially get some business from it.
 
I’ll wrap this episode up by telling you that 10 minutes into the phone call, this mortgage guy told me how much he appreciate me reaching out and in such a positive way. He knew my name and reputation and asked if I would be willing to do some classes with him where he regularly gets 50-75 people for a lunch and learn and, of course, I said yes! He followed it up by asking if I was on their appraiser panel and I told him we were not. He immediately said he’d take care of it and added our company to their panel by the end of business that day. I wont tell you what their fees are for a standard 1004, but I will tell you that its 38% higher than the average fee for our area and company, which is about $450. I know fees are different everywhere and, for some of you that may be low and for others it will be high. Our company, I am very proud to say, typically commands the highest fees in our area based on the relationships we’ve cultivated, our community outreach, our report quality, our education courses, and of course, the fact that we do a lot of non-lender work so we don’t have to take the low fee AMC work. Nevertheless, I will gladly take fees for standard work that is almost 40% higher than the standard fee for the same work that we do with many of our clients. I don’t know yet whether the work will be worth it, what the underwriting process is like, what dealing with them is like, but, like you, I am more than willing to find out because, after all, isnt that how we cycle in new A clients so we can cycle out the D and E clients? Absolutely it is! And for that I need to thank that vile venomous appraiser who did her best to get everybody riled up over something that less than 7 people out of 1000 will even accept. And of the 7 people who accept the waiver offer, its because the organization providing the funds for that loan doesn’t feel the need to have one done. Without her exposing herself to all of us as the vile individual she is, I may not have been exposed to this opportunity and reached out to this lender. I will follow up with you all in future podcasts and let you know how this situation turns out as we talk further about the lifetime value of a client and the lifetime value of an opportunity.
 
Thank you my friends for investing your most valuable currency with me again this week, and that is, of course, your time! I hope I have been able to share something valuable with you all in this episode, despite some of the negativity I felt like I had to express to make my point. We’ll be back next week with some tactical and practical on the three step process we use to build your master mission message. This is the mission, values, and actual practices you utilize to create your culture, run your business and solve problems for your clients on a daily basis and its literally worth millions of dollars over the life of your business if you do it right. I look forward to gathering will you all again next week my friends and, until then, I’m out!