Knoxville, TN –
Will you need to perform a regression analysis as a part of appraisals prepared for Fannie Mae?
No one will really know for a few months how the collateral underwriter will influence the appraisal and review functions. Let’s consider a hypothetical situation; an underwriter pushes a button and produces an analysis outputting that there is a 90% chance that the GLA adjustment should be within the range of $40.00 to $80.00 per SF, and the appraiser used $35.00. This situation is problematic for everyone concerned. In the first place, even if the CU’s analysis was run correctly there is still at least a 10% chance that the $40.00 to $80.00 range is incorrect. From the underwriter’s perspective, how would it look 3 years later if the lender was asked to repurchase the loan based on the premise that the appraisal and report were not credible; and the underwriter ignored the CU confidence interval and allowed the appraisal to go through with the $35.00 adjustment rate? Even if inadvertently, Fannie would be indirectly pressuring appraisers to concur with the CU’s outputs. Keep in mind this is all hypothetical. Fannie may have anticipated this and will implement appropriate safe guards.
What should you ask when purchasing a regression program?
There are many types of regression technology available to the appraiser. A few questions you should consider before purchasing are: 1) How much of the process will you control. 2) What are the costs? 3) How hard is the software to learn? 4) What automation is included to make things quicker? 5) How will you become competent in the use of the program? I can’t answer these questions for everyone, but here are the answers for AVT:
- You are in control of all of the process.
- A one-time fee of $249.00 which includes the USL Documenter program and the training material.
- Easier than most because it was designed for appraisers. There is even a color coding rating system for the outputs.
- There is nothing competitive to the built-in scrubbing feature or the market conditions analysis module, for the group of applications that the appraiser controls the entire process.
- This comes with 100 pages of regression theory and application training. This includes videos and Excel workbooks.
Don’t buy any product just because of the CU. Buy when you are ready to expand the level of statistical analysis in your appraisals.
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About David Braun
I’m David Braun, MAI, SRA. I have been developing software products, books, and seminars on important, but odd topics for appraisers for over a decade. I began selling regression software for appraisers 7 years ago. I believe that appraisers should begin incorporating statistical tools into their analysis in general, not specifically because of the anticipated CU. Over the past 8 years I have developed a really good regression program designed for appraisers. Check it out at www.AVTtools.com!
