On June 13, 2019, Clear Capital, an AMC operating nationwide and licensed in Virginia, sent an email to appraisers on their panel, regarding their hybrid appraisals. In the email, they admit that their third party ‘inspectors’ were providing appraisal opinions by commenting on the quality and condition of the improvement. They added, “1. This is an admission that inspector were previously offering appraisal opinions re Q&C. 2. There remain many other areas in hybrids that also are appraisal opinion being provided by non appraisers”. They went further to suggest that appraisers add the following in their report: “Clarification on Scope of Inspection: Per the scope of work identified, the interior and exterior inspection was not completed by the appraiser, however, was completed by the above named inspector who collected the information through an interior and exterior inspection. The information provided is deemed sufficient to comply with the requirements of the scope of work.”

None of the hybrid reports I have come across were USPAP compliant (see links of published hybrids below). None of the appraisers stated the extent of assistance received and/or named those providing the significant real property appraisal assistance. One report stated “Significant real property appraisal assistance was provided by Mueller Inc. representatives who completed the property inspection report that is made part of this document”. http://appraisersblogs.com/mueller-REO-hybrid-appraisal-report-vs-USPAP. Relying on the inspector’s improvement quality, condition, room count, and improvement size, would qualify as significant assistance. Did the inspector include attics, add-ons, three-season rooms, enclosed porches, basement square footage, etc. in the gross living area? Did they count pass-through rooms as bedrooms? Who is the inspector and what kind of training has he/she received. Appraisers completing these hybrid reports are relying on unnamed, unknown, unlicensed and/or untrained ‘inspectors’, and cannot produce a credible report.

A few months ago, I personally ran into a Muller ‘inspector’. When I asked him he was an appraiser he replied, “kind of”. He stated that he gets a $5 bonus for speed on each inspection but does not get paid more for complexity, size, distance, etc. and that he tries to “inspect” multiple properties in the same area as quickly as possible to maximize profit.

Hybrids put undue risk on consumers and create unnecessary risks for the citizens of Virginia

Links to published hybrid reports:

http://appraisersblogs.com/clearval-value-hybrid-appraisal

http://appraisersblogs.com/mueller-REO-hybrid-appraisal-report-vs-USPAP