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Another stupid idea from Fannie

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by Pamela Crowley (Florida), Feb 6, 2009.

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  1. Pamela Crowley (Florida)

    Pamela Crowley (Florida) Elite Member

    3
    Jan 13, 2002
    Professional Status:
    Retired Appraiser
    State:
    Florida
    http://www.bloomberg.com/apps/news?pid=20601087&sid=aTu9HA5cZgQ4&refer=home

    Fannie Mae to Loosen Rules for Home-Loan Refinancing
    Anybody interested in the AVMs that show properties are worth TWICE as much as reality???
     
  2. PropertyEconomics

    PropertyEconomics Elite Member

    1
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico
    Pam .. I agree with you, however, if you look at it from Fannies viewpoint ... they already own many properties and the need for moving product will be paramount to get this economy going. If some short cuts are not made, and lowering of credit scores contemplated ... the market will stagnate even more and we may see even further decline.
    I know appraisers should know, but I dont think many REALLY get the situation we are in. The total collapse of our economy is riding on a few things that must be done and done right the first time. There will be no second chances ... each chance takes too long.
     
  3. Pamela Crowley (Florida)

    Pamela Crowley (Florida) Elite Member

    3
    Jan 13, 2002
    Professional Status:
    Retired Appraiser
    State:
    Florida
    I look at their wanting to use AVMs as just another way they will be INTENTIONALLY pulling the wool over the eyes of the borrowers and the public and the investors by 'insinuating' properties are worth more than reality.
     
  4. timd354

    timd354 Elite Member

    109
    Jan 11, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    As much as I dislike Fannie Mae and think that they do a lot of stupid things, this is not a stupid decision on their part. If you take the time to read the actual guidelines for the new refinance program, it only applies to refinances of loans that Fannie Mae already owns...the new loan balance cannot be more than the lesser of 2% or $2,000 higher than the old loan balance (which does allow the borrower to roll some of the closing costs for the refi into the loan)...Since Fannie Mae already owns the loan, not doing an appraisal does not increase Fannie Mae's risk whatsoever and allows many borrowers to refinance who otherwise could not because of a lack of equity, which will reduce payments for these borrowers, which actually will reduce the risk of default.
    https://www.efanniemae.com/sf/guides/duguides/pdf/current/rndodu71aprupd.pdf

    As much as I would like to perform an appraisal and earn a fee on every loan transaction, there really is no need for an appraisal on these transactions.

    Fannie actually got it right this time.
     
  5. timd354

    timd354 Elite Member

    109
    Jan 11, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    Pam, that is simply not true....maybe you should try reading the actual guidelines for the program before you make ignorant statements about the program that just are not true. Its not like the investors in MBS don't read the guidelines for the loans which securitize the MBS that they are buying and Fannie is specifically warning the public/homeowners that they are not making any representations about the value of the properties under this program. They are not pulling the wool over the eyes of anyone. Here is what the guidelines have to say regarding this issue:

    Note: [FONT=Arial,Arial][FONT=Arial,Arial]Fannie Mae specifically does not warrant that the estimated value used in the determination of eligibility for the DU Refi Plus property fieldwork waiver represents the actual value of the subject property. As such, lenders should not make any representations to third parties that Fannie Mae has performed any kind of property review, appraisal, or valuation of the subject property for these loans. [/FONT]

    [/FONT]I dislike Fannie as much as everyone else, but when they are right about something, then they are right.....when appraisers and others make baseless charges about things that Fannie actually does right, that lessens the credibility of the many legitimate criticisms that appraisers have of Fannie's policies.
     
    Last edited: Feb 6, 2009
  6. PropertyEconomics

    PropertyEconomics Elite Member

    1
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico
    I agree Tim ... all Fannie is attempting to do is get a nonperforming loan into performing status ... I dont think Fannie is going to make a killing doing this, I dont think there will be wool pulled over the eyes of the borrower and frankly since we are spending my tax dollars, I almost favor a $35 AVM over an appraisal that costs $400 and will be done by someone that just hits the number anyway. To me its a tax savings.
     
  7. Randolph Kinney

    Randolph Kinney Elite Member
    Gold Supporting Member

    169
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Every one relax. It is more of the same, cooking the books.
     
  8. timd354

    timd354 Elite Member

    109
    Jan 11, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    I hope that they don't even spend $35 for a AVM....there is simply no reason that they need to do any valuation of a property where they already own the loan and are simply letting the borrower have a lower interest rate.

    Lord knows there are many legitimate reasons for appraisers to be very critical of Fannie Mae (re:the HVCC), there is no reason for appraisers to make ourselves look like fools or make oursleves look greedy in that we want a piece of the action in every deal even though an appraisal clearly is not needed to assess or reduce risk in a transaction.
     
  9. Mr Rex

    Mr Rex Elite Member

    213
    Jan 12, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    This will get the rabble aroused. Where did Fannie get the data from to run their AVM? Certification 21.:)
     
  10. Scott Kibler

    Scott Kibler Elite Member
    Gold Supporting Member

    68
    Oct 7, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    Not every intended use requires an appraisal. This one certainly does not.
     
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