Fannie, appraisers move to the back of the bus.

[J Grant]

The AVM sets the range for ACE - aka, if the purchase price or lender estimate of value is 430k (for example ), how wide is the typical AVM range that the target value of 430k has to fall within?

400-450k?
Or a narrower range of 410-440 k?

The main difference in the WAIVER /ACE is that as long as the target value, whether a sale price or a lender estimate, falls in a range, the loan goes through on the collateral value side. That differs from the same property and same borrower getting an appraisal, where the OMV below the target value, can ""kill the deal", though parties can renegotiate to either a lower sale price or the borrower puts more $ in.

What happens to the borrowers and properties rejected for a WAIVE/ ACE? They go to the appraiser. Despite a set of studies that compare the same metrics, if nearly every property is now eligible for a waiver, assuming the borrowers choose that option, the appraisers are appraising the rejects - more difficult or non-conforming properties and riskier borrowers.

 

[J Grant]

The above should have read a loan is eligible for a waiver ( instead of the property ) Not able to edit after 10 minutes posted.

 

[DWiley]

....if nearly every property is now eligible for a waiver....

If the Earth is flat....

There is more to waiver eligibility than just the LTV.

 

[Sadie]

In the case of a appraisal waiver, the collateral value and condition are still evaluated. That is why the Freddie program is called ACE (Automated Collateral Evaluation).

Yeah, tell me more (s). This is the same excuse that was used prior to the recession. I worked the sub prime market for years and am pretty aware of how people will try to game the system. The mortgage problems of 2006-08 were caused by programs that were normally used just in the sub prime market and expanded out to A paper lending. By simply using the ACE program for lending, then you are simply swapping one way to game the system with another. I am very familiar with automated valuation progre

The AVM sets the range for ACE - aka, if the purchase price or lender estimate of value is 430k (for example ), how wide is the typical AVM range that the target value of 430k has to fall within?

400-450k?
Or a narrower range of 410-440 k?

The main difference in the WAIVER /ACE is that as long as the target value, whether a sale price or a lender estimate, falls in a range, the loan goes through on the collateral value side. That differs from the same property and same borrower getting an appraisal, where the OMV below the target value, can ""kill the deal", though parties can renegotiate to either a lower sale price or the borrower puts more $ in.

What happens to the borrowers and properties rejected for a WAIVE/ ACE? They go to the appraiser. Despite a set of studies that compare the same metrics, if nearly every property is now eligible for a waiver, assuming the borrowers choose that option, the appraisers are appraising the rejects - more difficult or non-conforming properties and riskier borrowers.

The AVM should have a reliability index which must be met before an appraisal is waived. It used to be that way, now I am not sure.