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FNMA Refis - the Blind leading the Stupid

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by Mike Kennedy, Feb 18, 2009.

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  1. Mike Kennedy

    Mike Kennedy Elite Member

    38
    Sep 28, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    New York
    Fannie Mae Eases Appraisal Requirements; Too Early to Assess Impact
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    [FONT=Arial, Helvetica, sans-serif]Starting April 4, Fannie Mae will no longer require appraisals or property inspections from some borrowers who are refinancing mortgages. Instead, Fannie Mae’s Desktop Underwriter system will validate property values through automated valuation models. The new requirements most typically apply to existing appraisals on file and for loans that already contain risk for Fannie Mae.
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    Under the new guidelines, lenders will be required to enter an estimated value of the house, which would then be compared with an estimate from an automated valuation model. If the two values are comparable, Fannie Mae will grant the borrower an appraisal waiver. If the two are not comparable, it will trigger an appraisal requirement.
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    http://www.appraisalinstitute.org/ano/current.aspx?volume=10&numbr=3/4#6568
     
  2. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    145
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    Fannie Mae will no longer require appraisals or property inspections from some borrowers who are refinancing mortgages. Instead, Fannie Mae’s Desktop Underwriter system will validate property values through automated valuation models. The new requirements most typically apply to existing appraisals on file and for loans that already contain risk for Fannie Mae.

    What a stupid joke... Why would a lender not use the SAME AVM to get the 'price' right? And if not, then they would ask for a ton more "comp checks" without the least intention of hiring anyone.
     
  3. timd354

    timd354 Elite Member

    58
    Jan 11, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    Fannie is very stupid, but this is not a stupid idea. If Fannie alrerady owns the loan and the refinance is a non-cashout refinance (which is what this program is for), then there is absolutely no additional risk to Fannie Mae by refinancing the loan without an appraisal. As much a I would like to see appraisals required in all transactions for selfish reasons, there really is no reason to require an appraisal in these transactions.
     
  4. Carnivore

    Carnivore Elite Member

    0
    Jan 15, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    I disagree with you. There is a very important reason to know the actual value of the house. How else will stock holders and potential stock holders regain confidence in the company?

    Seriously, Fannie has lost a lot of money and now no one wants to invest in them! Same goes for all the crooked banks!

    Who would invest in a company if you dont know the real value of the stock.
     
  5. Frederick

    Frederick Senior Member

    4
    Nov 2, 2005
    Professional Status:
    Certified General Appraiser
    State:
    New Jersey
    Yesterday I listened to Obama use the word; "valuation" over and over again which suggests that there will be a strong need to value real estate assets in the future which is generally good for us as a profession. That being said, I pray that we do not see another boom but simply a strong flow of highly scrutinized appraisals. The last thing we need is the return of "Skippy".

    If you look at the "Jobs Board" here on AF you will already see inquiries for appraisers by firms who cover the entire state or multiple states. This suggests (but is not an accusation per se) that appraisal mills are gearing up again.

    Yesterday, a good client of mine sent me an appraisal from a mill he engaged when I was unavailable. The appraisal exhibited evidence of a poor understanding of basic appraisal principles and the requirements of the secondary market which killed his deal. Apparently the value was sufficient to grant the loan but the appraisal failed to present a defensible and supported valuation analysis that provided adequate commentary to illustrate the appraisal problem at hand. Funny thing was the appraisal had 3 company names on it that indicated that it was prepared by an appraisal company for a statewide AMC who then provided it to a regional AMC. I wonder what the appraiser was paid by the appraisal company and what that company was paid by the statewide AMC and that company was paid by the regional company.

    As much as I read complaining about blacklists here I hope they continue to cull "Skippy" and avoid being used as a coercion tool. Although I feel bad for the innocent caught up in them and hope I can avoid them myself I realize the continued lack of any enforcement will be the demise of us all anyway. In the absence of government regulation it seems to be the only deterent at this time.

    In summary, losing a little work this way is not necessarily a bad thing and since Fannie is already on the hook for them using an AVM, which is essentially a rearview mirror of the market, it is not critical at this point.

    It would however be nice if there was an equity recapture provision to the mods that would project work for us in the future.
     
  6. Doug in NC

    Doug in NC Senior Member

    3
    Jan 17, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    The matters being attended to by the Obama administration are so dire and desperate that there is no time to concern ourselves with trivial matters like "accountability". Luckily, the VP indicated that there is maybe a 1/3 chance that the new administration's efforts will be successful. Now that's what I call hope we can believe in.
     
  7. Carnivore

    Carnivore Elite Member

    0
    Jan 15, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    this is the part I dont understand:

    Under the new guidelines, lenders will be required to enter an estimated value of the house, which would then be compared with an estimate from an automated valuation model. If the two values are comparable, Fannie Mae will grant the borrower an appraisal waiver. If the two are not comparable, it will trigger an appraisal requirement.

    Who's estimate will be compared to the AVM?
     
  8. Greg Bell

    Greg Bell Senior Member

    0
    Jul 7, 2006
    Professional Status:
    Gvmt Agency, FNMA, HUD, VA etc.
    State:
    Louisiana
    The guy at the desk by the door....
     
  9. George Ellerman

    George Ellerman Senior Member

    3
    Feb 21, 2005
    Professional Status:
    Licensed Appraiser
    State:
    Ohio
    "Hey Lou, you got the estimate of value for that place on Main St. !!!??"

    e6ae8f701d82fb66.jpg
     
  10. TICK TOCK

    TICK TOCK New Member

    0
    Oct 25, 2007
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    I Love This Forum!

    "Hey Lou, you got the estimate of value for that place on Main St. !!!??"

    [​IMG]

    :rof::rof::rof:
     
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