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Freddie Mac new policy?

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by vanguard, Mar 13, 2009.

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  1. vanguard

    vanguard Member

    0
    Oct 18, 2004
    Professional Status:
    Retired Appraiser
    State:
    Minnesota
    A recent C/E instructor said she had breakfast with one of the Freddie Mac representatives and he stated the Freddie Mac has been using AVM's to refute values on appraisal reports. Apparently he used an example of a home that appraised at $180,000. The AVM came in at $120,000. They are then requiring the mortgage originator to come up with the difference. Since the loan package may have taken a while to enter Freddie's realm you would think that The AVM would have to be based on a retrospective analysis. I do not know if AVM's can do a retrospecive analysis. I don't know if Fannie is implementing the same policy. If someone has additional information related to their policy please let me know. Perhaps someone can enlighten me as to what they think the ramifications might be to the appraiser aand the potential litigation that may transpire.
     
    Last edited: Mar 13, 2009
  2. timd354

    timd354 Elite Member

    109
    Jan 11, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    I don't believe for one second that a mortgage originator is going to actually buy back a loan or "come up with the difference" based solely on an AVM. Any mortgage originator would just tell Freddie to "eat sheeet" under those circumstances.

    Additionally, if Freddie were to implement such a policy on a widespread basis, lenders would simply stop selling loans to them.

    Concerning the liability of the original appraiser under such a circumstance, if all that someone has to refute one of my appraisals is an AVM, I am not worried in the least as I believe it is pretty easy to convince any judge or jury that appraisal done by an actual person who actually inspected the subject property is much more reliable than a valuation spit out by some computer that never inspected the property.
     
    Last edited: Mar 13, 2009
  3. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    48
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    I recently completed an appraisal on a residential property here in Colorado Springs for the VA. The underwriter stip'd I explain why I didn't use a sale that showed up on an AVM. Turned out it was a good sale, never went through MLS, and I amended my appraisal to include it.
     
  4. Midwest1

    Midwest1 Sophomore Member

    0
    Jan 25, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois

    there is a first time for everything. it might have just been luck. you should have purchased a lottery ticket. seems all the stars were in line that day.:unsure:
     
  5. Tom McClure

    Tom McClure Sophomore Member

    0
    Jan 18, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Ohio
    Mike, just curious; since the additional sale was not from local MLS, was it exposed to the market for a reasonable time period and how did you verify the data?

    Tom McClure, Ohio
     
  6. Tom Woolford

    Tom Woolford Elite Member

    84
    Nov 20, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Florida
    Garbage in, garbage out.
     
  7. SANDY

    SANDY Senior Member

    0
    May 17, 2007
    Professional Status:
    Appraiser Trainee
    State:
    Florida
    Excellent question
     
  8. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    48
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    Our public records shows Grantee/Grantor, Sales Price, Interest rate, type of loan, term of loan, and condition. I was able to find an old MLS on the property (last sale was in the 90s) and got some pretty good info about the property. Also pulled the assessor's record. That was as far as I was going to go.

    Some of you might have gone to the property and attempted to contract the new owner...not me. I just reported what I was able to find out from public records and old MLS.
    I have no idea if it was exposed to the market at all. All I know is...non-related parties. This is a reason why I really prefer to only use MLS sales.
     
  9. fifteen

    fifteen Senior Member

    0
    Nov 15, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Washington
    So mike, you didn't verify if it was arms length? No trucks or hi-def tv's included in the sales price?
     
  10. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    48
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    Our public record states..."good sale, non-related parties". Thats the best I can do.
     
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