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  #1  
Old 07-19-2007, 08:17 PM
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Default Fannie To Determine Market Conditions? Declining Markets

Just received an e-mail from a client. Apparently Fannie (as of 07/22/2007) will identify if a certain Market is declining in their automated underwriting system and will alert the lender. The lender is then supposed to 'carefully review' the appraisal to 'ensure accuracy.'

Fanny says..."It is unacceptable for the appraiser to ignore these issuse and not report the factual property value trends and market conditions."

My client says that the automated UW takes place BEFORE the appraisal order is sent so...Does that mean that Fannie is defining our Market Conditions?

Just wondering....
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Old 07-19-2007, 08:19 PM
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Quote:
Originally Posted by Blue1 View Post
Just received an e-mail from a client. Apparently Fannie (as of 07/22/2007) will identify if a certain Market is declining in their automated underwriting system and will alert the lender. The lender is then supposed to 'carefully review' the appraisal to 'ensure accuracy.'

Fanny says..."It is unacceptable for the appraiser to ignore these issuse and not report the factual property value trends and market conditions."

My client says that the automated UW takes place BEFORE the appraisal order is sent so...Does that mean that Fannie is defining our Market Conditions?

Just wondering....
Why don't they simply do away with the appraisal and also use their automated underwriting sytem?
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Old 07-19-2007, 08:25 PM
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Because there has to be someone to blame? I'm new at this, but that seems to me to be what our role has become industry wide.
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Old 07-19-2007, 08:30 PM
xmrdfghap xmrdfghap is offline
 
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Originally Posted by Blue1 View Post
.........Does that mean that Fannie is defining our Market Conditions?

Just wondering....
Somebody needs to. Apparently the mainstream Skippy is too busy to bother with that kind of non-essential and unnecessary data.
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Old 07-19-2007, 10:27 PM
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Quote:
Originally Posted by Blue1 View Post
Just received an e-mail from a client. Apparently Fannie (as of 07/22/2007) will identify if a certain Market is declining in
The "market" may be declining, but that doesn't mean prices are declining for every style or type.
  #6  
Old 07-19-2007, 11:40 PM
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Somebody needs to. Apparently the mainstream Skippy is too busy to bother with that kind of non-essential and unnecessary data.
I dunno Greg...Skippy is pretty versatile. If FANNIE identifies a declining Market then who is Skippy to disagree?
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Old 07-20-2007, 01:33 AM
Doug Wegener Doug Wegener is offline
 
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http://www.mortgagebankers.org/files...dQuestions.pdf
  #8  
Old 07-20-2007, 06:52 AM
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Originally Posted by Steven Santora View Post
The "market" may be declining, but that doesn't mean prices are declining for every style or type.

Steven - I tried to make that distinction in a thread a few days ago, however was pretty much just blasted. Someone here stated that anyone who is not checking the declining box was an indiot or a skippy.

Market conditions may soften, but actual declining values, in my experience, are usually limited to one or two projects in a given area. I see a lot of slowing in price growth, but in my area right now no declining values. I tried to explain that there is a difference between declinging values and a shift to a buyers market. There are just so many appraisers now that have never been through these shifts in market conditions that they don't recognize them for what they are. Too many people are use to hearing about double digit price growth. To them, when there is low single digit growth, they see declining values.
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Old 07-20-2007, 06:54 AM
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I don't see this as changing much for appraisers who are in the habit of providing support for their market trends in their report.

What is really changing is the scrutiny of that supporting info and how the underwriters react to it. It seems we're being put on notice to do a good job in that area. The problem with that is that clients don't like having to decide if the appraiser's support is "good enough". I can see some clients reducing this to a "requirement to check decling" assignment parameter.

It seems the loan originators are being put on notice to quit arguing with appraisers who have determined a declining market. That could be a good thing.

Blue is right, though, Skippy will happily mark declining if the LO tells him to.

I expect banks will start including some sort of info on their orders that indicates the DU declining market notation. I just hope they don't reduce it to a "must check declining box" stip.


------

I noticed that if the DU message comes up a full interior/exterior is required. Does this mean that in notoriously declining markets appraial orders will mushroom?

Last edited by Marcia Langley : 07-20-2007 at 07:04 AM.
  #10  
Old 07-20-2007, 07:01 AM
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How does Desktop Underwriting requirements filter down to MBs? I'm assuming not every little brokerage has DU.

For example, In the case of this new DU message, do banks notify the brokers they buy loans from that there is a new "rule" they must comply with for their package to be acceptable?
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