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  #1  
Old 03-13-2009, 09:55 AM
vanguard vanguard is offline
 
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Default Freddie Mac new policy?

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 by vanguard : 03-13-2009 at 09:56 AM. Reason: language
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  #2  
Old 03-13-2009, 11:08 AM
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timd354 timd354 is offline
 
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Quote:
Originally Posted by robert allen View Post
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.
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.
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Last edited by timd354 : 03-13-2009 at 02:11 PM.
  #3  
Old 03-13-2009, 01:02 PM
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Mike Garrett, RAA Mike Garrett, RAA is offline
 
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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.
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  #4  
Old 03-13-2009, 08:03 PM
Midwest1 Midwest1 is offline
 
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Quote:
Originally Posted by Mike Garrett, RAA View Post
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.

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.
  #5  
Old 03-13-2009, 08:15 PM
Tom McClure Tom McClure is online now
 
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Quote:
Originally Posted by Mike Garrett, RAA View Post
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.
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  
Old 03-13-2009, 08:25 PM
Tom Woolford Tom Woolford is online now
 
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Garbage in, garbage out.
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  #7  
Old 03-13-2009, 08:37 PM
SANDY SANDY is offline
 
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Originally Posted by Tom McClure View Post
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
Excellent question
  #8  
Old 03-13-2009, 08:41 PM
Mike Garrett, RAA's Avatar
Mike Garrett, RAA Mike Garrett, RAA is offline
 
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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.
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  #9  
Old 03-13-2009, 09:02 PM
fifteen fifteen is offline
 
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So mike, you didn't verify if it was arms length? No trucks or hi-def tv's included in the sales price?
  #10  
Old 03-13-2009, 09:25 PM
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Mike Garrett, RAA Mike Garrett, RAA is offline
 
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Our public record states..."good sale, non-related parties". Thats the best I can do.
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