Appraisal Waiver (Explosion)

[alebrewer]

Jeez what kind of decaf coffee are you drinking? READ my post # 104.

Read the three scenarios of the LTV%. THE LTV % WAS A LENDER DECISION , and certain decisions of LTV increase risk, and the increased risk of different LTV has NOTHING to do with the collateral valuation itself. In all three examples I gave, the valuation of the collateral of 32 Cherry Street was the same $300,000.

The increased risk DOES have to do with the collateral valuation. A collateral value of $300k represents a VERY low risk for a borrower that is putting $200k down, no? And yet.... if the valuation of the collateral is $5M, then the $200k down doesn't mitigate the risk nearly as nicely. To use another example, let's say a buyer is putting 5% down on a $500k home. That's $25k, right? Now, let's say the home is overvalued by $100k. Now the lender is upside down on the loan. How can you say that the collateral value has nothing to do with the lender decision? Unless I'm completely missing what you're laying down. Either way - another rabbit trail.

 

[djd09]

BTW, you going to answer the question posed about transparency?

sure. Can you provide me the link to all the addresses of appraisal waivers for sales transactions in cuyahoga county, Ohio?

 

[J Grant]

The increased risk DOES have to do with the collateral valuation. A collateral value of $300k represents a VERY low risk for a borrower that is putting $200k down, no? And yet.... if the valuation of the collateral is $5M, then the $200k down doesn't mitigate the risk nearly as nicely. To use another example, let's say a buyer is putting 5% down on a $500k home. That's $25k, right? Now, let's say the home is overvalued by $100k. Now the lender is upside down on the loan. How can you say that the collateral value has nothing to do with the lender decision? Unless I'm completely missing what you're laying down. Either way - another rabbit trail.

It is not a rabbit trail, you are completely missing point what I am saying ( and tried so show with an example in post 104 )

Point is the collateral value of 300k is the appraisal (or alt product)- that appraisal's s quality and credibility as an appraisal has NOTHING to do with the LENDER DECISION of a lower risk or higher risk L%V %.

I agree, and often post that an over valuation increases risk. But in a credible MV valuation, then it is the lender increasing the risk with a low equity/low down LTV% decision.

Your example above supports the point - the VERY low risk for borrower putting down 200k on a 300k purchase is a lender LTV% issue, not the collateral assessment itself. Borrower could change mind next day and call lender hey I want to change it and put only 5% down - now the risk is greater due to LTV but the 300k valuation has not changed and is not a factor .

 

[alebrewer]

It is not a rabbit trail, you are completely missing point what I am saying ( and tried so show with an example in post 104 )

Point is the collateral value of 300k is the appraisal (or alt product)- that appraisal's s quality and credibility as an appraisal has NOTHING to do with the LENDER DECISION of a lower risk or higher risk L%V %.

I agree, and often post that an over valuation increases risk. But in a credible MV valuation, then it is the lender increasing the risk with a low equity/low down LTV% decision.

Your example above supports the point - the VERY low risk for borrower putting down 200k on a 300k purchase is a lender LTV% issue, not the collateral assessment itself. Borrower could change mind next day and call lender hey I want to change it and put only 5% down - now the risk is greater due to LTV but the 300k valuation has not changed and is not a factor .

Carry on.

 

[djd09]

What Is an Appraisal Waiver? A Way To Save Cash on a Refinance

"Great news," it announced. "We got you an appraisal waiver!"

With an appraisal waiver, however, your lender calculates your home's value instead—and rather than an in-person visit, it uses software and algorithms that take into account market conditions, recent nearby home sales, appraisal reports, and other data.

Appraisal waivers were once rare, but the coronavirus pandemic has made them more popular.

After all, offering an appraisal waiver means lenders can skip sending an appraiser—a living, breathing human being—into a home. In the era of COVID-19, an appraisal waiver is a safer, healthier option that helps limit the potential spread of the virus.

Fannie Mae, one of the government-backed companies that support the mortgage lending industry, even began recommending that lenders offer appraisal waivers whenever appropriate during the pandemic.

"They are lending to you based on what they believe that asset is worth, so they're going to do everything in their power to get it right," says Jeremy Sopko, CEO of Nations Lending.

Plus, these days, appraisal software has gotten fairly sophisticated.

"In a waiver situation, lenders truly have it down to a science," Sopko adds.

What Is an Appraisal Waiver? A Way To Save Cash on a Refinance

An appraisal waiver can lower your closing costs and help you close faster during a home...

www.chron.com

Believe the Science.

Trust the bailout quasi Government Sponsor Enterprises.



Cheap and Fast, except for their new fee.

 

[Mejappz]

sure. Can you provide me the link to all the addresses of appraisal waivers for sales transactions in cuyahoga county, Ohio?

Better yet ask him to provide you access to the CU data in your County . You know the one you helped create.

 

[alebrewer]

Better yet ask him to provide you access to the CU data in your County . You know the one you helped create.

Agreed - the issue of transparency is a valid concern insofar as appraisers aren't even allowed access to the model that their appraisals are being judged by, and that their appraisals helped to feed. The 'pat' response I've gotten when I've asked about that lack of transparency is that the agencies don't want appraisers 'appraising to the model'. Fairly lame, IMO, but nonetheless - that is the definition of lack of transparency.

 

[djd09]

access to the CU data in your County .

i have never seen it. nor have access to it. but but but they are so transparent (repugnant).

 

[DWiley]

Props for dodging the actual question

 

[djd09]

i learned from the best.