Give me a break

[DWiley]

It a magic elixir, kind of like EXOS.

Actually, it is just math. It is a pretty simple matter to look at loan performance for waivers and compare that to the performance of loans with similar characteristics but with an appraisal. I mean, we know how many loans in each “bucket” go delinquent. So, no secret sauce in the analysis at all

 

[djd09]

no, the only secret is the data and the secret pilots. if the transparency was any less, they would be invisible. never one link.

 

[djd09]

edit

 

[George Hatch]

The difference is that all those products you mentioned are mostly unregulated. In contrast, appraisals might be one of the most heavily regulated industries in the country.

Agree. No argument. It's an obvious point.

If what you're mad about is that the lenders are allowed to use these not-an-appraisal in lieu of getting an appraisal then yes, that's exactly what is happening.

With that said, I didn't hear any appraisers (myself included) complain about the actions of govt when they were forcing our clients to buy appraisals against their will. We exploited the market for services that the govt created without uttering a peep about the evils of govt. It's not as if we actually earned that business on our own merits - the govt FORCED us on the lenders as an unfunded federal mandate. Me included, just as much as anyone.

So now the lenders are identifying their alternatives and their regulators are allowing them to use those alternatives under certain conditions. The free ride is over.

 

[DTB]

Frankly, when a waiver is offered it means that the property is of the type where the AVM has proven to provide a more reliable result. In such cases, the odds of default actually go up if an appraisal is used. I know that appraisers dont really like hearing that, but it is what the data shows.

That data may show some correlation but that certainly is not causation.
Since defaults are the results of life occurrences and not appraised values, I suspect that those with "shakier" deals get traditional appraisals. Thus they will have more defaults, totally unrelated to the appraisal.

 

[DTB]

Actually, it is just math. It is a pretty simple matter to look at loan performance for waivers and compare that to the performance of loans with similar characteristics but with an appraisal. I mean, we know how many loans in each “bucket” go delinquent. So, no secret sauce in the analysis at all

Loan performance is independent of valuation method used.
How many borrowers have you uncovered that walked away because the property was overappraised?

 

[Mejappz]

Agree. No argument. It's an obvious point.

If what you're mad about is that the lenders are allowed to use these not-an-appraisal in lieu of getting an appraisal then yes, that's exactly what is happening.

With that said, I didn't hear any appraisers (myself included) complain about the actions of govt when they were forcing our clients to buy appraisals against their will. We exploited the market for services that the govt created without uttering a peep about the evils of govt. It's not as if we actually earned that business on our own merits - the govt FORCED us on the lenders as an unfunded federal mandate. Me included, just as much as anyone.

So now the lenders are identifying their alternatives and their regulators are allowing them to use those alternatives under certain conditions. The free ride is over.

Well, they can shop for whatever products they want. During the housing crash, the number of BPOs ordered compared to appraisals was not even close(in favor of BPOs); if they wish to order AVMs, BPOs, etc., fine. With one caveat. If the loan goes bad, they eat it 100%.

 

[djd09]

i guess there was never a need for the ivpi

 

[DWiley]

That data may show some correlation but that certainly is not causation.
Since defaults are the results of life occurrences and not appraised values, I suspect that those with "shakier" deals get traditional appraisals. Thus they will have more defaults, totally unrelated to the appraisal.

Please read what I said again. I am not comparing waivers to appraisals on “shakier deals”. The comparison is between loans with the same credit characteristics. And no one is claiming causation. But loan performance is the ultimate measure of risk analysis

 

[DTB]

Please read what I said again. I am not comparing waivers to appraisals on “shakier deals”. The comparison is between loans with the same credit characteristics. And no one is claiming causation. But loan performance is the ultimate measure of risk analysis

I did read that after posting, hence my 2nd post.

Loan performance is irrelevant to the valuation process unless you are of the opinion that people will default because they got inflated valuation numbers.

I totally disagree with the premise of tying loan performance with valuation, makes no sense to me.