Be the Driver, rather than just a passenger of your appraisal practice

[Dublin ohio]

I acknowledge that, but it is a mis application of the purpose of an appraisal, and thus they can play games and mis use it for risk management

Well the cert we sign says it will be used for a mortgage lending decision. Sounds like risk management to me

 

[glenn walker]

I dislike the term risk management. Imo, risk evaluation is a better term because the lender uses an appraisal to evaluate the property ( says the URAR ). The lender and UW qualify the borrower for X $ loan amount based on income, credit, down payment, which is a first component of loan decision.

As you said, the primary use of the appraisal is assist with front end risk management /lender decision - yes or no , per the information in the appraisal we will, or will not, green light the loan on this property as collateral. Obviously the value is either there or not there.. Then the decision would involve does the property meet quality, condition and other lending standards.

But once the lender makes a yes for the collateral of the property, I fail to see where the appraisal has a relation to risk - unless the appraisal was substantially deficient or misleading thus resulting in the lender making a faulty risk decision to loan on the property (for X $ amount).

You or I can dislike the term " Risk Management" but your or my opinion is 100% irrelevant. Life would me much easier for many if they would quit trying to fight issues they have no control over . Also DO YOU believe everything you read on a form ? "Risk Management is not a single line item, it consists of numerous calculations and input my many people. BUT As Danny has repeatably stated what a properly is worth today has nothing to do with what your appraised value was last month or even three years ago.

 

[J Grant]

Well the cert we sign says it will be used for a mortgage lending decision. Sounds like risk management to me

If they want to call it risk management on their end there is nothing we can do about it. But RM implies a wide umbrella term, and it is not stated on the URAR as the intended appraisal use

The intended use stated on the URAR is evaluate the property for a mortgage lending decision. Which is a more limited and specific use than "risk management"-

 

[glenn walker]

If they want to call it risk management on their end there is nothing we can do about it. But RM implies a wide umbrella term, and it is not stated on the URAR as the intended appraisal use

The intended use stated on the URAR is evaluate the property for a mortgage lending decision. Which is a more limited and specific use than "risk management"- which is their verbiage

When you are as big as F & F you do not need to explain or make your forms conform to what a few appraisers care about. we Certify things everyday we have no idea what they even mean. Just do your job and dont worry about it LMAO

 

[J Grant]

Risk management is the process of anticipating unwelcome events and mitigating their effects as much as possible. It includes anticipating and assessing risks, planning around them, monitoring them, and responding to them when appropriate.

I just looked up a definition of Risk Management - see above. Other definitions were similar.

Lenders can do as much anticipating of unwelcome events /planning wrt risk management as they want. Which does not change the fact that an appraisal is an effective date product for the intended use of a lender decision of the subject property.

Pay attention because the problem goes beyond verbiage - the problem is stakeholders are using it rationalize replacing appraisals replaced with an alternate product, because "appraisals do not bring much to the table for risk management"

Since appraisals were not designed to serve as a risk management tool, then judging appraisal on that metric is flawed. But that is what they are doing, and then declaring appraisals are expendable because they are not adding much to risk management. Which is the reason I am spending so much time on it.

Turns out my car does a lousy job of mowing my lawn. I suppose because the design and intended use of a car is for transportation and not lawn cutting. ( sarcasm, it is an analogy )

 

[Tiffany Gibbons]

Risk management starts before the loan is even made. Recall the last loan you applied for - all that information on your income, your assets, and yes, your collateral, that is collected before the loan is made is all part of risk management. The primary point of the appraisal is to assist with that front end risk management.

So why the push for waivers and riskier appraisal products by that logic? And Lenders are charging fees for the waivers. What are they charging a fee for?

 

[glenn walker]

Risk management is the process of anticipating unwelcome events and mitigating their effects as much as possible. It includes anticipating and assessing risks, planning around them, monitoring them, and responding to them when appropriate.

I just looked up a definition of Risk Management - see above. Other definitions were similar.

Lenders can do as much anticipating of unwelcome events /planning wrt risk management as they want. Which does not change the fact that an appraisal is an effective date product for the intended use of a lender decision of the subject property.

Pay attention because the problem goes beyond vergiage. They are using to this to rationalize getting rid of appraisals /use an AVM type substitute, because "appraisals do not bring much to the table for risk management"

. Since appraisals were not designed to serve as a risk management tool, then judging an appraisal on that metric is wrong . But here they are , doing exactly that, and using it against us. It is not just simple verbiage because if that is all it was I would not be writing so much about it.

Turns out my car does a lousy job of mowing my lawn. I suppose that is because the design and intended use of a car is for transportation and not lawn cutting. ( sarcasm, it is an analogy )

Money Center Banks , Fannie Mae all big institutions "risks- management " is not part of classic text book definitions. This is because unlike Private Business they have the Federal Reserve and Treausry as Partners and they also have a Multi Faceted Politcal and Social Instructions and Mandates , which require them to take extraordinary risks that no other Lenders or buyers of mortgage backed securities are willing to purchase.

Therefore remove any classic risk management theory's from your playbook. EXAMPLE: The Wall Street Mortgage backed security traders, quit buying mortgage when rated went down to 2% to 4% -The risk is to great . Therefore F & F and Other Agencies are a Giant Sinking Fund where you find and sell your low rate mortgages to them , and if they fail so be it. Nobody else can do the Classic "Wash Rinse Repeat" and be bailed out every 8 years. In Summary the appraiser is not part of the the game, so quit believing Forms and Certifications. During the next coming meltdown nobody is going after the appraisers , as everyone 2008 to 2014 discovered there is no money chasing appraisers , you simply place them on the do not use lists and their careers are over.

 

[djd09]

Wells Fargo Workers Went on Appraisal-Fraud Bender​

It feels like Ground Hog Day all over again. Who can forget the Wells Fargo banker who, stressed from opening fraudulent accounts in the name of hapless depositors, had begun guzzling hand sanitizer? That was in 2016. New revelations from the nation’s second-largest mortgage lender will make the U.S. taxpayer want to take a good long pull on the nearest bottle of hand wash.

Some Wells Fargo loan officers – an unknown number of whom have since been terminated – protested the allegations, telling reporters that some of the occurrences dated back to the early days of the pandemic and that guidance from senior managers at the time was ambiguous. Less ambiguous were the commissions they received after altering the data. Fannie has since stepped up efforts to force loan buybacks on lenders who peddled these shaky loans and others to the mortgage giant.


Fraud and abuse appear to be part of the dog-eat-dog culture at Wells Fargo.


Astute observers recall the case of Angie Payden, the Wells Fargo banker in Hudson, Wisconsin, who recounted in 2016 how she’d been pressured by managers to defraud customers in various ways, among them informing them there’d been fraud on their accounts in order to keep closing and opening accounts to pocket bonuses for herself and her bosses. But the stress became too great.

“One morning, before meeting with a customer, in which I knew I was going to have to sell unneeded services, I had a severe panic attack,” Payden told the New York Times. “I went to the bathroom and took a drink of some hand sanitizer. From that point, I began drinking the hand sanitizer all over the bank.” The viscous substance, which she drank between 2011 and 2014, gave her the strength to continue ripping off hapless depositors.


During the fake-accounts era at Wells, managers actively trained branch personnel in how to defraud account holders at scale, pressuring employees like Payden to open redundant accounts and cross-sell products at all costs. The bank later said it had fired 5,300 employees it found responsible. The average was 377 fake accounts per fired employee.


The use of appraisal waivers – equally ripe for abuse — exploded during the pandemic, peaking in 2020 and early 2021, reported the Urban Institute.

Wells Fargo Workers Went on Appraisal-Fraud Bender

Loan officers at Wells Fargo altered values in the bank’s database, so loans would qualify for so-called appraisal waivers... It feels like Ground Hog Day

appraisersblogs.com

bagott has a tongue

 

[glenn walker]

So why the push for waivers and riskier appraisal products by that logic? And Lenders are charging fees for the waivers. What are they charging a fee for?

Thats Proprietary Information not available to appraisers

 

[Tiffany Gibbons]

Wells Fargo Workers Went on Appraisal-Fraud Bender​

It feels like Ground Hog Day all over again. Who can forget the Wells Fargo banker who, stressed from opening fraudulent accounts in the name of hapless depositors, had begun guzzling hand sanitizer? That was in 2016. New revelations from the nation’s second-largest mortgage lender will make the U.S. taxpayer want to take a good long pull on the nearest bottle of hand wash.

Some Wells Fargo loan officers – an unknown number of whom have since been terminated – protested the allegations, telling reporters that some of the occurrences dated back to the early days of the pandemic and that guidance from senior managers at the time was ambiguous. Less ambiguous were the commissions they received after altering the data. Fannie has since stepped up efforts to force loan buybacks on lenders who peddled these shaky loans and others to the mortgage giant.


Fraud and abuse appear to be part of the dog-eat-dog culture at Wells Fargo.


Astute observers recall the case of Angie Payden, the Wells Fargo banker in Hudson, Wisconsin, who recounted in 2016 how she’d been pressured by managers to defraud customers in various ways, among them informing them there’d been fraud on their accounts in order to keep closing and opening accounts to pocket bonuses for herself and her bosses. But the stress became too great.

“One morning, before meeting with a customer, in which I knew I was going to have to sell unneeded services, I had a severe panic attack,” Payden told the New York Times. “I went to the bathroom and took a drink of some hand sanitizer. From that point, I began drinking the hand sanitizer all over the bank.” The viscous substance, which she drank between 2011 and 2014, gave her the strength to continue ripping off hapless depositors.


During the fake-accounts era at Wells, managers actively trained branch personnel in how to defraud account holders at scale, pressuring employees like Payden to open redundant accounts and cross-sell products at all costs. The bank later said it had fired 5,300 employees it found responsible. The average was 377 fake accounts per fired employee.


The use of appraisal waivers – equally ripe for abuse — exploded during the pandemic, peaking in 2020 and early 2021, reported the Urban Institute.

Wells Fargo Workers Went on Appraisal-Fraud Bender

Loan officers at Wells Fargo altered values in the bank’s database, so loans would qualify for so-called appraisal waivers... It feels like Ground Hog Day

appraisersblogs.com

bagott has a tongue

I think closing costs should be heavily scrutinized. I have seen charges for refinance loans (when rate were the lowest we'd ever seen, and Lenders were definitely "rolling some points and costs into the "cash out" and the internal rate switch to a lower rate. Certainly wasn't in the appraisal fee, lots of pork the average borrower just signs on the dotted line, doesn't know better and the Lender was "selling a lower payment while still raking it in. What could go wrong?