Freddie Mac vs Appraiser Bias

[Elliott]

Very true. This is a Houston fee shop in the 60s, no earrings, tats or tank tops. I believe Lord William took the photo.

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And when an appraiser couldn't decide on a value, one of the senior members would say, "Pull the trigger!"

 

[George Hatch]

Back when who/what you are was the primary determinant in who won a dispute. Appeal to authority rather than the appeal to reason.

 

[Tiffany Gibbons]

Very true. This is a Houston fee shop in the 60s, no earrings, tats or tank tops. I believe Lord William took the photo.

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No women or people of color either. Not very diverse, just an observation.

 

[George Hatch]

Similar to most professions at the time.

 

[J Grant]

So what if it is corporate greed? The principle of substitution itself is based on greed. I'm acting in what I think are my own best interests. For better or worse, whether better or not, whether more risky or not, the lenders apparently have come to the conclusion that 3rd party inspectors are a reasonable substitute for "appraiser did inspects" for some assignments. Even if only on a relatively limited basis.

Not only that, but going forward their experience with these is going to accumulate and the data is going to accrue. If it comes to pass that there is no significant increase in losses that much is going to be self-explanatory. The critics are really going to be hating it if the lenders actually turn out to be right.

It won't be apparent until several years plus out, until enough loans are in the system and a market cycle comes and goes to see if a higher % of third party inspected had a higher rate of default or review issue , or complaints from buyers , owners or RE agents.

The lenders might be right or might be wrong . Meanwhile appraisers who rarely go out in the market will lose the market experience and direct personal home observation experience. By the time enough years pass to see any affect from this, I'll be done, so the newer generation will deal with it -

 

[J Grant]

So what if it is corporate greed? The principle of substitution itself is based on greed.

Corporate Greed as the driving force is fine in private industry.
But wrt housing markets, and the taxpayer backed loans, greed driven decisions can result in bailouts by taxpayers and losses by individuals and overly volatile housing markets. Greed as the dominant driver should not be the standard.in a taxpayer backed /insured mortgage system.

We saw where it led in the last market debacle and in 3-5 years will see where today's greed driven decisions brings us.

 

[Tiffany Gibbons]

Similar to most professions at the time.

I wouldn't know firsthand.

 

[Tiffany Gibbons]

Corporate Greed as the driving force is fine in private industry.
But wrt housing markets, and the FF/GSE'. the results of the greed driven decisions can result in bailouts by taxpayers and losses by individuals and overly volatile housing markets. Greed as the dominant decider should not be that in a taxpayer backed /insured mortgage system.

We saw where it got us in the last market debacle and in 3-5 years will see where today's greed driven decision brings us.

Hey, you're supposed to have forgotten that by now, lol

 

[Bobby Bucks]

No women or people of color either. Not very diverse, just an observation.

What level of color would it take to meet your approval? I'm kind of swarthy looking due to most of my people originating east of Calais. My guess is Fannie/Freddie/HUD/Alphabet soup inc. will soon have a box for us to check for that, maybe I can press "Alt" on the keyboard and hit 2 boxes........sort of like an ACI override code.

 

[George Hatch]

I wouldn't know firsthand.

I don't "know" firsthand either, but I know what I've seen of all the pics from the period.

I'm only ~10 years older that you, and I wasn't a kid when I got into this business.