New USPAP Q&As published March 6, 2025

[Joe Flacco]

The secondary market is what the problem is.

 

[CGinMN]

It does not take more than a relatively small number of repurchases push a smaller lender into bankruptcy.....I have seen it happen more than once. Also, when the mortgage market slows down, the model you describe of offsetting losses from repurchases by earning fees from other originations that they don't have to repurchase typically falls apart in specdtacular fashion.

That's when they just hang a new sign and start anew.

 

[timd354]

What you are saying shows that you as a secondary market insurer do not actually care about the appraisal development or appraisal adjustments. You just care about the valuation being reasonable.

That is what the problem is. You don't really care about how the appraisal is developed. That is how the secondary market thinks, that is how the loan sellers think, and that is probably how the appraisal providers for those sellers think.

Flacco, since mortgage insurers have nothing to with the selection of the appraiser, there is nothing an MI can do except either choose to insure the loan or not insure the loan based on the information in the loan file or based on the lender's delgation authority. Sure, on those non-delgated files that we do underwrite, we can pend the file for the lender to go back and ask the appraiser to provided additional comparable sales, clairfications, etc., but if we do that, the lender is likely going to flip the loan to another MI, so we may as well jsut decline the file if we don't like the appraisal.

 

[CGinMN]

Ballpark, what is your decline rate on enterprise loans due to appraisal issues? Do you review every appraisal, or just non-delegated?

 

[Joe Flacco]

Flacco, since mortgage insurers have nothing to with the selection of the appraiser, there is nothing an MI can do except either choose to insure the loan or not insure the loan based on the information in the loan file or based on the lender's delgation authority. Sure, on those non-delgated files that we do underwrite, we can pend the file for the lender to go back and ask the appraiser to provided additional comparable sales, clairfications, etc., but if we do that, the lender is likely going to flip the loan to another MI, so we may as well jsut decline the file if we don't like the appraisal.

Yes exactly. Your sellers are giving you what you accept.

 

[timd354]

That's when they just hang a new sign and start anew.

Yes, pre-2008, that is exacltly what often happened. Now, it is not so easy to do that Additiuonally, even if you can setup a new entity and get it licensed, it is extermely difficult for a new company whose principals were invovled with a recently failed mortgage lender to obtain the financial backing, particularly warehouse lines of credit, needed to originate loans at a volume where you can actually make money.

 

[NC Appraising]

Probably the stupidest statement ever uttered by an appraiser, and many use it. Then defend made up sh%t in the next breath. No wonder there have been no cumulative gains in appraisal practice in 30 years. Stuck on stupid.


Can you name a single appraisal technique for which this is not true? It is amazing how willing appraisers are to demonstrate their ignorance. Those who never made any effort to comprehend "statistics" are the most sure it can't be useful or reliable, then go on to espouse the grand superiority of sensitivity analysis and how a range in values is superior to a point value while opining as to a most probable price. Stuck on stupid (SOS).

First off f u..

I use aloft, spark and Synapse. I also use MLS stats/data (sam) and the hpi. I run stats and data from multiple sources.

Hpi said stable. MLS stats increasing. MLS fast stats had increasing. The comps, after adjustments indicated a stable market.

That is what I mean when I say stats can lie. An appraiser can easily put a stat in the report that is wrong just to meet the gses requirements or they can manipulate it...cost approach.

I can manipulate aloft, the cost approach, synapse, etc. I can make the data and stats lie.

Very first thing my stats teacher said in college and I never forgot it.

That being said, I agree with you Karen. Sensitivity analysis is mostly BS or atleast how most appraisers use it.

 

[CGinMN]

Anyone in sales who has a book of business will land on their feet.

 

[glenn walker]

99% of the transactions at Walmart occur without shoplifting because everyone knows there are measures in place to discover and punish the crime. Take those away, and guess what happens.

Coming in at contract price was not a crime and it's not stealing...not a great example or comparison your trying to make. At least fall back to the old stand by.. those are skippys or they need more training or the GSEs should discipline them or it's the AMCs....lol

 

[TerryRohrer]

Wow. Assxxxhole said what? Someone's panties are in a wad.

I use aloft, spark and Synapse. I also use MLS stats/data (sam) and the hpi.

Hpi said stable. MLS stats increasing. MLS fast stats had increasing. The comps, after adjustments indicated a stable market.

That is what I mean when I say stats

Of course, the blind user satisfied to just punch the enter button to run someone else's program (that said user never attempted to understand) is no part of the problem. It is "stats" that is the problem. Adding ten more programs with the same approach will not add any additional insight. Do you know how Aloft or Spark or Synapse or HPI or MLS or MLS fast stats are doing what they are doing, and what they are doing it to? Maybe survey brokers and average their guesses and rely on that "support" too.