20 Minute AI Appraisals Are Coming

[glenn walker]

a mortgage broker, an atari stick, and a number...what could go wrong

Mortgage brokers havent been ordering appraisals for almost 16 years. You need to get over them. The AMC replaced them but are worse- but you wanted to get rid of the broker's- the problem was the medicine they gave you was worse than the disease.

 

[cpursley]

Read up on AI - it does not think, it can not handle many diverse jobs at once such that go into an appraisal - other than adding some narrative which seems similar to canned comments, I do not see how it does wanting much different than an AVM and an AVM has a certain use for sure, as well as certain limitations.

It's good at some other things beyond narrative. Like parsing of unstructured information into structured data, classifying images, etc. But really just as an aide.

 

[Vermonter]

Read up on AI - it does not think, it can not handle many diverse jobs at once such that go into an appraisal - other than adding some narrative which seems similar to canned comments, I do not see how it does wanting much different than an AVM and an AVM has a certain use for sure, as well as certain limitations.

Is that from that one book you read on AI two years ago? You really need to find a new book, or maybe take a class because everything you say tells us you don't know what advancements are happening in AI.

 

[J Grant]

It's good at some other things beyond narrative. Like parsing of unstructured information into structured data, classifying images, etc. But really just as an aide.

We can do that too - just saying -

What many seem to overlook is that, assuming valuations become faster, what happens then? Every lender will offer the same speed, so they are still stuck competing with each other. And no matter if the Avalon comes back in an hour, a day, or a week, there is a finite number of homes that sell every year and a finite number of refinances as well. Mortgage loans are big $ and the fees and obligations that go along with them are serious stuff. Do taxpayers want the exposure of backing a 500k loan with an AVM or AI assist into a product? And the borrower still has to qualify -lending is not like selling widgets or socks on Amazon- You are not guilty of this, but others are, and it seems inane that they think just because something can sell with a click on Amazon that lending and valuations should be like that. And they forget that a whole exo system of Amazon makes their speed possible - warehouses, buyers in bulk, internet presence, trucks delivering, etc. It just does not magically happen.

 

[J Grant]

Is that from that one book you read on AI two years ago? You really need to find a new book, or maybe take a class because everything you say tells us you don't know what advancements are happening in AI.

Nope, books and articles read very recently. Yes is is advancing but there are still limitaitns and it is expensive, uses tremendous energy, the chips are costly etc.

 

[glenn walker]

Human appraisers keep everybody involved in the transaction honest. I have prevented an amazing amount of outright fraud during my career. Take us out of the loop, and watch the double contracting begin.

No you may have red flagged potential fraud but most is committed in underwriting not inflated values. But Mortgage Backed Securities are not a single loan and managing a 500 $ billion dollar fund the biggest risk is in changes in interest rates.

The 0.5% risk from over values or fraud is pretty much meaningless when looking at the portfolio as a whole. The problem is old appraisers live in a risk model that's been mostly gone since Savings and Loans closed in 1989 era.

Quit thinking about a loan and A property and think A million loans whereby the risk is bundled.

 

[glenn walker]

Is adding 2 + 2 = 4 any different than saying four zeros 0000 = 4 ? Lol

 

[Vermonter]

Is adding 2 + 2 = 4 any different than saying four zeros 0000 = 4 ? Lol

But how will the 0 know the house is next to a nuclear waste dump without an appraiser?

 

[J Grant]

No you may have red flagged potential fraud but most is committed in underwriting not inflated values. But Mortgage Backed Securities are not a single loan and managing a 500 $ billion dollar fund the biggest risk is in changes in interest rates.

The 0.5% risk from over values or fraud is pretty much meaningless when looking at the portfolio as a whole. The problem is old appraisers live in a risk model that's been mostly gone since Savings and Loans closed in 1989 era.

Quit thinking about a loan and A property and think A million loans whereby the risk is bundled.

WASHINGTON, D.C. (February 6, 2025) — The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 3.98 percent of all loans outstanding at the end of the fourth quarter of 2024, according to the Mortgage Bankers Association's (MBA) National Delinquency ...Feb 6, 2025

 

[djd09]

Mortgage brokers havent been ordering appraisals for almost 16 years. You need to get over them. The AMC replaced them but are worse- but you wanted to get rid of the broker's- the problem was the medicine they gave you was worse than the disease.

are you lobbing me softballs on purpose....the mortgage broker doesn't need to order an appraisal...they estimate value without a license...they are called waivers