Fannie's Own Statement About Waiver /value Acceptance;

[J Grant]

A-Z-06 Fannie Mae does not warrant that the estimated value provided by the lender is the actual value of the subject property. The lender may not make any statements to any third party (including the borrower) that Fannie Mae performed any kind of appraisal or valuation of the property.

My comment :
The above is from the Fannie Mae Selling Guide; they admit the value estimate provided by the lender might not be the actual value of the property. Then they state that Fannie did not perform any kind of appraisal or valuation of the property. Yet posts here assume an AVM was done by Fannie (or Freddie). An AVM is an automated valuation model. Was an AVM done, or was it another type of analysis performed from the data analytics? If an AVM was done, why doesn't it count as a valuation in the Fannie statement?

 

[CGinMN]

Saying “the lender may not make any statements to the borrower that Fannie Mae performed any kind of valuation of the property” is not the same as “Fannie did not perform any kind of valuation of the property.”

 

[J Grant]

Saying “the lender may not make any statements to the borrower that Fannie Mae performed any kind of valuation of the property” is not the same as “Fannie did not perform any kind of valuation of the property.”

Okay, you are making the case for misleading the borrower.

Normal reasoning would be to assume that if Fannie prohibits the lender from saying it performed any kind of valuation, it might mean Fannie didn't perform a valuation. If Fannie performed an AVM, why not inform the borrowers ( and/or share the results)

This prohibits the lender from admitting an AVM was made; if that is what happened, it is misleading. Why isn't full disclosure present? Why is the AVM kept secret from the borrower? How does that align with the public trust?

BTW, this is the same pattern as when AMCs forbid an appraiser from discussing their fee or reveal the appraiser's fee to a borrower in an AMC assignment. ( the subject of consumer borrower lawsuits in the courts ) Misleading secrecy from the major players, with the low-paid, treated-like-dirt appraiser the only one required to have disclosures, meet the standards of USPAP, and be scrutinized on any statement.

The MV definition references a well-informed or well-advised buyer. Keeping vital information hidden from a borrower as a buyer means they were not well informed or well advised. They might make different decisions if they were.

 

[swandel1]

I was under the impression that the waiver process / evaluation, including the estimate of value, was done by the mortgagee e.g. the lender, not the insurer.

 

[CGinMN]

Okay, you are making the case for misleading the borrower.

Reading is FUNdamental.

 

[Bob Ipock]

Reading is FUNdamental.

The appraisal is not for the borrower. It is for the lender client. Unless stated, the borrower is not an intended user. Can any appraiser make the claim that their appraisal is the ACTUAL VALUE? How about the other 5 appraiser who might come up with a different value? Exactly what does ACTUAL VALUE mean?

 

[J Grant]

The appraisal is not for the borrower. It is for the lender client. Unless stated, the borrower is not an intended user. Can any appraiser make the claim that their appraisal is the ACTUAL VALUE? How about the other 5 appraiser who might come up with a different value? Exactly what does ACTUAL VALUE mean?

Good question. What does actual value mean? Where is the definition of actual value for valuators or appraisers?

Actual value sounds like a weasel word for them avoiding the statement that it is not the market value of the property.

Since the purpose of an appraisal is to provide a market value opinion for a property, it does not provide an opinion of Actual value. (whatever that is ) Where is the definition for actual value in an appraisal or any valuation? An appraisal has to state the type of value sought in a definition.

An appraisal is done to standards that can measure the credibility of the market value opinion (or other identified value type ) developed. If 5 appraisers appraise the same house, it might or might not result in 5 different market value opinions. Each of the five reports can be reviewed and vetted for the credibility and support of the MVO. Some variation among the 5 might be reasonable; however, an outlier value opinion might not stand up to review .

Where is the standard of credibility and credible support for the lender or borrower estimated value ( or sale SC price as the value ) in a WAIVER/value acceptance? If Fannie prohibits the lender from disclosing that an AVM was done, and Fannie says the value estimate might not be the actual value of the property, then whatever standard of credibility exists is not open to review or analysis by others as it would be in an appraisal.

 

[George Hatch]

Do you honestly think these applications have a 100% approval rate regardless of the amount the brokers are estimating? That they never decline an application based on the value of the property? That they're running their waiver program without any due diligence of their own?

EXactly what do you think they mean by it when their summary of their process refers to using "data based analytics" prior to issuing a waiver?

Think it through. Use your words. Whatever response you intend to post, read it out loud to yourself to see if it makes any sense. Because any implication of "the GSEs are using no diligence of their own WRT values in their waiver program" is giving off an IQ-75 vibe.

 

[Surf Cat]

The borrower is signing on the dotted line accepting the value acceptance. They want the house..... the lender wants to make the loan, everybody's happy.

The Borrowers retain the right to order a full appraisal on their dime should they be worried they're overpaying.

This is a great system for the lender.... the borrower is taking all the risk. Should some defect be found later by the borrower after their happy move in, too bad so sad.... they waived the negotiation leverage.

If the borrower defaults and short sales or forecloses... their world is wrecked with a short sale / foreclosure on their credit plus the loss of any earnest monies and the lender is made whole from the government backed loan. Plus profits from servicing the loan I assume...

What the bummer is.... is that these value acceptance sales are not indicated in public records as such. For the researching market value seekers...... it's data cancer infecting arm's length sales.

 

[J Grant]

Do you honestly think these applications have a 100% approval rate regardless of the amount the brokers are estimating? That they never decline an application based on the value of the property? That they're running their waiver program without any due diligence of their own?

EXactly what do you think they mean by it when their summary of their process refers to using "data based analytics" prior to issuing a waiver?

Think it through. Use your words. Whatever response you intend to post, read it out loud to yourself to see if it makes any sense. Because any implication of "the GSEs are using no diligence of their own WRT values in their waiver program" is giving off an IQ-75 vibe.

You asked me this exact same question a day or two ago, and I answered that I do not believe these applications have a 100% approval rate. So why are you asking me again? I wrote this post assuming everybody was aware the WAIVER might not get a 100% approval rate. My post obviously addresses the cases where they did get approved for a waiver.

Did you honestly forget that you asked me this and I answered that I know 100% approval is not the case,, or was asking it again a way to make me look poorly informed?

I did not say they did not do due diligence. I said whatever diligence they used, they prohibit the lender from revealing it was done to the borrower, and it is not made open for scrutiny or review by others