3.6 Crunch Time

[Sandra Koutsopoulos]

In WI, the weather is an important factor for sure, in order to keep all that mobile machinery pristine.

 

[Vermonter]

Most of the folks that overpaid got waivers. Then the markets officially juiced. Let the good times roll.

Not in my market. I came in under contract more often than not and the loans still closed. Waivers aren't given at random. They're given to lower risk borrowers that are well aware they're overpaying.

High sales prices that are greenlighted by waivers since a waiver always hits the sale price once approved - all it takes is one high sale a month to enter the comp database in appraisals, AVM's or other to skew valuations and prices in an area.

Same applies to buyers waiving appraisal contingencies. One buyer that wants a property at any cost and has the money to throw at it will skew the comps higher with or without an appraisal.

We won't know how good or bad waivers are until we see the default rates associated with them

 

[Alsie35]

Not in my market. I came in under contract more often than not and the loans still closed. Waivers aren't given at random. They're given to lower risk borrowers that are well aware they're overpaying.



Same applies to buyers waiving appraisal contingencies. One buyer that wants a property at any cost and has the money to throw at it will skew the comps higher with or without an appraisal.

We won't know how good or bad waivers are until we see the default rates associated with them

The biggest factor in default rates are the loan underwriting decisions. That's probably 99% of it right there. Appraising over valuation, if it made any difference at all, was probably a very small percent of what caused the Great Recession RE crash, for example.

That resulted solely from a political decision made during the Clinton administration, and continued during the Bush II administration, to extend easy credit to tens of millions of people who were manifestly not creditworthy.

It's likely quite exceedingly rare that an appraising over evaluation error is implicated in a borrower decision to default.

It begins and ends with loan underwriting decisions. If you give people with questionable credit easy access to mortgages they're going to have a much higher loan default rate than people with stable financial backgrounds.

So associating appraisals with the loan default crisis was, and is, a red herring, used to beat appraisers over the head with, and also as a fake because to justify completely destroy the appraising profession as the 3.6 Abomination is in process of doing as we speak.

I don't know why nobody has made this fairly obvious point as this discussion has gone on but there you have it.

 

[Zoe]

The biggest factor in default rates are the loan underwriting decisions. That's probably 99% of it right there. Appraising over valuation, if it made any difference at all, was probably a very small percent of what caused the Great Recession RE crash, for example.

That resulted solely from a political decision made during the Clinton administration, and continued during the Bush II administration, to extend easy credit to tens of millions of people who were manifestly not creditworthy.

It's likely quite exceedingly rare that an appraising over evaluation error is implicated in a borrower decision to default.

It begins and ends with loan underwriting decisions. If you give people with questionable credit easy access to mortgages they're going to have a much higher loan default rate than people with stable financial backgrounds.

So associating appraisals with the loan default crisis was, and is, a red herring, used to beat appraisers over the head with, and also as a fake because to justify completely destroy the appraising profession as the 3.6 Abomination is in process of doing as we speak.

I don't know nobody has made this fairly obvious point as this discussion has gone on but there you have it.

Memphis was one of largest foreclosure areas in the nation due to mortgage fraud. FBI and many federal agencies were here when I was almost solely working for FNMA in foreclosures on single family residential. Performing those residential appraisals and in talking to many homeowners in foreclosure, the homeowners knew their home was over appraised in the process. Mortgage brokers were putting pressure on some appraisers like if you can meet this value, we will give you the appraisal.

My point is I would disagree with you that some homes were not over appraised on the front end before the loan ever got started and borrower found out later. I know it to be true from experience with borrowers.

Your 99% opinion is hogwash to me. The appraisal protects all parties involved in transaction from risk with unbiased market value opinion.

When I was doing the liquidation appraisals, I researched the history and found out the bank was underwater on the front end when the loan was originally made. The bank was already under leveraged before the loan was made.

The only way that could happen is if appraisal was inflated.

 

[Zoe]

By the same token, waivers and avms can create the same protocol today. The market overall in USA today is showing a larger number of sellers than buyers so the shortage of homes is a hoax. Affordability is real. There is no shortage of homes for sell in USA overall today. Affordability is not there.

 

[Vermonter]

It begins and ends with loan underwriting decisions. If you give people with questionable credit easy access to mortgages they're going to have a much higher loan default rate than people with stable financial backgrounds.

That's my point....waivers are given to lower risk borrowers. Buyers waiving appraisal contingencies are bringing cash to closing. Both are less likely to default.

For some reason many here think waivers are just handed out to high risk borrowers like subprimes mortgages back in the day. It's not the same thing.

 

[Zoe]

New One Family Houses Sold: United States

Graph and download economic data for New One Family Houses Sold: United States (HSN1F) from Jan 1963 to Jun 2026 about 1-unit structures, headline figure, family, new, sales, housing, and USA.

fred.stlouisfed.org

 

[Zoe]

That's my point....waivers are given to lower risk borrowers. Buyers waiving appraisal contingencies are bringing cash to closing. Both are less likely to default.

For some reason many here think waivers are just handed out to high risk borrowers like subprimes mortgages back in the day. It's not the same thing.

I don't think waivers can necessarily inflate prices on like refinances, but they can on sales. Same way with hybrids and avms.

 

[Zoe]

Okay, buyer coming to closing less likely to default can be a misnomer as well. What if buyer is influenced by a biased party they are getting great deal when they are not.

The buyer finds out later they gave way more than market value at closing?

They want to sell and say hey, I gave way more when I bought it than I should have. It was their cash they gave more than they should have.

 

[cashcatz]

can't keep digital work files.

What? That's what Dropbox, Box.net, Microsoft file cloud sync thing does... everyone should be already using those in conjunction with their form software's cloud storage PLUS quarterly backups to an offline drive that is stored in a fireproof safe.