Appraisal Issues Found On 37 Percent Of Reverse Mortgage Loans: FHA

[Mike Kennedy]

​

Appraisal Issues Found on 37 Percent of Reverse Mortgage Loans: FHA

The Federal Housing Administration announced Oct. 1 that its investigation into potential appraisal inflation on reverse mortgage loans found that 37 percent were off by at least 3 percent, HousingWire reported. > FULL STORY

 

[Meandering]

3% variance on an opinion?



Sounds like someone did not meet the expected AVM value.

.

 

[Dublin ohio]

If they are basing their conclusions on the accuracy of their AVM. Why get appraisals. Just use the AVM. Do they really think that the information in their database is that accurate. Wonder how many were under valued

 

[RCA]

Totally ridiculous. 3% accuracy with an AVM (and it seems they are implying 100% accuracy for their AVMs!!!)? Well, maybe in a newer tract home subdivision. Around here, AVMs, aren't anywhere close to accurate except possibly for homes that are average quality, condition, appeal, functional utility and average in all other factors the AVM doesn't know about.

Fannie Mae, Freddie Mac and the rest of them don't have a clue on how to appraise homes, except to hire appraisers, most of whom don't have a very good foundation for appraising anything that isn't a tract home with lots of good comps.

 

[Meandering]

Appraisers don't get it.

Fannie's big reports look for "over valued" appraisals, and "over valued" is defined as higher than the contract price.

Appraisers have to be discredited so so they can be phased out as unreliable.

It is a power grab.

.

 

[glenn walker]

There is no contract price on a reverse BUT something is not right with this study and I would have been embarrassed to even release it. Something does' not pass the smell test and I have this gut feeling internally non-performing loan portfolios are growing.

 

[Elliott]

Compared to what? Zillow? A Black Box?

 

[The Bob]

About all I get from FNMA NPDC is HECM defaults. Most are as trashed as an REO, so you have to wonder how the condition in OA was reported. Lenders have always placed less DD on refi's over purchases but this seems bass ackwards to me. At least with a sale, the impact of deferred items is going to be reflected in the price, assuming the buyer has some wits. Now WHY would an appraiser mis-represent the condition?
Its the same old same old. Don't hit the number, no more soup for you!
If FHA was smart they would re-institute the panel and review XX% of all appraisals.
You're never going to get rid of this BS as long as the lender can hold a dagger over the appraiser for not hitting the number.