Appraisal Waiver (Explosion)

[Non Sequitur]

Just in case anyone has any illusions as to what is on the table and for how long, this is from a 2016 Exposure Draft, page three of this thread: https://appraisersforum.com/forums/threads/new-exposure-draft.212318/

 

[djd09]

"Freddie Mac’s mission is to provide liquidity, stability and affordability to the U.S. housing market. COVID-19 has provided challenges and had far-reaching impacts on many facets of lending – including appraisals. Join Freddie Mac as they discuss automated collateral evaluation (ACE) appraisal waiver – one solution that has allowed them to fulfill their mission and effectively manage collateral risk while alleviating concerns around social distancing. "

HousingWire Annual Virtual Demo Day

Event Overview HousingWire Annual virtual demo day is designed specifically to help mortgage and real estate industry decision-makers identify the technology solutions they need to operate efficiently and securely. In a half-day format, the HousingWire Annual sponsors will demo their platforms...

www.housingwire.com

Hello Danny?

 

[DWiley]

"Freddie Mac’s mission is to provide liquidity, stability and affordability to the U.S. housing market. COVID-19 has provided challenges and had far-reaching impacts on many facets of lending – including appraisals. Join Freddie Mac as they discuss automated collateral evaluation (ACE) appraisal waiver – one solution that has allowed them to fulfill their mission and effectively manage collateral risk while alleviating concerns around social distancing. "

HousingWire Annual Virtual Demo Day

Event Overview HousingWire Annual virtual demo day is designed specifically to help mortgage and real estate industry decision-makers identify the technology solutions they need to operate efficiently and securely. In a half-day format, the HousingWire Annual sponsors will demo their platforms...

www.housingwire.com

Hello Danny?

Yes??

As I have already said, we have 20+ years of data regarding the use of methods other than appraisals to evaluate collateral risk, and that data shows that when the alternative methods are used, loan performance is actually better. So, what is your question?

 

[djd09]

swiping appraisals on one side, and pushing USPAP on the other.

you still owe me a cigar.

 

[djd09]

So, what is your question?

my question is, are you currently doing GSE appraisals? and if no , why not?

 

[J Grant]

Yes??

As I have already said, we have 20+ years of data regarding the use of methods other than appraisals to evaluate collateral risk, and that data shows that when the alternative methods are used, loan performance is actually better. So, what is your question?

Could you consistently present this in context ( you have done when asked ) as to why loan performance is better - since the valuation of the property has zero to do with how the borrowers perform. When asked you stated, the reason, which most of us already know that waivers are granted to stronger borrowers with more income, better credit, more $ down - so of course the borrower will perform better, so it had nothing to do with the fact an appraisal was not used - but the implication is that appraisals somehow are the reasons for poorer performance when performance belongs to the borrower.

What is the reasons other products aside form waivers tie in to loans performing better? A loan does not perform, a borrower preforms so it must have something to do with the borrowers or amounts of $ of these loans or the loan products. .

Loan performance is back end, but the valuation of property collateral is the front end . Why is a front end valuation, used by client to determine whether to lend or not and then for how much $ , being judged on something it has no control over or responsibility for - borrower performance, months or years later?

 

[djd09]

credit and collateral are two different words for a reason.

it is nothing more then an ACE sales pitch.

 

[DWiley]

my question is, are you currently doing GSE appraisals? and if no , why not?

No, I am not. I have a fulltime job doing something else

 

[DWiley]

Could you consistently present this in context ( you have done when asked ) as to why loan performance is better - since the valuation of the property has zero to do with how the borrowers perform. When asked you stated, the reason, which most of us already know that waivers are granted to stronger borrowers with more income, better credit, more $ down - so of course the borrower will perform better, so it had nothing to do with the fact an appraisal was not used - but the implication is that appraisals somehow are the reasons for poorer performance when performance belongs to the borrower.

What is the reasons other products aside form waivers tie in to loans performing better? A loan does not perform, a borrower preforms so it must have something to do with the borrowers or amounts of $ of these loans or the loan products. .

Loan performance is back end, but the valuation of property collateral is the front end . Why is a front end valuation, used by client to determine whether to lend or not and then for how much $ , being judged on something it has no control over or responsibility for - borrower performance, months or years later?

As I told you before, when I say that I am comparing loans with similar characteristics (anything else would be an unfair and invalid comparison) - that is, holding all variables equal, except for the methodology used for collateral analysis (appraisal or something else).

It should come as no surprise that the performance of the risk tools used is analyzed quite thoroughly. The goal is to always use the risk tool that works best for the situation at hand. There are many cases where appraisals perform better, and that is why they are the most used tool. But, there are cases where one can easily document that alternatives work better. That is not an opinion, it is just what the data shows.

Yes, performance is measured on the back end, but the risk analysis is done at the front end. Performance data is used to measure how good the risk analysis was.

 

[djd09]

No, I am not. I have a fulltime job doing something else

and of course. it is more lucrative over there. and without the ROV. just make sure when you confirm ACE appraisals, to add in the signed certification.

oh i forgot

rules for thee not for me.