Appraiser Full Employment Act ?

[Riick]

Is the housing bill also "The Appraiser Full Employment Act" ??

Among the bill’s key centerpieces are provisions which authorize
the Federal Housing Administration to endorse up to $300 billion
in new 30-year fixed rate mortgages for troubled subprime borrowers;
lenders and investors must, however, first write-down principal loan
balances to 90 percent of current appraisal value.

ALSO...
Think about the conflicting pressures:

LENDER wants a high value - as per usual? (( or do they just want the d!@mm thing off their books?))
Homeowner wants a value as low as possible?
What's a poor MB to do in terms of pressuring the appraiser?

Given those conflicts..... Could it be that they actually want a real value?
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[Mike Kennedy]

nah.......just run a avhum.......we STILL don't wanna know the Truth. All we need is a number. Got one?

 

[Riick]

But Mike...
All those AVMs give high values
.....At least right now they do ROTFL....

If they somehow were "tweaked" for low values (Oh my G_D, how could that happen)

the Lenders will have bigger losses/write-downs
.
.

 

[Randolph Kinney]

My understanding is the holder of the existing mortgage has to agree to amount of debt forgiveness so that a new loan can be done.

So there will be a tendency to minimize the debt forgiveness and to roll the excess into the FHA loan.

 

[Mztk1]

Given those conflicts..... Could it be that they actually want a real value?
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Given the fact that they will not be able to draw an income off the margin, the MB's take is going to be based on the dollar amount of the loan.

Wholesale lending will open up again as the MBer is out for the highest possible value and it is in the lender's better interest to turn a blind eye to it.

 

[Mike Boyd]

Sounds to me like 2 appraisals will be needed......unless they are allowed to use AVMs.

 

[Lloyd Bonafide]

It doesn't look like much of anything will happen this year - according to HUD, they definitely won't have the program ready by October 1, and maybe not until the middle of next year, (your government in action).

http://www.housingwire.com/2008/07/26/as-housing-act-passes-questions-emerge/

Even if the program is ready this fall, I wonder how many homeowners will qualify for the program. Most of the people that are underwater seem to have gotten 80/20 loans, and if you have a second mortgage, you may not qualify for the program.

 

[Michael Tipton]

I do not see a lot of leeway with the Appraisal Independence provision included on page 407 of the bill. Looks like they want a true estimate of market value.​

‘‘(g) APPRAISAL INDEPENDENCE.—
‘‘(1) PROHIBITIONS ON INTERESTED PARTIES IN A REAL ESTATE TRANSACTION.—​

No mortgage lender, mortgage broker, mortgage banker, real estate broker, appraisal management company, employee of an appraisal management company, nor any other person with an interest in a real estate transaction involving an appraisal in connection with a mortgage insured under this section shall improperly influence, or attempt to improperly influence, through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, nonpayment for services rendered, or bribery, the development, reporting, result, or review of a real estate appraisal sought in connection with the mortgage.​

‘‘(2) CIVIL MONETARY PENALTIES.—​

The Secretary may impose a civil money penalty for any knowing and material violation of paragraph (1) under the same terms and conditions as are authorized in section 536(a) of this Act.​

 

[SlyAce]

I am sure the government wants a true estimate of market value for the same reason the banks want to inflate the market value as much as possible: the higher the appraisal, the smaller the haircut the current mortgage holder(s) have to take.

I am not an appraiser and I am new to this forum. I came here essentially to figure out an answer to one question: how much appraisal fraud do you people think there will be under this legislation? The banks have a huge incentive to have the properties appraise high. How easy will it be for them to somehow cause this to happen?

 

[Bama Bayou]

But Mike...
All those AVMs give high values
.....At least right now they do ROTFL....

If they somehow were "tweaked" for low values (Oh my G_D, how could that happen)

the Lenders will have bigger losses/write-downs
.
.

Priceless. I bet they have been working overtime this weekend "tweaking the model". Actually it takes about ten seconds of code writing to deflate what they have been inflating.