Appraisers Need Not Apply -- Article on Waivers

[George Hatch]

Me: "I think the value of my property is $22M"​

Fannie: "Okay"​

You're a creative thinker if you think there's no valuation of any kind being performed.

 

[DWiley]

No idea what you're talking about.

I have said publicly (multiple times) that I favor opening up the UCDP data, and my view on that has not changed. At the same time, I think many appraisers have not thought through all the ways such a decision might affect them.

 

[glenn walker]

No, my quote was not directed at you but DW.

I know that I just wanted to slap you before he does : )

 

[glenn walker]

I have said publicly (multiple times) that I favor opening up the UCDP data, and my view on that has not changed. At the same time, I think many appraisers have not thought through all the ways such a decision might affect them.

My only concern is I know how hard everyone tried to game the system and I must admit I tried everything I could think of to see how and why certain things would pop up in the reports. I also know Underwriters and others who would try to figure it out but as fast as we thought we had it down suddenly changed. Therefore my conclusion was outside of loan officers and others gaming the system it would really would have minimal use for appraisers and have no effect on the appraisers own data and or his/her final opinions of value.

So what if the last appraiser rated it a C-4 and now I go out and it has since been updated or remodeled and it's now a C-3 . Frankly I can think of very little data from UAD that would enhance or-change my OMV. To me UAD is similarly a analytical tool which applies more to "risk" management of a large portfolio and one to use to watch for different appraisers trends and patterns.

It's also a potential tool to monitor certain appraisers patterns-If I was at F & F and we believed we may have a rouge appraiser and 100% of all of-his reports were C-3 conditions and 100% all hit the purchase or contract price it would-certainly make it easier to see a pattern that was not even statistically possible.

Having spent my entire life around lenders-loan officers and loan brokers one thing Know for sure is letting them into that type of a data base is letting them-into the banks vaults It would have to be a very limited amount of data. Many learned how to game the Du System fairly quickly.

Imagine Millions of users from-Banks-Lenders -AMCs signing in to that data base it could open the door for hackers and instead of shutting down a pipeline they shutdown -down F & F could find themselves being held-hostage. Hello Fannie this is Vlaminck your friendly data miner and we now have you in lock down mode a few hundred million-maybe we will send you our unlocking tool.

 

[glenn walker]

Please-Please can I just take a little peek inside : )

 

[djd09]

Most lenders only use the waiver because the home's market value was calculated fairly recently and when the market has been either very steady or better yet on one that has gone up significantly in the last 36 months. Thats when an- in-person valuation estimate make the underwriting process more efficient for both the borrowers and the lender. Example: My City has been increasing for over 5 years or longer and even the worst of the worst has increased by 50% over that time period and homes in good condition are up in just 6 months by 25% or more. Also mots of these are already in the CU Systems data bank so there is no reaosn to send an-appraiser out on a home that had either been purchased or refinanced in the last 36 months. I have pulled up every refinance appraisal i have completed in 2018-2019 & 2020 and out of those about 75% had been done with waivers and by the same lender

We also ran comparables on about 15 of them just to see what value differences between the last time we appraised them and what they are worth now. All of those values were 20% to 50% higher and all were minimum C-4 and many C-3 when I had completed them. I then ran the AVM and even looked at zillow and MLS because these were all cookie cutter non-complex homes where a monkey could estimate a value at +/-5% to 10%.

My final analysis concluded that there was very little to no risk using waivers as long as that persons financials were good. So as a Lender I would be crazy to order a full appraisal because not only can I shave off 5 to 7 days off to funding but I also have a customer and borrower who is much happier with their overall loan experience. The only person who suffered was me because back in the day i would have gotten orders on many of them and they were easy money since I had the building sketches and most vital information in my files. All I would have needed was six new comps and Bingo easy money. ( Note: I have not seen any waivers on Complex or Rural properties unless they were rate and term or very limited 5% type cash outs So apparsiers fighting waivers juts need to be honest and admit its not that they care about the Lender or GSE'S risk and its not because they are concerned about a borrower or buyer over-paying recuse truth is the "Appraisers" value will-usually be higher than what the waiver allowed and therefore- the appraiser-brings no value to the table.

The "appraisers argument is maybe the homes physical condition has changed since the last appraisal but that is mostly not valid because the "Borrower" has the option of getting a full interior exterior-if they believe the waiver is too low and not reflecting those upgrades. As far as a lower physical condition the typical loan production appraiser rarely makes a condition between a C-3 and C-4 of 5% to 10% on the high side. A C-5 or C-6 was never even funded until it had been brought up to a minimum C-4 so that's not even a valid argument.

Boys and Girls -Unless you have something of value to sell its a long way to the top in rock and roll and technology will and is changing the game. You will survive just not on the same business model and this refinance boom has given many a false sense of security but remember almost-every appraisal you are doing right now is begin added into the Big-Green Machines data stripping operation and on the next transaction there will be a waiver and not you being sent out to do it again. Year 2023 -Hey MARGE-I just found out these dirt-bags are not using appraisers anymore to do REO or Pre-Foreclouser valuations that no good NAR and those no good Realtors are being used to see why the physical conditions and maybe Zillow partnered up with Fannie & Freddie because they already started buying homes by the thousands because they had all the data on which-homes where in forbearance or Pre-defaults and they just contact those folks pay full price and the owner gets his cash and now the agencies own in partnership ones that can be flipped or rented and professionally managed by the new Team Zillow. Hey Angry Cat is that a fact ? No Uncle Billy but thats how they did it with Black Rock back during the great mortgage meltdown and-so now they have the formula down to a tee . Hey Angry-Cat I think you are onto something how come we never get in thees deals ? Uncle Billy because we were overly negative and we thought Zillow and Corelogic where never going to amount to anything and thats why we missed Google-Tesla-Apple because technology had passed us bye. Uncle Billy -Yeah but we own rentals and land and you can never make any more dirt ! Uncle-Billy shut up they are working on synthetic dirt at 20% of the cost of real dirt so your 20 Acres will be worthless and we are like the guys who figured a horse was more reliable than some dang thing Henry Ford made and we missed that opportunity to : )

keep trying.

it is better then the scum bag mortgage brokers inserting targeted values also the borrower gets more input then the independent appraiser. oh except in indiana.

 

[Terrel L. Shields]

They are passed on to the appraiser.

I'm thinking Exact RimsCentral- the appraiser doesn't pay any fees I know of. You can expand the coverage area at your own expense but that's between you and RIMS. The banks I worked for using RIMS paid my fee and no charges were incurred from RIMS.