Are Appraisals Really Relevant?

[Non Sequitur]

 

[Mark K]

If an loan applicant has a stellar credit score, history and net worth, what more could a lender ask for. Maybe a $50 Door Dash inspection? <shrug>

If lenders would vet borrowers to the extent that they scrutinize appraisal reports, appraisals would be essentially a non-issue. However they want to loan to anyone with a pulse and therefore, believe that an appraisal will help mitigate their risk. It won't. When a deadbeat quits paying their mortgage and stays in the house for 1-2 years and trashes it in the meantime, the appraisal is nowhere near 'accurate' and therefore, useless.

F/F and others should make high risk borrowers pay a very high mortgage insurance premium that reflects the risk of the high LTV, low FICO, job switching borrowers and quit wasting time with SFR appraisals. The "$50 Door Dash inspection" would be sufficient.

Just the same as the insurance companies writing polices on homes in hurricane alley like S. FL. Premiums are very high, reflecting the risk.

 

[alebrewer]

It literally doesn't matter what the investors or the RE brokers or other outsiders think about the lenders' usage of appraisals. Nobody asked them their opinion on the matter and nobody cares about their opinion.

Unless they're taken public...

 

[George Hatch]

Unless they're taken public...

.....someday that might happen

 

[alebrewer]

I kinda doubt it - at least under the current mandate to provide affordable housing...