AVM Replacing Traditional Appraisals

[Tumbuktu]

Income Declines, Originations Increase at Rocket in 2Q . . [Inside Mortgage Finance Publications - Aug 02, 2024]
Rocket Companies posted net income of $177.9 million for the second quarter of 2024 . . . . The nonbank also touted a new ability to deliver cash from home equity loans in as few as seven business days thanks to a switch from traditional appraisals for the loans to an automated valuation model.

 

[Bob Ipock]

US Banking regulation do not allow an AVM for the primary valuation on a first mortgage loan.

 

[Dublin ohio]

The best you might get for a heloc is a 2055 offered at maybe $150. Most of the heloc orders I have seen recently are for properties that have only public records for a data source. No relatively recent MLS listings. So they are actually not much better than an AVM since subject info is extremely limited.

 

[Bob Ipock]

C. AVMs Used In Connection With Making Credit Decisions
The final rule would apply to AVMs used in connection with making a “credit decision,” which
refers to a decision regarding whether and under what terms to originate, modify, terminate, or
make other changes to a mortgage. The final rule expressly excludes the use of AVMs in
monitoring of the quality or performance of mortgages or mortgage-backed securities. The use
of AVMs solely to monitor a creditor’s mortgage portfolio would not be a credit decision under
the final rule because the credit decision has already been made by the lending institution.
Further, limiting the scope of the rule to credit decisions and covered securitization
determinations reflects the statutory definition of AVM, which focuses on the use of an AVM by
mortgage originators and secondary market issuers to determine the collateral worth of a
mortgage secured by a consumer’s principal dwelling.17

 

[J Grant]

A home equity loan is more like a line of credit - some banks order an appraisal on a high-value property, and others have been using an AVM for some time now.

 

[Bob Ipock]

Real Estate Appraisals: Final Rule | OCC

The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation today approved a final rule that allows financial institutions to defer completion of appraisals and evaluations for 120 days after the closing of...

www.occ.treas.gov

 

[Bob Ipock]

https://www.FDIC.gov/resources/bankers/appraisals-and-evaluations/

 

[Mile High Trout]

Posted about this a minute ago.

Second part of post.

Seriously. Have you read the nearly 200 page AVM final rule yet?

If you did not believe the concerted dismantling of the residential appraisal industry would happen.

You will become a believer after reading the AVM final rule.

Dang links are not working. They work on my side but when I press post, they do not show up. Testing this method out...

https://appraisersforum.com/forums/...area-providers-win.238392/page-9#post-3410687

TAF and HUD make a deal...PAREA providers win

why do the unethical stakeholders hate the independent appraiser so much....george will explain it to me :rof: :rof::rof:

appraisersforum.com

 

[Tom D]

It's called a line of credit on you house, being either a 1st or 2nd in line. Actually, there no fees attached to doing an equity line. Usually not term dominated. Go in and walk out with one. It makes your house equity a big credit card, but with a better rate.

This thread is a little late on the future of appraisers.

 

[J Grant]

It's called a line of credit on you house, being either a 1st or 2nd in line. Actually, there no fees attached to doing an equity line. Usually not term dominated. Go in and walk out with one. It makes your house equity a big credit card, but with a better rate.

This thread is a little late on the future of appraisers.

Easy come, easy go - the bank can cut off a HELOC at any time. In fact that was one of the triggers of teh last housing meltdown - the banks got nervous about all those lines of credit putting borrowers into negative equity and started closing them down -