So this thread topic is about a company offering a NO APPRAISAL mortgage Loans. The important point here is this is a very limited Program. Simply this is for people who are of little risk for default. They are so well off that many probably could just not have a mortgage at all. They have credit scores above 800, they have substantial liquid assets, they have substantial annual income that may be from several sources. Their debt to income ratios is extremely low. Frankly they may not have any debt or so little its nothing to even worry about or even if they do have debt it is well securitized by something other than their personal home. The super rich don't even get involved with this kind of program.
What this program is about comes down to one thing. Its a fishy expedition to get customers. Many who jump at this may not qualify, People like simplicity when they can get it because lives today are very complex. Many today operate with smart phones and tablets that simplify the things they have to do at work and in between the Play time. Amazon is making a life less complex for buyers. You can even buy your groceries from your smart phone and tomorrow its delivered to you home.
So what I have written below probably should be under the Desktop Appraisal Thread. It applies here also, because if they cant give you a no appraisal loan then maybe they can take the Desktop route and if that fails the drive by appraisal and ultimately the regular 1004.
So what happened in the past. For those of you who were not appraising back then here it is in a nutshell, I have just babbled my thoughts as they came up.
I am not an eloquent writer like George Hatch.
What we should worry about and also the reason you have more Job security than you realize as an appraiser. Its simple, history has a bad habit of repeating itself.
As best as I can recall the Sub-prime mortgage market created the collapse and the prime market was degraded also. So how did this get started? George Bush Jr was the catalyst of the collapse. George had a policy of getting everybody into a home. Sounds good right! Studies have proven that stable neighborhoods, with owner occupied homes reduced crime, encouraged stable family units, kids do better in school, everything is better. The American Dream.
Problem was that subprime is just that subprime! Some of the causes of being a sub-prime borrower: Government doing what it does best it constantly screws up our economy. Enter your personal life; financially/socially stinks, You cant keep a job and if you had a job it was low pay, dead end and no real future. you don't pay your creditors on time, you have way to many kids for you income level, You became ill thus out of work, no health insurance so you you can barely pay a doctor , The family value system you were raised under was one of live day to day, what was good enough for your parents is good enough for you, meaning that mill job is all you need. because your daddy worked there The families life's is a Jerry Springer Show episode on a continuous loop. All of a sudden sub-prime borrowers could buy a house, even though they couldn't buy a coca cola with a credit card when they walked into clutches of a greedy unscrupulous mortgage broker who knows how to twist, turn and jam thru a mortgage loan. These small time crooks had their favorite appraiser..turn, churn get it out the door type checklist Charlie AKA Skippy...having said that there were honest/ethical appraisers among the herd. Most of them appraised for the local hometown banks and even for brokers. These appraisers had been around a long time and they had scruples and such. They were basically making a average living with little to no pressure. The local banks did not pressure these appraisers. Loan generators who fed mortgage bankers worked independently or in a sweat shop. Mortgage Bankers sometimes were just someone who had a credit line established from a bank and this dude is where things really got bad. This character knew how to package loans so it would not draw to much attention from large national banks, the GSE's and such. This dude could hold a crappy loan until he finally found a way to dilute/average out the entire package/portfolio enough to where it would not draw to much attention. Simply mix a quart of bad milk with a gallon of grade A fresh Milk and come up with a 5 quarts of milk that had a mild almost indiscernible smell but was still edible.
Where it all collapsed is when dilution could no longer be done. Home Loans started going into foreclosure. This pace quickened and post foreclosure sales(REO) prices did not come close to covering the original mortgage. The economy played a large role in this collapse. Refinance played a huge role leading up to the collapse.
People would get a 2nd mortgage to buy a new car, etc.
So what disturbs me about no appraisal or limited appraisal, aka desktop in particular is the players,
I could go on and on...but you get the picture. Its still that way today in 2018...
This is why we will be around for quite awhile.
So I Apologize for all this babble. Now we can all go back to the Comedy Show 'Pittsburgh Pete and his Sparing partners.' You know who you are
