Data Cancer Due to Waivers

[glenn walker]

Change the POTUS, change the priorities of the agencies.
Change the POTUS again, change the priorities of the agencies again.

Rinse and repeat, in perpetuity.

Your assuming the system stays the way it's been in your and my lifetime. I believe that system is going away as like the 80 year way we've run our foreign policy and things like NATO. The Whigs didn't expect to be replaced and people tend to comprehend that every 100 years most Nations quit operating as they did in the past. Our two party system was not the intent if the founding father's but it became like a fixed bureaucracy and its members just assume it will continue in perpetuity. My view is we are watching the collapse in slow motion of a two party system dying. What we don't know is what is going to replace the broken one and how will it take final control.

 

[George Hatch]

Your assuming the system stays the way it's been in your and my lifetime. I believe that system is going away as like the 80 year way we've run our foreign policy and things like NATO. The Whigs didn't expect to be replaced and people tend to comprehend that every 100 years most Nations quit operating as they did in the past. Our two party system was not the intent if the founding father's but it became like a fixed bureaucracy and its members just assume it will continue in perpetuity. My view is we are watching the collapse in slow motion of a two party system dying. What we don't know is what is going to replace the broken one and how will it take final control.

I'm sure that sooner or later "what's now" will give way to "what's next". But I learned a long time ago to refrain from trying to predict the timing because I've usually been way wrong when I've tried to do that in the past.

WRT the "appraisers-r-racists" trope I believe (but cannot prove) the accusation to unfounded as far as the profession as a whole. So if the current admin takes their foot off the gas on this theme we might get a reprieve but I don't expect that to last for longer than this swing of the political pendulum.

That's why I still think it prudent for appraisers to proceed under the assumption that these politics will return with the next change in POTUS politics, AND that the potential exists for appraisers to get hassled in the future for something they might have let slide in the past. I also believe that garden variety laziness and errors have been far more common when it comes to those contested value conclusions than personal animus or unconscious bias. The property that's located 2 blocks away and is similar either did or didn't sell at that price.

If it matters, I'm much prefer to be wrong about this possibility than to be right. But I'm not taking any chances on that and I don't think any other appraisers should, either.

 

[glenn walker]

Back on topic there is no data cancer and the Phil program is kinda like click bait for frustrated appraisers who are the same ones who are still talking about Hvcc and AMCs and TAF... their just not willing to accept the reality that with technological advances waivers and even no appraisal loans will be the norm in 5 years. The real issue is loss if business and I get that and sympathetic to those folks but I also believe those folks need to think about alternatives to the traditional fee appraisal model. The cancer is not waivers that's a symptom of change.

 

[George Hatch]

If it's possible for waiver usage to result in price creep in the market then the answer to the Data Cancer allegation cannot be "Never". But "Always" is equally unlikely. What remains is to quantify how rare/common it is for prices in the GSE value limitations to be increased - or decreased - due to appraisers not even looking at these particular properties.

The RE market runs in cycles, so "increasing too fast" isn't the only possible negative outcome. If the waivers can prompt for additional increases in an increasing market they can also prompt for additional decreases in a declining market.

Better for appraisers to let the data speak than to commit to conclusions which might be later overtaken by the facts.

 

[glenn walker]

If it's possible for waiver usage to result in price creep in the market then the answer to the Data Cancer allegation cannot be "Never". But "Always" is equally unlikely. What remains is to quantify how rare/common it is for prices in the GSE value limitations to be increased - or decreased - due to appraisers not even looking at these particular properties.

The RE market runs in cycles, so "increasing too fast" isn't the only possible negative outcome. If the waivers can prompt for additional increases in an increasing market they can also prompt for additional decreases in a declining market.

What if we have no residential appraisals in the future ? And lenders just do their own internal analysis using data and inside people non licensed . Would there he any cancer on values? No because buyers and sellers determined prices not appraisals. There is no such thing as data cancer unless sales prices are not reported or recorded correctly. My point is data cancer is only possible if someone misreported a closed sales price. Market values are based on transaction prices not on did someone get an appraisal done on a property they purchased.

 

[Joyce Potts]

Let's consider a little mouse in the house.

Lobbyist?

Ya caught me!

 

[Joyce Potts]

Back on topic there is no data cancer and the Phil program is kinda like click bait for frustrated appraisers who are the same ones who are still talking about Hvcc and AMCs and TAF... their just not willing to accept the reality that with technological advances waivers and even no appraisal loans will be the norm in 5 years. The real issue is loss if business and I get that and sympathetic to those folks but I also believe those folks need to think about alternatives to the traditional fee appraisal model. The cancer is not waivers that's a symptom of change.

Hopefully, TAF is on the chopping block as well.

 

[Zoe]

Hopefully, TAF is on the chopping block as well.

It is so much division in the profession it is crazy.

Name the party, I can almost guess without being certain.

 

[Zoe]

I always look at motives. It is part of my profession.

 

[Dale Floyd]

What if we have no residential appraisals in the future ? And lenders just do their own internal analysis using data and inside people non licensed . Would there he any cancer on values? No because buyers and sellers determined prices not appraisals. There is no such thing as data cancer unless sales prices are not reported or recorded correctly. My point is data cancer is only possible if someone misreported a closed sales price. Market values are based on transaction prices not on did someone get an appraisal done on a property they purchased.

I remember when the FSLIC was rolled into the FDIC because they went busted. Why? Because the powerful Savings and Loan financial institutions were misbehaving with mortgages and utilizing manipulated data in their internal appraisals. There was no independence then, and the data became cancerous because pricing was unrealistic yet that didn't stop the lenders from lending which produced even more problems in over pricing. We all saw it, and many predicted problems long before they showed up. I was there during those days, as were you and many others out here. That is why we exist as a license profession.

I would submit that we've seen data cancer before. Saw it begin to happen again before HVCC required buffers in place between the appraiser and the banker before Congress passed Dodd/Frank. Why was that needed? Because history tends to repeat itself if we go back to the same ways as before. We'd better be mindful once again.