Data Cancer found....

[TerryRohrer]

If/when the GSE AVM is way wrong its going to mostly be because the appraisers' data made them wrong. Nobody here in this thread even wants to touch upon the ramifications of that.

Wow! What a whopper that is! Hopefully you just forget to put the "(sarcasm)" warning in.

 

[J Grant]

We'll soon see how common or rare those waiver + high LTV mortgages end up being. There's apparently a fair more to getting a waiver than the value of the property (stated or otherwise).

If/when the GSE AVM is way wrong its going to mostly be because the appraisers' data made them wrong. Nobody here in this thread even wants to touch upon the ramifications of that.

In a toxic and perverse way we should HOPE the GSEs AVM greatly outperforms the commercial AVMs which don't have access to what the appraisers have said about these properties over the years.

??

Raw sales data pricse populate an AVM - from cash sales, from WAIVER sales, and from financed sales where an appraisal was used. Or any other sale they might use.

Being that that is the case, how do you conclude that when the GSE AVM is way wrong, it is mostly because the appraiser's data made them wrong?

Nobody sees these AVM's outside of Fannie and Freddie that I am aware of ( if so, I stand corrected ) - We do not see them. Therefore we don't know which sales were included or excluded or what adjustments were made in terms of them going "wrong"--

 

[Terrel L. Shields]

It has to be too much Tennessee eggnog.....

His imaginary friend.

 

[George Hatch]

Wow! What a whopper that is! Hopefully you just forget to put the "(sarcasm)" warning in.

What's untrue about it? They have the subject's physical characteristics from every appraisal submitted to them over however many years. AND they have the appraiser's comp selection to show them where to look for the current comps, also repeated however many times that property and each of the comparables have been appraised over however many years.

None of the commercial AVMs have access to anything like the GSE databanks.

"This property has been appraised 3x in the last 10 years by 3 different appraisers. In addition to the physical characteristics the appraisers said they saw, we can also see what neighborhoods each went to in order to find their comps. And we have all the prior appraisals on those comparable properties, too". ​

Sure, physical conditions change over time. But only some of those characteristics. AND for some of their deals their programs are adding in 3rd party PDRs to update the info on the physical conditions.

Obviously not as good as a current appraisal when said appraisal was competently performed but IRL the percentage of the appraisers who have been performing to specs hasn't been 100%, either.

 

[J Grant]

We'll soon see how common or rare those waiver + high LTV mortgages end up being. There's apparently a fair more to getting a waiver than the value of the property (stated or otherwise).

If/when the GSE AVM is way wrong its going to mostly be because the appraisers' data made them wrong. Nobody here in this thread even wants to touch upon the ramifications of that.

In a toxic and perverse way we should HOPE the GSEs AVM greatly outperforms the commercial AVMs which don't have access to what the appraisers have said about these properties over the years.

It is not just the desired value of the property - it is , as you allude to, other things - oddball or repair issue properties and the credit or income/assets of the borrower.

This means the leftovers go to the appraiser- the nonconforming properties, the hard-to-value properties, the weak or bad credit borrower properties - all of which make the loans more risky, and then they can turn around and say how much worse loans perform when an appraisal is made.

 

[J Grant]

What's untrue about it? They have the subject's physical characteristics from every appraisal submitted to them over however many years. AND they have the appraiser's comp selection to show them where to look for the current comps, also repeated however many times that property and each of the comparables have been appraisers over however many years.

None of the commercial AVMs have access to anything like the GSE databanks.

NOT EVERY DATA POINT SALE as a comp or statistical population in an AVM is from an appraisal.

There can be cash sales, auction sales, REO sales, and WAIVER-based sales.

Do you have knowledge that the GSEs;s are ONLY using properties that had an appraisal as comps?

Furthermore, other factors can contribute to an AVM being "off."

 

[George Hatch]

NOT EVERY DATA POINT SALE as a comp or statistical population in an AVM is from an appraisal.

There can be cash sales, auction sales, REO sales, and WAIVER-based sales.

Do you have knowledge that the GSEs;s are ONLY using properties that had an appraisal as comps?

Furthermore, other factors can contribute to an AVM being "off."

Completely true. Not every datapoint the AVM has access to was financed with an appraisal that was sent through the GSEs. For those sales the AVM and the appraisers are equally disadvantaged. They're working with the same reduction in data quality.

You can't see what any other appraiser has said about any of your comps. Or what they have said in the past about your subject. The GSE AVM is technically seeing more appraiser data than you are. Leastwise, that's the potential. Now if the GSEs aren't taking full advantage of their database then that's their own fault. At a minimum they have the access, even if they're not fully utilizing that access.

They might not be limiting their usage of the AVM to the waivers, either. For all we know they might be running their AVM for every deal including the ones they're receiving appraisals for. In their shoes, that's what I would do.
-------
And of course it also goes without saying that there are other ways an AVM can go wrong, but that applies to appraisers, too. We just saw one of our thought leaders use price/sf on an SFR dataset where the structures ranged from 1600-3200sf. Price/sf is an aggregate indicator with separate numerators for the site value and improvement value. And as far as the site values go not all those sites will have exactly the same contributory value, either. That's why we never use price/sf as the dominant unit of comparison for SFRs.

 

[CGinMN]

If/when the GSE AVM is way wrong it’s going to mostly be because the appraisers' data made them wrong.

I disagree that it will be mostly because of appraiser data. What makes you think this?
It will mostly be because their AVMs don’t account for non-quantitative elements.

Appraiser data is collected for the intended use in an appraisal assignment, not an AVM. If the GSEs want to misuse appraisal data for other purposes without due diligence, that is on them.

 

[Terrel L. Shields]

also repeated however many times that property and each of the comparables have been appraised over however many years.

and, of course, we all know a property never changes, nor is updated, nor added on.

 

[George Hatch]

and, of course, we all know a property never changes, nor is updated, nor added on.

Asked and answered. That's what the 3rd party PDRs are for - to update the database.

Besides, "always" and "never" are in play with the usage of these things.