Fannie, appraisers move to the back of the bus.

[Joyce Potts]

The most recent fannie newsletter of more better ways than an appraiser. And some of yous think we still have a future.

More innovative, efficient ways to establish a property’s market value​

Leading an ever-evolving market, Fannie Mae has an updated range of valuation options that balances traditional appraisals with innovative alternatives, making the process of establishing a property’s market value more efficient and accurate. These options match the risk of the collateral and the loan transaction.

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Yeah... I'm waiting for those REOs... already a couple so It most probable to increase

I'd love to see the data that any GSE or lender lost significant money on a foreclosure because of an over valuation over the last 10 years.

 

[DWiley]

No, that's caveat emptor. Paying over list price, with an appraisal waiver, using a taxpayer backed mortgage is cancer.

I though Phil's argument was that waivers facilitated purchase prices that are "too high"? If that is the case, I see no difference when a cash sales does the same thing. But, I appreciate you clarifying your view. and hats off to PC for coming up with such a creative and inflammatory phrase. That's brilliant marketing.

 

[George Hatch]

Whatever avoidable damages that were caused by excesses during an increasing market trend will be revealed during the subsequent downturn. If such damages DON'T show up in the post mordems that will also be revealed during the subsequent downturns.


If the "caused a huge and expensive problem" outcome occurs that will spur additional "reforms", possibly including reversal of some of the elements of the current programs. Maybe they'll outlaw AMCs or impose a rigid review quota for their entire appraisal report intake.

OTOH
If the "didn't cause a problem" does end up occurring that will disprove some of the talking points which are currently in use.
If the "caused a problem but that problem was small/insignificant compared to the time/effort/costs" occurs that will also disprove the talking points.
Either of those outcomes will ensure the perpetuation of these programs.

And we probably don't even want to entertain the possibility of "significantly reduced the problem" outcome because that will completely justify these changes to an extent which is beyond debate. Or reproach.


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This brings to question: compared to the environment that existed before, how much avoidable damage to the existing trends do we believe these programs have been adding? None? A little? A lot? Because the answer to that question is what will result in whether or not the recent "muh-dernization" efforts either continue or get rolled back.
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I don't know what the answer is to these questions, but then again nobody other than the lenders and GSEs which are in possession of the actual reports is even in a position to make those comparisons or to monitor those trends. And they're not sharing the extent to which they have been monitoring the situation or what conclusions they have already come to. Those analyses are proprietary to their business interests. All that we can observe of what they know is how they have been acting.

 

[Sadie]

My neighbor two doors down paid $50,000 over list. No appraisal. No waiver. Just good ole cash Is that also "data cancer"??

And that sales price will feed into the data for the area. Depends on if its an outlier or just under priced for the area.

 

[J Grant]

My neighbor two doors down paid $50,000 over list. No appraisal. No waiver. Just good ole cash Is that also "data cancer"??

No, because if they bought it and it was listed on MLS, it gets disclosed on MLS as a cash purchase, so it is easy to see if the fact that they paid cash impacted the price.

Though I would not call it data cancer I hate that term.

 

[George Hatch]

Appraisers run into outliers all the time. No big deal unless/until they become prevalent in the market enough to demonstrate a trend. If that happens we'll probably see a 2-tiered pricing trend which will also be subject to disclosure and analysis. Probably in the form of a user-driven requirement to identify those conditions among those sales via personal confirmation. That'll be fun.


All the more reason to do more analysis of the market conditions besides just searching for a handful of comps by price.

 

[DWiley]

No, because if they bought it and it was listed on MLS, it gets disclosed on MLS as a cash purchase, so it is easy to see if the fact that they paid cash impacted the price.

??? Does the definition of MV not include, "...payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto"??

 

[J Grant]

??? Does the definition of MV not include, "...payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto"??

I never said the MV definition did not include cash!!

However, if a buyer pays cash, and they overpay, the US taxpayers are not backstopping the loan wrt the loss if the owners go underwater with the loan or later defaults.

 

[Non Sequitur]

??? Does the definition of MV not include, "...payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto"??

Is a loan based on a waiver the same as "financial arrangements comparable" to cash?

 

[George Hatch]

I never said the MV definition did not include cash!!

However, if a buyer pays cash, and they overpay, the US taxpayers are not backstopping the loan wrt the loss if the owners go underwater with the loan or later defaults.

No, your comment was to question whether paying cash impacted the price, apparently when compared to sales financed by a mortgage.