Federal Reserve Bank Of Philadelphia - Appraising Home Purchase Appraisals

[timd354]

"Simple as that. If you opt for no appraisal, you’ll know immediately whether your contract price is acceptable for the mortgage amount you’re seeking. That’s impossible with the traditional approach where you have to wait for the appraiser to bless the deal, which sometimes doesn’t happen because the appraisal comes in lower than the contract price."



Appraisal-free home sales could raise buyers’ interest

http://www.bostonherald.com/busines...l_free_home_sales_could_raise_buyers_interest

Depends on who you interview....

Not really. The problem with the article you linked is that it consists of nothing more than the opinions of an appraiser, a real estate broker and the head of the MBA with no supporting data or analysis. The arguments in that article pretty much amount to "appraisals are good because we say so"

That is an extremely weak answer to the conclusions in paper that cites the the analysis of a lot of data.

 

[timd354]

Since appraisals and applications hit the junk pile when they are not high enough, how could they not have an upward bias? They only get to count the appraisals that are at the selling point and above. All others don't make the database.

Apparently you did not read the paper, because the data they analyzed included appraisals that came in under contract price that were uploaded through various pipelines even if the loans did not ultimately close.

I definitely disagree with some of the conclusions in the paper and can certainly criticize some of the methodologies used in the study, but your particular criticism is unfounded.

Try actually reading the paper next time before coming to any conclusions about it or criticizing the methodology....that way you might actually find something that is a legitimate error.

 

[Eli]

Not really. The problem with the article you linked is that it consists of nothing more than the opinions of an appraiser, a real estate broker and the head of the MBA with no supporting data or analysis. The arguments in that article pretty much amount to "appraisals are good because we say so"

That is an extremely weak answer to the conclusions in paper that cites the the analysis of a lot of data.

You are so biased in your opinion that it means nothing. What generates you more income?

Fastest and cheapest? Timd, you are a dead duck in the water. Like many, you don't realize it yet. Heck, find comfort the FDIC, OCC, i.e. dont realize it either. Their track record stinks compared to FHA and VA on losses.

 

[timd354]

One thing for sure; this paper sure adds fuel to Mike K's "bulls eye" argument!

I actually think that upward bias and conformation conclusions in the paper are the easiest conclusions to make a strong argument against. However, those are not the conclusions that present the most danger to appraisers

 

[Eli]

It may not be in my lifetime, but government takeover of appraisal and healthcare is on the horizon.

 

[hastalavista]

I actually think that upward bias and conformation conclusions in the paper are the easiest conclusions i to make a strong argument against.

I'd be interested in hearing that.

I didn't review the math (and I'm not sure I'm qualified to do so) but let's use this following example: Purchase price is $300k.
A. AVM values a property at $300k
B. Appraisal concludes an adjusted range of $297k to $310k; appraisal concludes a value of $305k
C. Property goes into default

Questions:
How significant is that information loss? I'd argue it isn't significant at all (I'd argue there is no information loss).
Did the $5k make a difference in the default risk? Hard to believe that would be the case.

However, those are not the conclusions that present the most danger to appraisers

I agree.

 

[timd354]

You are so biased in your opinion that it means nothing. What generates you more income?

Fastest and cheapest? Timd, you are a dead duck in the water. Like many, you don't realize it yet. Heck, find comfort the FDIC, OCC, i.e. dont realize it either. Their track record stinks compared to FHA and VA on losses.

Your right, my opinion in the overall scheme of things means little.

However, the opinions and conclusions of the researchers at the Federal Reserve Bank of Philadelphia likely do mean a lot and undoubtedly have been used to justify PIW expansion and will continue to be used to justify the expansion of non appraisal alternatives in the future and thus, appraisers would be well served to have intelligent and well supported arguments to rebut the conclusions and implications of this study. Appraisers simply running around and claiming that appraisals are better than the alternatives based on nothing more than because we say so is not a well supported or strong argument. if you are not intelligent enough to understand that, then I don't what else I can say.

 

[Eli]

Your right, my opinion in the overall scheme of things means little.

However, the opinions and conclusions of the researchers at the Federal Reserve Bank of Philadelphia likely do mean a lot and undoubtedly have been used to justify PIW expansion and will continue to be used to justify the expansion of non appraisal alternatives in the future and thus, appraisers would be well served to have intelligent and well supported arguments to rebut the conclusions and implications of this study. Appraisers simply running around and claiming that appraisals are better than the alternatives based on nothing more than because we say so is not a well supported or strong argument. if you are not intelligent enough to understand that, then I don't what else I can say.

I'm telling you point blank that losses on VA loans and FHA loans are proof. Call Ben Carson.

Or favor your friends who went bankrupt. Be careful!

 

[timd354]

I'm telling you point blank that losses on VA loans and FHA loans are proof. Call Ben Carson.
Or favor your friends who went bankrupt. Be careful!

Proof of what? FHA loans defaulted and suffered losses more than 3 times that of conventional GSE loans and VA loans defaulted at twice the rate of conventional GE loans. Those are facts and facts can be a real beach when you don't know what the heck you talking about.

Time to put you back on ignore.

 

[Eli]

Proof of what? FHA loans defaulted and suffered losses more than 3 times that of conventional GSE loans and VA loans defaulted at twice the rate of conventional GE loans. Those are facts and facts can be a real beach when you don't know what the heck you talking about.

Time to put you back on ignore.

Let's talk about VA losses compared to conventional. Let's reconcile all factors. You never should have been an appraiser. Well, you no longer are, or are you? Legal issue again?