FHFA Request opinions from Lenders & others on what the new version of an appraisal will be.

[Mejappz]

Sure, they might have the data, but is anyone analyzing it?

No, they are not, at least not by an **independent** monitor. For example, when I worked at one of the country's biggest jurisdictions, the data would be analyzed by an independent third-party company, which included appraisers who were trained on reviewing and analyzing large data sets.

Furthermore, the Jurisdictions follow a set of standards and guidelines that have been fine-tuned and refined over decades and often must meet state requirements. The GSEs are the wild, wild west. It does not matter what anyone tells you here. It is all BS.

 

[DWiley]

It does not matter what anyone tells you here. It is all BS.

The irony meter just pegged

 

[Jim Scholl]

Of course that data is analyzed. Remember, for all the talk about waivers, the majority of deals still require appraisals. And, take out rate/term refis (where an appraisal really has no risk benefit) and it is the vast majority.

Waivers hit 49% in February 2021 to Fannie / Freddie

 

[DWiley]

Waivers hit 49% in February 2021 to Fannie / Freddie

Yes, that has been widely reported. And, as I said, it is primarily because during that time >75% of loans were refis. Waiver use on purchases remains very low.

I have asked this before, but no one seems willing to answer - I am a lender. I have an existing loan on your home. I can refi your loan balance and lower your payment $200. What benefit does an appraisal add to that scenario? I already have the loan and any risk associated with the collateral. What benefit would a new appraisal bring? Even if you are upside down on the property, if I lower the payment I lower the default risk.

 

[Jayjay25]

Yes, that has been widely reported. And, as I said, it is primarily because during that time >75% of loans were refis. Waiver use on purchases remains very low.

I have asked this before, but no one seems willing to answer - I am a lender. I have an existing loan on your home. I can refi your loan balance and lower your payment $200. What benefit does an appraisal add to that scenario? I already have the loan and any risk associated with the collateral. What benefit would a new appraisal bring? Even if you are upside down on the property, if I lower the payment I lower the default risk.

Makes sense if it’s a rate and term refi AND you are holding the note.

 

[DWiley]

Just to give a little perspective on the volume of appraisals being ordered....

Spotlight on Appraiser Capacity During the Pandemic

Get insights about the impact of COVID-19 related factors on appraisal volume and appraiser capacity, including a state-by-state view, from Danny Wiley, senior director of Single-Family valuation.

sf.freddiemac.com

 

[Sadie]

Yes, that has been widely reported. And, as I said, it is primarily because during that time >75% of loans were refis. Waiver use on purchases remains very low.

I have asked this before, but no one seems willing to answer - I am a lender. I have an existing loan on your home. I can refi your loan balance and lower your payment $200. What benefit does an appraisal add to that scenario? I already have the loan and any risk associated with the collateral. What benefit would a new appraisal bring? Even if you are upside down on the property, if I lower the payment I lower the default risk.

If you are upside down on the loan, and it defaults, you now have a REO property on your hands. Hello, remember 2007-2008? Lowering the default risk is not lowering the overall risk. The job of an underwriter is to ensure the lender has adequate collateral for the loan.

 

[DWiley]

If you are upside down on the loan, and it defaults, you now have a REO property on your hands. Hello, remember 2007-2008? Lowering the default risk is not lowering the overall risk. The job of an underwriter is to ensure the lender has adequate collateral for the loan.

Sure. But, we already had the loan. So, we already had the risk. How would a new appraisal reduce that risk? And, by the way, a new appraisal is not the only choice for evaluating the value and condition.

 

[glenn walker]

Yeah in actuality by lowering the rate Fannie Lowers there default risk

 

[Zoe]

Yes, that has been widely reported. And, as I said, it is primarily because during that time >75% of loans were refis. Waiver use on purchases remains very low.

I have asked this before, but no one seems willing to answer - I am a lender. I have an existing loan on your home. I can refi your loan balance and lower your payment $200. What benefit does an appraisal add to that scenario? I already have the loan and any risk associated with the collateral. What benefit would a new appraisal bring? Even if you are upside down on the property, if I lower the payment I lower the default risk.

That is a stupid question for the lender and the GSE and the homeowner. When did you make the loan? Last year? 20 years ago?

That sets up the borrower for abuse.