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

[Jim Scholl]

Actually, I said aside from the rate/term refis that appraisals were ordered the vast majority of the time.

Yes, the number of waivers has greatly increased, and that is primarily because the grate majority (like over 75%) of loans made recently have been for refis. For purchase loans the percentage of waivers is still very low. Because of crazy market conditions, some buyers are waiving the appraisal as a contingency in the purchase contract, but that has nothing to do with GSE policies.

Oh, and by the way, the actual number of appraisals being processed is still at record levels. Nationally, appraisers have more work than they can do, but some seem fixated still on the appraisals they are not getting.

Do you work for Freddie Mac?

 

[DWiley]

Do you work for Freddie Mac?

Yep.

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

 

[Jim Scholl]

Yep.

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

So you are pushing the company line. You are a good employee but your ideas are not good for appraisers. Now I have to get back to work. Appraisers please click on the link and read what your clients are saying about bifurcated appraisals and waivers.

 

[DWiley]

You are a good employee but your ideas are not good for appraisers.

Given the current threats to the appraisal profession, what in your opinion would be good for appraisers? Do you just want to keep the status quo? Or, what changes would you support?

 

[George Hatch]

So you are pushing the company line. You are a good employee but your ideas are not good for appraisers. Now I have to get back to work. Appraisers please click on the link and read what your clients are saying about bifurcated appraisals and waivers.

Criticizing him for his day job is the cheap shot - you go after the individual when you don't have what it takes to go after these ideas and opinions.

So let's stick to the subject. If you think the facts he cited in support of Freddie's policies are inaccurate then what do you think those facts are?

 

[Sadie]

Did you originate that first loan last month, last year, 10 years ago? Your assumptions on current may or may not be correct. Its not as simple as you would like. Why take an avm guess? Why take the risk at all? We heard these same rationales in 2005-2009 or so. Now, someone answered.

Agree, remember the credit risk loans? No doc loans? Stated income loans? The rationale for these loans is the same argument that is being made by other posters, "don't need an appraisal, these borrowers are safe". Until it all went south. Its all cyclical. The reduced doc and/or appraisal waivers need to be priced according to actual risk, not just perceived risk. Less documentation, higher rate.

 

[Mejappz]

open the waiver books, show them what racism really looks like

Why do you think the GSEs keep it under lock and key?

 

[Sadie]

What difference does any of that make? None.

You have a loan. Your payment is $1500 per month. If a refi can lower the payment to $1,250, the default risk is lowered, because your financial obligation is lessened.

But, wait, you say - the house value has declined and it is no longer worth the loan balance!! So?? The the loan balance is already on the books. If you default on the current loan (which is more likely with the higher payment) , the lender is upside down anyway

But wait, the house has degenerated into C5 condition!! So?? There is already a loan on the house in that condition. If you default on the current loan (which is more likely with the higher payment) lender gets it back in that C5 condition.

The bottom line is that an appraisal offers no additional risk management in this scenario. Investors are in the risk management business, not the appraiser employment business.

The ghost of 2007-2008 will haunt you with this kind of thinking. Part of the risk management business is evaluating collateral. What the heck do you think an appraisal is for? Appraisers assist the lenders by providing a value estimate for collateral. And people rarely just refi a new payment, the vast majority of the time they take money out and they usually finance closing costs.

 

[Dublin ohio]

And people rarely just refi a new payment, the vast majority of the time they take money out and they usually finance closing costs.

Those would require an appraisal. . Waivers are primarily for rate and term only.

 

[Dublin ohio]

The ghost of 2007-2008 will haunt you with this kind of thinking.

Not even remotely the same situation. We are not talking about loans to those who should not have got them to begin with. Or the flood of ARMs. Etc, Etc.