• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

FNIS AVM.... again

Status
Not open for further replies.

Pamela Crowley (Florida)

Thread Starter
Elite Member
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
FYI - The October 28 issue of Appraisal Intelligence contained the following article:

Top-five originator replaces appraisals with AVM-based valuation
ABN AMRO Mortgage Group (AAMG), originating far in excess of half a billion mortgages a year, agreed to replace appraisals in many of its first mortgage loans with a FNIS AVM-plus-inspection-plus-insurance. Bank and company officials, and the minds behind the technology, break it down for us.
 

airphoto

Senior Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Pennsylvania
Pam,

That doesn't make sense .. less than 300 million population in the country .. average 2.7 persons/household makes for a lil over 100 million households (plus commercial units.) That news release claims that this outfit does 500 million mortgages per year?
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Bill, they must be counting all of the equi-lines, and the renegotiated loan addendums as individual loan closings.
 

BarbaraNJ

Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
New Jersey
Pamela and everyone else:

Does anyone ever recall hearing about what an automaker does when they become aware that an auto (manufacturing) defect exists? I seem to remember that they weigh the cost of a worldwide recall and repair with the liklihood of being found responsible for a death or injury in court and the cost of the defense and any $$$ award.

I truly believe that the AVM use falls into this catagory. I think that statistical models are used not just to arrive at an area value, but also on the possiblilty of "getting burned".

As it took many years of abuse for reality to hit the banks in the late 80's and early/mid 90's, I have concluded that these quickies will be used until the cost of bad loans exceeds a predetermined acceptable percentage.

Right now, statistics are being set based on the average homeowner and property physically inspected by an appraiser. Once applicants become aware that no one is going to even drive past their property, rampant fraud will begin. Of course , it will take years for applicants to catch on, and more years before the lenders find themselves writing off an unacceptable amont of loans to want to go back to physical inspections.

This could all take as little as five and as many as twenty years, but I am of the opinion that it will happen.

How many homeowners are deterred from applying for a loan because their home is falling down around their ears?? If they are in a decent neighborhood, and realize that no one will inspect their home, common sense says that they will be more likely to try to squeeze more money out of the ol' Ponderosa.

Once the lenders get real fed up with foreclosing on these "bow-wows" (no disrespect to all the fine dogs or their people out there), the light bulb will go back on and the tide will turn once again.

As much as I love the business, I hope I'm not around for all of this.
 

Michael Reilly

Junior Member
Joined
Jan 15, 2002
I am not a big fan of AVM's and as a partner of a fairly sizable appraisal shop nor should I be. I think like most of you I am in business to make money but unlike some folks out there I'm in it to make lots and lots of it. As I watch this industry evolve (over the last 5 years for me) those firms I tend to watch are the big players as they (the big players) usually set the tone and pace in their industry. If (and it's apparent some folks here do) you follow FINS and the other players it's hard not to study the men and women behind the scenes to understand what really drives them and ultimately this industry. What I think they get out of it and what truly drove me into it, is the size of this industry the mom and pop mentality that runs it for the most part and all that money to be made if you land in the top 10 or so.

On yahoo.com I recommend you check out yahoo finance type in FNIS for a stock quote and then click their latest news release

Fidelity National Information Solutions 3rd Quarter Earnings Release and Conference Call
Wed, Oct 23, 2002, 1:00 pm Eastern

Listen to the archived event audio

You will absolutely learn something that in my opinion will be frightening to some, especially when they get to the part about insured BPO's conducted by realtors and the volume they are doing right out of the gate with this product. These folks are slick, smart, and take no prisoners. They could care less about our grumblings. If they can create a product that will compete with yours that is accepted and saleable they have no qualms about taking food right out of your mouth and as sick as that sounds I want to be just like Mike. I'm in this for the money not fame but absolutely fortune and in my book there is nothing wrong with that so long as your fair and above board with everything you do.

My sick perspective.

Mike -NY
 

Leon Stewart

Member
Joined
Jan 15, 2002
BarbaraNJ:

But many Appraisers on this Forum are constantly indicating how busy they are, and that they are not concerned about the changes that are occuring in this business on a daily basis, but anyway, I hope they are putting aside a few of the many dollars they are making because they may have to go back and get it sooner than they think.

You're right the AVM's will likely create huge losses for those responsible for the paper, but the individuals involved would have made their millions and will be laying down on one of those Islands sipping a glass of lemonade grinning and laughing, counting his millions, and even if he's sent to jail he wont do no more than a few years, and wouldn't you do a few years and get out and have access to several hundred millions for the rest of your life?

leon
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks