Give me a break

[DTB]

As I read it: LTV...they are using the analyses to determine which valuation product ("V") carries an acceptable level of credibility given the "L" component.

How do they get the V prior to deciding which product they will use? Doesn't the V come after?

 

[DWiley]

Why?

I suspect, don't know, that the offer of a waiver was tied to a lower estimate of property value. Owner then takes a chance that the human appraiser will come up with a "better" number.

Why else would a property owner wish to be "inconvenienced and delayed" by have a traditional appraisal completed? And likely at a higher cost to them.

I must be missing something in this process and really wish to understand it better.

The simple answer is that some just want an appraisal; that is particularly true on a purchase, where there may even be a contract contingent on an appraisal. Note the low percentage of waivers on purchases.

 

[alebrewer]

I've never quite understood having appraisals done on R/T refi's. The lien holder obviously is aware of the borrower's creditworthiness, and in most cases, an appraisal was done for the purchase transaction. The default risk does not increase or decrease in response to whether or not an appraisal is performed for the R/T Refi... C/O's - another animal entirely.

 

[djd09]

I never said that. My point is your competition is unregulated while you are regulated to death.

of course, in the next thread they will whine about comp photos, all the while waivers never drive bye anything.

 

[Tru Red]

Just watched both videos (quality & condition). I think the intended audience was 2nd graders. Really felt like I was being "talked down to". Nor professional at all.

EXACTLY what we thought. Written for a 6 or 7 year old at best.

 

[J Grant]

I've never quite understood having appraisals done on R/T refi's. The lien holder obviously is aware of the borrower's creditworthiness, and in most cases, an appraisal was done for the purchase transaction. The default risk does not increase or decrease in response to whether or not an appraisal is performed for the R/T Refi... C/O's - another animal entirely.

I am not on lender end but am speculating
It would be because they consider a refinance a new loan? Even if it is with same lender ?Otherwise why the points and huge amount of other fees to do it ( the appraisal one of the more moderate fees I can not understand why of any of them the appraisal fee is the one under attack ) ,
The borrowers circumstances could change wrt employment/credit/debt and the property could have changed either upgraded or depreciated since OP loan. and of course prices go up and down in market so X years back equity and LTV might not apply

 

[alebrewer]

The borrowers circumstances could change wrt employment/credit/debt and the property could have changed either upgraded or depreciated since OP loan. and of course prices go up and down in market so X years back equity and LTV might not apply

And how would a 'new' loan affect the default risk? IOW, the borrower's circumstances would be the same whether it was a new loan or not...

Otherwise why the points and huge amount of other fees to do it

Obviously I don't get why the LO would make an entirely new commission on a R/T either.

 

[DWiley]

I am not on lender end but am speculating
It would be because they consider a refinance a new loan? Even if it is with same lender ?Otherwise why the points and huge amount of other fees to do it ( the appraisal one of the more moderate fees I can not understand why of any of them the appraisal fee is the one under attack ) ,
The borrowers circumstances could change wrt employment/credit/debt and the property could have changed either upgraded or depreciated since OP loan. and of course prices go up and down in market so X years back equity and LTV might not apply

OK, but I am a lender with a loan on your home. Say your payment is currently $2000 and I can refi you and lower the payment to $1650. In that situation, what is gained by having an appraisal? I have your loan and all the associated risk already. Lowering your payment would reduce the loan risk, regardless of how much the home is currently worth or what condition it is in. If your home is now a wreck, well I already have the loan on that wreck.

 

[J Grant]

And how would a 'new' loan affect the default risk? IOW, the borrower's circumstances would be the same whether it was a new loan or not...


Obviously I don't get why the LO would make an entirely new commission on a R/T either.

Don't ask me, I am not on the lender side !

 

[alebrewer]

OK, but I am a lender with a loan on your home. Say your payment is currently $2000 and I can refi you and lower the payment to $1650. In that situation, what is gained by having an appraisal? I have your loan and all the associated risk already. Lowering your payment would reduce the loan risk, regardless of how much the home is currently worth or what condition it is in. If your home is now a wreck, well I already have the loan on that wreck.

my point exactly! Even though default risk is mitigated to some extent with the lower payment, the lender has lost money on interest rate risk... IOW, now they're holding a 'new' loan at, say 2.5%, whereas before they had a loan at 4% on the books. I've just never gotten the whole R/T scam... maybe it's BECAUSE they are losing on interest rate risk that they replicate all the loan fees. Still doesn't address why the new appraisal though. I'll probably lose sleep over this tonight.