Give me a break

[alebrewer]

It's not about what those doing the grunt work earn. It is about the profits and compensation to the CEO's top management/share holders - in a capitalist's system they are allowed to earn obscener profits, but when it is earned at my expense due to a govt entitlement to them via a split of the bundled appraisal fee, I have a problem with that.

that is no different than the obscene profits made by a CEO, in any field, at the expense of the 'grunts'... you just happen to be in the field of appraisers. If you were in my wife's field, you'd probably be ranting about how that system isn't fair either. Remember - just tap your heels together three times.

 

[J Grant]

I know of no appraiser who has an agenda toward diminishing the use of appraisals. On the other hand, as a borrower, if I have the choice of two valuation products with similar accuracy (however that is measured) - one at $100 and 5 minutes turn-time, and one at $600 and 2 weeks turn-time, which is the more prudent product to purchase? AND, as a lender, is there no fiduciary responsibility to the borrower to minimize closing costs as much as possible? At the end of the day, I am - first and foremost - a laissez faire proponent. Only secondly an appraiser. If the market can provide an alternative valuation product with similar accuracy as compared to an appraisal that I prepare - and at a MUCH lower cost and turn-time, I probably need to start re-training for my new job...

D Wiley sure seems to ! And that is not a slight to him,, I assume it is due to his position and that his agency wants that direction (unless it is a personal thing to him, idk )

Moving on from there.... if the borrower has a choice, they would choose the cheaper and faster product, but does the borrower get to choose ? The borrower is not the client and the client includes the intended users (investors , the ones stuck with the collateral ) If the borrower can choose a fast quick valuation, then does the borrower get to choose insta quick low fee title work ? Does the borrower get to choose the points the lender makes ? If I were a borrower and lender was letting me choose I'd object to why just that one fee is the one I get to choose =

IF it gets to point in future where need and use for appraisals for lender work becomes vastly reduced than yes many would look for a new job - then why are they introducing parea, diversification etc seems we are still needed = pesky us...

 

[J Grant]

that is no different than the obscene profits made by a CEO, in any field, at the expense of the 'grunts'... you just happen to be in the field of appraisers. If you were in my wife's field, you'd probably be ranting about how that system isn't fair either. Remember - just tap your heels together three times.

But I am not a grunt employee of an AMC or bank or lender - I am an independent contractor/professional and the GOV't entitlement of AMC unlimited share of bundled fee for a free ride to lender, at my expense, is an unfair competitive advantage to the AMC, amounts to pay for play to get work on appraiser part, usury etc - at some point a very good attorney will take this on... the new admin has far more important things to address now but at some point perhaps they can be persuaded to look at it.

 

[alebrewer]

Moving on from there.... if the borrower has a choice, they would choose the cheaper and faster product, but does the borrower get to choose ? The borrower is not the client and the client includes the intended users (investors , the ones stuck with the collateral ) If the borrower can choose a fast quick valuation, then does the borrower get to choose insta quick low fee title work ? Does the borrower get to choose the points the lender makes ? If I were a borrower and lender was letting me choose I'd object to why just that one fee is the one I get to choose =

Ok - change the purchaser of the product/service to the lender - if both alternatives create similar outcomes, which would you prefer as a lender?... I'm not saying that they do yet, but in very homogenous markets I'd submit that an AVM is probably as accurate as an appraisal. Maybe moreso, but I don't have access to the data to make that determination. Just seems intuitive.

 

[alebrewer]

But I am not a grunt employee of an AMC or bank or lender - I am an independent contractor/professional and the GOV't entitlement of AMC unlimited share of bundled fee for a free ride to lender, at my expense, is an unfair competitive advantage to the AMC, amounts to pay for play to get work on appraiser part, usury etc - at some point a very good attorney will take this on... the new admin has far more important things to address now but at some point perhaps they can be persuaded to look at it.

Just click your heels, J...

 

[Mejappz]

Fannie Mae and Freddie Mac​

Fannie Mae and Freddie Mac, which guarantee roughly half of all U.S. home loans, exist to help keep the mortgage market afloat. During the crisis, however, the two firms verged on the brink of collapse, costing taxpayers approximately $188 billion in rescue funds.

In December 2011, the SEC filed charges against six former Fannie and Freddie executives who nearly sunk the mortgage giants, alleging they knowingly misled investors about their exposure to risky subprime loans.

According to the SEC, Fannie told investors in 2007 that it had less than $5 billion in subprime loans on its books. The SEC said the true figure was closer to $43 billion. Similarly, in 2006, Freddie disclosed between $2 billion and $6 billion worth of subprime loans, far short of the $141 billion the SEC alleged was on the books.

Fannie and Freddie entered into agreements accepting responsibility for its conduct, though neither admitted or denied the charges. For their part, the six executives named in the case promised to challenge the government, arguing that the companies consistently disclosed the makeup of their loan portfolios. The cases are ongoing.

Too Big To Jail? The Top 10 Civil Cases Against the Banks | FRONTLINE | PBS | Official Site | Documentary Series

In nearly every major legal case to emerge from the crisis, government prosecutors have won multi-million dollar settlements, but companies and officials have not been required to admit wrongdoing.

www.pbs.org

they got the data

Fannie and Freddie entered into agreements accepting responsibility for its conduct, though neither admitted or denied the charges. For their part, the six executives named in the case promised to challenge the government, arguing that the companies consistently disclosed the makeup of their loan portfolios. The cases are ongoing.

 

[George Hatch]

Some of you continue to approach this issue from the perspective of what's best for the appraisers instead of what's best for everyone else in the transaction.

If a lender already owns the financing on a property and the borrower has already established a payment history then the utility to both of those parties doesn't justify the costs of spending $400 more on an appraisal than they'd pay for an AVM. Similarly, if the LTV under consideration is so low that the lender can't get hurt regardless of the property condition then that scenario also doesn't pose enough risk to a lender to justify spending $400 more to get an appraisal.

Sure, the argument can be made that the $400 is peanuts when compared to the potential for loss if the property is grossly overvalued by the AVM but when we're talking in terms of large groups of these transaction that margin of "gross overvaluation" has to be pretty large in order to get to a break-even with those additional $400s.

Talking sense and in perspective about the issue doesn't amount to undermining appraisals. It's a straight cost-benefit comparison.

 

[Mejappz]

Redirect Notice

The man behind the AVM? No wonder the secrecy.

 

[alebrewer]

THE AVM? I was unaware there was only one...

 

[J Grant]

Some of you continue to approach this issue from the perspective of what's best for the appraisers instead of what's best for everyone else in the transaction.

If a lender already owns the financing on a property and the borrower has already established a payment history then the utility to both of those parties doesn't justify the costs of spending $400 more on an appraisal than they'd pay for an AVM. Similarly, if the LTV under consideration is so low that the lender can't get hurt regardless of the property condition then that scenario also doesn't pose enough risk to a lender to justify spending $400 more to get an appraisal.

Sure, the argument can be made that the $400 is peanuts when compared to the potential for loss if the property is grossly overvalued by the AVM but when we're talking in terms of large groups of these transaction that margin of "gross overvaluation" has to be pretty large in order to get to a break-even with those additional $400s.

Talking sense and in perspective about the issue doesn't amount to undermining appraisals. It's a straight cost-benefit comparison.

That is your perspective ..

The appraisal cost is paid by borrower vs $X cost paid by borrower for an /AVM or evaluation . Either way the borrower pays, so the lender does not lose a dime by using appraisal

CAVEAT I understand recent legislation requires an upgrade from an AVM alone for loans including equity lines etc, that they at least must order an evolution with inspection (thus the explosion of desktop appraisals second party inspection ) so it is not like the alterative to an appraisal is a dirt cheap $25- $50 AVM.

As far as benefit, it goes back to the the role of the appraiser vs the role of people around an AVM. An appraiser is an unbiased PARTY, while the AVM is an unbiased PRODUCT. The appraisal is supposed to be an unbiased product as well, backed by the license and experience of the unbiased appraiser. But WHO backs up /takes responsibility for the AVM? And can biased parties manipulate which AVM they order, how many they order to get result they want, or do they even get to choose the value they want from a range provided by an AVM?

All of which might explain why poor schlub appraisers are offered the princely sums of $50-$75 of doing a desktop appraisal in place of an aVM

I do think where is a place for AVMs and lender's /agencies use them to pre check value on a loan, review appraisal values etc c. Maybe one day AVN can be incorporated into an appraisal too , idk. but substituting an AVM for an appraisal is problematic unless there is a slew of regulations about how they are ordered, who gets to review them if anyone, , who picks the value from their result etc, and that combined with the inspection requirement makes them almost as expensive as an appraisal ..... just saying.