High Interest Rate = AVM

[Blue1]

Seems AVM's are being done for folks with sky-high rates. Just did an assignment today......borrowers told me of a neighbor that had an "electronic appraisal" done on their home. When I probed further, I found out that the intrest rate was 15+%. (Guy wanted "fast" money to buy a "toy") Homeowners said they wanted a "good" interest rata and were told they needed a (real) appraisal. Shouldn't it be the other way around? Just wondering...... :roll:

 

[Richard Carlsen]

One would think it would be the other way around. One would also think that if you are going to take a junior position on a property by doing an equity loan, you would want to know as precisely as possible what the equity really is in the property; hence a real appraisal.

But banking logic has never made sense to me.

Remember the First and Great Rule of Bank Lending: You shall only loan money to people who don't need it. And the Second Rule is like unto it: You shall always loan money to those you play golf with. On these two rules hang all of the laws of banks, bankers and the banking community.

 

[airphoto]

Most importantly .. NEVER FORGET:

Banks hire clerks, and promote from within!

 

[mcsskkii]

It makes sense when you think the bank takes on more risk to use the AVM, and the higher the risk, the higher the rate. So when an appraisal is done, lower risk to the bank, the lower the rate.

 

[Larry Lyke]

The "bank(s)" you're talking about are not portfolio lenders.