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HUD "Clearance Sale"

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Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
That's a hefty inventory. Gee, I wonder why?

If FHA had a VALID review process, this wouldn't be happening.
 

airphoto

Senior Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Pennsylvania
Actually, in our area most of them are bid above the listing price ..
 

Lee in L.A.

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Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
If they didn't practically give the houses to people who can't really afford them, and/or pay too much, this wouldn't be happening. :eek:

Then again, if they didn't, how big would their inventory be? :?

Course, a lot of them seem to be in the "less desirable" areas. If you can afford better, you're going somewhere else. :!:
 

Leon Stewart

Member
Joined
Jan 15, 2002
That's a hefty inventory. Gee, I wonder why?

If FHA had a VALID review process, this wouldn't be happening.

Didn't HUD/FHA pay out about $40M to several Review Firms a year or two ago to tighten up their System where they thought they were getting many faulty Appraisals?

leon
 

Leon Stewart

Member
Joined
Jan 15, 2002

Even though the $ 1,000 rebate is something different, HUD has had the same problem for years. First of all a $ 1,000 doesn't mean a lot to stimulate a person to buy a house who's estimated value is too high reference to the repairs needed. Second, most of these homes are not available for FHA financing, and a borrower has to show some financial stability to finance the purchase price and the amount of the repair cost into one package. Plus the loan amount has to stay within a realistic market value estimate. At the same time the borrower has to have a downpayment and closing cost on the total loan package.

Most of these homes will probably be sold to Investors after the 10 day Owner-occupant period expires because they have the expertise to do the repairs and sell the house at a good profit, but some investors are staying away from many of these deals because of the "Fliping" scandals which are running ranpant throughout the country, since that's the category these deals fall into.

leon
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
yes Leon they did.

However with lack of oversight and coordination those same review firms attempted to hire from the very short list of appriasers willing to perform ANY review work at all to do full reviews (some of which involved inspections at approximately half of what the market rate for standard reviews run - let alone a full FHA 8O )

Since they were more interested in quantity than quality, what they wound up with in most areas was some of the least qualified folks working for starvation wages on an unreasonable turn time.

What do you think the quality WAS on those reviews?

And from a personal standpoint: there was ZERO provision for informing any appraiser reviewed of their strog or weak points! Any system lacking feedback is pretty weak.

Hows about this for a change: Pay honest reviewers honest fees for proper reviews. Limit the number of reviews, but when you find a strikingly BAD (obvious fraud or physical inconsistancy) take a random sample of three other appraisals from that same appraiser for further review.... IF you discover a pattern, nail him or her to the wall. :twisted:

Of the three reviews I have ever received all (many many years ago) - two were glowing (all 5's thank you very much) , one said 3333,2! (bad appraiser) 'see attached'. Despite no small amount of effort, I was NEVER able to find out what was 'attached' :? HUD claimed not to have access, they did have the same record I did but no explanation no attached, and absolutely NO interest in providing me with the information needed to even see where we had erred :evil: . Kinda makes you wonder...
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Hows about this for a change: Pay honest reviewers honest fees for proper reviews. Limit the number of reviews, but when you find a strikingly BAD (obvious fraud or physical inconsistancy) take a random sample of three other appraisals from that same appraiser for further review.... IF you discover a pattern, nail him or her to the wall.

Lee Ann,

Just what I was thinking..... or dreaming?
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Hey Pam,

as long as we are dreaming... :roll:

How's about even an anon tip whereby if you see something REALLY out of whack, like getting cancelled off a sale that you find out later goes FHA :evil: when the realtor sees your eyes widen when you see the foundation tumbling down in the corner...
 

Leon Stewart

Member
Joined
Jan 15, 2002
Lee Ann:

HUD knew what they were getting into when they let out those Regional Review Contracts. They knew that when they let a Contract to one Individual (or Company) to perform services over a Region of several States that the Contractor would have to hire substandard individuals to work at sub-fee. All they were trying to do was make the public think they were doing something to correct the problem. So they ended up with the situation they have now.

HUD or anyone else will not be able to correct the problem of "faulty" values until they Review the loan process of particular lenders. If one Appraiser is discredited, the lender, who is directing the process will just replace that Appraiser with one that will do similar work. That's how this system works, and it can't be corrected by being concerned with just the Appraiser. It's the Lender who selects the appraiser, and a Lender will select an Appraiser that will prepare the type of reports that allows the Lender to close his deals. This stuff ain't "Rocket Science", and the "powers that be" know how to correct the problem, but they wont, for fear of a economic downturn in the housing industry. If the problem is corrected, Lenders will close far fewer deals than they do now. But the sure way to solve the faulty Appraisal process is to seperate the Appraiser from the Lender. That way there would be no benefit for the Appraiser to prepare a false report since the lender would not be responsible for his work flow.

leon
 
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