Hybrid

[Deleted member 130081]

Gee. Where I have heard sentiments like those last two sentences before?

When the database war was being waged, I was labeled as being part of the "opposition" and "the dark side" then as well. (you can easily scan historic posts and verify that). When, in fact, I was simply working for the best interest of appraisers, and doing so having been exposed to a broader experience than most who painted me with that label. So, at least I am on familiar ground. As things have played out, there are many who disparaged my views on a national appraiser database who have subsequently called for the formation of the very thing I was fighting for. C'est la vie. Whats a few million dollars lost?

Many appraisers label the people who provide a their very livelihood (at least for most residential appraisers) as "opposition." I am working hard to try to change that, but that does not include just telling people what they want to hear to appease them, as some of today's popular pundits do.

There is over ten years of market testing behind the "hybrid" process. Lenders order hundreds of them every day, and have been doing so many years. It is THEIR analysis of how this affects risk that, at the end of the day, will drive market demand.

I understand the fear, especially given the crazy fees I see being tossed around. But fear is best addressed with a logic and sound reasoning. All this ad hominem, ignoring of basic facts, and general fear mongering will get us nowhere.

Let me ask you Danny, champion of the appraiser and all-around do-gooder for the industry, what benefit do bifurcated appraisals offer the appraisal profession? What is this benefit that simpletons like myself are too foolish to see?

 

[J Grant]

D Wiley -what motivation does Fannie have with regard to fees? Whether the appraisal cost $200, $300, $500 or $1,000 is irrelevant to Fannie. The driving force for the GSEs is service time. Turn times on this work has historically been significantly lower. Since we don't yet know the SOW or reporting format that Fannie might adopt, it is impossible to say if the same will be true of any process they pursue.

Fees aside, what is the benefit of faster turn time? You guys have done a great job of selling Fannie/Freddie on the advantage of faster turn times, but what advantage to they really offer ?. Fast turn times means less time to verify/research/analyze on appraiser end and on inspector end, pressure to run from property to property.

What will the big savings on turn time be with bifurcated...1 or 2 days? Why does that matter to a borrower, who cant' move or close for a month or more anyway in a purchase, and for a refinance, if a borrower is so desperate for money, is saving a day a good idea ? Mortgage loans last 15-30 years and REO or short sale procedure drags on for months ( years in some cases), so why Fannie/Freddie are jumping on the UBER model bandwagon of saving a day is important is funny. Even more ironic is wit will not increase the number of loans or profitability for lenders. There are only so many consumers that will buy or borrow, and a 2 day time shave or $100 saving on appraisal fee is not going to change that.

If all lenders see a time to close shortened and appraisal fees less they will end up just as they are now, competing against each other for a limited set of borrowers.

 

[DWiley]

LOL. Champion of the appraiser. Yup, that's you Danny.

I think when the world economy is at stake, and the US taxpayer pays for the bailout of banks who could care less about anything other than the profit in front of them for the day, then it is time to stand up and oppose dangerous ideas. Hybrids are a slippery slope. They are an inferior and dangerous product. Appraisers should not be telling our lending clients these are a-ok, rather should be sounding the alarms and alerting them of the risk. You keep saying the bankers are self-regulating their own risk - maybe you should take up being a comedian. Sell your bridge to someone else.

I have never said that "hybrids" should replace all traditional work. I have never even hinted at such. Fannie itself is projecting use in certain limited cases.

I worked in the field for nearly three decades, and there were certainly a LOT of properties over the years where I could have easily developed just as reliable an appraisal using information that I had obtained from something other than a personal inspection. Anyone who disputes that just isn't being honest with themselves. That certainly does not mean that the process is acceptable for all uses or all properties.

I am all for proper use restrictions. Lenders that have been using these products for years have such restrictions in place already, so having them in origination work only makes sense. The challenge is the the proper use, in the eyes of some appraisers is NEVER

 

[DWiley]

...1 or 2 days?

Really?? Run a TVM calculation on a portfolio of billions and see what affect a day or two has.

 

[DWiley]

Let me ask you Danny, champion of the appraiser and all-around do-gooder for the industry, what benefit do bifurcated appraisals offer the appraisal profession? What is this benefit that simpletons like myself are too foolish to see?

If you cannot see that answer, then my explaining it would be pointless. You would just find some new angle of attack.

I am out

 

[Meandering]

Wait what? Danny just said these are being ordered every day by the hundreds by lenders.

What this is, is a slippery slope. It is a measure to skim the expense of the appraisal, without regard to the quality of the appraisal. What do you suppose the world would look like if these were how it happened all the time? Which brings me to your last point...

BPOs and AVMs have certainly been used in lending, and in the case of BPOs, have been developed illegally in most cases. Does that make them a good product? Seems to me the lending world is much more interested in compliance, as opposed to making sound lending decisions. History shows this over and over and the most recent history, shows the taxpayer providing the bailout when things go south.

The greatest trick the Devil ever pulled, was convincing the world he does not exist. Not trying to get religious here, but there are plenty of Devils in the banking industry pulling the strings. Misguiding focus is one of the oldest tricks in the book. I wonder, do you suppose you are immune?

Which brings up an excellent question.

Where is the self proclaimed queen of compliance??

After all that screaming about compliance, she should have weighed in by now.

.http://www.columbiainstitute.org/Reengineering the Appraisal Process.pdf

.

 

[DWiley]

So why is FNMA interested in turn time....

See my reply to JG. It is not about one loan. It is about cutting the total time on the whole portfolio. A single day is worth far more $ than most can imagine.

 

[Meandering]

That is correct. They have been used for years for servicing, HELOC and other non-origination purposes. What is new is that they are being considered for a portion of origination work. And that consideration is based on examination of past performance of "hybrids" as compared to "traditional" work.

What motivation does Fannie have with regard to fees? Whether the appraisal cost $200, $300, $500 or $1,000 is irrelevant to Fannie. The driving force for the GSEs is service time. Turn times on this work has historically been significantly lower. Since we don't yet know the SOW or reporting format that Fannie might adopt, it is impossible to say if the same will be true of any process they pursue.

Thank you for finally agreeing with me.

 

[J Grant]

Really?? Run a TVM calculation on a portfolio of billions and see what affect a day or two has.

That's an honest answer. Which shows a shift in Fannie/Freddie policy, to favor banker interests over the mission of public trust . ( consumers and borrowers and markets )

If it benefits bank's bottom line to close a day or two faster and have the funds, that is their reason to push for bifurcated. It really does not benefit the borrower, which is the reason often touted. Borrowers don't really benefit from closing 1 or 2 days faster on a refinance and in a purchase often can't close sooner due to seller closing date/contracts etc.

 

[chad hampton]

Heaven forbid anyone stand in the way of too big to fail from making more billions.

Who needs due diligence anyway?