Hybrid

[djd09]

ACE: A Free Appraisal Alternative for a Faster Close

Automated Collateral Evaluation (ACE) is a new free capability in Freddie Mac Loan Advisor Suite® that allows you to underwrite a loan without a traditional appraisal. It helps you get your borrowers to closing faster and − since there’s no appraisal fee − saves them money.

Here’s how it works: Submit your loan to Loan Product Advisor®, specifying an estimate of the value or the sales price for the mortgaged property. ACE’s proprietary automated valuation model determines the acceptability of the value (or sales price) as the basis for underwriting the loan, and uses available data − like existing appraisal data, Multiple Listing Service data, and public records − to assess the condition and marketability risks associated with the property.

If the analysis determines the risk is acceptable, the Loan Product Advisor Feedback Certificate will indicate that the loan is eligible for ACE. That means you can originate the loan without an appraisal and you’re relieved of the representations and warranties related to the value, condition, and marketability of the property.

While ACE was originally only available for no cash-out refinances, we recently expanded eligibility to include purchase transactions. That means even more borrowers can benefit from ACE.

As of September 1, 2017, purchase loans can be submitted to Loan Product Advisor and assessed for ACE eligibility. Additionally, purchase loans that were submitted to Loan Product Advisor prior to September 1, 2017 can be resubmitted and assessed for ACE eligibility, but only if a traditional appraisal has not been obtained.

To take advantage of ACE, you need to use Loan Product Advisor 4.3 or higher. So submit your loans to Loan Product Advisor, find out if they’re eligible, and start passing on the benefits to your borrowers. If you don’t already have access to Loan Product Advisor, get started now.

http://www.freddiemac.com/singlefamily/community_lenders/news/20171005_free_appraisal.html

The Ultimate Hybrid.

 

[bnmappraisal]

And why shouldn’t it be a major component of the complaints and objections.

I'm not arguing that it shouldn't be the major/main complaint and objection

As I've said throughout this whole encyclopedia of a thread, my main objection to doing one of these types of "products" is the fee(s) that have been thrown out there by others who have done them/been offered to do them.

 

[chad hampton]

Don't you think appraisers also object the seemingly devaluation of the work we do in the field? I view the site visit as 50% of the work I do. Every bit as important as the other 50%. In many cases, much more important. I can't trust information collected based on a $50 fee someone was given. Same reason why I don't eat steak from golden corral. For the price, I can't trust that it will be worth a damn.

 

[J Grant]

DJD-The Ultimate Hybrid."

An appraisal waiver through Fannie or Freddie ACE is not a hybrid, it's using their own proprietary evaluation model/ other data including appraisals and other factors to qualify- below is interesting

specifying an estimate of the value or the sales price for the mortgaged property. ACE’s proprietary automated valuation model determines the acceptability of the value (or sales price) as the basis for underwriting the loan, and uses available data

I assume if their research shows a value model short of the SC price or refinance estimate it gets rejected for program and goes to an appraisal ? Whatever....I know I;ve gotten some super rush orders lately ( for good fees ) and have no idea why- are they rejects from these programs now in a rush to close? An appraisal contingency was in the contract and lender has to do an appraisal anyway? I can't say I can only observe an uptick in last minute rush orders..

Appraisers have no control over programs like this and if we "lose" a certain number of transactions to them so be it. We only have control over the product we produce, the appraisal, of whatever form that is.

I am not a fan of bifurcated but will keep an open mind since it may come to pass. As far as desktops, I have not done any, the fees and turn time are not appealing, if some appraisers do them successfully and make $ go for it. The question is if they will ever be looked at down the road or not for those doing them , so far does not seem to be the case but as they expand that might change.

 

[bnmappraisal]

Don't you think appraisers also object the seemingly devaluation of the work we do in the field? I view the site visit as 50% of the work I do. Every bit as important as the other 50%. In many cases, much more important. I can't trust information collected based on a $50 fee someone was given. Same reason why I don't eat steak from golden corral. For the price, I can't trust that it will be worth a damn.

I agree with the benefits of seeing a property first hand as well.
I just think the bigger issue (IMO) is the fee(s) being offered.

 

[J Grant]

Don't you think appraisers also object the seemingly devaluation of the work we do in the field? I view the site visit as 50% of the work I do. Every bit as important as the other 50%. In many cases, much more important. I can't trust information collected based on a $50 fee someone was given. Same reason why I don't eat steak from golden corral. For the price, I can't trust that it will be worth a damn.

They are deliberately devaluing the site inspection by describing it as "data collection" or "data gathering"...that way they demote it from appraisal practice to a chore . The inspector will not provide or make judgments or opinions about the property, to avoid crossing the line into appraisal practice.

Even if the inspector does a good job, there is a disconnect in what they observe and my perceptions onsite. Many times in an appraisal the pre research, including current MLS photos has me thinking one way about a property, and the inspection changes my mind as the features or defects or property are not observed, first hand ( and talking to people on site can give insight, the owner, builder, RE agent as well, that will be lost ) .

What happens with the comps if the inspector photos them- the appraiser pre selects the comps for the inspector to photo? Or appraiser uses MLS photos ? What if appraiser finds a better comp after inspection? What happens when an owner or RE agent is unhappy with the value and part of their complaint basis is an appraiser did not inspect the property? I wonder how efficeint these will be in practice...I do think the lenders and AMC;s will expect accelerated turn times on them which will magnify any possible problems even more.

i wonder if all lenders will choose to use them, or just the big box AMD/lenders who can profit from them in scale and using staff appraisers or inspectors they hire or outsource..

 

[djd09]

Third Party Inspectors + AVM + Cross State Compliance Signature = One World Appraising.

This is not about fees, It is about control.

 

[J Grant]

I agree with the benefits of seeing a property first hand as well.
I just think the bigger issue (IMO) is the fee(s) being offered.

The economic blow to our profession will be the fee, if a significant enough portion of work goes to bifurcated. As for other aspects of it, lack of personal site inspection combined with accelerated turn times will make it harder for appraisers to fulfill diligence/be confident in their own appraisal .

The big box lenders or AMC's think replacing experienced appraisers with newer fast track trained "tech savvy" (buzzword ) will compensate because the goal is to get compliant people doing the appraiser part fast and at low pay, no questions asked accept inspection results 100% . .

Remains to be seen how good a job the inspectors will do under adverse conditions...low paid and pushed for fast delivery and volume. I doubt an individual inspector will set out to do a "bad job", but they'll get ground down by the system like anyone else would, a burnout job with turnover since they will be treated like replaceable cogs. .

A non appraiser inspector has NOTHING invested in any one particular home inspection. Whereas an appraiser has a lot invested ( their license, and reliance on the onsite portion) in every inspection- That is the difference, even if both go through the same motions of walking a property, measuring and taking photos.

 

[ucbruin]

@J Grant

I'm just responding to the inspector portion of the product....

"What happens with the comps if the inspector photos them- the appraiser pre selects the comps for the inspector to photo? Or appraiser uses MLS photos ? What if appraiser finds a better comp after inspection? What happens when an owner or RE agent is unhappy with the value and part of their complaint basis is an appraiser did not inspect the property? I wonder how efficeint these will be in practice...I do think the lenders and AMC;s will expect accelerated turn times on them which will magnify any possible problems even more."

From the bits of information I've received from 2 different AMCs, inspectors don't provide comps...
I could be wrong though...

"Remains to be seen how good a job the inspectors will do under adverse conditions...low paid and pushed for fast delivery and volume. I doubt an individual inspector will set out to do a "bad job", but they'll get ground down by the system like anyone else would, a burnout job with turnover since they will be treated like replaceable cogs."

From what I've gleaned the AMCs want appraisers because they believe the non-appraiser inspectors don't provide the same level of details was appraiser do....

I doubt there will be sufficient volume to create inspector burnout....

 

[J Grant]

Clearly inspectors don't "provide" comps, My question was, do they photograph comps as part of their inspection? If so, does appraiser pre select comps prior to inspector going out? How is that going to work...whatever I guess all these questions will be answered when/if these products roll out and if their assignment goes beyond companies mainly using staff appraisers ( seems tailor made for that )

From what I've gleaned the AMCs want appraisers because they believe the non-appraiser inspectors don't provide the same level of details was appraiser do....

Where did you "glean" that from ? I thought the whole point of bifurcated new fannie certs for that product is to allow non appraisers to do the inspection portion.