I'm piling on....F the AMCs

[George Hatch]

Mortgage lending is heavily regulated. For cause. What the HVCC and D-F did was bring the same limitations to the SFR appraisals that the feds had previously imposed on the FRT and RRT lenders 15 years prior. And they did it for the same reason - the outside MBs and the in-house loan officers have no legitimate business even touching an appraisal assignment until the lender provides their borrower with their copy.

 

[djd09]

...the MB estimates value via waiver which makes the gse's the largest unlicensed appraisal firm in the history of the world congrats

 

[glenn walker]

The Ship Sailed 13 years ago and it's time to quit looking in the rear view mirrors because your also 13 years older and not much time left for many to make some money.

 

[chad hampton]

You think there's really any difference today? I'd argue it's worse. Who do you think works at lenders? I'll give you a hint - no one that works at a lender wants to not make loans.

 

[George Hatch]

The lenders are required - and subject to regular examinations from their regulators - to keep the appraisal function isolated from the loan production function. Most of my regulated lenders handle it through their underwriting or credit depts.

Even if they had former loan production employees working in their due diligence depts they wouldn't have anything to gain by cheating or lying to their employer. No bonuses for doing a credit check or reviewing an appraisal for underwriting criteria.

 

[djd09]

they are not in the business of killing deals...

 

[George Hatch]

Whatever deals the lenders are going to make will be at their own discretion anyways. If their own due diligence employees are lying to them - despite not getting paid extra to do so - then that's an internal problem. Not an internal problem+external problem as would be the case when taking appraisals in from the sales side.

If you're a lender and your own reviewer is lying to you for some reason that's still a problem. But it's not as big a problem as when both the reviewer and the outside loan broker or loan officer on staff is also lying to you.

 

[chad hampton]

I know a lot of loan officers for lenders. they’re all paid based on how much they produce. Salary and commission. Not much has changed in that regard.

 

[djd09]

of course nothing has changed...ask fastapp

 

[George Hatch]

I know a lot of loan officers for lenders. they’re all paid based on how much they produce. Salary and commission. Not much has changed in that regard.

Of course that remains the same. That's why the lenders they work for are required by regulation to isolate the appraisal loop from them. That's been the case on our side of the business since 1990. D-F just brought the 1-4 side under the same level of control.

At the bank I worked for (32 years ago) the lender's own loan officers weren't even allowed to call us or step foot onto our floor. If they had a problem with an appraisal the dispute went to their VP to interact with our VP to be reconciled there. The appraiser gets called in and if they were right then our chief appraiser held the line. If the appraiser was wrong the chief appraiser got on them right in front of the loan production VP.

We virtually never lost those disputes.
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Now if you're saying (which I think you are) that the some/most/all lenders are telling their own lies in their underwriting in order to book more loans then I'd agree that the chances for that are not zero just as they aren't 100%. But if they're doing that despite being subject to inspections and reviews of their loan files by their regulators then how much worse are those same lenders behaving when some of the brokers they're doing business with are also lying, albeit without the knowledge and consent of the lenders? At least when it's the lender doing it they're doing so in an informed manner. When it's an outsider the lender doesn't even know they're making a bad decision.