George Hatch
Elite Member
- Joined
- Jan 15, 2002
- Professional Status
- Certified General Appraiser
- State
- California
Can I ask why that particular time period? Higher percentage of them due to the lockdown?
The Premier Online Community for Real Estate Appraisers!
-
Welcome to AppraisersForum.com, the premier online
community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.
In search of Data Cancer via Waivers - Riverside, CA
- Thread starter George Hatch
- Start date
TC
Elite Member
- Joined
- Jan 31, 2002
- Professional Status
- Certified Residential Appraiser
- State
- Pennsylvania
Fixed it.
CGinMN
Senior Member
- Joined
- May 20, 2011
- Professional Status
- Certified General Appraiser
- State
- Minnesota
My thoughts are
-I think that is when the GSE AVMs would break down and have higher error rates.
-Higher % of waivers. The GSEs waiver use was not purely collateral risk-based; it was to keep the mortgage market liquid due to appraiser capacity concerns. So they might have been more liberal with waivers.
-During that period, buyers, sellers, and agents tried to justify as high a price as possible. Affordability was not capping the buyer's ability. Now affordability is a big issue. Could "data cancer" be holding values up in certain markets? I suppose, but I would be looking in that covid period first.
-I think that is when the GSE AVMs would break down and have higher error rates.
-Higher % of waivers. The GSEs waiver use was not purely collateral risk-based; it was to keep the mortgage market liquid due to appraiser capacity concerns. So they might have been more liberal with waivers.
-During that period, buyers, sellers, and agents tried to justify as high a price as possible. Affordability was not capping the buyer's ability. Now affordability is a big issue. Could "data cancer" be holding values up in certain markets? I suppose, but I would be looking in that covid period first.
George Hatch
Elite Member
- Joined
- Jan 15, 2002
- Professional Status
- Certified General Appraiser
- State
- California
Well if you get any further into it I'll be extremely interested in what you find. As far as I know we don't have a similar database to sort with or I'd be all over it.
CGinMN
Senior Member
- Joined
- May 20, 2011
- Professional Status
- Certified General Appraiser
- State
- Minnesota
These are GSE stats on purchase waivers only (including PDRs). Data is compiled from AEI. This excludes refis. The inflection point in 2023 is from waiver+ data collection being turned on. Freddie's PDR program appears to be much more successful, while Fannie's waivers are falling off, hovering around 10%. Green Line is the average between the two and assumes a 50-50 split, so overall it is rising about 1% per year. Changes to LTV limits will result in increases. Further adoption of data collection by lenders will result in increase. You can see both Fannie and Freddie are more cautious about giving waivers in the first half of the year compared to the second half. The reason should be obvious.
Why are Fannie's numbers higher in 2021 and 2022 compared to 2023 and 2024, while Freddie's have trended upward? It is not just Freddie's PDRs, that only accounts for maybe 2%. Freddie is clearly more confident in their waiver model. Fannie seems almost skiddish. There is a very strong incentive for the GSEs to issue a waiver. If a lender can sell to either Fannie or Freddie, but only one of them gives an appraisal waiver, that is who they will sell to.
Why are Fannie's numbers higher in 2021 and 2022 compared to 2023 and 2024, while Freddie's have trended upward? It is not just Freddie's PDRs, that only accounts for maybe 2%. Freddie is clearly more confident in their waiver model. Fannie seems almost skiddish. There is a very strong incentive for the GSEs to issue a waiver. If a lender can sell to either Fannie or Freddie, but only one of them gives an appraisal waiver, that is who they will sell to.