Inspection

[Terrel L. Shields]

I must say that I find it disconcerting to be sympathizing with the position in which Fannie/Freddie must be finding themselves. The allure of being able to someday sell the 5-minute loan approval must be overwhelming. They must surely recognize that if an alternate program can beat them on turn times it's going to cut into their business.

So there is no consideration whatsoever of the potential for over lending? And thus the gov is to ignore entirely the systematic risk to the entire housing market from rapidfire ill-vetted loans? So let's forget title insurance and income verification as well. Check we can do that by lunch time...?

the reason that Millenials often reject homes of BabyBooms is exactly and precisely that - floorplan issues.

Older homes won't appeal to them and with wireless technology, the telephone wiring is a waste of money...and soon that cable bill? May just cut the cord entirely. And with MGTOW issues, young people will live alone, build smaller houses with simple utilitarian accessories...Hmm, I have the house envisioned that I was born in. 2 rooms, no electricity.

​

 

[J Grant]

George Hatch said: ↑
I must say that I find it disconcerting to be sympathizing with the position in which Fannie/Freddie must be finding themselves. The allure of being able to someday sell the 5-minute loan approval must be overwhelming. They must surely recognize that if an alternate program can beat them on turn times it's going to cut into their business.

What are the "alternate program" ?? Fannie/freddie operate with tax payer backed $, which is why their purchase program is the one that offers low interest rates and low down payments (favorable terms for consumers ) from lenders. What imaginary other large scale program would be their competition - a program can offer faster , but how can they match terms? Unless Jeff Bezos puts his personal billions on the line to back loans and he ain't stupid...

Regardless of reasons or risk fannie/freddie are determined to go ahead . For appraisers the quetion will be how much will it change and how fast? Depends on FHA program, what percent of appraisals are replaced by hybrids and 1004P etc, /work around of sale contract appraisal contingencies and RE agents reaction ..

Inspection are the new growth area for sure. Res lending - either appraising will become a more diverse business within it where appraisers have more options , or it will be a business where appraisers simply have a far more scaled down role Seems it can go either way, or perhaps a mix of both depending .on region, clients, property types etc...best to all in the times ahead ! .

 

[RCA]

So there is no consideration whatsoever of the potential for over lending? And thus the gov is to ignore entirely the systematic risk to the entire housing market from rapidfire ill-vetted loans? So let's forget title insurance and income verification as well. Check we can do that by lunch time...?

Older homes won't appeal to them and with wireless technology, the telephone wiring is a waste of money...and soon that cable bill? May just cut the cord entirely. And with MGTOW issues, young people will live alone, build smaller houses with simple utilitarian accessories...Hmm, I have the house envisioned that I was born in. 2 rooms, no electricity.
View attachment 39871
​

Millennials will go for older homes if they are remodeled. They like the kitchen, family, dining and living rooms to blend in, so you can carry on a conversation across all these rooms. They like lost of light, e.g. skylights or equivalent, and verandas ... that sort of thing. The plan I gave is almost the quintessential millennial home; what isn't could be easily fixed. As far as size, - well some older Millenials are already into their third child and have good paying jobs ....

 

[Mark K]

. The harsh reality is we cannot stop the change. There is too much money at play and the public is the bullseye.

Some appraisers continue to believe that they are a really important cog in the lending machine, leading to an overestimation of their importance in the equation.

Maybe the lenders have awoken to the fact that appraisals, good and/or bad, didn't prevent the massive losses in the last real estate meltdown. And it follows that if our services don't prevent significant losses, maybe our services aren't as necessary as once thought. Some will strongly disagree with this point, ad nauseum, but howling at the moon will not prevent changes in the system.

On another note, it would be interesting to see what the default rate is for loans that had 2055 drive-by inspections vs. 1004 interior inspections. Maybe the lenders have this info and they're finding the difference in defaults insignificant. It then follows that the idea of an interior inspection, in many cases, is superfluous.

Darwin didn't say that the strongest (or most vocal and frequent forum posters) will survive; he said that adaptability is the key to survival. History has proven this to be a fact in nature and business. Soon a lot of appraisers will be like the Kodak company (remember them). Arrived too late to the digital party thinking that real film would never be replaced; the world couldn't do without the parking lot foto-mat booths. LOL​

 

[DWiley]

yes you are, avoiding the lawsuit question.

LOL. I assume you are referring to the VaCAP story post at ApprBlogs, yes?? The story that is just as accurate as their story about VA rates being required in Virginia I suppose it does not matter how many times they post something that is egregiously false as long as they keep saying stuff a certain segment wants to hear.

 

[Eli]

Look for the CFPB and FBI soon. LOl

 

[Eli]

I can't fix stupid. Lol Forget the FTC. lol

 

[J Grant]

Some appraisers continue to believe that they are a really important cog in the lending machine, leading to an overestimation of their importance in the equation.

Maybe the lenders have awoken to the fact that appraisals, good and/or bad, didn't prevent the massive losses in the last real estate meltdown. And it follows that if our services don't prevent significant losses, maybe our services aren't as necessary as once thought. Some will strongly disagree with this point, ad nauseum, but howling at the moon will not prevent changes in the system.

On another note, it would be interesting to see what the default rate is for loans that had 2055 drive-by inspections vs. 1004 interior inspections. Maybe the lenders have this info and they're finding the difference in defaults insignificant. It then follows that the idea of an interior inspection, in many cases, is superfluous.

Darwin didn't say that the strongest (or most vocal and frequent forum posters) will survive; he said that adaptability is the key to survival. History has proven this to be a fact in nature and business. Soon a lot of appraisers will be like the Kodak company (remember them). Arrived too late to the digital party thinking that real film would never be replaced; the world couldn't do without the parking lot foto-mat booths. LOL​

Very few, if any 2055 were done for origination lending, so there is no default comparison to be had. Origination loans have mainly used appraisals and thus there is no control group. That is why fannie is proceeding with caution.

Appraisals can not prevent default, but then neither can any other form of valuation. The change now is due some lenders pressuring for speed in the point of loan decision,.

Since the property collateral for a loan is substantial it still needs an inspection, investors need to know what they are buying /rule out the problem properties. Since USPAP did not define inspection for appraisal purpose as part of appraisal practice/sig assistance, that allows a USPAP compliant appraisal using a non appraisers to inspect. ( label data collection to CYA) Why use non appraisers- because they comprise a cheaper and more plentiful labor pool, Since RE agents are in the test group the reason is not for "better" inspections, - at least they are not pretending "better" is the reason..

The housing market crash --back then a mortgage broker could order an appraisal, and if it did not hit value, throw it in the trash and order another one. I bet there were enough good appraisals thrown in the trash to have mitigated . What banks stay silent on is majority of HELOC loans were no appraisal using an AVM or BPO and many wildly over valued, - (I applied for one, valued 150% over ). The first credit pulled was HELOC-overnight banks froze borrower's equity line of credit, which set off panic selling as the first wave .

We may go the way of Kodak or play a different role in the process. Will see ...

 

[Eli]

IRS will be next. :LOL

 

[Eli]

IRS may be the dagger..Can you imagine if they turn on an AMC or lender on employee/independent contractor?

That would be a battle for the ages. I know who would win. It would be the IRS.