Like him or not

[alebrewer]

Jim Amorin has access to the data, and has performed some REALLY interesting analyses. The below (from one of Jim's posts in LI) is just more confirmation for the users of appraisal services that the current valuation model is broken.

 

[Tom D]

The main pattern problem? The fed ***ks it up all the time.

 

[alebrewer]

I do believe one of the causal factors is/was the lax underwriting WRT refinance appraisals. Even that, though, implies that appraisers are the ones ultimately to blame...

 

[CGinMN]

I have been paying attention to his posts, and it is clear to me that Jim Amorin often does not understand the nature of the data he is asking his AI to analyze. For someone espousing ethical use of AI, you would think this would be pre-requisite #1.

 

[alebrewer]

I think that's probably the case with most folks who attempt that level of analysis. I've always preferred data over baseless opinions, though. Haven't you?

 

[CGinMN]

No, I'd prefer hearing baseless opinions rather than opinions developed from analyzing data that is not understood.

 

[alebrewer]

Not I. I'll take the opinion of someone who's willing to dig in and try to understand what the data is trying to tell them. I guess, for me, it boils down to this: there are a lot of folks who poopoo data analysis because they don't understand how to do data analysis. I know that doesn't apply to you, but it nonetheless reinforces the idea that data analysis leads to poor results, so lets not attempt it.

 

[Terrel L. Shields]

FOMO - fear of missing out. Fast rising prices? we gotta buy before prices are too high. Falling prices? We gonna buy because prices are cheap.

 

[CGinMN]

It's ok to try to understand it. But when you are in a position of educator and positioning yourself as an expert, you should be clear about what you know and what you don't. Just because AI gives you the ability to do an analysis, doesn't mean the conclusions you draw are credible. Competence matters.

Here, the MAIs are chalking it up to homeowner intelligence. I felt the need to black his name out because it is just an unbelievably daft comment. Why are apples more expensive than oranges? Because people who buy apples are smarter!

 

[alebrewer]

It would be pretty easy, given that the researcher had the requisite data, to make a correlation between 'market run up' and 'appraiser leniency'. IOW - when markets are improving at 10-15% a year, appraisers can be hypothesized to be more generous with 'upward' market adjustments than what the market truly reflects.