No bias here - keep moving

[George Hatch]

You're proving my point... when the GSE's engage in libel against appraisers for the purpose of pimping their alternative valuation products, they are using said social discourse to allay their obligation to defend their libel. If, in fact, you're right that - from a social discourse perspective - the onus is on the accused, then the GSE's have used that tool to shift said onus. It's despicable.

I don't want to throw gasoline on the fire but libel is about "untrue".

The primary way the activists approach this and other issues is to start with the outcome and back into a predetermined explanation for its cause. If it's true that homes in some neighborhoods are valued lower than other homes then that's a fact that gets thrown into the stewpot along with the historical facts involving redlining and highway construction and so on. Noticing that's how these arguments get made isn't an endorsement or advocacy of that methodology, merely an observation.

So if their conclusion that many people have suffered over the years is in any way factually correct, and that leads to some suggestions for improvement on our end that combination might be unfair, but we can at least see how it happened. As I say, nobody is going to settle for any outcome short of zero-defect on this one, which means we will likely never get completely out from under the accusation.

Now the waiver thing itself is arguably a separate issue. I always thought that was all about expediency and fees with the racism angle being added as an afterthought.

 

[George Hatch]

I know for a fact you're better than this post, George. For the most part it's just a rambling defense of DW and the other appraiser folks at the GSE's. I know most of those folks personally - and well enough to know they're big enough to defend themselves if they choose to do so.

WRT this part, though: "my guess is that the recent change to the waiver program to increase the max LTVs to 97% might be entirely politically motivated, not greed motivated." - I agree with you. I don't think it's greed related at all. I personally believe it's related to potential disparate impact.

Okay, how much control do you think the valuation side of the business has over the company's public narrative on the issue?

 

[alebrewer]

We've gotten WAY off the topic - the topic being the EXTREMELY demeaning public stance the GSE's have taken against appraisers who choose not to perform hybrid/desktop assignments. Just want to make sure we don't lose sight of that heinous offense.

That said, I think we're WAY past the conversation leading to 'some suggestions' for improvement - but keep spinning the mantra. Maybe someone will bite.

WRT the racism angle being an afterthought - I used to think that as well, but I don't think I was giving them enough credit. I now believe the racism thing is central to their push for alternative valuation products. Right or wrong, there is still a strong opinion - societally speaking - that appraisals are integral to assessing market value. An opinion held, I'm sure, by many institutional MBS investors. Simply touting the mantra that the GSE's AVM is as good as appraisers lacks a certain 'umph'. But.... if they say that AVM's are superior to appraisals in that they are unbiased - now you've made a legit argument. There is simply no argument to be proffered that could refute that assertion.

 

[alebrewer]

Okay, how much control do you think the valuation side of the business has over the company's public narrative on the issue?

I believe the Scott Reuter/DW/Justin Alexander/Lyle Radke level folks have a tremendous influence over single family policy at the GSE's.

 

[George Hatch]

We've gotten WAY off the topic - the topic being the EXTREMELY demeaning public stance the GSE's have taken against appraisers who choose not to perform hybrid/desktop assignments. Just want to make sure we don't lose sight of that heinous offense.

Yeah, I already stipulated to the observation that's no way to persuade appraisers to their point of view.

 

[George Hatch]

I believe the Scott Reuter/DW/Justin Alexander/Lyle Radke level folks have a tremendous influence over single family policy at the GSE's.

I was specifically asking about the company's narrative. And indirectly referring to their underwriting protocols, not the specifics of the appraisal policy or AVM policy themselves.

When the appraisal dept says "We need this" that's is one function; When the quants say "we analyzed and found this" that's arguably a separate and different function. Unless those quants are working under the direction of the appraisers, which I don't know.

For all we know the appraisal dept may have influenced this outcome to the positive for appraisers. The quants are not appraisers. All they're seeing is numbers. Same as the cat ladies and Brookings.

 

[George Hatch]

As others have said, I'll be interested to see what happens with waiver usage the next time the RE markets tank and the foreclosures ramp up.

 

[Terrel L. Shields]

the historical facts involving redlining and highway construction and so on. Noticing that's how these arguments get made isn't an endorsement or advocacy of that methodology, merely an observation.

Highways are built thru the cheapest available property to reduce the cost of a project. Would anyone propose running a highway thru a development surrounding a golf course where the houses are multi-million-dollar estates? A-the owners would go to court and delay the project for years, B-the taxpayer would pay out the nose whether the state was successful or not in condemning expensive estates. So, what is the solution to not routing a new road thru the poorer neighborhoods and rural pastures?

 

[alebrewer]

The quants are not appraisers.

Tell that to Keith Wolf... I get your point, though. But yes - the folks I mentioned (and others) are driving the narrative. Some moreso than others. For instance, I'd expect Scott has more influence than Danny on the Freddie side.

 

[George Hatch]

WRT the racism issue, aren't there a bunch of complaints sitting around at HUD? I wonder how those are turning out?

My sense of it all so far is that there's a lot more smoke than fire. But even a little fire is going to be taken real seriously.