Objectionable Valuations Become Hate Speech,' Inflating Home Prices

[djd09]

the machines program themselves...head cheer

 

[chad hampton]

The issues with waiver sales are that they are not paying with cash, they are using other peoples money. When waivers were first being pushed they said they would be for very low LTV used mostly on Home equities. But like everything else, you can’t trust a word they say.

We might have to start adjusting for sales when waivers were used. You could put them at the bottom of the sales grid under the label - DW/ACE +PDR adjustment. My data shows it could be as high as 20% adjustment needed.

 

[chad hampton]

Who are these users were talking about? Are they the same folks that needed bailed out by the taxpayer. Should’ve let them all go out of business. I’m pretty sure we’ll have that chance again real soon. There will be chaos in the streets if we give those assholes one more dollar. Probably be even worse than Chicago

 

[George Hatch]

The issues with waiver sales are that they are not paying with cash, they are using other peoples money. When waivers were first being pushed they said they would be for very low LTV used mostly on Home equities. But like everything else, you can’t trust a word they say.

We might have to start adjusting for sales when waivers were used. You could put them at the bottom of the sales grid under the label - DW/ACE +PDR adjustment. My data shows it could be as high as 20% adjustment needed.

(technically, someone taking out a 80% LTV loan is using LESS of other people's money whereas someone using a 95% LTV loan is using MORE of other people's money. Math is funny that way).

So what was the difference between your appraisal and the recent sale price on the one you were talking about earlier?

As far as adjustments go, if you can demonstrate the waiver-enabled sales are selling for more than the other sales then you're REQUIRED to apply the adjustment.

 

[chad hampton]

It wasn’t a sale, they were refinancing now. I can’t give you any more information on that since you’re not the client. Probably went with a different lender who didn’t buy into the GSE bull****. I’ve been reading lately that a lot of lenders are overriding what the GSE say. Probably a good policy.

 

[chad hampton]

Am I required to apply that adjustment even if the user doesn’t want it? That’s a hell of a dilemma, because we have to give the user what they want.

 

[Surf Cat]

So what was the difference between your appraisal and the recent sale price on the one you were talking about earlier?

I'm curious about this as well. What happened?

I just appraised a waiver home last week. Listed in late 2023 for 750, purchased for 800. When I was doing my appraisal inspection for his refinance, the borrower informed me that he knew he paid above list price and was surprised when they told him they didn’t need an appraisal. He figured he was gonna have to come out of pocket for the difference, but he was thankful that the GSE waver king put the risk on the American taxpayer and not him.

Now we’ve had a year of that data cancer point in that market. I have no doubt that waivers play a big part in the current inflated values. It’s hard to ignore….assuming you’re out there in the real world appraising.

This^^^^

Did the home appreciate in value? Decline? Was it worth $800k when it was given a waiver?

 

[chad hampton]

I have no idea if it was worth 800 when it was sold, I suspect not being that I know what the market was a year ago. The house is about a mile from me. I don’t think it’s good policy to be using waivers on a property that is being bid up well over list price.

But the homeowner was glad he didn’t have to go renegotiate the contract or spend his own money. He’d rather use mine and George’s. I don’t blame him.

 

[George Hatch]

It wasn’t a sale, they were refinancing now. I can’t give you any more information on that since you’re not the client. Probably went with a different lender who didn’t buy into the GSE bull****. I’ve been reading lately that a lot of lenders are overriding what the GSE say. Probably a good policy.

Talking about a value conclusion in isolation to any identifying information is not a violation of confidentiality. So that ain't it.

I'm pretty sure that if the waivered value was too high then you would have led with that instead of attempting to dodge the question. So really, I'm reading the dodge as an admission that your appraised value isn't grossly different from the prior sale.

But hey, thanks for playing. Now lets see if we can find a real example of a waiver being a big mistake for the lender's safe/sound mortgage position.

 

[George Hatch]

I have no idea if it was worth 800 when it was sold, I suspect not being that I know what the market was a year ago. The house is about a mile from me. I don’t think it’s good policy to be using waivers on a property that is being bid up well over list price.

But the homeowner was glad he didn’t have to go renegotiate the contract or spend his own money. He’d rather use mine and George’s. I don’t blame him.

What do you mean you don't know? You were required to *analyze* that prior sale due to it being inside the 3yr sales history window. 9/10 lenders would also require you to reconcile between that known recent prior sale and your current valuation anyway. AND comment how common or rare it is in that market for properties to sell above their list.

If the waivers stop at 80% then the other 20% was the borrower's own money. Duh