Phil Crawford Podcast

[Non Sequitur]

 

[J Grant]

Separately, in 2012, FHFA announced a new representation and warranty framework for the enterprises to enhance certainty for lenders regarding when a mortgage could be subject to repurchase, potentially shifting some risk from lenders to the Enterprises. In 2014 and 2015,FHFA directed the Enterprises to consider and take steps to implement changes to this framework related to appraisals.As we now discuss, each Enterprise has launched appraisal waiver programs that also provide relief to lenders with representation and warranty exposure for the values of affected properties for eligible loans.

 

[timd354]

What does a PAVE report have to do with WAIVERS?

Waivers are taking the bulk of business away, not PAVE.

The allegations of appraisers' bias against certain groups is one of the main arguments that the GSEs' use to justify the expansion of waivers....Thus, PAVE has a lot to do with the expansion of appraisal waivers.

Once a WAIVER is granted, it ALWAYS comes in at the SC price- because when a WAIVER is issued, the sale contract price is the default property value. .

If a waiver is not granted, then the order is sent for an appraisal.

Read up on them- a WAIVER is not the same as an AVM valuing a property.

A waiver may not technically be an AVM, but a waiver is undoubtedly not granted unless the value submitted is supported by either Fannie or Freddie's internal AVM within a certain tolerance.

 

[J Grant]

The allegations of appraisers' bias against certain groups is one of the main arguments that the GSEs' use to justify the expansion of waivers....Thus, PAVE has a lot to do with the expansion of appraisal waivers.

A waiver may not technically be an AVM, but a waiver is undoubtedly not granted unless the value submitted is supported by either Fannie or Freddie's internal AVM within a certain tolerance.

I think PAVE had very little to do with it. GSE's were developing WAIVERS back in 2016, long before PAVE came along. They just used it as an excuse later, but nothing changed because of it.

A WAIVER is not an AVM, ...theoretically or otherwise. An AVM is done on the property by Fannie or Freddie, and if the lender value estimate or the SC price falls within the AVM range, it is accepted and is the value of the property for the loan..

Which I assume is what you meant when you called it, " the value submitted"

We should use clear language - "the value submitted" can imply that an authority or professional submitted a value. The value is a target $ amount estimated by a loan officer or other party at a lender that would make the loan work, or it is a Sale contract price in a purchase.

 

[Cob]

I am thinking Crawford may be Jewish. I have a feeling he has a bunch of money.

WOW, can you sterotype a little more???

 

[George Hatch]

I think PAVE had very little to do with it. GSE's were developing WAIVERS back in 2016, long before PAVE came along. They just used it as an excuse later, but nothing changed because of it.

A WAIVER is not an AVM, ...theoretically or otherwise. An AVM is done on the property by Fannie or Freddie, and if the lender value estimate or the SC price falls within the AVM range, it is accepted and is the value of the property for the loan..

Which I assume is what you meant when you called it, " the value submitted"

We should use clear language - "the value submitted" can imply that an authority or professional submitted a value. The value is a target $ amount estimated by a loan officer or other party at a lender that would make the loan work, or it is a Sale contract price in a purchase.

The way I read "value submitted" is that it's only used to qualify whether Fannie/Freddie will even look at that application for that program. DW said in that interview that they use their own AVM for the valuation itself and their overall analysis isn't affected by anything the broker does. So no, just because there's a sale price doesn't mean the GSEs are going to automatically stipulate to it. They *use* their AVM.

A loan application is a loan application being made by the applicant. The "we will accept" offer is made after the GSE decides the deal (including their valuation) meets their criteria.

 

[Terrel L. Shields]

It would be interesting to see the internal AVM used by Fannie and curious if it is shared with Freddy. Does it use MLS data? County records? Or, (my bet) it uses all those appraisals that real appraisers submitted over the last 3 decades and that begs a question (or 2). Since those are history do they apply a time adjustment? Since they claim the appraisers are racist and over-value everything except properties owned by minorities, then they are, by their admission, using flawed sales to create an AVM, which by definition, must also be inflated and racist.

 

[alebrewer]

It would be interesting to see the internal AVM used by Fannie and curious if it is shared with Freddy. Does it use MLS data? County records? Or, (my bet) it uses all those appraisals that real appraisers submitted over the last 3 decades and that begs a question (or 2). Since those are history do they apply a time adjustment? Since they claim the appraisers are racist and over-value everything except properties owned by minorities, then they are, by their admission, using flawed sales to create an AVM, which by definition, must also be inflated and racist.

Does it use MLS? Not to my knowledge - just the data mined from several thousand appraisals.
Do they apply a time adjustment? Yes

To your point about their data being inherently racist and inflated - to my knowledge they haven't built in any smoothing techniques that would favor underserved neighborhoods. As such, I'd hazard a guess that their models are, indeed, 'inflated and racist' if, and only if, they consider said appraisals to be 'inflated and racist'.

 

[chad hampton]

are there any areas of the country that are increasing right now? I’m in North Carolina, which is generally one of the hottest markets in the country and I haven’t been seeing increases in over a year.

 

[TerryRohrer]

I'd hazard a guess that their models are, indeed, 'inflated and racist' if, and only if, they consider said appraisals to be 'inflated and racist'.

Recent messaging suggests they believe appraisals are under-inflated and racist. Based on the mix of their loan purchases, their actions are clearly racist. Their AVMs then, must be appropriately inflated and racist squared.