Phil Crawford Podcast

[DWiley]

Does it use MLS data? County records?

Home Value Explorer®

Home Value Explorer® (HVE®) is a Freddie Mac Automated Valuation Model (AVM) tool that generates an estimate of property value in seconds. HVE encompasses several models rolled into a single product, for one low cost.

sf.freddiemac.com

 

[Tim Hicks (Texas)]

After all, Freddie Mac and Fannie Mae know more about valuation than we do...according to them.

 

[J Grant]

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.

To clarify, I did not say the GSE automatically stipulates it. And we know they "use" their AVM . Lets describe what happens-

Fannie or Freddie researches a property, and if it meets the criteria, they offer a WAIVER to the lender . If the borrower agrees to the WAIVER, the lender submits either their own value estimate in a refinac,e or the sale price is the value for a purchase.
Fannie or Freddie runs an AVM. If the lender's value estimate in a refi, or the SC price in a purchase, falls with the AVM value range, the lender's value estimate or the SC price is the value of the property for that loan.

I outlined the above for brevity. I did not detail every step they might use or the order of the steps to qualify a property for a WAIVER offer, nor anything about borrower qualification.

 

[J Grant]

After all, Freddie Mac and Fannie Mae know more about valuation than we do...according to them.

Actually, imo, they are saying the opposite - since a lender values the property in a refinance WAIVERS, and a SC price is the value in a purchase WAIVER, where is the expertise from FF?

Fannie or Freddie runs an AVM, and if their AVM range is such that the lender's value estimate or the SC price falls within the AVM range, then the WAIVER gets green-lighted. Fannie or Freddie did not value the property as a point value, leading to how do they know more about a value they never gave -

I see teh WAIVER as a giant pass-the-buck move and it is amazing the regulators accepted it - I suppose all the talk about risk management convinced them. It passes the valuation off, to of all people, a lender, or a RE contract. Fannie or Freddie vets the property to qualify, but they do not decide the point value.

It is also a pass the buck because there is relief from reps and warranties for the lender in a WAIVER ( no buyback). The taxpayers are stuck. IDK if there is any level that Fannie or freddie held responsible for the point value in a WAIVER They may be, but idk - are they?

 

[J Grant]

Home Value Explorer®

Home Value Explorer® (HVE®) is a Freddie Mac Automated Valuation Model (AVM) tool that generates an estimate of property value in seconds. HVE encompasses several models rolled into a single product, for one low cost.

sf.freddiemac.com

But is this estimate from Home Explorer used in the WAIVER or is the lender's value estimate ( in a refi) used?

And a SC price as the value of the property when a pruchse WAVIER is used?

 

[DWiley]

But is this estimate from Home Explorer used in the WAIVER or is the lender's value estimate ( in a refi) used?

And a SC price as the value of the property when a pruchse WAVIER is used?

https://sf.freddiemac.com/faqs/automated-collateral-evaluation-ace-FAQ

See Question 2

 

[Terrel L. Shields]

Does it use MLS? Not to my knowledge

The article that @DWiley shows indicates that it does use MLS, county records and its internal info. A sort of all of the above. Which means county records are worthless in non-disclosure states and any non-MLS sale there is opaque. Whatever. The bias, therefore, is still to the high side, right? Unless you count those nasty old racist appraisers. I guess I guess I am racist. I've only appraised 2 places where a black was an owner - both were wives of white men. Or could that be because there are few blacks living here? Maybe. I appraised a couple of estates owned by a gay, one who died of AIDS. My (female) partner was put out by his significant other though, "He's way too cute to be gay." I laughed. OTOH, one of my mentors was gay and she was terribly pretty as well as stacked like the proverbial brick outhouse. OTOH, she had the demeanor of the stereotypical gay - very judgmental. Her partner told me once that she couldn't work for her either. Then there were the two ex-nuns who lived together - only one bed. They were hilarious to talk too. Frankly, they are all just people. I don't get why it would ever impact your appraisals.

 

[George Hatch]

To clarify, I did not say the GSE automatically stipulates it. And we know they "use" their AVM . Lets describe what happens-

Fannie or Freddie researches a property, and if it meets the criteria, they offer a WAIVER to the lender . If the borrower agrees to the WAIVER, the lender submits either their own value estimate in a refinac,e or the sale price is the value for a purchase.
Fannie or Freddie runs an AVM. If the lender's value estimate in a refi, or the SC price in a purchase, falls with the AVM value range, the lender's value estimate or the SC price is the value of the property for that loan.

I outlined the above for brevity. I did not detail every step they might use or the order of the steps to qualify a property for a WAIVER offer, nor anything about borrower qualification.

That's not my understanding of it. My understanding is the borrower submits an application and offer their value estimate and the underwriting program checks all their internal boxes including the value and offers the waiver.

That's what their graphic shows, what their explanation says and what DW commented to.

 

[J Grant]

That's not my understanding of it. My understanding is the borrower submits an application and offer their value estimate and the underwriting program checks all their internal boxes including the value and offers the waiver.

That's what their graphic shows, what their explanation says and what DW commented to.

If it is the borrower's estimate of value and not the loan officer's estimate of value, it still is not an estimate of the point value from Fannie or freddie, correct?

I pasted from the Fannie website in these post - HERE IT IS IS

Value Acceptance (Appraisal Waivers)​

Fannie Mae
https://singlefamily.fanniemae.com › display


PDF

Fannie Mae accepts the value estimate submitted by the lender as the market value for the subject property when a value acceptance offer is exercised. The ...

 

[J Grant]

https://sf.freddiemac.com/faqs/automated-collateral-evaluation-ace-FAQ

See Question 2

I opened the link but can not paste from it, but it says, in essence, ACE uses the lender value estimate or the SC price - can it be pasted? Thanks