Pre-paids = seller concession?

[Lee Lansford]

Tenny, MN. All deals had concessions.

10 years ago! 5 years ago? Always?

 

[residentialguy]

You're a slow reader, lee

Get up to speed, man.

I have no idea, actually. Tenny is not in my area. Just havin a bit of fun.

 

[JSmith43]

But remember, the "distinction" is for underwriters and NOT appraisers.

That is certainly correct. My mission was to make sure forum readers that don't speak "underwriter" know how to best communicate what they find, when analyzing the contract. The vocabulary has its nuances.

 

[JSmith43]

if such concessions are customary, by all means, give them a pass. However, for one to find them customary, such concessions must be paid in virtually all deals, in good time and in bad, no matter the type of financing, even in cash deals.

Calvin, have you been following the REO's = or not= to traditional sales poll threads? If so, my condolences Did you notice that the inconvenient parts of the MV definition are up for spin like a Senator would describe his unpopular vote? The part of the above quote I put in bold reminded me of the situation.

The hypothetical conditions in the MV definition may need a rewrite, and so does the GSE paragraph under the * in the MV definition on the 1004 that describes how to handle financing concessions.

Of course, with a simplified definition, that could open the door for AVM's which have trouble filtering out less reliable market data or at least grading the data as to quality/reliability.

These word games with other appraisers are nothing. Try reasoning with an underwriter that dug in her heels over a word. BTW, seller financing concessions is the term I generally use. But a weak UW might be confused or fear later confusion over the file if the word seller & concession are linked, even with the intervening descriptor (financing). It is probably an automated underwriting thing, which kicks it into a review by a supervising entity.

 

[Calvin the Airedale]

Calvin, have you been following the REO's = or not= to traditional sales poll threads? If so, my condolences Did you notice that the inconvenient parts of the MV definition are up for spin like a Senator would describe his unpopular vote? The part of the above quote I put in bold reminded me of the situation.

The hypothetical conditions in the MV definition may need a rewrite, and so does the GSE paragraph under the * in the MV definition on the 1004 that describes how to handle financing concessions.

Of course, with a simplified definition, that could open the door for AVM's which have trouble filtering out less reliable market data or at least grading the data as to quality/reliability.

These word games with other appraisers are nothing. Try reasoning with an underwriter that dug in her heels over a word. BTW, seller financing concessions is the term I generally use. But a weak UW might be confused or fear later confusion over the file if the word seller & concession are linked, even with the intervening descriptor (financing). It is probably an automated underwriting thing, which kicks it into a review by a supervising entity.

Until a few moments ago, I avoided even reading the threads but now have posted in the newest one.

It amazes me how frequently appraisers and others fail to grasp the significance of the exact definitions of value that are required or employed in any given assignment.

I recall giving a deposition in a law suit between RTC & OTS versus the former owner of a thrift that they had taken over for which I was the CA. The owner was suing for an unlawful taking and eventually won.

The OTS lawyers asked if I had always valued the commercial properties in the portfolio to "market value". I answered "no."

It was an "Aha!" moment for them. They thought they had opened door to malfeasance on my part and exposed some scheme to over value assets for the purpose of inflating net worth.

"Were you aware that your obligation is always to appraise to MV? they asked.

"No, that isn't true." I said. "It is one's obligation to appraise to the definition required by regulation, which in some cases might be something other than MV."

They had no idea that the OTS required institutions to use "fair value" as a standard by which to value their troubled assets, nor what implication that could possibly have. (It our case, it actually inflated the value of the assets, but that's another story.)