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Purchase Loans With No Appraisals - I Told You It Was Coming

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Elliott

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Joined
Apr 23, 2002
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Certified General Appraiser
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Oregon
So there's a "shortage" of appraiser and Freddie announces in the future they won't require appraisals? If I were a young person, there's a field I'd avoid. Some days you wonder why they float these balloons. Why not play Russian Roulette with title insurance ?
 

J Grant

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Dec 9, 2003
Professional Status
Certified Residential Appraiser
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Florida
Freddie is rolling out a no appraisal program for a limited set of qualifying borrowers and properties. That's all I have read from the articles on topic to date.
 

Restrain

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Jan 22, 2002
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Certified General Appraiser
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Florida
No balloon. They were testing this stuff a decade ago. Now, thanks to all of our work and CoreLogic having their fingers in most of the MLS systems, F/F believes that they can do AVMs for the bulk of the lending. Saves the borrower money, don' cha' know.
 
D

Deleted member 134708

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I said this year ago or so. I was working with California's air resource board in former life.

If you can sell it to legislation as "money saving for the consumer" you can get 100% of the votes.

This will be no different. If they sell it that way, done and done.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
I have been warning appraisers on this forum that 'no appraisal purchase loans' were coming.
You and many others.

Is this a big deal? I don't think so. For the very reason you point out; it has been coming and should be no surprise.

What % of loans will be captured by this? Hard to say, but I have a 7,500 home master planned community about 3-miles from my house. Does a purchase with 75% down and a high credit score in that development need an appraisal?

This will affect suburban appraisers in the major metro areas more than anyone else.

The important question is, will these loans be packaged separately or identified differently when they are securitized?
Before the housing bubble, I had a change to go to a presentation given by one of the Rating Agencies' analysts; she rated RMBSs. I asked her if there was any credit enhancement due to the type of appraisal on the security rating? She said appraisals are not even on their radar.
 

J Grant

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Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Automated appraisals for purchase loans, too
What's interesting about the Freddie Mac system is that it will allow automated appraisals not only on refinances but on some purchase mortgages, too, mostly for properties that have had recent appraisals done on them and have plenty of comparable sales. Freddie Mac told industry publication Valuation Review in its Jan. 2 edition that most mortgage loans will still require a traditional appraisal

Seems like we will still be needed, since they do not extend the program to properties unless a recent appraisal provides enough information about the property. Sill, imo it is risky esp for purchases...but they are going ahead with it. Not sky is falling time (yet), and appraisers will have a role for years to come, but it is a trend that even if it takes up a smaller market share, cuts down on volume of orders. On the other hand, seems like there is an uptick in need for desktop work ( though fees are lower )
 
D

Deleted member 134708

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I only know 1 non-internet person that does desktops. They say about 1/10 is for a purchase. Realtor does interior pics.
 

Restrain

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Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Fannie says that they will do their internal AVMs on properties where' they have adequate data on the subject and sufficient market data'. AKA they can get the MLS sheet, tax sheet, and run an AVM that makes value on the loan. A prior appraisal will not be needed.
 

Confident Rabbit

Senior Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Washington
Fannie says that they will do their internal AVMs on properties where' they have adequate data on the subject and sufficient market data'. AKA they can get the MLS sheet, tax sheet, and run an AVM that makes value on the loan. A prior appraisal will not be needed.
Gramps was a milkman. Pops was a TV repairman. Sonny was an appraiser. And so it goes.
 
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