The Decline of the Appraisal Industry: An Unsustainable Future

[Terrel L. Shields]

Check. My booties are always pre-positioned in the pocket in the back of the driver's seat.

Imagine Fern trying to inspect a chicken farm or worse, a hog farm or cattle feed lot. It'd be worth the price of a ticket.

 

[Mark K]

Exactly why they named it: The Modernization of Appraisal - (camouflage for slicing & dicing a profession)

The changes taking place in the appraisal profession have been coming for a long time; should be no surprise to anyone paying attention. It should also come as no surprise that the powers-that-be want to remove us from the equation. The problem for appraisers is that the lenders, with F/F blessing, write the rules.

F/F should be abolished and the lenders should have to keep the loans they make on their books. I suspect appraisers would be a more integral part of the process in that case. But as long as F/F are taxpayer subsidized, little more than a convoluted welfare program, appraisers will be finding their roles diminished more each year.

 

[BRCJR]

The changes taking place in the appraisal profession have been coming for a long time; should be no surprise to anyone paying attention. It should also come as no surprise that the powers-that-be want to remove us from the equation. The problem for appraisers is that the lenders, with F/F blessing, write the rules.

F/F should be abolished and the lenders should have to keep the loans they make on their books. I suspect appraisers would be a more integral part of the process in that case. But as long as F/F are taxpayer subsidized, little more than a convoluted welfare program, appraisers will be finding their roles diminished more each year.

Sounds good on paper but, lenders keeping 30-year mortgages on their books would cause mortgage money to dry up. Then what?

 

[J Grant]

The changes taking place in the appraisal profession have been coming for a long time; should be no surprise to anyone paying attention. It should also come as no surprise that the powers-that-be want to remove us from the equation. The problem for appraisers is that the lenders, with F/F blessing, write the rules.

F/F should be abolished and the lenders should have to keep the loans they make on their books. I suspect appraisers would be a more integral part of the process in that case. But as long as F/F are taxpayer subsidized, little more than a convoluted welfare program, appraisers will be finding their roles diminished more each year.

The problem with this scenario is mortgage rates would rise due to higher losses if lenders had to keep loans on their books ( not sure what that means - if lenders had to fund the loans they would not be able to in the volume we see now).
It is not just their rates, it is the terms - 30 years etc - compare to a lot of private lending with balloon loans and balance due to 5 years
If mortgage rates and terms changed drastically, homes across America could lose huge amounts of equity, forcing big losses to homeowners -

 

[Sadie]

Earlier I stopped by at Vineyard Vines and didn't want to look shabby.
And the dirty shoes went into my Tesla. Ugh.

Don't you have back up shoes with you at all times? I call them my dog poo shoes. That happes in all weather.

 

[Mark K]

Sounds good on paper but, lenders keeping 30-year mortgages on their books would cause mortgage money to dry up. Then what?

Money wouldn't dry up...it would be priced to reflect the risk. I might get a 5% mtg. and the high LTV, low FICO would have to have money down (oh, the horrors!) and probably pay 7-8%. Besides I'm not saying abolish the secondary market, just F/F.

And yes, it would result in falling real estate value/prices, maybe down to a reasonable level.

I know abolishing F/F will never happen but the current lending industry backed by taxpayers (F/F) will continue to cause artificial inflation in home prices and also result in the cyclical booms/busts in the business. And it results in the interested parties writing the rules and doing anything/everything to make more loans, more quickly, putting more appraisers out of work. You don't need appraisers or care about risk when you're lending OPM.

 

[Sadie]

The changes taking place in the appraisal profession have been coming for a long time; should be no surprise to anyone paying attention. It should also come as no surprise that the powers-that-be want to remove us from the equation. The problem for appraisers is that the lenders, with F/F blessing, write the rules.

F/F should be abolished and the lenders should have to keep the loans they make on their books. I suspect appraisers would be a more integral part of the process in that case. But as long as F/F are taxpayer subsidized, little more than a convoluted welfare program, appraisers will be finding their roles diminished more each year.

Look back at what residential real estate was like back then. No 30 loans, more like 5-6 year loans, balloon payments, lots of renters, no 3%, 5%, 10%, 20% down-50% down was norm. Sounds like a plan!

 

[Terrel L. Shields]

lenders keeping 30-year mortgages on their books would cause mortgage money to dry up.

do you think that they won't offer 30-year mortgages in that case? More like 10, max 15 years? Or ARMs? In the 90s as interest rates were dropping I was in ARMs, my brother advising when my loan would be advantageous to refinance. It would be more like a 1950s bank scenario.

 

[Mark K]

Look back at what residential real estate was like back then. No 30 loans, more like 5-6 year loans, balloon payments, lots of renters, no 3%, 5%, 10%, 20% down-50% down was norm. Sounds like a plan!

Its hard to believe that people could actually buy a house in the 'old' days.

 

[Terrel L. Shields]

Its hard to believe that people could actually buy a house in the 'old' days.

A new house in 1972 (say 1400 SF) cost about $13,000 to $20,000. My brother built a 1,700 SF house for $15,000 in 1972 on the farm. My niece still lives there, and it (on 8 acres) would easily bring $250,000. So, the $7,000 a year job is now paying $60-70,000 but the house increased far faster.