Three days in a row. Different GLA than advertised.

[J Grant]

From Perplexity:

When Fannie Mae or Freddie Mac offer an appraisal waiver (now often called "Value Acceptance" or ACE), the value estimate for the property is accepted as submitted by the lender and is not independently provided as a range by the Uniform Collateral Data Portal (UCDP). The UCDP's role is to supply historical appraisal data and risk analytics that help determine eligibility for a waiver—not to communicate a value range or separate value judgment for the property during waiver issuance.

How Value Acceptance Works​

• If eligible for an appraisal waiver, the system accepts the lender's estimated property value as the transaction value without providing a new appraisal or value range.
• The underlying data in UCDP is used by both Fannie Mae and Freddie Mac in their risk modeling to evaluate waiver eligibility and confidence in the submitted value.
• UCDP does not issue a value range or its own estimate in situations where the waiver is granted. The acceptance is binary: either the submitted value is accepted or the waiver is not offered.

Summary of Process​

• Value Acceptance/appraisal waiver means the property value on the loan application is accepted as-is for loan underwriting by the GSEs.
• No value range or additional valuation is communicated by UCDP to the lender; only the acceptance of the lender's stated value is confirmed.

This process expedites lending and simplifies documentation where adequate data confidence exists, but the UCDP does not provide a new value or value range in waiver cases; it only supports the determination of waiver eligibility and value acceptance.

Thanks for the response on this one!

Incredibly, they got regulators to approve value acceptance/formerly a waiver. Not even a value range- (idk what risk modeling consists of_). The lender estimates the value they need in a refinance! (Hitting a target value for a property is what the HVCC and Dodd-Frank sought to prevent ) - Or the sale price is the value.

If a Value Acceptance is low risk, why doesn't the lender or GSE backstop the value? ( a rhetorical question) The lender is relieved of reps and warranties ( meaning they do not have to buy the loan back ) -leaving the taxpayer the burden.

 

[chad hampton]

Remember, regulators only approved them for the wuhan flexibilities. They weren't meant to be long term.

But snake oil folks gonna do snake oil type ****. They can't help themselves. I'd say these guys would have made good used car salesmen, but that's unfair to used car salesmen.

 

[J Grant]

HVCC and Dodd Frank legislation was enacted in part to prevent target values being hit in an appraisal - so the GSEs bypass the appraisal and invent a product that let the lender fill in a target value for the property!
Couldn't make this stuff up...

 

[J Grant]

The GSEs stopped talking about appraisals done on the front end to establish a value for the LTV%. Instead, they called appraisals a tool for "risk management"- and concluded that since a borrower can default anyway, or if a high percentage of appraisals meet a SC price, no appraisal is needed for risk management in many cases! That paved the way for the WAIVER.

 

[DWiley]

Remember, regulators only approved them for the wuhan flexibilities.

A simple search using any readily available search engine will show that GSEs' use of waivers started well before the first case of COVID was reported and well before the pandemic.

I do not mind at all those who challenge the use of ACE and VA. I do mind those who post false claims as if they are facts.

 

[ZZGAMAZZ]

Thanks for the response on this one!

Incredibly, they got regulators to approve value acceptance/formerly a waiver. Not even a value range- (idk what risk modeling consists of_). The lender estimates the value they need in a refinance! (Hitting a target value for a property is what the HVCC and Dodd-Frank sought to prevent ) - Or the sale price is the value.

If a Value Acceptance is low risk, why doesn't the lender or GSE backstop the value? ( a rhetorical question) The lender is relieved of reps and warranties ( meaning they do not have to buy the loan back ) -leaving the taxpayer the burden.

Are entities that provide automatic valuations financially liable for failed collaterization?

 

[RCA]

Property can have negative value. There are some properties that the bank and property owner are fighting to give the property to the other because its worthless due to rent controls. There could also be a time that taxes make it negative value.

That's what I said: "at least if we assume the property cannot have a negative value (e.g. contaminated)".

You know we can always make the range [-infinity,+infinity] and be 100% accurate. That is the idea. We can also make assumptions, that further bracket our statements and make them more "accurate." "Mr. X is not an idiot, if we assume he is not an idiot," is always true. Or is it, well ok, semantics: Just assuming something doesn't make it true, but,within the context OF the assumption, convention is that we assume the assumption is true for the sake of argument, although in full realization that iy may not be. Or, in fact maybe we KNOW it is not true, and just want to exercise a Hypothetical Condition for the sake of some higher level more complex argument. Note that I use the term "assumption" as generally used in speech and writing; but in the context of an appraisal report, the meaning of "assumption" is rather quirky and loose. Notice below the implicit contradictions. Figure out if you know what it really means when an appraiser says he "assumes":
[ Hint: It plays around with what is "professionally accepted." Oh! So safe: Just do what everyone else does! ]

Per ChatGPT:





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So, this is a reasonable question: Is appraisal a fraud?

 

[RCA]

My answer is that many appraisals are a fraud. They don't have to be. You have to understand that appraisers may not have enough information to do any more than just proffer the most likely value given the evidence they have. But they need to make it clear just how thin the ice is, that their conclusions rest on. And that is a problem, because the lenders, the owners, the AMCs and I suppose even the GSEs won't allow that degree of honesty. They will surely find another appraiser, with some "sense."

 

[sputnam]

Or opining to the SP as your opinion of value because the SP is within the range of adjusted sales. Just because one reconciles to the SP doesn't mean they backed into their value...

No one said that it always means that.... did they?

 

[alebrewer]

No one said that it always means that.... did they?

Was just offering clarification for anyone who might interpret your post as fact...