UAD 3.6 discussion

[Sadie]

The fannie mae automated appraisal factory is being put into place. They now have a simple checkbox recipe that their CU avm can look over in 10 seconds.
I'm also assuming that once fannie has enough of the new uads on file, an appraiser won't be needed, period. CU will do the market grid itself, just need someone to do a decent inspection. Why the current splitting of the appraisal process., it isn't faster or cheaper. They will only need subject info to imput into the system, to feed the avm.

But i also believe they will need some appraisers for those loopey properties, the highs and the rurals and unique. Now those appraisers may make a decent living, probable will be a fannie direct order system to appraiser. Cloud based, instantly given to CU.

As I am finding out, they need appraisers when the AVM for the waivers spits out a number they don't like.

 

[Sadie]

I think close to three decades in the RE business including years as an agent when I shared offices with mortgage lendes gave me as good an idea as you seem to have - about their supposed intense problems with reading comments on the addendum page.

Neither of us knows how much more pain there will be for them to pore over the data and comments in sections in UAD 3.6 since it has not rolled out yet

I was a mortgage processor and closer for several years. If a question came up about a property and I couldn't find it, usually it was not in the report. We used to read the darned things before asking for stuff. Of course this was the dark ages and we were mostly paper based. No online stuff for us! I actually think once the learning curve is over, it will be a cleaner report. For the most part.

 

[Sadie]

Despite the press release from whoever wrote it,. I fail to see how UAD 3.6 offers benefits to lenders. The prboem lenders face is what every on the RE food chain faces - how to get more income. And none of the increased efficiency or computer programs have brought in any more income to loan officers, RE sales agents and brokers, and not to appraisers. In some cases, every new effeicncy actually decreases income.

Loan officers, like RE agents, are sales people. I don't; buy the increased efficiency a more detailed appraisal fofamt delivers but that aside, it won;t save the lenders any money and even if lenders dumped appraisals and used some instant valuaotin form it would not save them money either since the borrower covers the appraisal fee.

Lenders face the same existential problem- RE is not an industry where more volume or inventiveness is possible; it deals in a finite number of sales and refinances a year, no matter what. In a hot market, the sales and refi volume drive income up, only to see it wiped out in the inevitable slow cycle. That is the reality of the RE business. All the tech bros and managers make some money off the margins.

RE product - it is not like a sneaker manufacturer, that can design an amazing new sneaker or find a way to make them for half price and thus double its sales. RE is not an innovative business and it is stuck with the limited inventory depending on the market activity and interest rates beyond anyone control.

Appraisers, needless to say, have seen their fees most impacted, mainly from third-party AMC predation. If canned comments are not functional in the new UAD format, it might slow down some of the and burn folks who pump out AMC orders, and thus lead to a marginal fee increase.
Not having the ability to input any saved comments will increase turn time for all appraisers or at least the time needed to do an appraisal. That might lead to some measely fee increase.

I see it as just making is so all comments about say the site as being with the site, instead of having to flip over to the addendum for the complete comentary, or all of the contract details, right there instead of half on the front and the remainder in the addendum. And a reduction fo the add on verbiage or forms to be USPAP compliant. I give it 6 months to a year before there is an issue/change that requires a work around (because there always is, an issue that it).

 

[Sadie]

I've heard there isn't very good participation from the lenders to date. Doesn't make much sense since we were told that it was the users that wanted this.

I still put it at 50-50 that the entire thing is scrapped.

Well they like change about as much as we do. But not scrapped, maybe changes down the road, I mean why do you need front door elevation?

 

[Sadie]

He's right, J. Just because you clearly label your addenda does not infer that everyone else does the same. Underwriters literally spend hours searching for required commentary - be it ANSI statements, FHA statements, revision statements. Folks just throw those comments anywhere in the report. Sure - Control F works, but you shouldn't have to do that...

The biggest users of residential appriasal reports (Fannie & Freddie) are obviously not completely satsified with the apprasial reports that they are receiving and thus are changing their forms. This is the first major change to the GSE appraisal process since the UAD was rolled out over a decade ago. Like it or not, it is simply not realistic to expect that things will always remain the same, especially after 10+ years of no major changes to the forms or the process. Whether the changes turn out to be good or bad remains to be seen, but change is coming either way.

The form we are using now came out in 2005. Its been a while since there has been an update. This is a long time over due, But it is a big change.

 

[Sadie]

Here is a "chicken or egg" question for you.....does it take dual incomes for many pople to buy a home because home prices are so high or are home prices so high because many households are now 2-income households and the real (adjusted for inflation) median household income in the U.S. has increased by about 2.5X since the early 1950's? Curiously, the median real (adjusted for inflation) home price in the US increased by about 2x from the early 1950's until the present time (CPI Prices in second chart below are expressed in constant 2025 dollars), which means that affordability now is slightly better than it was in the early 1950's, based on overall household income (which now often includes dual incomes).

View attachment 102407
View attachment 102409I

You need to throw in supply and demand to make the charts actually applicable to real life. More people mean there is a demand for more housing. You notice the population chart is similar to the housing price chart.

Back to basic econ. supply and demand.

 

[Tom D]

Sadie and j.grant. Now more impressed with your backgrounds. But your appraisal thoughts always solid. My current appraisal thoughts. Get the h*ll out of this more detail wanted that has no affect on value.

Please detail the comps interior and exterior conditions and quality and why you came out with that quality rating.

 

[Sadie]

Sadie and j.grant. Now more impressed with your backgrounds. But your appraisal thoughts always solid. My current appraisal thoughts. Get the h*ll out of this more detail wanted that has no affect on value.

Please detail the comps interior and exterior conditions and quality and why you came out with that quality rating.

I do wonder why the level of detail. It’s almost like everyone who had an appraiser miss something they thought was important and now that had to be in the new report. I am especially irritated at having the indicate how high above grade the front door is. It’s as if no appraiser had input on the final product.

 

[djd09]

120 Million Square Feet: Store Closings In The US Are On Pace To Set A New Record High In 2025​

If everything is going to be just fine, why are thousands of stores closing all over the country?

In fact, during the first six months of this year 5,822 store closures were recorded closed…

If stores continue to close at this rate, we will break the old record that was established during the pandemic by a wide margin.

... the economy is shrinking

 

[Essexfenwick]

120 Million Square Feet: Store Closings In The US Are On Pace To Set A New Record High In 2025​

If everything is going to be just fine, why are thousands of stores closing all over the country?

In fact, during the first six months of this year 5,822 store closures were recorded closed…

If stores continue to close at this rate, we will break the old record that was established during the pandemic by a wide margin.

... the economy is shrinking

Minimum wage policies cause inflation and kill retail.

Shopping moves totally online