The Premier Online Community for Real Estate Appraisers!
-
Welcome to AppraisersForum.com, the premier online
community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.
Waiver Stats
- Thread starter alebrewer
- Start date
Dublin ohio
Elite Member
- Joined
- Mar 20, 2008
- Professional Status
- Licensed Appraiser
- State
- Ohio
Did you read the post by DW. Check out page 5
J Grant
Elite Member
- Joined
- Dec 9, 2003
- Professional Status
- Certified Residential Appraiser
- State
- Florida
The problem is the misleading narrative that says things like appraisals have a higher default rate than WAIVERS as if the valuation itself made the default rate greater or lesser, when it was in large part the borrower strength in both credit rating, downpayment and other factors
The better way to state is would have been that Waiver approved borrowers have a lower default rate
The Bob
Senior Member
- Joined
- Jan 20, 2002
- Professional Status
- Certified Residential Appraiser
- State
- Virginia
Most of those numbers are pretty close. The biggie I see is that 87% of ACE originated loans were Re-fi's, about 60%+ more than none ACE eligible.
With a sale you usually have 4 parties that agree with the price, the buyer and seller obviously, but also 2 agents representing those parties. In a Re-fi, it's usually based on the owner's guess, and that's usually based on the $ amount they need, not on a unbiased opinion of value.
Back when the market crashed, I did 100's of REO's. A lot for Fannie. When I checked for prior sales, very few had a prior sale as the most recent recording of a mortgage, most were re-fi's as the prior loan. The condition of some of those were so bad there is no way they looked substantially different when that prior re-fi was done. I'm talking seeing daylight in the corner of bedroom ceiling, rotted floors, plumbing/electrical issues etc...
The Bob
Senior Member
- Joined
- Jan 20, 2002
- Professional Status
- Certified Residential Appraiser
- State
- Virginia
Well, according to some, the appraisal is a "risk management tool".
alebrewer
Elite Member
- Joined
- Mar 11, 2008
- Professional Status
- Certified Residential Appraiser
- State
- Texas
It is a risk management tool. It provides the lender (or should) with a sense of their collateral exposure in the event of default. The valuation is not a predictor of default, nor does it influence the potential for default - AT ALL. In fact, the only time a valuation product is necessary is if there is a default. If there is no default - it's a signature loan. The appraisal (if one was procured) would have been a waste of money.
Dublin ohio
Elite Member
- Joined
- Mar 20, 2008
- Professional Status
- Licensed Appraiser
- State
- Ohio
I keep on trying to figure out how that would correlate in determining default. I gave up because it made my hair hurt.
alebrewer
Elite Member
- Joined
- Mar 11, 2008
- Professional Status
- Certified Residential Appraiser
- State
- Texas
The ONLY correlation I can come up with is that there MAY be higher risk of default for lower priced properties. If it turns out there is a correlation between the two: (1) it would be HIGHLY problematic if the GSE's took that stance, and (2) even then - there is correlation - but no causation... IOW - even if lower values are correlated to higher defaults, the valuation document was not a causal factor in the default.
Alsie35
Elite Member
- Joined
- Sep 14, 2020
- Professional Status
- Certified Residential Appraiser
- State
- Texas
Scott Adams would wryly observe upon reading this thread & the attached documents that any time someone is paid $$$ to do research on a particular topic, their results will ALWAYS go in the direction that the person who ordered the study wants them to go. In this case, this study was commissioned by the forces of the "new appraising tech", looking to find reasons to indicate that tech is better than the existing system. Abra-cadabra, and - *VOILA*! 