Waivers, huh?

[CGinMN]

The other thing we don’t really know or haven’t heard anything about is concentration risk. If waivers are granted more often for specific property types, say 1-15 year old C2/C3 tract homes, waiver concentration could be higher in specific neighborhoods. If it ends up happening that these default at higher rates of/when the market sours, are there tail risks (legal) to the GSEs? We already know waivers can’t detect property condition-related issues, which is probably one reason they are moving away from waivers to property data collections.

 

[Zoe]

You are not reading the chart correctly. It shows shares, not totals. That is not 40.7% or all loans, it is 40.7% of the loans with waivers.
You can check that what I am saying is accurate by simple adding the percentages in that chart. You will find that waiver and appraisal will both add up to 100%

They are increasing dramatically. You see the inherent risk I am sure.

I have seen people totally change the interior of a home for the worse in a short period of time. Where are all these PDCs coming from?

Are they licensed?

Waiver is even more risky.

 

[Zoe]

Definition of INHERENT

involved in the constitution or essential character of something : belonging by nature or habit : intrinsic… See the full definition

www.merriam-webster.com

​

inherent​

adjective​

in·her·ent in-ˈher-ənt
also
-ˈhir-

Synonyms of inherent
: involved in the constitution or essential character of something : belonging by nature or habit : INTRINSIC
risks inherent in the venture

"What we got here is failure to communicate"

 

[Zoe]

I have seen subdivisions change in a short period of time also. See the inhirent (intrinsic) risk boy, girl?

That's okay. I'll have work one way or the other.

 

[djd09]

Wells Fargo has fired dozens of loan officers accused of misusing appraisal waivers. Some say the bank gave them mixed signals.​

• Wells Fargo fired dozens of mortgage loan officers last week after investigations found they made allegedly improper changes to loan files.
• Wells Fargo said loan officers changed the number for a home's value without getting the borrower's consent.
• The changes made the loans qualify for an appraisal waiver from Fannie Mae and Freddie Mac.

One former employee said some loan officers might change the value if they found a more advantageous valuation on the real-estate websites Redfin or Zillow, which rely on algorithms fed on data from millions of homes across the country. Borrowers might request a change after looking at those same websites.

Most of the loan officers who spoke with Insider also point out that Wells Fargo allowed all of them to continue writing new loans for another two years, raising questions about why Wells Fargo waited so long if the behavior was so harmful that it required firing broad swaths of the bank's loan officers.

Tobias Peter, the assistant director of the American Enterprise Institute's Housing Center, said his research suggested that waivers, while relatively new, had a positive effect on the real-estate market. Peter said appraisal waivers tended to cut down on price inflation that sometimes occurs when human appraisers, especially working on refinances, might be inclined to work with borrowers to provide a valuation that they need, say, for a cash-out refinance.

Wells Fargo has fired dozens of loan officers accused of misusing appraisal waivers. Some say the bank gave them mixed signals.

Wells Fargo said the fired employees engaged in misconduct. But some loan officers said the bank's policies weren't clear.

www.businessinsider.com

 

[J Grant]

I’d like to know, during periods of rapidly increasing property values (20-21), if waiver issued comps were utilized similar/more/less in appraisals than the other comps, and also if they adjusted to indicate values that are same/more/less than other comps utilized. Then we can find out if there’s “data cancer.”

Agre- sales fiannced using a waier are NOT identified as such ,unlike every other sale which is identified as conventional, FHA, VA, cash - so ther is no way for appraisers, investors, or anybody to track the prices of sales sold using waivers to compare them to other sales.

G Hatch keeps going on about how lenders only need to know if a sale is grossly overvalued - 1) that is really bad news if true, for individual homes and their owners could fast be underwater and affect on markets - 2) the lenders should not be the only ones in control of the valuation since they are salespeople, they are not the investors buying/holding the loan and they are not the taxpayers backing the loan - the waiver, as far as i know, is the first large scale shift in res mortgage Fannie/freddie loans where the lender decides the value ( and yes we f** know by now they also use an AVM ) - but despite using an AVM, the reality is the lender decided the subject value !! that is the old mortgage brokers wet dream -

the bottom line about waivers is they evade the regulations put on appraisals wrt predetermined values by not using an appraisal

Idk how they convinced the regulators to accept that - i suppose with the lower risk speech - but they make their own risk studies so who is to say - plus, their risk studies leaveout the impacts on markets on sales financed with waivers, plus, again, if they are so certain the risk is so low, why aren't the lenders made to back these waiver valuations with reps and warranties? A lender must back an appraisal with reps and warranties for the collateral in the loan, but they do not do that on a waiver.- it falls 100% on the tax payer. One would think if the Waiver was such a low risk, the lender would have no problem with the reps and warranties on the value ( sarcasm). The lender must provide reps and a warranty on the value of an appraisal, but not for a waiver. A different set of rules.

 

[djd09]

ironically, with sky high home prices, there is no appraiser petition for value pressure or an ivpi...

 

[George Hatch]

Agre- sales fiannced using a waier are NOT identified as such ,unlike every other sale which is identified as conventional, FHA, VA, cash - so ther is no way for appraisers, investors, or anybody to track the prices of sales sold using waivers to compare them to other sales.

G Hatch keeps going on about how lenders only need to know if a sale is grossly overvalued - 1) that is really bad news if true, for individual homes and their owners could fast be underwater and affect on markets - 2) the lenders should not be the only ones in control of the valuation since they are salespeople, they are not the investors buying/holding the loan and they are not the taxpayers backing the loan - the waiver, as far as i know, is the first large scale shift in res mortgage Fannie/freddie loans where the lender decides the value ( and yes we f** know by now they also use an AVM ) - but despite using an AVM, the reality is the lender decided the subject value !! that is the old mortgage brokers wet dream -

the bottom line about waivers is they evade the regulations put on appraisals wrt predetermined values by not using an appraisal

Idk how they convinced the regulators to accept that - i suppose with the lower risk speech - but they make their own risk studies so who is to say - plus, their risk studies leaveout the impacts on markets on sales financed with waivers, plus, again, if they are so certain the risk is so low, why aren't the lenders made to back these waiver valuations with reps and warranties? A lender must back an appraisal with reps and warranties for the collateral in the loan, but they do not do that on a waiver.- it falls 100% on the tax payer. One would think if the Waiver was such a low risk, the lender would have no problem with the reps and warranties on the value ( sarcasm). The lender must provide reps and a warranty on the value of an appraisal, but not for a waiver. A different set of rules.

Appraisers can verify every sale they use to find out about the financing that was used. So, "no way to know" isn't a thing. Besides which everyone here has experience using all-cash sales where the market participants used no appraisal or AVM at all, and we never previously worried about the market getting away from .....the market. If it hasn't happened with the all-cash sales then what makes you think the use of a relative few 0-80% LOANS would enable the market to run away from the market?

Ultimately, what the lenders WILL do is primarily limited to what their regulators ALLOW them to do. So when it comes to stopping the lenders from doing things appraisers don't like it is those regulators who have the authority to apply that coercion.

 

[djd09]

Wells Fargo has fired dozens of loan officers accused of misusing appraisal waivers. Some say the bank gave them mixed signals.​

• Wells Fargo fired dozens of mortgage loan officers last week after investigations found they made allegedly improper changes to loan files.
• Wells Fargo said loan officers changed the number for a home's value without getting the borrower's consent.
• The changes made the loans qualify for an appraisal waiver from Fannie Mae and Freddie Mac.

One former employee said some loan officers might change the value if they found a more advantageous valuation on the real-estate websites Redfin or Zillow, which rely on algorithms fed on data from millions of homes across the country. Borrowers might request a change after looking at those same websites.

Most of the loan officers who spoke with Insider also point out that Wells Fargo allowed all of them to continue writing new loans for another two years, raising questions about why Wells Fargo waited so long if the behavior was so harmful that it required firing broad swaths of the bank's loan officers.

Tobias Peter, the assistant director of the American Enterprise Institute's Housing Center, said his research suggested that waivers, while relatively new, had a positive effect on the real-estate market. Peter said appraisal waivers tended to cut down on price inflation that sometimes occurs when human appraisers, especially working on refinances, might be inclined to work with borrowers to provide a valuation that they need, say, for a cash-out refinance.

Wells Fargo has fired dozens of loan officers accused of misusing appraisal waivers. Some say the bank gave them mixed signals.

Wells Fargo said the fired employees engaged in misconduct. But some loan officers said the bank's policies weren't clear.

www.businessinsider.com

 

[djd09]

see them following USPAP...hell no...and why should they it is useless