Wait.... are you saying that, before the crash, ours was an industry of advocates, not disinterested third parties? And that, somehow, we've cleaned all that nonsense up - no longer do we produce inflated reports 'as an industry'. Yet now - even though we've gotten rid of all those bad apples, the appraisals will lack credibility because of the alternative SOW? Tell me, J - if our services can't be relied on in either situation, what are we actually accomplishing?
Stop twisting around what I Said.
The services of honest appraisers who are not number hitters could always be relied on - the problem pre crash is that allowing mortgage brokers/loan officers, and RE agents to pick the appraiser meant the honest appraisers did far less lender work than the number hitters did during that time . Do you understand that , or not ?
Problem is we have not gotten rid of all those bad apples . It never happened, only a small number of appraisers lost their licenses after the crash. There were some corrections put into place post crash but lots of holes in them and a conflict of interest wrt AMC system exists.
A minority, idk of what percent of appraisers, do inflated values - a lower percent than pre crash but any amount is too much - but allowing it to go on is deliberate, agencies and lender interests voted down the round robin system such as old FHA or VA, which is the better solution wrt appraiser independence and they neutered any other meaningful protections of it.
Appraisal waivers, strangely enough, do exactly what the bad appraisal actors pre crash (or now ) for that matter do - make the SC price the amount loaned on for LTVM or the refinance target valu estimate a loan officer gives. The only stop gap on it is as long as the SC price or loan officer value falls within a range of value from Fannie/freddie proprietary AVM. Nobody outside their closed system knows how wide that value range is, or how good the AVM is .
How many high SC priced got green lighted with waivers, that started the ball rolling with price increases ? We will never know. They will never tell us. They will never do a study to find out, an dif they do, would not release it. Fannie and freddie design studies to result in what they want, can tweak any parameters of the study they want, and only make public those results they want. So who can argue with it ? Nobody can. They put forth a false measure about appraisals and valuations based on default risk, but appraisals are not done for default risk purpose, they are done for a MV opinion purpose for the front end decisions about a loan. .
By using a false measure for appraisals, default risk, they are able to say things like this or that showed no increase in risk or sliver of less risk. Idk, is the fact that these enterprises needed bailouts a clue to how competent they are at assessing risk? Just saying.
