Appraisers = Buggy Whip Makers?
Appraisers Going the Way of the Buggy Whip Makers?
Ken Harney has another article all appraisers should read: Refinancing mortgage? Maybe you don’t need that appraisal after all
This discusses and discloses the Fannie and Freddie initiatives to eliminate appraisals ON CERTAIN TYPES OF LOANS.
Of course, the loan sellers/salespeople are all in favor of speeding up the process, eliminating costs, and promoting a ‘better relationship’ for their loan customers.
Appraisers, on the other hand, are wary of the processes which rely on dated property info kept in giant data bases, and disinterest by ‘those with the gold’ to really understand the property they are loaning on.
As Mr. Harney’s article mentions, appraisers are warning about the process which is akin to the low or no doc loans pushed and accepted back in the early to mid-2000’s, before the worldwide financial meltdown – which appraisers DID NOT CAUSE, by the way. Whether anybody actually listens is another matter because the whole focus is to SELL LOANS NOW regardless of future consequences.
Excerpt from the article:
Do we always need an appraiser to tell us what a house is worth? The two biggest sources of mortgage financing in the country — Freddie Mac and Fannie Mae — think not…Both companies emphasize that they only permit waivers of appraisals when they have substantial data on the property involved and the local real estate market….
Not surprisingly, appraisers view the whole trend as an impending nightmare — potentially sending them to the fate of buggy whip manufacturers, travel agents and others whose industries have been decimated by new technologies. Unlike buggy whip makers in an age of automobiles, however, appraisers argue that they have a legitimate, continuing role. There is simply no technological substitute for what they bring to the table: Eyes, ears, noses and the ability to independently analyze a home, its interior, the neighborhood environment and market conditions, and arrive at an accurate opinion of its current worth. Computer programs may be jam-packed with data and algorithms but they have no clue about what damage — or improvements — may be present inside a house.