Category: Snippets

Regulators today are often removing barriers to responsible behavior with the hope of expanding lending activity since falling mortgage rates aren’t the answer. Banks are pushing back and it is instructive to see the way FDIC thought back in 2006. FDIC and the U.S. Treasury have turned out to be very anti-appraiser and are championing ways to automate as a way to replace us. Think about wildly inaccurate Zestimate-like AVMs on first mortgages. Economist, real estate agent and good follow John Wake shares this:

Here is a NAR deck on AVMs (automated valuation models). Here are some recent survey results that show more than half of the respondents indicated, it is either NEVER appropriate or NOT SURE if it is appropriate for a non-appraiser to perform a valuation on a home. So the jury is still out for a third of respondents but a third are absolutely sure it is inappropriate. One can infer that appraisers have an opportunity to convey what AVMs really are to the public.  

In meetings with the National Association of Realtors and The Appraisal Foundation, there was a lot of time spent listening to AVM owners espousing their importance and more sober observations of the pitfalls. One of the presenters seemed to be bragging that 90% of the time, a good Automated Valuation Model (AVM) can be within plus/minus 10% of the actual value. Remember that Zillow’s Zestimate is within 5% of the actual value only 50% of the time. Both numbers are very dreadful and very random inconsistency across the marketplace. But still, there is a place for their use in conjunction...

The Most Important Issue Facing The Appraisal Industry RIGHT NOW If you thought the answer was the House “modernization” panel discussion that occurred in front of the House Financial Services Committee this week you were wrong. The state of North Dakota is attempting to obtain another waiver request, not the laughably written request of last summer. Now North Dakota is requesting a waiver for five years! From the Federal Register The request seeks a waiver of appraiser credentialing requirements for appraisals for federally related transactions under $500,000 for 1-to-4 family residential real estate transactions and under $1,000,000 for agricultural and commercial real...

Banking still hasn’t recovered from the financial crisis using this metric. History is repeating itself right now with the “modernization” movement – code word for “automated valuation” using abysmally unreliable technology. “Trust” is Hard To Win Back Trust is a wildly important asset to have in the banking industry. They violated the public trust during the housing bubble and have worked hard but still haven’t reach pre-bubble trust levels. Let this be a lesson to Appraisal Management Companies, Mortgage Lenders, GSEs and Regulators who are currently working hard to undermine consumer trust again through the mortgage valuation process in order...