Are ‘No Appraisal’ First Mortgages the Future?
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A human appraiser usually goes to a home…
The article, linked here, purports to say that future mortgage loans will be done without using the services of a “boots on the ground” appraiser… "the human appraiser". Why??… because speed and low cost are paramount when people want to finance their largest investment in their life.
From the article:
“The appraisal process, which typically is not automated, remains a problem. A human appraiser usually goes to a home, takes pictures, . It takes seven to ten days to turn around, van den Brand said.
But this, too, could be automated, he claimed.
“Appraisals are just data,” he said. Satellites could take pictures of a home. Comparable data for the neighborhood can be looked up. Eventually, an appraiser won’t have to come to the house, cutting seven to 10 days from the process.”
What an absolutely naïve comment by this lender! Appraisals are MORE THAN just data. Appraisals are a verification that the components of a home actually exist in confirmation that those do not degrade the value of the property. Apparently though, the fact that there ‘might’ be something terribly wrong with the structure is of no concern to this lender.
Satellites, or for that matter, front photos only taken by a ‘field inspector’ driving by at 40mph will not reveal all the specifics of a property that the lender really should know about.
I don’t claim to be an expert on the lending appraisal and underwriting requirements of the GSE’s and other agencies who insure mortgages.
But I can tell you this. The raising of the de minimus to $400,000 or higher will succeed in putting appraisers out of business, across this country. That will result in a factual “appraiser shortage” currently touted as fake news by various AMC’s and some lenders who do loans in ‘underserved’ counties. The same will happen if the regulators buy into the notion that property info is not really paramount for first mortgages.
I guess I really should get my resume rewritten to show my qualifications to be a bouncer at a Nevada desert bordello… as I mentioned in a previous essay I wrote. The only problem with this is there are few of those entities that exist, but there will be lots of appraiser applicants… definitely NOT an appraiser shortage.