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Bid Request to Find the Lowest Bidder Coming Soon to Mercury Network

Bid assignments are more often than not awarded to lowest bidders…

For the past couple of days, we have been hearing rumors about Corelogic beta testing a “Residential Bidding” system for Mercury Network. It is no longer a rumor. It will be launched in late August.

It did not take Corelogic long, after it acquired Mercury Network, to implement some changes. The bidding system will allow their customers to request bids from multiple appraisers. They claim that this feature will help their clients find an appraiser faster. Yet, will this be the primary reason it will be used?

Based on what we have experienced and seen in the past, bid assignments are more often than not awarded to lowest bidders and not to the most qualified. Appraisers who bid the lowest usually get the majority of the work. Most established and experienced appraisers usually decline or ignore bid assignments.

In our opinion, bidding systems are nothing more than a big auction of appraisal service. Low bid almost always wins!

Excerpt from Residential bidding: Vendor FAQ

Is this a broadcasting or mass-blast system?

This is not a way for your clients to mass-blast an email to appraisers whether or not they’re qualified to complete the order. This system helps your clients reduce assignment times and make sure they’re choosing the right appraiser for their residential orders – particularly for complex, rural, or similarly difficult-to-assign orders. Your clients can use an extensive set of criteria and weighting factors to select a group of appraisers who are highly qualified to service the order, so if you’re receiving a bid request, you can be sure it’s because your location, professional qualifications and performance are right for the job.

Will clients be sending bid requests looking for the first response?

Not really — our bidding system works differently. Your client can send a bid request to select appraisers who have been pre-qualified based on the client’s custom selection criteria. Then, when your client has the bids they requested, they’ll select the appraiser who best fits their needs for the job. In short, the focus of our residential bidding system is for your clients to quickly select the best appraiser for the job based on the appraiser’s availability, not the cheapest one or the first one to respond… Read more »

Image credit flickr - Financial Times
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52 Responses

  1. John J Appraiser says:

    Pure genius on the part of Mercury and CoreLogic! The tides are turning and we are going to see more and more lenders stop using amcs and use portals. Their practices of fast and cheap will not change, just the avenue in which they acquire it.  Think about it, amcs must be licensed in each state. Most states do not require portals to be licensed. Same old practice, no licensing fees, no bonds,  no oversight, no C& R fee requirements. Pure genius on their part.  We all need to bring this to the attention of our Legislators and Regulators and change the definition of appraisal management companies to include portals. This will force licensing of portals and provide the oversight for consumer protection as our license dictates.  Granted, this will only be a deterrent as I am sure they will find another way to obtain fast and cheap.

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    • Baggins Baggins says:

      Please add individual licensing of all persons working there for portals and amc’s.  Because individuals are not licensed, their accountability for every day interactions is quite limited.

      License the portals?  A novel but interesting proposal.  Per my comments down page here, is it possible that lack of appraiser user controls and transparent disclosure of order volumes may just perhaps skew going rate fee tables in favor of firms and volume producers, leaving the majority of independent quality minded appraisers in a state of permanent dis advantage?

      I’m going to go back to my old tag line;  If you’re deemed good enough to be on any given companies list of approved appraisers, you should be able to expect a fair allotment of that workload.  My first question with any potential engagement is;  Do you have standard fees and rotational distribution?  That’s really the best engagement, complies with ethics and regulation on the same exact note. You are not asked to build your business around a question mark, or compelled to take an antagonistic rather than helpful position regarding the success of your fellow peer appraisers.  Direct rotational assignment with consistent fees closely aligned to the consumer fee is good for all of us, where as preferential assignment by fee is only good for a select few. I’m just one guy at the desk and I just went 10 years without a complaint, and that’s because I don’t compete by fee or turn time. Can we get a credit check dealie so lenders can see how much more responsible I am, via my credit score? Open order capacity? Existing orders in que? We need a different metric other than fee and turn time.

      http://www.mercuryvmp.com/feeanalytics/

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  2. George says:

    If turn times is truly the issue here, The AMCs should have learned by now that having a dedicated, loyal panel who they treat with respect and pay fairly will provide them with all the help they need. It’s not about turn time, it’s about the $$.

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  3. Bruce Consaul says:

    I don’t respond to most bid requests. I’ve learned that if you are providing a quality service  and your fees reflect that then providing bids is a waste of time. I do provide a fee and turn time quote only if it appears to me that I was the only person contacted, at least with that particular email, and only if the person requesting provides their entire engagement and requirements up front. This will be just another race to the bottom.

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  4. Ralph says:

    It’s a ruse desguised with turn times, in a race to the bottom.  AMC’s never care about quality and competence, just cheaper by $1 will get the order.   I don’t take their calls, respond to their emails and have them remove me from panels.  They serve no one but themselves!

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  5. Bryan says:

    UGH!

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  6. Jeff says:

    We are already starting to see changes in Appraisalport as well. I work with Mercury and Appraisal port and have always enjoyed working with both systems but now Corelogic owns both so the changes are already starting to begin. Would be a good time to open a new appraisal portal since Mercury and Appraisal port sold out

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  7. John Pratt says:

    If this was truly about improving turn time then it should only request what is your earliest available turn time and not ask for a fee. I recently received a request which stated they needed a very quick turn time, I replied 3 days and my Fee was $1200 (I knew they would not accept my fee). They got back to me and asked what I would charge for a 10 day turn around. My response was apparently Turn Time was not that important, if you want a cheaper fee I suggest you contact another appraiser.

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  8. I call these “Fishing Expeditions”. This is my automatic reply:
    Sorry, I no longer accept FISHING EXPEDITIONS.
    If you want me to do an appraisal for you then send me your best fee and turn time and I will accept it, decline or give you a counterproposal.
    Thank you
     
    Hank

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  9. Jack connor says:

    Getting greedy. And as always when work slows down there a layoff all Steph and come back to us. When they come back tell him to hang it in there ass.

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  10. Baggins Baggins says:

    Your new and better alternative to Mercury. It’s just that you only can use this if the lender chooses to, and adds you to panel. It’s a simple direct assignment platform that works well without all the hoo ra. This is the system which I recommend to a lender if I’m able to make a direct sale and provide information about where to turn away from amc’s and such. There is a shotgun feature there but it’s different, you’re one on one with companies so it’s just different. You can drop one without effecting the other.  They’re not trying to be data aggregators and advocates, they’re just sticking to the proper limitations of facilitating secure order and delivery. https://valuelinksoftware.com/

    If you have to recommend in the future, save the above link. If you have direct clients, you probably have already picked up something through this system. I’ll snip a photo later, don’t want to share client names. Thanks.

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  11. Tom Moliari says:

    I have been on the Mercury Network for at least 5 years now but I have never ever received a reasonable assignment offer. In fact, almost never receive potential orders from them. This is because I list my fees higher than any of the lenders who use the Mercury Network will pay in my area. So this is no big loss to me. But for those who dogfight over any order that comes across the board, this may be a problem. And for those who do compete based upon low fees, this is just the beginning. As the analytics become better and better, expect more valuations to be completed by AI in the future.

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  12. Baggins Baggins says:

    Tom, please allow me to make your day partner.  You’re going to love this approach.  Set all fees to $1.  Mercury allows search by fee and in predictable fashion, that happens frequently.  So simply enter fee as $1 with note;  Please provide your best fee and most reasonable turn time, and I’ll be happy to accept or negotiate to C&R. 

    Best fee to whom, to be precise?  It’s important to define and understand your audience.  For years I’ve requested a vacancy sign much like a motel, along with an open order count limitation the appraisers can disclose and control.  I should be allowed to tell lenders whom search for appraisers, that I’m sitting there with no orders in Mercury.  Likewise I should be able to solicit to lenders directly whom use mercury so I can build energy.  Lenders should be allowed to know how many orders appraisers are carrying, so they don’t all end up sending all that work to the low bidder or largest firm.  Would lenders still flood them with orders if they understood the obvious volume gaps in service providers, often over inconsequential fee differences? 

    They set this up, I just do my best to operate within the confines of existing modeling.  Not being allowed to solicit via mercury is a missed opportunity.  If corelogic can’t reach them through mls, they’ll reach them through mercury.  The moral of the story is now your distribution portal has a new interested party; corelogic shareholders.

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  13. Mike Ford Mike Ford says:

    Baggins your last link to AMS (valuelink?) gave me a great idea.

    I wonder if a union doing appraisal disbursement work would be an AMC OR if national labor laws would exempt it. Much like a longshoreman or dock worker, carpenters or electricians union?

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  14. Baggins Baggins says:

    That might have been covered in that mess of letters when reg z and also even before then when hvcc rolled out, the thousands of letters appraisers, lenders, regulators, and management companies wrote regarding how to define who’s who’, agency, firms vs amc’s, and all of that. FRB published all of those letters but gave appraisers a special allowance to remain anonymous.  Agency definition was never my concern though, I don’t care what the firms do.  Farming vs managing, per se differences at best.  The core modeling is mirrored from a process viewpoint; acquire proprietary client leads, farm out the orders for profit.  Amc’s merely took over a subset of existing practice and turned it into an entire industry.  Ramped up the puppy mills, if you will.  The writing on the wall has changed, process patterns are changing yet again, and more frequently. Who could predict it and why bother when if you’re a major player, you can steer it another direction instead. The beauty of this particular train wreck is that it’s happening in slow motion over the period of a decade, no end in sight yet. My trick to survival is to only stand on the tracks for very brief periods.

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  15. Mike Ford Mike Ford says:

    If an AMC tells me they typically pay $450 and bid up from there depending on complexity-Id be inclined to take them seriously. If I were looking for loan transaction appraisal work I’d seek those guys out  though the new min fee is fast approaching $525 -550 even for an AMC..

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  16. Chris says:

    I don’t know any appraiser who is charging less than $375, Maybe you guys on the west coast still have an over supply of appraisers.

    We on the east coast are doing fine with fee now.

    Please confirm if you guys are on the west side of the country please

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    • Baggins Baggins says:

      Location does have something to do with it, but it’s not that simple. It comes down to one amc and one appraiser in the end. My mom is an appraiser and she’s not as tough as me towards amc’s and such. They constantly try to trick her and talk her down to lower fees. PCV even boldly told her they’re reducing fees to 333 or something along those lines. They clearly knew CO fees were skyrocketing. Their likely thought process was to recover the loss margin from one appraiser, passed on to another. There is no more consistency, it’s a free for all, courtesy of amc management. They got exactly what they promoted; ready substitutability of business relationships. Now they seem to be working as agents of fee suppression, in complete denial when the appraisal fee breaks their regular norms. Either they don’t understand inflation or they don’t understand cost of living and wages, or who knows, they’re having a tough time all around. They’re tech jockies not real estate professionals.

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      • Chris says:

        I agree !!! I pooled our cont’ Ed class by asking them is anyone accepting fees under $250, NO ONE, I asked under $300, NO answer, I than asked $350, And happy to say loudly….NO ONE !!!

        Its all B.S that some appraisers out there believe that if they offer $225, and they put in for $350, and a minute goes by and they get an email saying someone accepted the offer…like 1 minute later…its just B.S.

        Hey, they are running a business like us….they have a right to shop for low fee’s.

        The word I am hearing is that these lenders who contracted with the AMC’ s are getting really pissed with them.

        I believe with the amount of appraisers not curtailing to these assholes…Their time is almost over.

        Stick to you guns appraisers…its going to get better for you as appraisers retire.

        If you are on the west coast with an over supply of appraisers…stick it out, get organized, call the Virginia Coalition of Appraisers and organize yourselves.

        The nude models, who stand in front of the art students at our university’s and collages, organized themselves…….If they can do it, YOU can do it !!!

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        • Baggins Baggins says:

          The amc’s argumentative justification for suppressing fees never did hold water in the first place. I’m not worth less because I’m in closer proximity to other professionals. We’re not selling widgets and drive time is inconsequential to most of us within reason.

          It’s the same old thing in real estate right Chris, “they’re selling rainbows.” Got to hand it to the amc sales people, if they would have used those selling rainbow methods in general realty sales, they probably would be top tier. Regrettably for them, it’s impossible to sell someone elses service levels without having them agree to that in the first place. In the case of amc’s, they certainly did try to sell the chicken before they had even acquired the eggs.

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          • Chris says:

            Well said !!!

            All they had to do is follow the VA model. We have no issues ! Payments are made, most of the time is under 30 days, Some idiots try to play the game that they forgot…ya right…But just the threat of making a complaint to the VA is enough…They than over night the check……lol

            Our profession is always changing, this is just another one.

            Stick to you guns appraisers…they need us…don’t forget !!!

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    • Mike Ford Mike Ford says:

      I speak to East Coast and Southeastern region appraisers all the time and I dont know one of them that thinks $375 fees are “just fine.”

      Effective September 1, 2017 Virginia VA fees (and all Virginia State minimum fees as a result) will rise to $500 or more). THAT is a reasonable fee on the lower end of the reasonable range. Not $375.

      As for your ‘Poll” about how many people would have answered “yes” if you had instead asked “Is it ok to cheat on your income taxes (for example only) by not declaring cash fees paid at the door?” That no one would admit to doing such a thing in a public forum among strangers does not mean it does not happen. I’ve had appraisers tell me specifically that one should always try to get cash payments whenever possible ‘because IRS is not going too have anyway to know about it.’ By the way dont assume IRS wont know about those. I used to work for IRS, remember?

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      • Chris says:

        when you cash a check and show your drivers license, the bank writes that down, all the IRS has to do is search you drivers license.

        Don’t do it !!! We are certified !!!

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        • Mike Ford Mike Ford says:

          Lol, cash payments don’t involve drivers licenses, and ANY IRS agent using the Accurint System needs to have specific justification for doing so in advance. They cant just use it for fishing expeditions – which wouldn’t be a very efficient method of finding tax cheats in the first place. Its real value is asset searches.They have better methods than DL# for assuring basic compliance.

          You ARE 100% right on last sentence – “just dont do it.” It’s dishonest. Although that entire meme had little to do with the original point being made.

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          • Baggins Baggins says:

            Interesting, the IRS relationship. Several years back was my last year with many amc orders in the mix. I found that many of the amc’s 1099’s did not have proper figures for amount paid to me. Although that was lower than my figures and would have relieved some tax burden, I corrected and manually entered 1099’s differently. Or, well I can’t remember now but I did report honestly and found it to be an unnecessary time drain to not be able to rely on the 1099 statements. Some of them mis stated for only like 2 or 3 mid year orders where nothing could go wrong with that book keeping if done properly.

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            • Mike Ford Mike Ford says:

              Baggins-similar here. I don’t want to embarrass the Big O from India that used to virtually control the AMC market but once, before I went to work for IRS they failed to 1099 me. They DID however send IRS the info under their payment entity ($1,500). I also showed the income…under the Big O company I worked for. Any surprise IRS wanted to adjust my tax liability by $3,000 !? Don’t expect a lot of common sense from IRS once you point out a mistake.

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  17. Mike Ford Mike Ford says:

    It is their right to do so.

    I’m just going to sit back and watch now. If AVMs are so good then there will be no problem. If they are NOT, then Freddie will collapse just like IndyMac did.

    Of course that does not mean I wont seek work directly from borrowers that feel they’ve been screwed by AVMs and cheated on the interest rates that are tied to loan to value ratios.

    It may just open an entirely NEW area of business for me. Certainly helping to look out for consumers interests can’t be a bad thing.

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    • Chris says:

      Mike…..I have to know…

      1. How dumb are these people?

      2. Who is actually pushing for this nonsense?

      3. Didn’t any of these people learn anything over the years !!?

      And you are right, We just have to find these sale in mls, call the buyers after settlement and ask them to use our services….Can you imagine the hell these people will live with…lol

      I can NOT wait !

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      • Baggins Baggins says:

        You’re asking about larger political issues bro.  Best turn to the pros.

        Geesh, which one to present to you, they speak very competently on financial systems like all the time.

        In a nutshell;  protectionism misdirected.

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      • Mike Ford Mike Ford says:

        Chris, in order asked:

        1. Beyond comprehension. Perhaps criminally so. Certainly they should not be allowed to walk public streets without a keeper.

        2. Two groups-the investors that have not been named or organized. The ‘big’ boys. Second group are those employed in the industry itself. They can make much more money without all those pesky regulations.

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  18. Tom Moliari says:

    Even low bid websites for obtaining appraisal assignments may soon be a thing of the past. The process of eliminating residential appraisers from mortgage loans has begun.

    Freddie Mac – Freddie Mac Introduces Innovative Appraisal Alternative for Home Purchases and Refinances

     

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    • Baggins Baggins says:

      Good one Tom.  There is a larger game at play though.

      Just found this group this morning.

      Arguing for stricter lending standards, the investors themselves.

      http://investorsunite.org/

      The United States Congress is considering Government Sponsored Enterprise (GSE) reform that would wipe out Fannie Mae and Freddie Mac shareholders for good. These shareholders include everyday Americans such as public service retirees, teachers, firefighters and police officers. These individuals and pension funds invested in the GSEs before, during, and after the conservatorship and should be made whole under any reform. Taxpayers have been repaid with interest for their 2008 bailout of the GSEs.

      Our country’s respect for the rule of law demands that private property rights be protected and Investors Unite gives Fannie Mae and Freddie Mac shareholders a voice in that fight.

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      • Tom Moliari says:

        Many individuals would like to see Fannie and Freddie eliminated and have private investors funding the mortgage market. That may come to pass in the not-too-distant future. One of the main reasons why there is still a large market for residential appraisals is because Fannie and Freddie require them. But now that they have built up their databases with appraiser supplied data on residential properties, they are able to value properties cheaper and faster with AI.

        Whether or not investors replace Fannie and Freddie in the secondary market, the game that is played now is control of data. Investors are likely to purchase the Fannie and Freddie data on residential properties. If proven accurate, AI valuation models will be used by investors. If they are not proven to be accurate, investors will dump them as use appraisers some other method. But when you consider the quality level of the average residential appraisal with fees of $275, it is not hard to imagine that AI valuation models may be as accurate or perhaps more accurate than the average residential appraisal out there when it comes to valuing cookie-cutter tract built homes and condominiums.

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        • Chris says:

          I don’t think any of us are doing cookie cutters anymore, and not for a long time, only if all GLA match and lot sizes match and there is enough of sales in the development.

          Our sub-division housing here in the PA area has wide value differences. And a lot have external to deal with !!

          Think about it , all renovated versus beat up, if I was an investor…..

          Same old talk !!!

          For the past 25 years I have been hearing this crap!!! And I have NEVER not been busy.

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        • Baggins Baggins says:

          Great ones Tom. Well, checks and balances are not a product of the government, they are a product of We The People. The private companies are purchasing data in every industry possible. I’ll go out on a limb and predict that real property data will suffer the same ailments regarding stale data, ill defined or absent comprehensive polices on shelf life retention of data, and often abused data streams as third party data suppliers literally make it up in order to have data to sell, that or violating privacy left and right.

          When data fusion centers grow legs, eyes, ears, a nose, can knock on a door, and recognize biased participators directing their programming and then self correct that script, perhaps they could one day replace humans.

          I’d beg to disagree that our services are in high request per mandate and this will fail in the absence of the current suppliers whom promote the mandate. Decentralization typically results in stronger free market participation rather than weaker. The notion of a decentralized investor market coupled with centralized ai data management, does not compute.

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    • Baggins Baggins says:

      Gave that a more careful read. Collateral risk, for the benefit of investors primarily. Is that aligned with the chartered mantra? Continuing to paint the reason for regulation as something to protect them, rather than prioritize the consumers. The re prioritization of time over risk is not aligned with the spirit of what this private consortium of lender interests is supposed to be accomplishing. If you still think the gse’s, the fed, and the cdc are government agencies think again. They’re for profit enterprises, with government sanction.

      There is probably reference gold in there regarding valuation practice standards, but I don’t have time to dig into that right now. The charter is essentially their contract to the taxpayers whom they’re supposed to answer to.

      FEDERAL HOME LOAN MORTGAGE CORPORATION ACT

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  19. Mike Ford Mike Ford says:

    Reprinted from an email sent to me:
    In an article today (8/21/17) written by Rob Chrisman in Mortgage News Daily, the move to use AVM’s for home purchases by the GSE’s is outlined.
     
    It is interesting to note the different perspectives of the mortgage giants.  I have bolded those below.
     
    Freddie Mac is introducing an automated appraisal alternative for some purchases and refis. “Freddie Mac’s automated collateral evaluation (ACE) assesses the need for a traditional appraisal by leveraging proprietary models and using data from multiple listing services and public records as well as a wealth of historical home values to determine collateral risks.” ACE has been available for some refis since June, but will also be available for some purchases starting in September. So starting this fall borrowers looking to buy a new home could forego a traditional appraisal as Freddie Mac expands its big data valuation alternative. ACE uses more than 40 years of historical data and public records to model and vet home values. ACE mostly applies to low-risk mortgages. The program became available for qualified refinancings in June but the roll out for new home purchases is Sept 1 for primary residences. Borrower savings of about $500 expected when using appraisal alternative, closing times on new loans to narrow by seven to 10 days.
    Fannie Mae is updating Desktop Underwriter® (DU®) effective Saturday, August 19, to offer Property Inspection Waivers (PIWs) on some purchase transactions (view DU Release Notes). “This update responds to market changes, and allows our lenders to offer your borrowers a choice for efficiency and cost savings by foregoing an appraisal on some lower-LTV loans. Eligibility is limited to one-unit principal residences and second homes up to a maximum 80 percent loan-to-value ratio. It is estimated that PIW offers will be issued on less than 5 percent of purchase transactions. Offer rates will vary by lender and fluctuate over time.
    “Lenders have the option to exercise a PIW offer, and may not accept it if they have any reason to believe that a full appraisal should be provided (for example, if there was a hurricane or other natural disaster in the area of the property), or if the borrower wants an appraisal. View more information about PIWsBorrowers always have the choice to obtain an appraisal…we expect the acceptance rate on appraisal waivers for home purchases to be low. Many home buyers want an appraisal to support the price they pay for a home, and most of purchase contracts include a contingency clause for an appraisal. Fannie Mae continues to require full appraisals on the vast majority of purchase money mortgages to establish market value of homes and provide valuable input to our appraisal database to support CU analytics and future innovations.”
     
    Dave Towne”
     

    Two observations: (1) All this hoopla and risk for what they claim will likely only be 5% of mortgages? Really? Does anyone really believe that? Sounds like spurious rationalization to minimize the appearance of risk-perhaps so taxpayers will continue to backstop bad loans.

    (2) “Leveraging” models and using public data. What the HELL does THAT mean? Leveraging as an alternative euphemism to analyzing or studying? How’s that forty year old historical data doing to help someone that intends to ‘flip’ a note in six months? Extraordinary assumption that short term trends mirror the forty year trend?

    But perhaps my favorite is only use PIWs in 80% LTV loans. How will they KNOW whether it’s an 80% loan if they have no idea what the market value is?

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