Tagged: Freddie Mac

FHA Temporary Partial Waiver - Actual Reasoning & Directive 2

FHA Temporary Partial Waiver

FHA Appraisers, on April 26, 2021, FHA issued this Temporary Partial Waiver, which is active for one year. This temporary partial waiver is effective for the 12-month period between April 26, 2021, and April 26, 2022. It is found in FHA INFO #21-25 April 27, 2021: Temporary Partial Waiver of the requirements of the single Family Housing Policy Handbook 4000.1 Section II.D.4.c.iii.(F)(2) Required Analysis and Reporting that the Appraiser must include, analyze and report a minimum of two active listings or pending sales on the appraisal grid (in addition to at least three recently settled sales) in an Increasing Market...

Forms Redesign Extended Into 2023-24 6

Forms Redesign Extended Into 2023-24

What once was a ‘three year’ project to redesign and implement revised appraisal forms has morphed into one taking far longer. Actual implementation and use of ‘new forms’ are not scheduled to happen until (presumably) early in 2024, but could be extended even further. By 2024, the currently used ‘forms’ will be 19 years old, and the current UAD overlay entering ‘teenage hood’ at 13. For context, the current Planet Mars Perseverance Rover mission to successfully plan and land scientific instruments took only 9 years! Details for the ‘forms redesign extension’ are based on the announcement from Fannie Mae (and Freddie...

Our Job Is to Observe & Report... Not to Commit Mortgage Fraud 25

Our Job Is to Observe & Report

Our job is to observe and report. For an appraiser to arbitrarily go into another area to get “comps” merely because it would result in a higher value is an act of fraud… Dear President Biden, Sir, I welcome your incoming administration, and my sincerest hopes and well wishes are extended to you in terms of healing in this nation. Additionally, as an appraiser, I welcome the desire for equality in housing opportunity in the United States, and if there is any bias in my profession, I support efforts to correct this. However, in watching your party’s position on race...

FHFA RFI on Hybrids, Waivers, AVMS, Racism... 6

FHFA RFI on Hybrids, Waivers, AVMS, Racism

The FHFA is requesting input on appraisal related policies, practices and processes. We encourage everyone to submit comments. The Request for Input (RFI) is open to comment until February 26, 2021. The input received in response to the RFI will be used by FHFA to determine the necessary modifications needed to ensure Fannie Mae and Freddie Mac (the Enterprises) operate in a safe and sound manner. “Modernizing the appraisal process has the potential to create a more streamlined and accurate collateral valuation process. But if modernization is not properly adopted, it could have negative unintended consequences,” said Director Mark Calabria....

Gaming of the System - Not With My Money Fannie & Freddie! 8

Gaming of the System

…gaming of the system is happening not only with income, (yes automated income verification has returned) but now property valuations… Appraisers have some very strong opinions on computer driven appraisals. Others are noticing the dangers as well. It is more than just automated valuation models though. In an article written by Danielle DiMartino Booth, for Bloomberg, Fannie Mae and Freddie Mac are specifically called out on their appraisal waivers. The author compares the dangers of the automated income verification being done in the 2000’s and how the system was easily gamed to the appraisal waivers currently being done. The author...

Reconciling the Erosion Within My Profession... Preserving the Public Trust 12

Reconciling the Erosion Within My Profession

The continued reliance of unregulated aggregators and bifurcated products continues to erode the public trust at the expense of discarding the profession specifically intended to promote the public trust. How does this protect the public?… On June 14, 2005 Steve Jobs told a class of graduates, “you can’t connect the dots looking forward; you can only connect them looking backward” Around the same time, I was appointed as the sole residential member of the appraisal licensing board of my state. Little did I realize that this 2005 governor-appointed position would eventually lead me to sharing a stage in 2018 with...

Could the CFPB Eliminate AMCs? End of AMCs Fast & Cheap Mentality? 10

Could the CFPB Eliminate AMCs?

Will this be detrimental to appraisal management companies that operate under the fast and cheap mentality?… Let’s face it, the appraisal management company will not survive with quality appraisals at a reasonable and fair fee… The Consumer Financial Protection Bureau is seeking public comments on the proposed rules for a Qualified Mortgage. The proposed rules require the lender to season the mortgage for 36 months before they can sell it to Fannie or Freddie. What that means is the lender will own that loan for 3 years. Fast forward if the new rule goes into effect… The lender will be...

Ending the Conservatorship... Potential Changes to GSEs Gaining Steam 2

Potential Changes to GSEs Gaining Steam

Folks, if you have not been hiding under a rock since 2009, you know that both FNMA and FrMAC have been under ‘conservatorship’, regulated by FHFA for over the past 10+ years. If you’ve been paying attention, you also know that over the past few years there has been increasing talk to end the conservatorship, and now, to add competitors to the GSE’s in the mortgage loan purchase arena. That prospect is outlined in the latest Report to Congress by Mark Calabria, Director of FHFA, summarized in this article posted Tues, June 16, 2020, in Mortgage News Daily: The Federal...

Professional Opinions Can Never Be Replaced By Automation 10

Professional Opinions Can Never Be Replaced

Professional OPINIONS have value that can never, repeat NEVER be replaced by automation… Earlier this week, George Dell‘s article titled “Why is Residential Appraisal in Trouble?” was published on AppraisersBlogs. Respectfully, George misses or misinterprets a few items. There has been zero evidence that an AVM produces credible approximations of MARKET VALUE consistently or with even an acceptable degree of variance. None. Like George indicates, an AVM is NOT an appraisal. By definition, it is not an appraisal. FIRREA required appraisal standards; NOT banking industry and TAF proposed alternatives. TAF is very far out of line giving AVMs any imprimatur...

Why is Residential Appraisal in trouble? Is Residential Appraisal Finished? 29

Why is Residential Appraisal in Trouble?

Why is Residential Appraisal in trouble? Is Residential Appraisal Finished?… There will soon be no need for residential appraisers. I remember years ago, doing education for my merging AIREA/SREA chapter(s) in San Diego. AVMs were just coming to our attention. I invited a MAI who happened to also be a PhD in economics, Phil Mitchell. The room was full. Someone asked about those “automated algorithmic computer calculated appraisals.” Could a canned program do as well as an appraiser? Without hesitation, he answered: “Not only will these models be able to appraise – they will do it better!” That was 24 years ago. He was right, partially. I...

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