Originally known as Fannie Mae’s Collateral Underwriter (CU), and subsequently Collateral Underwriter 2.0 (CU-2)i this always dubious product of Fannie Mae is increasingly being referred to by some, if not many American Appraisers as The Fraudulator / Underwriter 2.0 (FU-2). To be clear it is not limited to the Collateral Underwriter (CU & CU-2) software. The new Fraudulator (FU-2) combines the CU products with their numerous improper uses. The end result of which includes OUTRIGHT FRAUD being perpetrated against banks via the repurchase letters Fannie Mae now issues on a quota based system rather than because of legitimate appraisal defects....
It is disheartening to think that those of us who have worked hard to maintain good credit scores will now be penalized with higher mortgage rates and fees, just so the government can subsidize people with riskier credit ratings. It’s no surprise that the Federal Housing Finance Agency’s (FHFA) new rule forcing homebuyers with good credit scores to pay higher mortgage rates and fees is causing a stir. The Federal Housing Finance Agency’s push for affordable housing is admirable, but it should not come at the expense of those with good credit scores who are trying to buy or refinance...
How can it be said that valuing a property lower than its eventual sale price based on current market evidence is tantamount to BIAS? The article titled “FHFA Data Fueling Looks into Appraisal Bias” was in the Inside Mortgage Finance Publications e-newsletter on 4/06/23. The Federal Housing Finance Agency is a is a critical provider of the data necessary for oversight, enforcement and research, FHFA Director Sandra Thompson noted during a discussion in late March. According to aggregate statistics from the Uniform Appraisal Dataset released by the FHFA, roughly 57% of appraisals were above the contract price in 2021. Just...
We the people need to redirect the mortgage lending direction… The time for every appraiser and consumer to step up is now. This country was founded on the principle of “We the people”. Please sign this petition and share it everywhere. Appraisers have been the target for blame for everything gone wrong in the mortgage lending world. We were blamed for the Savings and Loan collapse, the financial crisis of 2008, and appraisal bias and racial discrimination. Appraisers have even been the target on loans gone bad after several years on payments. Yep, we have been the target and have...
In response to the Federal Housing Finance Agency’s (FHFA) decision to allow Fannie Mae to expand its appraisal waiver program, the American Society of Appraisers (ASA) has released an op-ed by ASA’s Strategic Partnership Officer, John D. Russell, JD, criticizing this move. ASA believes that by expanding the appraisal waiver program and relying on data and models for mortgage lending instead of human interaction, Fannie Mae is leaving behind two very important aspects: safety and soundness as well as consumer protection. The fear is that overvaluation may occur due to a reliance on models which always try to chase value...
Waiving appraisal requirements on residential homes could erode consumer protection, stall attempts to create diversity in the profession… The recent announcement from Fannie Mae that they will waive the requirement for residential home appraisals has caused quite a stir in the industry. Fannie Mae’s decision to waive appraisals during this time of soon to come recession and bank liquidity issues is both surprising and concerning, and could have serious implications for both consumers and financial institutions alike. With falling values across many markets combined with rising mortgage rates putting even more pressure on borrowers’ wallets, this decision could potentially put...
At the crossroads of it all is a campaign to weaken or eliminate valuations… The nonprofit is now exploring ways it can set standards for automated valuations… Expect greater distortions from Freddie and Fannie’s plodding and committee-driven foray into automated valuations. Sometimes when the hair on the back of your neck stands up, there’s a reason for it. The nation’s $11 trillion mortgage market has been nationalized. This coup occurred in broad daylight and gradually. With Freddie and Fannie now in their second decade in federal conservatorship, the prospect that they will ever again be subjected to the watchful eye...
NPR topped the online edition of its article with the headline, “Black and Latino Homeowners are About Twice as Likely as Whites To Get Low Appraisals.” The problem? Freddie never called the appraisals “low.” While the Freddie Mac study finds no evidence of undervaluation, the NPR story about the study somehow does. Almost 30 years ago, Alan Sokal, now a professor of mathematics at University College London, perpetrated a memorable hoax. He submitted a pseudoscientific article to a cultural studies journal called Social Text. By design, his paper was strewn with nonsense. Titled “Transgressing the Boundaries: Towards a Transformative Hermeneutics...
Under-valuations that more accurately reflect the homes’ “true” value as opposed to the contract price will also alert the buyer, not just the lender, that he or she may be over-paying, which often triggers a renegotiation… when the seller and buyer settle on a new price after the appraisal, the new lower price reduces credit risk, costs to the borrower, and ultimately results in greater wealth for the buyer. The AEI Housing Center recently released an analysis revealing that reports by the Federal Housing Finance Agency (FHFA) and by Brookings, attributing the greater prevalence of under-valuations in home purchase appraisals...
Meanwhile, cratering home prices are eroding demand for the junk-rated credit transfers. As mortgage giants Fannie and Freddie bend the knee to their political overlords, they securitize ever riskier loans. It’s a sign of the times. But while no one was looking, the twins – who wield the full faith and credit of the U.S. government – began quietly offloading this surplus risk in the form of so-called “credit-risk transfers.” The U.S. taxpayer should be worried. As the public learned in 2008 with AIG’s credit-default swaps, hidden risk injected into the financial system doesn’t stay hidden for long. The twins,...
