Tom I’ve often speculated about why FNMA and others didn’t really care about C&R fees enough to put effective mechanisms in place.

ANYTHING that makes AVMs appear to be ‘almost as good’ as an appraisal was considered beneficial (in their eyes). No, I don’t think anyone sat around a table and planned to lower appraisal quality in order to make avms appear better… but I do think they deliberately chose not to see that the product or services that they were comparing avm with was flawed. Essentially bottom of the barrel, non compliant appraisals.

You need look back no further than elimination of the cost approach. While perhaps not required in all cases, it certainly provides for a checks and balance against other approaches… in all cases! One of the best warning signs is when land value is reasonably known and even the highest range of costs added are still far below the otherwise ‘apparent’ value during development of separate market approaches. It’s made me take second and even third looks at my adjustments many times… even those produced by the magic of regression!

Assumptions were allowed without cause as to highest and best use. Unpermitted additions, remodeling etc. that absolutely require permits were allowed to be treated as mythical ‘cost to cure’ items in a cost approach. Even with out documented reason to believe those CTCs reflected actual market conditions; or even accurate representations of real curative costs UWs and lenders that wanted to fund loans pretended they acceptably addressed illegal garage conversions or other non permitted additions….. now what were those four required elements of being highest and best use again? Something about being legally permissible… & maximally productive / profitable…

Chris-west coast here. Urban area lots of data.

No one earning $375 is “doing just fine” regardless of coast you are on. Virginia set their minimum fee at $525 based on RICHMOND area- for a reason. V/A in California is $600 for an SFR. At $500+- I’d agree with you.about appraisers doing comparatively fine.

But….  Who to call about it….

Vincent, yet FTC remains inexplicably unconcerned about this  monopoly

FNMA and Freddie are doomed to repeat their past history. They did not learn. FYI (all) there is nothing that either FNMA or Freddie do that cannot be done better and more safely by HUD/FHA; USDA or VA.

Nothing.

Even Credit Unions COULD develop the ability to market their own mortgage back securities (either via NFCU; PFCU and or WesCorp.) and the larger ones certainly have long track records for cautious lending and integrity. I’d love to see CUs cut into banking’s mortgage money, just like they cut into checking account fees and profits back in the 1970’s (remember how share checks and drafts came about?)

god, hope you jumped at the “opportunity”?!

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.

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.

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?

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.

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.

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.

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.

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

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.

One wonders how the free market for portfolio investors will react to that. Well, it’s not that simple I suppose, given the risky practices of gse’s in the past decade, capitol sourcing is getting tougher and tougher to come by. The solution in place seems to be effecting us appraisers quite negatively. Skip the requirements all together. They did it for capitol so it’s a nice short step to also do that for valuation checks and balances.

Something about hedge funds and derivitaves, a risk based model backed by the taxpayers, a move to zero capitol funding. It’s all over my head but does not look good.

As capital dwindles, trouble looms for Fannie Mae and Freddie Mac

Google search: capitol funding gse’s

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 !