Tagged: Federal Housing Finance Agency

February 28, 2022

Bias in Automated Valuation Models

The CFPB is reviewing bias in Automated Valuation Models (AVMs). The proposed rules are a joint effort by the Consumer Financial Protection Bureau, the Office of the Controller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration and the Federal Housing Finance Agency. These agencies are concerned AVMs may reflect bias in design and function. The mathematical models rely on biased data resulting in inaccurate valuations. Basically the agencies are stating historical data going back to redlining is built into these models and do not reflect current market data. Remember markets are not static and are...

Appraisal / Appraisal News / Appraisal Organizations / Appraisers News / Automated Valuation Models / AVM

October 29, 2021

Desktop Appraisals, Panaceas for Faster Reports

…I’ve discovered a potential anomaly in Desktop reports (and Hybrids also) which might shock some appraisers… Desktop Appraisals, Panaceas for Faster Reports. Or so they say. Bankrate.com has a revealing article published on Oct. 27, 2021, titled As Appraiser Shortage Delays Closings, Mortgage Giants Try Workaround | Bankrate FHFA (the GSE’s “manager”), after the administration change, under pressure from mortgage brokers and lenders, and after the experiment with the COVID era “flexibilities”, has decided to allow the GSE’s to accept a new type of appraisal for first mortgage (purchase) lending early in 2022: the Desktop report. The current line of thinking...

Appraisal / Appraisal News / Appraisers News / Federal Housing Finance Agency / FHFA

October 21, 2021

Desktop Appraisals Soon to Be the New Purchase Wrinkle

The desktop appraisals are not necessarily more reliable, which could become an adverse issue for appraisers in the future… Appraisers, we learned about this late on Monday, Oct. 18, 2021: Sandra L. Thompson, acting director of the Federal Housing Finance Agency (FHFA) appeared before the Mortgage Bankers Association annual conference on Monday. Her remarks to that group featured this: The “flexibilities” (i.e., the desktop appraisals) put in place for appraisers after COVID-19 hit, have ended. However, FHFA has been reviewing the data gathered during their use and examined feedback from lenders and other parties. She told the MBA attendees that both...

Appraisal / Appraisal News / Appraisers News / Federal Housing Finance Agency / FHFA

March 25, 2021

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...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisal Software / Appraisal Technology

February 24, 2021

Unaffordable Affordability?

If we value higher, what about affordability?… A great deal of economic, social, and political talk has been around affordability of housing. To explore this topic, it may be helpful to ask some questions. Good policy starts with the right questions. In simplest terms, some people have the resources to have nice homes in nice neighborhoods, others have just tolerable homes for shelter. And others have no homes at all. We call them “home-less.” More recently, we have become aware of the connection of poor housing and groups of certain ethnic categories. Discovery. There is association between housing status and...

Appraisal / Appraisal News / Appraisers News / Federal Housing Finance Agency / FHFA

FHFA Overseeing Appraisal Policy & Processes? Time to Stop the Trend

February 8, 2021

It Is Time to Stop the Trend

Why FHFA thinks the GSE’s should be even discussing appraisal processes is a question that needs to be asked of FHFA… Appraisers have let others dictate many things in our profession. It is time to stop the trend… How about 20 questions? The Federal Housing Finance Agency (FHFA) has 20 questions for you. Well, actually it is only 19 questions. The FHFA is the organization of the Federal Government that oversees Fannie and Freddie. They want feedback on how the GSE’s should move forward with appraisal policy, risk and appraisal processes. Now why FHFA thinks the GSE’s should be even discussing appraisal processes...

Appraisal / Appraisal News / Appraisal Organizations / Appraisers News / Fannie Mae - Freddie Mac / Federal Housing Finance Agency

June 19, 2020

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...

Appraisal / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac

May 20, 2020

The GSEs to Split from FHFA?

A key issue is Congress’s thirst for the income the two GSEs generate since they paid off their bailouts… Will separation happen? I found this info in the Mortgage News Daily e-newsletter by Jann Swanson on May 19, 2020: From the article “Fannie/Freddie Seek Financial Advisor to Help Them Exit Conservatorship”: “Fannie Mae and Freddie Mac (the GSEs) have taken what each is calling an important step toward ending their 12 years of operating under conservatorship. Each has announced they are about to issue a request for proposals (RFP) to secure a financial advisor to facilitate that move. In a...

Appraisal / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac / Federal Housing Finance Agency / FHFA

March 24, 2020

Temporary Appraisal Requirement Flexibilities

Temporary Guidance From Fannie Mae… FNMA has issued temporary guidance on appraisal requirements, including allowing desktop & exterior-only appraisals… Folks, due to the ongoing COVID-19 national emergency, the GSE regulator FHFA and both GSE’s have issued new (temporary) guidance on Monday, March 23, 2020. These remain in effect through May 17, 2020, but could be extended due to the on-going situation. NOTE: I have seen nothing yet from FHA or VA. Appraisers (and AMCs) CANNOT modify assignments or reports without specific authorization from the lender client. Appraisers CAN choose to do, or not do, assignments under the inspection guidelines, and per directives...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac

WRE Surveyed Appraisers Say NO to the Bifurcated Model

January 31, 2020

Listening to Appraisers

…appraisers believe that the bifurcated model and the use of unlicensed, untrained and unaccountable contractors for key elements of collateral assessment will adversely affect the health and welfare of the housing finance system, increase their own liability and damage the public trust… It is the goal of the Federal Financing Housing Agency (FHFA) to ensure the health and welfare of the housing finance system. FHFA oversees Fannie Mae and Freddie Mac and has, for the time being, paused the testing and development of bifurcated appraisals that bypass the participation of licensed appraisers (FHFA Puts Brakes on Fannie’s Bifurcated Program). I...

Appraisal / Appraisal News / Appraisers News / E&O / Errors & Omissions / Federal Housing Finance Agency