Wow that’s interesting. Cash out on your home mortgage loan like it’s an atm machine is so risky. There are so many other loan options with lower cash equivalent payment equivalents to choose from which are not tied to ones mortgage payment. Better financial education of the public at large starts with the basic concept of cash equivalent payment over the amortized term. The secret to the Jones’es up the street, the ones with all the fun toys, bbq’ing regularly, and flex cash; They financed half the principal debt amount compared to the next guy. One key aspect that the managers seem to over look is that in dealing with a real estate appraiser in person to attain those loans, those borrowers communicate with independent people whom can explain these concepts to borrowers. I’ll remain convinced the waiver and pdc programs are primarily to isolate borrowers so no qualified persons can give them good advice or an alternative way of thinking about loans.

The cold hard truth is there are entirely too many renewed mortgage loans in this country. That’s where all the absent wealth and missing home equity has gone to. I like Bagott’s lingo in describing ‘serial refinancers’. The sudden jump in mortgage rates also serves additional purposes in the future, to incrementally tick the rate down again one day, start that show of promoting serial refinancing all over again.

The bright side of the cash out waivers, is they will not be able to pin all that liability to the appraiser. Down side is my previous comment above this, instability and default is wildly profitable. Everyone all worried about saving a few hundred dollars up front on the appraisal. Additional closing costs and agency fees which are 10x the cost of the appraisal, and up to 20x the cost of the appraisal if considering the cash equivalent payment amount over amortized term, forget about it, not a problem!

One can acquire a signatory loan or simple line of credit without agency fees or closing costs, just fyi. But the people, they want what they want, they want it now, fires will be lit if the entitlements stop. Someone will be along shortly to lock me in a padded room and throw away the key for talking this way about consumer protection and financial education as being important prioritization items of concern for the government service enterprise related mortgage industry.

Reasons why lenders and gse’s outward messages about helping the people ring hollow. When the rubber hits the road, investors call the shots. Plunge protection team is hard at work assuring the market deflation which should be happening right now, with county treasurer default notices jumping to levels not seen in over a decade, causing plentiful discounted foreclosure sales are funneled to the investor groups upstream of regular citizens. Every time I hear the race baiters decry their ‘billions of lost market value’ with their housing interests, I immediately think of the trillions of dollars funneled to investors instead. As if adjusting the market valuation process will change anything, other that concealing the fact that gse managers are market manipulators rather than stewards of sound process. Modernization! Automation! Equity! The shell game of doling out favors at the auction block appears to have been noticed from the other side of the desk. Many investors are questioning why they are going through traditional avenues of buying shares and such when the gse’s are clearly setting up a new game where defaulted properties held as reits in perpetuity is actually providing returns. Why hold these investments and promote loan stability, when loan instability and foreclosures can pay so well in a time of limited housing availability, acquire the properties yourself for long term rentals instead? And per many other articles on ibuyers ebuyers investment buyers, etc, we know they target impoverished communities and specifically seek to purchase large quantities of starter homes, townhomes, and condos.

Also was scrolling through the above link and found this helpful census related graphic.

That appears rather complicated. Appraisers do not pay attention to these topics when developing opinions of local market value, for individual homes.

Price is not the same thing as value. The three types of value are value in market, value in income, value in use. The appraiser safeguards people from over investing in properties by way of well informed local market analysis. But if buyers choose to offer more due to some perceived increase of value in use, the buyer may offer an appraisal gap clause which would in turn, set a new higher value benchmark for the general location and home category they are buying.

The act of buying ‘over value’ is confusing for people because they often do not understand the act of paying more sets a new higher value standard for the home, which other market participators may or may not agree with in the future. Only time will tell if down the line, the cumulative response of other buyers confirms or denies a higher value benchmark.

Sometimes the act of paying more is a common sentiment which drives up entire areas due to pervasive opinions those locations bring increased value in use and subsequently support a higher market value and higher price. Sometimes the act of paying more is a financially unsound decision, because the common sentiment and also probably the areas economic factors, do not support the idea those homes in that location supports such a higher price comparative to homes in other areas.

Some people pay more than they should, often due to competition factors, but hopefully their personal opinion of value in use can offset the excess price paid, as they become over invested. The popular term for that being underwater, having paid more for the home than they can resell it for. Buyers and sellers set the benchmarks to price and value in any given location based on their opinions of a variety of factors such as amenity, taxation, government, safety, crime, demographic, and locational benefit or detrimental location factor reasons. Which is why seemingly similar homes in different locations most often times do have different values and variable price tags. The common sentiment of entire communities is what drives those communities market value benchmarks.

Arbitrary census tract boundaries set by bureaucrats and politicians have nothing to do with this except they become a reflection of what the cumulative body of local persons are willing to pay for properties in those broadly and sometimes randomly defined boundaries. Additionally, unless one had advanced tech tools, nearly everyone in this country would be unable to answer simple questions about what census tract they were physically present in that moment, nor would they be able to identify when they crossed the line from one tract to the other. I like to refer to this as; ‘Census tracts are not even on the map.’ Which is why most people don’t care about census tracts.

Census tracts are tools for government, developed primarily for statistical purposes to assist with further defining different boundaries such as for taxation and vote purposes, tracking population growth and decline, if I understand ‘census tracts’ at least somewhat accurately. The people walking in the real world in real time sure would be able to tell you if they’re in a nice safe area, or a dangerous crime area. If they’re in an area with economic opportunity, a popular area everyone wants to be, or in an area with scarce resources, inadequate amenity, limited popular appeal, and insufficient economic opportunities. But those same people would most likely not have a clue which census tract they were actually present in that moment.

Neither do appraisers know these things. Census tract data is only in appraisal reports because GSE’s include that data question on the appraisal forms they developed and require us to use, otherwise appraisers would not bother reporting on census tracts. We’re regular people too and all the census tract information in appraisal reports is filled automatically by the software which ties to government census databases, and is given absolutely zero additional consideration in the valuation analysis process. Anyone claiming otherwise can simply be challenged to identify census tract data in MLS listings for sale, of which they would be unable to do so. Because realtors, sellers, and buyers, do not care about census tracts either. It would be a nearly impossible and time laborious task to try and differentiate comparable selections and delineate within specific locations, where those census tract lines really were.

Also, fyi, some of the people pushing these census related analysis reports are from entirely different parts of the world, with experience in world banking affairs and collegiate endeavors. They do not speak for the local people, nor do we accept their world views as our own. They seek to be engineers of societal structure, but we never voted for them and therefore are not obliged to pay them any mind.

https://www.census.gov/programs-surveys/geography/about/glossary.html#par_textimage_13
Census tract definition from census dot gov glossary pages.

Sad thing is no one in Congress or Fudge or Walters or POTUS or VP will ever believe that the numbers they banked their bias/racist story on is flawed beyond belief!