Comment Detail

Comment

I agree with Director Calabria that if modernization is not properly adopted, it could have negative unintended consequences. The modernization process of appraisals will improve both loan quality and the origination process. 1) Property Inspection Waivers (PIW) should be uniformly applied with the same algorithms across both enterprises. I often as an originator will received a PIW through LPA for a property inputted as being > $1M with a very lower LTV but not with DU. Also, with the existing loan indicates as owned by FNMA, oftentimes I will not receive a PIW through DU but will receive a PIW through LP. 2) For a cash out refinance if the LTV is < 65% and there is an abundance of recent sales and data available, it should be more commonplace to receive a PIW. If the subject loan is a purchase and the LTV is 80% or below with ample reserves and credit scores > 720, the risk with a DTI under 45% is minimal assuming an abundance of comparable similar sales. 3) Integrate the FHA Scorecard and FHA loan datasets which always requires an appraisal unless the transaction is a streamlined refinance to be provided for conventional loan programs. 3) In high balance MSA’s, increase the value tolerances to exceed $1M with regularity. In Los Angeles, for example, a 1250 square foot home may have a market price in West Los Angeles of $1,450,000 with an LTV < 50%. The maximum value limit should be increased in high balance MSA’s such as Los Angeles, Santa Clara, San Diego and San Francisco.