Comment Detail

Comment

II. FHFA Appraisals Request for Information The FHFA issued a RFI on appraisal-related policies, practices, and processes. The feedback received will be used by FHFA to determine how the GSEs can improve the appraisal process while at the same time ensuring they don't take on unintended or inappropriate levels of risk. a. Questions for consideration include: i. Are there opportunities for process improvements that allow non-traditional valuation services (inspection-only, desktop, exterior-only) to augment traditional appraisals? The 2055’s option was very valuable as far as timing goes. The Desktop appraisals seemed to only cause confusion as some appraisers weren’t using the correct terminology on their appraisals. I feel that the 2055’s could be used in certain circumstances like Limited Cash Out Refinances under a certain LTV and with a certain credit score. ii. Do appraisal waivers have a place in Enterprise appraisal policy and process? If so, for what segment of loans? Appraisal Waivers have also been a game changer as far as fees for the borrowers and timing of getting the loan push forward. More appraisers seems to be retiring than new ones coming into the appraiser business so this feature along with Alternative types of valuations are very important to keep in play moving forward. I am not aware of the ins and outs of how FNMA determines if an Appraisal Waiver is offered. I’m surprised on some loans that don’t get an Appraisal Waiver. If an Appraisal Waiver isn’t offered, then it would be nice to have another option than to order a full 1004 appraisal. 1. What are the current risks to Enterprise safety and soundness in how appraisal waivers are offered? Would caps or other limits be appropriate? We believe if underwriting factors such as DTI, Credit etc are used in addition to the property characteristics, the product hits on the safety and soundness mark. Perhaps it could even be expanded on another subset of loans coupled with an exterior inspection to ensure average or better condition. III. How can the Enterprises improve their collateral tools currently available to lenders? The Automated Valuation Model (AVM’s) that we have been using have been a nice addition to our portfolio lending. They are quick and easy to order and the cost to the member is only $83. Turn time on an AVM is max of 30 seconds and a PICR (Property Inspection Condition Report) is usually around 3-4 days but I’m sure I could get a quicker turnaround time on those if requested 2-3 days. The PICR’s has also been a valuable additional that we use for our incident hits with the FEMA Disaster Area Checks. i. ii. Is there any data you could share regarding the performance of alternative appraisal solutions versus traditional appraisals? We have studied AVM and Tax Values relative to appraisals, and the result has been that on an overwhelming basis, both of these alternative valuation methods are conservative measures of value relative to an appraisal. iii. Should COVID-19 appraisal flexibilities be part of an updated appraisal process to address disasters and other events to lessen market impacts? I do feel that some sort of the COVID 19 Appraisal Flexibilities should be a part of any updated appraisal process. I know there were some FNMA audit files where the appraiser missed some verbiage on the appraisals when the COVID temporary flexibilities first started but going forward I would hope they would make it easier for the appraisers on what verbiage needs to be on the appraisals. iv. Do you believe appraisal policy and process improvements would have a positive impact on access to credit, including for rural and underserved markets by providing additional valuation services that serve the needs of these markets? Misc: Altra has used UCDP scores to shorten the review of some of our appraisals. What the underwriters reviews on the appraisal I feel is adequate but if the amount of appraisals could be limited by using alternative valuations preferably on refinances, that would speed up the entire process.