Appraisals requirements don’t really exist anymore. The appraisals usefulness is dead to 100 years of mortgage lending past practices. This country has inherited a new valuation tool as a means and method to determine housing values. It is called GAAP “basis in assets” held by the interest party. MSNBC cannot seem to grasp this storyline, five years later, so nothing changed.
The mortgage loan offered the household was calculated from the bank wire into settlement.
That amount in controversy is a commercial debt and benchmark for the new the valuation process. The appraisal is the value attributed to a home. The new financing scheme is all about a major banks obligation to the Fed or obligors “cost of funds.”
Now, consider where the MBS is charged and the ABS is written down to 10 cents on the dollar. So the value of a foreclosed home is the cost to short the devalued mortgage converted into equitable shares held in an investment trust. The objective is to calculate a cost basis to restore the stock price per share and has little to do with a home’s comparable value.
The Fed needs an appraisal at the stock’s original PAR value plus three years carry for likelihood of leaving the displaced homeowners empty home sitting unoccupied.
Maybe that’s what Obama was touting in Vegas last year claiming – “New HELP Homeowners program” …. NO APPRAISAL Necessary.