Fannie CEO Steps Down with Shocking Prediction
There is certainly some reality to that. And, I wouldn’t be surprised to see him as the CEO of a leading Fintech company soon.
Typical old financial industry dumbass. While technology is great and great for consumers to be more educated then years past, but it’s meshing the old and the new that makes a great customer experience. While consumers think they are smart they are not. Does a swipe show you the mold behind some bleach bottle under a sink? NOPE! The list goes on too. The old is still building that trust as an advisor and the way you do that is face to face, live conversations, not text. Mesh the old and the new and you have something cool
Oh, so now mortgage brokers are worried about being removed from the equation? Welcome to the party. You and FNMA would love to remove professional appraisers from the equation and go with crap AVM data. Now, you’re all about using “hybrid” products that are even worse because they are being marketed as something similar to a full appraisal. THEY ARE NOT.
Don’t worry about learning anything, we’ll teach you what you need to know. Fannie knows best. Right?
Real life scenario, I just appraised a home for a relo company. The sales agent has listed the recently rehabbed home for $920,000. It has half the lot size of all the other compatible, rehabbed homes in the neighborhood that sold near this price. Most of the homes in the neighborhood are double the lot size of the subject. There are plenty of rehabbed comps, sold, active, pending, with smaller, compatible lot sizes that support a value of $125,000 less than the subjects list price. Additionally, current market activity suggests a softening of the market. I explained all of this to the agent when I came out. She was totally unaware of the differences, but has not said anything to the homeowners, probably to save face! Even worse, some buyer will come along who is being under-represented and offer the higher price, never being informed of the differences in utility, characteristics or value. People are already buying into $125,000 holes even before swipe and click!
The perfect world he is presenting is just that, in a perfect world. It assumes all borrowers are qualified for the loan they want. They are not. They need Loan Officers for that. It assumes that all borrowers will make their payments on time. They won’t. Fannie Mae needs Lenders to service the loans for that. And it assumes that in a worse case scenario of foreclosure they will be able to take the house back like repo-ing a car. That will never happen. Making a mortgage loan is so hard and detailed because the collection and foreclosure process is so difficult and costly. The only way to simplify the process of getting a mortgage is to reduce the cost and stress of collecting on a defaulted one.
Totally agree with L.A. Walsh. I know in yesterday’s presentation, you emphasized how important it is for potential sellers to be educated on the changing market (but not everywhere – every local market’s different). The problem is that to get a listing, an agent needs to convince a seller that he can sell the property for more than the competition, so an attempt to give a ‘reality check’ to the potential seller will likely lose the listing. So until an established pattern of lower prices develops, sellers will likely list above market and buyers will still overpay. Seems like a chicken and egg scenario, but eventually it will correct itself.
I believe technology will never completely replace humans, it will just continue to make our jobs “easier”, for a lack of a better term. They have been trying to replace the salesperson for years, which I dont see happening anytime soon.
Could it be he is hinting that the gov’t do all lending for home buyers to the gov’t reaps the interest income, controls the rate the buyer pays all while borrowing the $ from China to lend to the consumer. Remember the fed is always looking for a way to score more revenue and they may see they could fund another social program off the interest income. Is this likely? I hope not, but it wouldn’t surprise me given how they just took Fannie Mae over & won’t release it because of all the free money they are reaping at investor’s expense. Just another wild possibility.
Real Estate Meltdown 2.0
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