That’s a good question for which I have no answer. I THINK a lender like WaMu is more likely to retain market share, even in a declining market. I know they do a large percentage of the high-dollar mortgages here in SD County and they’re hooked in as the primary mortgage lender on several of the new home subdivisions.
I know that about 50% of the appraisals WaMu was sending out for field reviews were getting cut and those loans were not being made. Many of those would now fly through the AMC reviews because they take so many shortcuts. If it’s bad to take shortcuts in an appraisal, it’s 5 times worse to do it in a review.
To be sure, a bad appraisal and an overencumbered property do not make for an automatic loss, but it does increase the odds when the borrower has little or no skin in the game and the markets are in decline.
