In a hilarious article, the CEO of Zillow said that the current market turmoil is exposing a lot of companies' poor management. Barton quoted the Oracle of Omaha himself: "Warren Buffett likes to say: you don’t know who’s swimming naked until the tide goes out. A lot of people (are) swimming naked right now, getting exposed."
Yes, a lot of people are... perhaps none more than Zillow. In November of 2021, in the midst of the hottest real estate market in a generation, Zillow announced that they were losing money on real estate and had to liquidate 7,000 units at a loss.
In the run-up to 2008, increasing numbers of lenders touted their "algorithms" that would tell them what your house was worth. Here in 2021, Zillow put their money where their mouth was, and choked. However, this hasn't stopped Fannie Mae from increasing the elimination of appraisals in favor of their "Collateral Underwriter." As Fannie Mae has begun dumping CRTs (Credit Risk Transfers, the new Credit Default Swap, or in other words, the trash that sank the mortgage market in 2008) onto the market, few understand that at the height of lending in 2020-2021, Fannie Mae accepted up to 50% of loans without an appraiser stepping foot in the home. Just a loan officer trying to "make the deal work" and slip one past the AI.
Zillow and Fannie Mae are the emperors right now in housing valuation, and I can assure you that as the tide goes out, the sight is not going to get better.
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