Appraisal News and Business Tips

6-9-16 Newz:: Expandable Space Station, Turn times, FHA news  

Time-lapse video of the International Space Station expandable habitat

Excerpt: On Saturday, May 14, NASA successfully completed the deployment of the first expandable habitat on the International Space Station. With help from the ground, NASA astronaut Jeff Williams began inflating the Bigelow Expandable Activity Module (BEAM) at 9:04AM ET.

He opened the valve 25 times to inject air into the module in short bursts, according to NASA. Time in between allowed the BEAM to expand and stabilize, as the NASA and Bigelow Aerospace teams monitored the module’s internal pressure. The BEAM was expanded to its full size seven hours later, at 4:10PM ET.

http://www.theverge.com/2016/5/30/11812844/this-time-lapse-video-of-the-beam-inflating-on-the-international-space-station-is-awesome

My comment: WoW!!!

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United States Spy Town Auction

It’s not the first time that an entire American town has gone on the auction block, but it might be the most unusual. Sugar Grove Station, West Virginia was originally a United States Navy military base to support part of the National Security Agency’s surveillance operation. Though the array of giant parabolic dishes that continue to track location and content of international telecommunications activity is still in operation and not part of the sale, they are completely obscured from view behind thick forest on their ridgetop one mile distant. When it became unnecessary to house related analytical staff at the base, it was retired in the fall of 2015 and put up for auction to the highest bidder over $1 million.

Built between 1960 and 2014, the fenced and gated rural town has private full-service utilities to support as many as 500 people on over 120 acres. Included are 80 homes on tree-lined residential streets in like-new condition, a swimming pool, bowling alley, youth daycare center, community center with fireplace which was designed to function as a restaurant with bar, a gym, full-sized indoor basketball court, tennis and racquetball courts, a football field, large playground with kiddie pool, and twelve guest cabins for visitors. There are also several large buildings for multiple use as well as a four-section hobby building for working on cars, woodworking shop and other creative pursuits. For community safety, a police station and fire station are already in place.

https://www.toptenrealestatedeals.com/homes/weekly-ten-best-home-deals/2016/06-06-2016/1/ 

https://en.wikipedia.org/wiki/Sugar_Grove_Station

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Get rid of Dodd Frankenstein? Republicans vs. Democrats

Excerpts from the Republican side:

“The economy isn’t working for tens of millions of working Americans who cannot get ahead and fear for the future of their families. Their paychecks remain stagnant; their savings have declined,” he continued.

“Why is this happening? One of the principal reasons is the Dodd-Frank Act, a grave mistake Washington foisted upon the American people nearly 6 years ago,” Hensarling said.

“Simply put, Dodd-Frank has failed. It’s time for a new legislative paradigm in banking and capital markets,” he added. “It’s time to offer all Americans opportunities to raise their standards of living and achieve financial independence. In a phrase, we need economic growth for all and bank bailouts for none.”

http://www.housingwire.com/articles/37213-inside-the-foundation-shattering-republican-plan-to-abolish-dodd-frank

Excerpts from the Democrat side:

“Hillary Clinton strongly opposes Chairman Hensarling and Donald Trump’s efforts to gut critical reforms put in place to protect the public after the financial crisis,” Gensler’s statement continued. “While Republicans attempt to roll back measures that protect consumers and curb excessive risk-taking on Wall Street, Hillary Clinton fight to defend Dodd-Frank and go beyond it, with tough new rules, stronger enforcement and more accountability.”

The Clinton campaign wasn’t alone in its criticism of the Republican plan.

Speaking Tuesday at a Senate Banking Committee hearing, Sen. Warren took her full allotment of time to lambaste Hensarling’s plan, nicknaming the Republican plan the “Wet Kiss for Wall Street Act.”

http://www.housingwire.com/articles/37213-inside-the-foundation-shattering-republican-plan-to-abolish-dodd-frank

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How school boundaries impact real estate values

By Ryan Lundquist

Excerpt:

5 Things to Remember about Schools & Real Estate Value:

Know the school boundaries: One of the fastest ways I’ve been able to obtain school boundaries is through GreatSchools.org. I type in the name of the school, click on the map, and then observe boundaries and even ratings of surrounding schools (just like the image above). Obviously the website could be wrong, but it’s a good start.

Don’t trust MLS comments: Properties are sometimes identified incorrectly in MLS, which is why we have to double-check by looking up various websites or even calling the school district.

Read the full post, check out his scattergraph, and the comments!!

http://sacramentoappraisalblog.com/2016/06/06/how-school-boundaries-impact-real-estate-values/

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Issues with the 1004mc: A closer look

by George Dell, MAI, SRA, ASA

Excerpt:

Problem: Use of neighborhood data

First, we note that the form requires the use of neighborhood data. This is a problem.

Appraisers are (properly) trained to use only comparable market data. A neighborhood does not automatically provide the best competitive market segment. Neighborhood data is defined as a group ofcomplementary uses. However, any experienced appraiser, or even a lay person knows that home buyers may look at only a few homes (of those available) in a given neighborhood. But, they will usually consider homes in similar or nearby neighborhoods.

This immediately sets up a conflict and disagreement between what the 1004mc analyzes, and what USPAP and best practices require. The form focuses on neighborhoods, while appraisers must focus on competitive property transactions (reflecting actual buyer actions). The two do not automatically coincide.

In fact, they seldom coincide. USPAP SR 1-4(a) specifically states “an appraiser must analyze such comparable sales data as are available.” This immediately sets up a conflict and disagreement of what the 1004mc requires, and what USPAP and best practices require.

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FHA survey

Tell them what it will take to get you to re-start FHA assignments

Survey by the very active Illinois Coalition of Appraisal Professionals

Excerpt: The National Association of Realtors (NAR) is reporting that some feel that the recent changes to the FHA’s handbook on appraisals require appraisers to take on home inspection-type duties to ensure standards are met and that consumers can mistake the role of the appraisal for that of an inspection.

Direct link to survey: https://www.surveymonkey.com/r/WF8Y3GV

Should not take long to complete with 19 yes/no questions

More info at:

http://appraisersblogs.com/fha-assignments-survey

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FHA vs. Fannie on 1004mc

From an Appraisal Institute class:

“The FHA requirement for One Unit Housing Trends is contradictory to the instructions for this section from Fannie Mae. Fannie Mae requires that this section of the report be based on the information from the 1004 MC form, including only properties that compete with the subject, determined by applying the criteria that would be used by a prospective buyer of the subject property. FHA, on the other hand, requires inclusion of all one-unit properties in the community or neighborhood/market area.”

Here is what FHA Ace Appraiser Doug Smith (who attended the class) says:

One major difference between a report destined for Fannie Mae and one intended for FHA is the handling of Single Unit Housing Trends. Fannie Mae states the section reflect the information found in the 1004MC. FHA requires the larger market be reported for all single-unit properties in the community.

FHA Property Values:

– Mark the box describing the current trend in the As-Is Property Values for one-unit houses in the community.

– Comparing houses that have been sold and resold in recent years is an effective way to determine market trends.

– Appraisers who use this method, however, should make sure to factor in any improvements or changes made to the property between sales “

FHA Demand /Supply

– Mark the appropriate demand/supply trend.

– To determine the equilibrium status of supply and demand in the neighborhood, compare the number of houses sold to the number of houses listed for sale in a recent time period.

– The similarity or difference between the number of houses sold and listed, not the absolute numbers, should determine the demand/supply level

FHA Marketing Time

– Mark the appropriate marketing time – the typical length of time a property most similar to the subject property would have to stay on the market before being sold at a price near its Market Value.

Check out the HUD Delivery

Guide at: http://portal.hud.gov/hudportal/documents/huddoc?id=SFH_POLI_APPR_RPT_FIN.PDF

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FHA inspection advice on appliances

Advice from the Virginia Association of Realtors Legal Hotline

Excerpt:

“I called VAR legal hotline, a service to all REALTORS (appraisers are REALTORS too if paying dues). I inquired about the liability of the FHA inspection protocol of operating appliances. The lawyers confirmed my belief that to reduce the appraiser’s liability as to operation of appliances and equipment is to have a responsible person present to operate the appliances for the appraiser. I have adopted this as a standard policy on all FHA/USDA assignments including HUD REOs.”

http://appraisersblogs.com/legal-hotline-advice-fha-inspections

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What is a reasonable turn time from assignment acceptance to report delivery for a non-complex SFR?

www.appraisalport.com poll

6-9-16 turn time poll

My comments: I guess a lot of appraisers are busy now. Too bad the poll did not include longer times. I am at 2-3 weeks now. AMCs that promised their lender clients 1-2 days turn times without giving a significant increase in the appraisal fee are in trouble ;> As we all know, turn time depends mostly on how busy we are and significantly changes over time. Residential lender appraising is a boom and bust business.

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HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to https://www.mba.org

Note: I publish a graph of this data every month in my printed newsletter, Appraisal Today. For more information or get a FREE sample issue go to www.appraisaltoday.com/products or send an email to info@appraisaltoday.com . Or call 800-839-0227, MTW 8AM to noon, Pacific time.

WASHINGTON, D.C. (June 8, 2016)

Mortgage applications increased 9.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 3, 2016. This week’s results include an adjustment to account for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 9.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 13 percent compared with the previous week. The Refinance Index increased 7 percent from the previous week. The seasonally adjusted Purchase Index increased 12 percent from one week earlier. The unadjusted Purchase Index decreased 12 percent compared with the previous week and was 6 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased to 53.8 percent of total applications from 54.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 5.0 percent of total applications.

The FHA share of total applications increased to 13.0 percent from 12.5 percent the week prior. The VA share of total applications decreased to 11.5 percent from 12.0 percent the week prior. The USDA share of total applications remained unchanged from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.83 percent from 3.85 percent, with points decreasing to 0.33 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) remained unchanged at 3.81 percent, with points decreasing to 0.25 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.71 percent from 3.65 percent, with points decreasing to 0.23 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.11 percent from 3.12 percent, with points decreasing to 0.35 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.96 percent from 3.00 percent, with points decreasing to 0.29 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.

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