Appraisal News and Business Tips

7-21-16 Newz//Bracketing-AMC staff appraisers-Appraiserville

8 Spooky New York Places That Should Be in the New Ghostbusters Movie

There’s something strange in these neighborhoods.

Excerpt: Here is one, but you gotta see the photos and the other 7!!

The Morris-Jumel Mansion

On a hill overlooking the Harlem River, the stately Morris-Jumel mansion is not only Manhattan’s oldest home but supposedly one of its most haunted. Its macabre history started after owner Stephen Jumel died in 1832. His wife Eliza was rumored to have had a hand in the death-there was some suspicion afoot that she orchestrated the carriage accident that killed him….

Take a break from typing appraisal reports and check it out!!

http://www.atlasobscura.com/articles/8-spooky-new-york-places-that-should-be-in-the-new-ghostbusters-movie

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The Shrinking of the American Lawn

As houses have gotten bigger, yard sizes have receded. What gives?

Excerpts:

The American house is growing. These days, the average new home encompasses 2,500 square feet, about 50 percent more area than the average house in the late 1970s, according to Census data. Compared to the typical house of 40 years ago, today’s likely has another bathroom and an extra bedroom, making it about the same size as the Brady Bunch house, which famously fit two families.

This expansion has come at a cost: the American lawn.

As homes have grown larger, the lots they’re built on have actually gotten smaller-average area is down 13 percent since 1978, to 0.19 acres. That might not seem like a lot, but after adjusting for houses’ bigger footprints, it appears the median yard has shrunk by more than 26 percent, and now stands at just 0.14 acres. The actual value lies somewhere between those two numbers, since a house’s square footage could include a second (or third) floor. Either way, it’s a substantial reduction.

Read the full story at: Very interesting!!

http://www.citylab.com/navigator/2016/07/the-shrinking-of-the-american-lawn/490157/

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There Go My Brackets

From the Illinois Appraiser June 2016

Excerpt:

Is it a USPAP violation to fail to bracket or end up with a tight bracket?

USPAP is silent on bracketing. For that matter, so is Illinois law. Here’s what Fannie Mae says;

“When there are no truly comparable sales for a particular property because of the uniqueness of the property or other conditions, the appraiser must select sales that represent the best indicators of value for the subject property and make adjustments to reflect the actions of typical purchasers in that market.”

Not a word about bracketing.

While comforting for an underwriter to see the collateral fall snugly into place, bracketing is still a guideline. This hasn’t stopped AMCs and lenders from complaining to the Board about missed brackets or huge ranges. There just isn’t a law against having a sloppy bracket, nor should there be.

Something else from Fannie Mae;

“It should be noted that the indicated value in the Sales Comparison Approach must be within the range of the adjusted sales price of the comparables that are reported in the appraisal report form.”

Read here for the full article:

http://appraisersblogs.com/bracket-value-comparable-sales

Check out the other very interesting articles such as AMC fair housing Myths and Evaluations. Link to original newsletter.

http://www.idfpr.com/DRE/ApprNewsletter.asp

My comment: I have never “bracketed” anything except the value, when I used to do appraisals for Fannie Mae loans. I have no idea why lenders are requiring bracketing for everything with an adjustment. Just another Stupid Scope Creep I guess. Works ok in conforming tracts with lots of sales and minimal adjustments, but goes downhill quickly after that. Of course, the entire appraisal review-by-computer assumes that all houses are in conforming tracts. As do the Fannie forms, of course.

WHAT DO YOU THINK ABOUT BRACKETING? POST YOUR COMMENTS HERE!!

https://appraisaltoday.com/2016/07/21/bracketing-and-uspap/

 

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The difference between these free email newsletters
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These email newsletters, started in June 1994, are mostly digests of other people’s blogs or web sites and articles with links. I often write my comments on the articles. Occasionally I write a short commentary on a topic.

What topics are included in these email newsletters? What is interesting to me or useful information. I usually include articles I find interesting, such as strange homes and buildings, which are often the most popular topics. I seldom link to web pages where there is lots of negative appraiser ranting unless there is useful information also. Having a positive attitude is very important to having a successful business.

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Sometimes there are critical issues for appraisers, such as Fannie’s Collateral Underwriter. I started researching and writing about CU in late 2014 and continued into 2015. Adjustments became a very big issue because of CU. I have been writing about adjustments ever since January 2015, including writing about statistical software, 1004mc, what adjustments should you make, how to make adjustments, etc.

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Most popular link last week:

http://www.atlasobscura.com/places/41999-mile-marker

I almost didn’t put this one in last week!!

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THREE GOOD BLOG POSTINGS ON AMCS, ETC.

Appraiserville by Jonathan Miller’s Housing Notes

Excerpt:

There are a lot of good things beginning to happen through the appraisal state coalitions which are adhoc groups of good people and good appraisers trying to fix the self-dealing mess of a post-financial crisis appraisal world. Appraisal trade groups such as the Appraisal Institute are so mired in their own complicated politics that they don’t communicate well with their members, and don’t really help their members very much these days. The Appraisal Foundation is fixated on a constant stream of micro changes to valuation rules that, while probably best intentioned, seem to be more of a process of self-preservation. Here’s a good link to bookmark if you want to know more about the “appraisal network” of coalitions. Appraisers like Tom Allen of Oklahoma and Lori Noble of West Virginia are helping to make a difference.

Read the full comments here. Search for Appraiserville, after reading about Pokemon Go just below the intro, of course ;>

http://www.millersamuel.com/note/july-15-2016

My comments: Sorry, I have not done Pokemon Go… so..no comments on it…

I agree with Jonathan’s comments…

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Fees, turn-times, & eliminating appraisers by Ryan Lundquist

Blah, blah, blah. That’s what people tend to hear when we start talking about issues facing the appraisal industry. But here’s the deal. What happens to appraisers can absolutely impact the public AND the entire real estate industry. Let’s take a minute to consider some current trends. Any thoughts?

Turn-times & 30-day escrows: Many Appraisal Management Companies (AMCs) order an appraisal and expect the appraiser to turn around the finished product in seven days or less. It seems like the better AMCs give appraisers more time whereas the worst ones expect reports in only 3 or 4 days. Here’s the thing though. Appraisers in Sacramento and many parts of the country have been turning down an avalanche of work every single day because AMCs are asking for unrealistic turn times for today’s market. Just the other day a colleague told me he literally turned down 19 appraisal orders in one day alone because he couldn’t meet the deadlines. It seems like seven days has been the benchmark of a reasonable turn-time, but that’s not doable right now for many appraisers. Remember, turn-times are not written in stone and they should change according to the market. Moreover, if nobody accepts the appraisal report because the due date is too fast, it will eventually get to someone who may not be an ideal candidate to appraise the property. Thus a quick turn-time rule ends up catering to whoever is going to get it done faster (and maybe cheaper). On a related note, appraisers being so busy can cause escrows to slow down, which means it can be far more difficult to close in only 30 days. Keep in mind though appraisals are often one of the very last things ordered during the loan process, and that’s surely part of the problem in closing escrows more quickly.

Read the full blog posting and the comments.

http://sacramentoappraisalblog.com/2016/07/19/fees-turn-times-eliminating-appraisers/

My comment: Very good explanation for the public and for real estate agents.

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If the AMC’s get their wish some appraiser’s jobs could be in danger by Tom Horn

Excerpt:

The AMC’s solution to the manufactured shortage of appraisers is to hire their own staff appraisers. This may not seem unreasonable to the general public because it would allow the AMC to provide appraisal services for their bank clients, but when you dig deeper to see the possible relationships involved you can see where it could affect the public’s trust.

Read the full blog posting and the comments here.

http://birminghamappraisalblog.com/in-the-news/amcs-plan-to-build-new-army-of-appraisers/

My comment: The Big Problem with residential lender appraisals is handling the huge ups and downs of the mortgage lending cycle. Prior to licensing and mortgage brokers taking over, the method was always lenders hiring armies of trainees, then laying them off. Lenders had a “core” of staff appraisers and gave the overflow to fee appraisers when it was busy. After licensing, fee appraisers hired the trainee armies, which did not work out very well.

AMCs are trying to replicate the old staff appraiser model, pre-licensing? Or what?

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Origination Volume Expected to Grow 2.2% in 2016: Fannie Mae

Excerpts:

Mortgage origination volume is now expected to grow in 2016 versus the prior year, according to the Economic and Housing Outlook for July from Fannie Mae.

Origination volume is forecast to reach $1.75 trillion in 2016, a 2.2% increase from the year before, Fannie Mae said Tuesday. Previously, the government-sponsored enterprise predicted a 2.8% drop in origination volume.

Duncan also predicted a “low for long” trend for interest rates. He said that a Federal Reserve interest rate hike likely won’t come until June 2017 as a result of global economic trends including the fallout from the Brexit vote creating financial volatility.

http://www.nationalmortgagenews.com/news/origination/origination-volume-expected-to-grow-22-in-2016-fannie-mae-1082545-1.html

 

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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. (July 20, 2016)

Mortgage applications decreased 1.3 percent from one week earlier (after increasing 21% in the previous 2 weeks),

according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 15, 2016. The prior week’s results included an adjustment for the July 4th holiday

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 24 percent compared with the previous week. The Refinance Index decreased 1 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index increased 23 percent compared with the previous week and was 16 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 64.2 percent of total applications from 64.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.1 percent of total applications.

The FHA share of total applications decreased to 9.9 percent from 10.0 percent the week prior. The VA share of total applications decreased to 11.2 percent from 12.1 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.65 percent from 3.60 percent, with points unchanged at 0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.66 percent from 3.61 percent, with points unchanged at 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 3.53 percent, with points decreasing to 0.30 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 2.90 percent from 2.88 percent, with points decreasing to 0.31 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.86 percent from 2.78 percent, with points increasing to 0.29 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate increased 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.

1 Comment
  1. Hi, Ann,
    Your offbeat findings online are great, such as the haunted houses and the shrinking of lawns. Keep up the good work!
    Lucinda

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