Appraisal News and Business Tips

11-3-16 Newz: Freddie-lower appraisal requirements, Do you like appraising?, Wells Fargo overcharges on appraisals

2016’s Best Small Cities in America

Excerpt:

Small-city dwellers enjoy tighter networks, shorter commutes and an abundance of land, just to name a few advantages. Granted, there are tradeoffs such as perhaps fewer restaurant options or shorter business hours. But one of the best perks of living in a city with a relatively smaller population is cheaper cost of living – generally speaking, that is. According to the Economic Policy Institute, a two-parent, two-child family would need to earn $49,114 a year “to secure an adequate but modest living standard” in Morristown, Tenn., compared with $106,493 in Washington.

So which small cities outshine the rest? WalletHub’s analysts compared 1,268 cities with populations between 25,000 and 100,000 based on 30 key indicators of livability. They range from “housing costs” to “school-system quality” to “number of restaurants per capita.” Continue reading below for the winners of the top spots, expert commentary and a full description of our methodology.

https://wallethub.com/edu/best-worst-small-cities-to-live-in/16581/

My comment: Check your city – mine was listed!! But, did not rate high on cost of living with a median home price of around $800,000… But, you can see the mayor at the grocery store to complain about potholes ;>

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Wells Fargo agrees to $50 million settlement over homeowner appraisal fees

Excerpt:

Wells Fargo & Co (WFC.N) has agreed to pay $50 million to settle a racketeering lawsuit accusing it of overcharging hundreds of thousands of homeowners for appraisals ordered after they defaulted on their mortgage loans.

The proposed settlement, which requires court approval, was disclosed in a filing on Friday in an Oakland, California federal court. If approved, it will resolve nationwide claims that Wells Fargo charged much more than it paid for third-party appraisals, exploiting borrowers who could least afford it and driving them further into default.

http://www.reuters.com/article/us-wellsfargo-settlement-idUSKBN12V27F

Freddie Mac’s Loan Advisor Suite – lower appraisal requirements

Excerpt

Loan Collateral Advisor is an appraisal assessment tool that promotes better appraisal quality by analyzing appraisal reports and providing real-time risk assessment feedback on appraisals. Also, any appraisals submitted to the Uniform Collateral Data Portal (UCDP) will seamlessly and automatically integrate with Loan Collateral Advisor.

This article gives the “big picture” for lenders

http://www.housingwire.com/articles/38157-freddie-macs-loan-advisor-suite-gives-lenders-greater-certainty-and-efficiency

Info from Freddie with screen shots of Collateral Advisor:

http://www.freddiemac.com/loanadvisorsuite/loancollateraladvisor /

FAQs from Freddie

http://www.freddiemac.com/loanadvisorsuite/faq/loancollateraladvisor.html

Appraisal Institute comments and copy of their letter

http://www.appraisalinstitute.org/ano/appraisal-institute-concerned-with-freddie-mac-policy-changes

Excerpt from Appraisal Institute letter to Freddie:

“Unlike the Property Inspection Waiver policies announced by Fannie Mae this week which are limited to lower-risk refinance transactions the policy change by Freddie Mac appears to be oriented to purchase-mortgage transactions or transactions with the highest risk to the agency. It has become standard practice to obtain a complete interior inspection appraisal to understand things such as property condition. Unlike a refinance transaction, where a previous appraisal is likely to be on file, loan purchases generally have less information available to the agency, which is where appraisal data provides added input to risk management.”

My comment: of course, Freddie has to try to keep up with Fannie’s Property Inspection Waiver. But… they don’t have CU, etc. I did not have time to check this out before sending this newsletter, but thought I would let you know.

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SoFi and Fannie Mae announce cash-out refi for student loans

An estimated 8.5 million households could potentially benefit

Excerpts:

Capitalizing off of its start as a student lender, SoFi and the government-sponsored enterprise Fannie Mae announced a new loan option on Wednesday allowing homeowners to refinance their mortgage at a lower rate and pay down the balance of an existing student loan.

Under the new loan option, which is titled the Student Loan Payoff ReFi, SoFi stated that it will pay down the student loan by disbursing payment directly to the servicer of the student debt.

… SoFi stated than an estimated 8.5 million households in the U.S. could potentially pay down or completely pay off their student debt obligations with this new option.

According to Experian data, the average homeowner with outstanding cosigned student loans has a balance of $36,000 on those student loans, and those with outstanding Parent PLUS loans have $33,000 in student debt.

http://www.housingwire.com/articles/38430-sofi-and-fannie-mae-announce-cash-out-refinance-student-loan-offering

My comment: For appraisers, this means more appraisals will be needed. The student loan situation is a Big Mess. Quite different than a mortgage loan with a fixed payment and term. Also, student loans cannot be discharged in bankruptcy. Some borrowers have their amount due keep increasing over time when they defer full payments. Also, often students have multiple loans. Private loans are often worse than government loans. It is terrible to be caught in this trap when you are young. Too bad if you did not graduate with an engineering, computer science, etc. degree. Of course, this only applies to borrowers or co-signers who own a home. I was very lucky. When I went to college in the 1960s state tuition and living expenses were low. I worked my way through with part time jobs, about 20 hours per week. When I got my MBA in 1980, state tuition was very low and I lived at home.

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In the paid Appraisal Today
November 2016 issue 

How appraisers get into trouble using email, social media, online postings, face-to-face conversations, etc. 
Is there any private communication?

THE PRIMARY RULE FOR EMAIL AND THE WEB = ASSUME THAT WHAT YOU WRITE WILL BE PUBLISHED ONLINE AND EVERYONE IN THE WORLD CAN READ IT!!

Answer: There is no private communication, including postal mail.

Excerpt:

Most Important email tips for staying out of trouble

Do Not Hit Send until you wait for awhile. Unless it is a quick no or yes reply, I almost always wait. Sometimes I save it and let it sit overnight, particularly when it is a long email that could be controversial. Often, I change it or delete the entire email. There is software to get it back within 5-10 seconds, but it is much easier to get in the habit of waiting to send it. Yes, sometimes I do hit reply and want to take it back…

Do Not Hit Reply All, unless you really mean it. Often, people are annoyed to get another irrelevant email. Or, worse, it goes to people you did not want to see it.

Sample topics discussed

  • Why there is no email privacy
  • Email encryption
  • Person to person and phone conversations
  • Disclaimers at the bottom of emails
  • Web site postings – be very careful
  • Lender and AMC privacy requirements

One good tip that keeps you out of trouble can more than pay for your Appraisal Today subscription!!

$8.25 per month, $24.75 per quarter, $89 per year (Best Buy)

or $99 per year or $169 for two years

Subscribers get, FREE: past 18+ months of past newsletters

plus 4 Special Reports, plus 2 Appraiser Marketing Books!!

To purchase the paid Appraisal Today newsletter go to

www.appraisaltoday.com/products or call 800-839-0227.

If you are a paid subscriber and did not get the November 2016 issue, emailed November 1, 2016, please send an email to info@appraisaltoday.com and we will send it to you!! Or, hit the reply button. Be sure to put in a comment requesting it ;>

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Do you like appraising?

Poll: Overall with all factors considered, do you like your job as a Real Estate Appraiser?

Thanks to www.appraisalport.com and Steve Costello for these great polls!!

My comment: I have been appraising for over 40 years and still love my profession (I don’t think of it as a job), but… The Rule of Self Employment: Appraising (or whatever you do) would be great except for those darn clients!! (If they give me any hassles, I kick them off my Approved Client List)

Many of us would like to get emailed appraisal orders with a good fee, a check in the mail before we start, a convenient appointment time (for us), we tell them the turn time, and we email the appraisal back. No questions later, of course ;>

WHAT DO YOU THINK? POST YOUR COMMENTS AT www.appraisaltodayblog.com !!

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Freddie Mac’s Loan Advisor Suite – lower appraisal requirements

Excerpt:

Loan Collateral Advisor is an appraisal assessment tool that promotes better appraisal quality by analyzing appraisal reports and providing real-time risk assessment feedback on appraisals. Also, any appraisals submitted to the Uniform Collateral Data Portal (UCDP) will seamlessly and automatically integrate with Loan Collateral Advisor.

This article gives the “big picture” for lenders

http://www.housingwire.com/articles/38157-freddie-macs-loan-advisor-suite-gives-lenders-greater-certainty-and-efficiency

Info from Freddie with screen shots of Collateral Advisor:

http://www.freddiemac.com/loanadvisorsuite/loancollateraladvisor /

FAQs from Freddie

http://www.freddiemac.com/loanadvisorsuite/faq/loancollateraladvisor.html

Appraisal Institute comments and copy of their letter

http://www.appraisalinstitute.org/ano/appraisal-institute-concerned-with-freddie-mac-policy-changes

Excerpt from Appraisal Institute letter to Freddie:

“Unlike the Property Inspection Waiver policies announced by Fannie Mae this week which are limited to lower-risk refinance transactions the policy change by Freddie Mac appears to be oriented to purchase-mortgage transactions or transactions with the highest risk to the agency. It has become standard practice to obtain a complete interior inspection appraisal to understand things such as property condition. Unlike a refinance transaction, where a previous appraisal is likely to be on file, loan purchases generally have less information available to the agency, which is where appraisal data provides added input to risk management.”

My comment: of course, Freddie has to try to keep up with Fannie’s Property Inspection Waiver. But… they don’t have CU, etc. I did not have time to check this out before sending this newsletter, but thought I would let you know.

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Fannie’s Property Inspection Waiver blog comments

Lots of comments on my blog in response to last week’s “Fannie’s Property Inspection Waiver (no appraisal) effective 12/10/16 for all lenders”

My favorite quote is an excerpt from Steve Brenner’s post:

“The sky may not be falling just yet, but, I think it’s time to start looking for falling objects.”

You can see all comments on this post here:

https://appraisaltoday.com/2016/10/26/fannies-property-inspection-waiver-effective-121016-lenders/#comments

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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. (November 2, 2016) –

Mortgage applications decreased 1.2 percent from one week earlier

according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 28, 2016.

 

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis from one week earlier to its lowest level since May 2016. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.4 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 9 percent higher than the same week one year ago.

The refinance share of mortgage activity remained unchanged at 62.7 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 4.4 percent of total applications.

The FHA share of total applications remained unchanged at 11.1 percent from the week prior. The VA share of total applications increased to 12.4 percent from 12.2 percent the week prior. The USDA share of total applications remained unchanged at 0.7 percent from the week prior.

 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since June 2016, 3.75 percent, from 3.71 percent, with points decreasing to 0.36 from 0.37 (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 its highest level since June 2016, 3.74 percent, from 3.71 percent, with points decreasing to 0.32 from 0.35 (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 increased to its highest level since June 2016, 3.59 percent, from 3.56 percent, with points increasing to 0.33 from 0.28 (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 increased to its highest level since June 2016, 3.04 percent, from 3.01 percent, with points increasing to 0.36 from 0.28 (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 2.97 percent from 2.93 percent, with points increasing to 0.40 from 0.32 (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. Mortgage lending will also take into account the (perceived) riskiness of the mortgage loan.

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