Appraisal News and Business Tips

4-6-17 Newz .VA Appraisers Congress Hearing .Appraiser and Timeshare Scam .Fourth Approach

Assessing VA Approved Appraisers and How to Improve the Program for the 21st Century – House Committee on Veterans’ Affairs Subcommittee on Economic Opportunity April 4, 2017

Link to video of hearing: https://youtu.be/uoVmYOq4HQY  (scroll forward past the logo)
Witnesses included:
– NAR 2016 Real Property Valuation Committee Chair
– Vice President, Appraisal Institute
– Chief Revenue Officer, Clear Capital

My comment: I have always been surprised that so few appraisers are interested in doing VA appraisals. Guess they like working for AMCs with hassles and low fees. Every week, at the bottom of every free email newsletter, I include the MBA origination stats, including VA, which is similar in volume to FHA. This week FHA and VA are very similar – around 11% of originations.

I wrote an article about the plusses and minuses of VA appraising in my Paid Appraisal Today newsletter, available to paid subscribers (see below). What I really like about VA is that you are helping veterans, not a lender trying to make a deal however they can. I noticed that a Representative O’Rourke was one of the first speakers in the video ;>
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Federal Court Permanently Bars California Man From Preparing Property Appraisals

Appraiser prepared thousands of appraisals in conjunction with timeshare donation scheme

dExcerpts: A federal court in Helena, Montana permanently barred Ron Broyles of San Rafael, California from preparing – or assisting others in preparing – any property appraisal that will be used in connection with federal taxes, the Justice Department announced. Based upon evidence the government submitted to the Court in support of a request to bar Broyles, the Court found that Broyles assisted in the organization of a timeshare donation scheme, directly participated in and promoted that scheme, which resulted in timeshare owners claiming improper federal tax deductions for donating their timeshares.
The Court also found that Broyles prepared at least 5,000 appraisals for timeshares to be donated to an entity called Donate for a Cause. Previously, the Court entered permanent injunctions against the other individuals and companies involved in the timeshare donation scheme, including Donate for a Cause, Timeshare Closings, James Tarpey of Montana, Curt Thor of Washington, and Suzanne Tarpey of Montana.
… According to the United States’ evidence, between 2011 and 2014, Broyles earned more than $617,000 from preparing appraisals for timeshares to be donated to Donate for a Cause, which constituted all – or virtually all – of his appraisal income during that time….
Thanks to Richard Siebel for this info!!

My comment:www.asc.gov  has Ronald Broyles listed as a certified residential appraiser. Per CA regulator, he has had his residential license since 2004 and previously had a certified general license from 1991 to 2000. Timeshares can be very tricky to appraise, so I have heard…

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Fourth Approach to Value

Excerpt:

Now, I know a lot of you real estate appraisers out there probably started chuckling as soon as you read the words ‘fourth approach to value.’ If you did, I get it, believe me! I used to be the same way. Over time, however, I’ve grown to see how it can often be a vital part of the valuation process.
Let’s have a quick recap for anyone who’s either forgotten the fourth approach, or never learned it to start with. You have your three traditional approaches: market, cost and income. The ‘fourth approach’ is basically like sitting on the curb across the street from your subject, after carrying out the inspection and asking yourself, “Well, what the hell would I pay for this thing?!”

My comment: I have always used this approach and consider in invaluable!! I always called it the Curbside Approach, but like the Fourth Approach better. I have no idea why other appraisers don’t use it. This is why appraisers cannot be replaced by CU, etc. Skip over the negative comments after the article. Maybe someone will comment on this approach instead.

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In the paid Appraisal Today 

Do VA Appraisals! C/R fees and no AMCs!!

Excerpt: 

The VA is very different from FHA and almost all other lenders. VA’s mission is to help veterans get mortgage loans. Everything else is secondary to this mission. The VA wants to be sure that veterans don’t pay too much and don’t purchase homes needing work (health and safety). I have never done VA appraisals but, to me, this is the best part of working for VA.

I don’t know of any lenders, except maybe some credit unions, that put borrowers first.

VA is looking for knowledgeable, experienced appraisers. Quality of work, timeliness, and professional demeanor are important. Erase from your mind any value pressures, not reporting any problems, fitting your appraisal into the AMC “boxes”, etc. You are a professional, not a form filler.
To read the full article, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
 
If this article helped you to get on the VA panel, it is worth the subscription price!! 
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In Search of the Ever Elusive Predominant Value

Excerpt: I’ve been around a long time and during my lifetime I’ve chased many elusive things like The Sandman, The Tooth Fairy, Leprechauns, The Pot-of-Gold at the End of a Rainbow, Unicorns and the The Bright Elusive Butterfly of Love (Bob Lind, 1966), but the most elusive of all things taunts me every day. I get little messages, “warnings” even, that my opinion of value is either above or below that most elusive predominant value! Oh my friends, I have searched and searched and have left no stone unturned, only to come up empty. I’ve looked for clues on a 1004, only to be left in the raw despair of disappointment! I know it must be there! I’m being told by my “Par”, who I love very much and look up to, and who is sometimes very “strict”, that my value is not equal to my predominant value. That must be so, or else it has to be above or below!
My comment: Appraiser Humor is hard to find!! Worth reading. After the fun, the author goes into the details: 1004MC, price vs. value, etc. More Computer Generated Scope Creep.
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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 www.mbaa.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 https://www.appraisaltoday.com/products.htm or send an email to info@appraisaltoday.com . Or call 800-839-0227, MTW 8AM to noon, Pacific time.

Mortgage applications decreased 1.6 percent from one week ago

WASHINGTON, D.C. (April 5, 2017) – Mortgage applications decreased 1.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 31, 2017.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 8 percent higher than the same week one year ago.
The refinance share of mortgage activity decreased to 42.6 percent of total applications from 44.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8.5 percent of total applications. The average loan size for purchase applications reached a survey high at $318,200.
The FHA share of total applications increased to 11.1 percent from 10.8 percent the week prior. The VA share of total applications increased to 11.1 percent from 11.0 percent the week prior.
The USDA share of total applications remained unchanged at 1.0 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.34 percent from 4.33 percent, with points decreasing to 0.31 from 0.43 (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 $424,100) decreased to 4.24 percent from 4.26 percent, with points decreasing to 0.24 from 0.26 (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 decreased to 4.15 percent from 4.24 percent, with points decreasing to 0.32 from 0.36 (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 remained unchanged at 3.57 percent, with points decreasing to 0.38 from 0.43 (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 increased to 3.33 percent from 3.30 percent, with points decreasing to 0.13 from 0.28 (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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