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My comment: I get all the Fannie announcements and have to scroll through them looking for anything relevant to appraisers for this email newsletter. Hopefully, Fannie’s appraiser info will be send frequently. The first newsletter is available.
Ecological Plastic Bottle House
One family’s mission to exemplify sustainability took on a whole new life as a surprisingly beautiful home.
Excerpt: Alfredo Santa Cruz and his family built the bottle house out of trash and recyclables they collected. Aluminum cans, glass jars, CDs, cardboard cartons, and of course, plastic bottles were all used as construction materials. The house has multiple rooms, and even furniture constructed from all these items.
Scroll down the page to see bottle houses in Michigan, Canada, and Azerbaijan!!
Trump: We’re going to do a very major haircut on Dodd-Frank
Excerpt: In the words of President Donald Trump, the era of “horrible regulations” is coming to an end.
On Tuesday, during a gathering of some of the CEOs of the country’s largest companies hosted by the White House, Trump told the crowd that his administration is working hard to “destroy” many of the regulations holding back the private sector and plans to continue doing so.
My comment: Repeal and Replace (a familiar plan) has been discussed.
Goodbye Plywood: Fannie Mae no longer allows plywood in pre-foreclosure
Servicers must replace plywood on existing properties
Excerpt: In a bulletin sent to servicers this week, Fannie Mae said that it “no longer accepts plywood boards as an acceptable boarding solution on windows of its properties.”
The bulletin stated that servicers are now required to replace any and all plywood boarded windows on homes in pre-foreclosure with clear boarding or a replacement window.
And servicers have 90 days from the announcement’s effective date, March 29, 2017, to re-glaze/repair or clear board all unsecured and previously plywood boarded windows, Fannie Mae said.
Rates going up! Worried about the future of your appraisal business?
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What Impact Do Changing Interest Rates Have on Mortgage Demand?
Source: The Harvard Joint Center for Housing Studies Thanks to Jonathan Miller for this interesting link!!
Excerpt: Could the post-Great Recession drop in housing demand have been driven in part by an increase in mortgage credit spreads across borrowers? In a new Joint Center working paper that uses proprietary data on the spread of mortgage rates across borrowers with different credit, I find that mortgage demand does react to mortgage interest rates in economically and statistically significant ways.
This finding is significant because little is known about the extent to which changes in interest rates affect the demand for mortgages. Measuring this effect is difficult because both interest rates and the demand for mortgages are driven by macroeconomic factors. For example, after the financial crisis in the late 2000s, interest rates fell as the Federal Reserve attempted to stimulate the economy, but the demand for mortgages also fell because individuals faced adverse macroeconomic conditions. A naive estimate would suggest that over this period, lower interest rates drove lower housing demand, which is clearly not correct.
My comment: academic article but interesting
Desktop appraisal with Non-Appraisers Doing Inspections? Lenders Keep Trying…
Clear Capital suggests that the VA consider the use of a desktop appraisal
Comments made in the recent house hearing on VA appraisals discussed in last week’s email newsletter.
Excerpts: The product is a hybrid of traditional appraisal process and methods and leverages a qualified, arms-length, real estate professional, such as a real estate broker or agent, performing a visual inspection of the subject property and providing other market insight and analytics.
(The appraiser) He or she should not need to be an Uber-driver, or handle a tape measure, or be a photographer, for hours on end for every valuation assignment.
AMC Desktop Appraisals with non-appraisers doing inspections
Excerpt: … a new wave of desktop appraisals available from some AMCs. These products have an inspection of the property performed by another individual and the photographs and property specific data is provided to the appraiser. The AMC’s are claiming that the entire product is on-line and no written report is needed. They also claim the report is USPAP compliant. They are looking at compensating the appraiser $65 and the report should take approximately 45 minutes to complete.
An AMC letter is included in the article.
My comments: Remember the comp checks almost every residential appraiser did during the mortgage broker days? No one ever saw the subject property. Somehow most appraisers thought they were okay. Did you set up a USPAP compliant file for each one?
I have been hearing about these residential desktop products for many years. They are easier to do now with the availability of online data and web forms. USPAP, of course, allows many types of appraisals including oral. So far, few appraisers are willing to do them, probably because of the low fees. If the desktop appraisal was $150 would you do it? How much would you want? $150, $240, $400? Maybe someone will do an appraiser survey…
There is a big email discussion on proposed CA regulation (SB 70) allowing commercial appraisers to do limited portfolio value updates currently done by non-appraisers (CPAs etc.) This has also been around for a very long time. Residential lender appraisers don’t like it, even though it would never apply to lender loans.
What I really hate about USPAP is the huge lender influence on USPAP. Many residential appraisers cannot think out of the “lender box”. Not all appraisals are done for lenders. Not all appraisals have to be done on Fannie forms. Remember what it was like before licensing and USPAP? Somehow appraisers knew what they were supposed to do.
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
Mortgage applications increased 1.5 percent from one week earlier
WASHINGTON, D.C. (April 12, 2017) – Mortgage applications increased 1.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 7, 2017.
The Market Composite Index, a measure of mortgage loan application volume, increased 1.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index remained unchanged from the previous week. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 5 percent compared with the previous week and was 3 percent higher than the same week one year ago.
The refinance share of mortgage activity decreased to 41.6 percent of total applications, the lowest level since September 2008, from 42.6 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 $318,700.
The FHA share of total applications decreased to 10.7 percent from 11.1 percent the week prior. The VA share of total applications increased to 11.3 percent from 11.1 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) decreased to 4.28 percent from 4.34 percent, with points increasing to 0.38 from 0.31 (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) remained unchanged at 4.24 percent, with points increasing to 0.28 from 0.24 (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 decreased to 4.14 percent from 4.15 percent, with points decreasing to 0.29 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 decreased to 3.51 percent from 3.57 percent, with points decreasing to 0.35 from 0.38 (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 remained unchanged at 3.33 percent, with points increasing to 0.17 from 0.13 (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.