Appraisal News and Business Tips

6-1-17 Newz .Our 25th Anniversary! .Zillow Class Action Lawsuit, FTC Says No to LA Setting AMC Fees

FTC Challenges Louisiana Real Estate Appraisers Board Regulations that Restrict Competition

Restrictions on fee setting violate federal antitrust rules, agency alleges

Excerpt from FTC: The Federal Trade Commission has filed a complaint against the Louisiana Real Estate Appraisers Board, alleging that the group is unreasonably restraining price competition for appraisal services in Louisiana, contrary to federal antitrust law. The complaint will be submitted to adjudication before an Administrative Law Judge, who will review it and render an initial decision.
In the administrative complaint, the FTC alleges that the Louisiana appraisers board limits the freedom of individual appraisers and their customers to engage in bona fide negotiations to set appraisal fees for real estate appraisals in Louisiana.
Excerpt from LA appraisal board comments:
In a statement, the Louisiana Real Estate Appraisers Board denies the FTC claims, adding that it is operating well within its rights and any accusations beyond that are “ludicrous” and without merit.
“Respectfully, the FTC is just plain wrong. By issuing this legally faulty and factually incorrect complaint, the FTC is seeking to punish a Louisiana state agency for following federal regulatory mandates,” Bruce Unangst, executive director of the Louisiana Real Estate Appraisers Board, said in a statement.
Read the details here from the FTC:
More info, including comments from LA appraisal board
My comment: Very interesting angle… I always wondered if it was ok for states to set AMC appraisal fees. I wondered who complained????
—————————————————————————————————

When Stairs and Slides Are Hiding in Plain Sight

Play real-life Chutes and Ladders at these obscure thruways.

Excerpt: An ordinary stroll can quickly become extraordinary when you stumble on one of the many hidden stairways and slides that dot the world’s cities. Some are seemingly mundane structures hiding fascinating histories, while others blend into the landscape like a secret, surprising even long-term residents. These slopes and climbs make ordinary places more fun.

My comment: I know about some local stairs but have never heard of slides! Check out the 9 places from all over the world!!
———————————————————————–

Zillow – $1 million prize for better algorithm

Excerpt: Zillow Prize, a contest that allows data scientists from around the world to work alongside us to improve Zestimate accuracy and have the chance to win $1 million. This is the first time we’ve ever invited data scientists outside of Zillow to work on the algorithm.
The contest is staged in two rounds: The public qualifying round, which opens today and closes Jan. 17, 2018; and a private, invitation-only final round that kicks off Feb. 1, 2018, and closes Jan. 15, 2019. By the close of Zillow Prize, the person or team who improves the accuracy the most AND beats a Zillow benchmark model will walk away with $1 million.
My comment: Great idea!! As we all know, the math is easy. The data is the problem… I need my data scientist team!!
———————————————————————————–

Suburban builders seek class action to stop Zillow estimates

Excerpt: Zillow uses “nonsense” methods to estimate home prices, creating potential losses for property owners, according to a lawsuit filed Friday, May 23 2017, in Cook County Circuit Court.
The real estate website, which displays homes making what it calls a “Zestimate,” shouldn’t be making appraisals without a valid appraisal license, said the lawyer, Barbara Andersen of Andersen Law. The Glenview lawyer earlier sued Zillow over the estimate on her own home, but in this most recent lawsuit she is representing CastleBldrs.com and Vipul Patel, Bhasker Patel and Jyotsna Patel.
My comment: Maybe this will make a difference. Maybe not. The lawyer’s original lawsuit was about the zestimate on her home. Getting the builders involved in a class action lawsuit is a good idea!!
———————————————————————————–

It was 25 years ago today, June 1 1992, that I published the first issue of the paid Appraisal Today!!

What a wild ride it has been!!

 
In 1994 I sent first issue of this FREE email newsletter.
New in the June 2017 issue of Appraisal Today
Appraisal Today newsletter 25th Anniversary!! Changes over the past 25 years. What a wild ride it has been!! Fees, AMCs, Fannie, etc. etc. 
Lots of changes since June 1, 1992, when I sent the first issue of Appraisal Today by postal mail!! This article is a summary of the changes, including time lines. Hard to believe that it has only been about 4 years, in late 2013, that the UAD was implemented. I’m trying to forget that HVCC was implemented in 2009.
Survival for the residential appraiser: How I learned to stop working and love the AVM that put me out of business! By Barry Bates

Barry Bates, 44 year appraiser, has always always “out of the box”;> He has experience in all facets of residential lender appraising, from field appraiser to executive, plus running his own appraisal company. He worked for a state regulator before his recent retirement. Very interesting perspective. Always has something “off the wall” and humorous to say and write!! I have known him personally for over 30 years.

To read the full articles, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
$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.
————————————————————————————–

Mortgage market to decline from $1.9 trillion in 2016 to $1.6 trillion this year

Excerpts: The MBA has predicted that overall refinancing volume will fall to $500 billion this year, down from $900 billion in 2016. Overall originations, including refinance and purchase volume, will fall from $1.9 trillion in 2016 to $1.6 trillion this year.
As the midway point of the year approaches, the home mortgage market has unfolded much as expected. Refinance activity has fallen steeply, particularly rate-dependent streamlined refinances that have been the industry’s bread-and-butter for several years.
Home-purchase loan activity also has risen as expected, although analysts say the tight inventories of entry-level homes for sale and rising prices have meant that the purchase-money side of the mortgage market has not been quite as strong as expected.

My comment: Appraiser businesses varies widely around the country. If you are in a market with relatively few purchases and few new homes being built, your lender work will be lower. AMC fees are declining in those areas. Time to look for some non-lender work. Consider “hard money” lending – no UAD, CU, etc. There are many other options. I have been writing about them in my paid Appraisal Today newsletter since June, 1992.

———————————————————————-

Corelogic: Comp Prices Often Exceed Subject Property Prices in Appraisals

Price Adjustment on Higher-Valued Comps Are Frequently Small and Downwardly Rigid

Excerpt: A review of 750,000 purchase-loan appraisals conducted in 2015 and 2016 showed that 69.1 percent of comps had a price – averaging 12 percent – above the subject property’s price, and 30.9 percent were below at about 6.4 percent on average. [1] See Figure 1.
While a more frequent use of higher-valued comps could lead to higher appraisals, value adjustments made by the appraiser to the comp in order to make the comp ‘similar to’ the subject property could negate this effect. However, if the adjustments to the comp property’s value are potentially inadequate or inconsistent, then this could partly explain why appraisal valuations tend to be reported above the subject property’s sales price.

My comment: a bit technical, but worth reading.

—————————————————————————
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 paid monthly 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 3.4 percent from one week earlier

WASHINGTON, D.C. (January 30, 2015) – WASHINGTON, D.C. (May 31, 2017) – Mortgage applications decreased 3.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 26, 2017.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 6 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 7 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 43.2 percent of total applications from 43.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.7 percent of total applications.

The FHA share of total applications decreased to 10.5 percent from 10.8 percent the week prior. The VA share of total applications increased to 10.8 percent from 10.5 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged at 4.17 percent, with points decreasing to 0.32 from 0.39 (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 4.11 percent, with points decreasing to 0.30 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.03 percent from 4.07 percent, with points decreasing to 0.32 from 0.34 (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 3.42 percent from 3.45 percent, with points increasing to 0.39 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 decreased to 3.22 percent from 3.27 percent, with points decreasing to 0.33 from 0.35 (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.

Leave a Reply