Appraisal News and Business Tips

6-22-17 Newz//McMansions .Credit Risk Increasing .Freddie – No Appraisals

What If McMansions Ruled the World?

Excerpt: Whether on the gleefully snarky blog McMansion Hell or in haunting photos of cul-de-sacs abandoned during the recession, McMansions-those ersatz chateaux of modern suburbia-are frequent targets of urbanists’ ire, derided as symbols of the wastefulness and isolation of suburban sprawl.
But what if the McMansion could be put in the service of urbanism instead?
My comment: Fascinating!!
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Appraiserville

Housingwire Gave Appraisers A Long Overdue Win

By Jonathan Miller
Excerpt: After a snarky trying-to-be-coy blog post that tried to win on a technicality that there was an appraiser shortage, many appraisers, including myself, took to the streets (the comments section) to voice our outrage. It was based on an amazingly misinformed Urban Institute post that doesn’t understand the appraiser role in mortgage lending, which was even more infuriating.
Housing Wire’s editor reached out to Jonathan Miller for the appraisers’ side of the story – He handed our long besieged industry a rare “win, include” and I am grateful for his honesty and for the opportunity to voice my view on their platform.

Click here to read:
Scroll down the page to appraiserville. Check out the graphs, etc on the way down!!

Click here to read Miller’s full post

Miller recommends taking this very short survey at: https://www.surveymonkey.com/r/W3V2MCX  There are only six questions and they focus on your day to day work experiences. The results will be shared soon.

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No appraisals? Freddie joining Fannie

By Ken Harney, nationally syndicated real estate writer
Excerpt: With no formal public announcement, on June 19 Freddie Mac began phasing in its plan to transition to appraisal-free mortgage for certain loan applications. Though limited initially to some refinancings, Freddie expects to expand the concept to home purchases in the coming months.
My comment: We all knew this was coming, especially after UAD when our own data was used to cut down on appraisals. Lenders Big Dream – no Deal Killer appraisals!!
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Coming in the July 2017 issue of the paid Appraisal Today

 

– What does Fannie really say? Part 2. Get the facts straight from Fannie Mae. Amaze underwriters!
– The Future of the Residential Appraiser (Part Deux). A View from the Regulatory Side By Barry Bates
– Plus more!! 
 
To read the articles, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
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To purchase the paid Appraisal Today newsletter go to

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If you are a paid subscriber and did not get the June 2017 issue, emailed June 1, 2017, 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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Risk levels down to early 2000s

Excerpt: Mortgage lenders are taking increased credit risks similar to those of the early 2000s, according to the Q1 Housing Credit Index Report released by CoreLogic on Tuesday. The level of credit risk taken by lenders in Q1 of 2017 was about the same as the average risk taken between 2001 and 2003.
According to the report, the shift toward riskier lending standards is a result of declining refinances.
My comment: gotta do something to increase those refis. Fortunately it is credit per this report. However, I am hearing more about value pressure on purchases.
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Tennessee proposes time limit for appraisals for damages and state board actions

Excerpt: HB 376 Tennessee House Bill. As enacted, limits any action to recover damages against a real estate appraiser arising out of the appraiser’s real estate appraisal activity to being brought within one year from a person’s discovery of the act or omission giving rise to the action; limits any disciplinary action against a real estate appraisal by the Board of Real Estate Appraisers from three years from the date the appraisal was completed. – Amends TCA Title 28 and Title 62, Chapter 39.
Link to the bill
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Former AppraiserLoft owner said to now focus on shady apartment rentals

Excerpt: Back in the summer of 2011, Aman Makkar stepped down as CEO of AppraiserLoft, a former national provider of collateral valuations services. Shortly after that, the company went under, closing its doors for good and taking Makkar down with it.
Or so we thought.
When the company closed its doors, it owed more than $3 million to appraisers for property valuations. Those invoices were never paid, to the knowledge of HousingWire.
As it turns out, Makkar has since resurfaced, this time setting his sights on potentially illegal apartment rentals in Santa Monica, California.
My comment: A Blast From the Past for appraisers. Don’t let this happen to you… carefully keep track of your accounts receivable. Don’t let them get too high. Don’t be dependent on just a few clients.
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New Jersey proposes change in AMC fees to what is paid to appraiser

Excerpt: The proposal states that lenders may only recover from the borrower “the direct cost of the fee charged by a duly credentialed real estate appraiser for an appraisal in connection with a mortgage loan application.”  Whether or not so intended, this provision can be read to limit the amount of an AMC’s fee that a lender may pass through to the borrower to the amount the AMC actually pays to the third-party appraiser it hires to perform the appraisal.
My comment: maybe it will be adopted. Interesting.
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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 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 increased 0.6 percent from one week earlier
WASHINGTON, D.C. (June 21, 2017) – Mortgage applications increased 0.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 16, 2017.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 0.4 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week to its highest level since November 2016. The seasonally adjusted Purchase Index decreased 1 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 increased to 46.6 percent of total applications from 45.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.5 percent of total applications.

The FHA share of total applications decreased to 10.1 percent from 11.2 percent the week prior. The VA share of total applications decreased to 10.4 percent from 11.1 percent the week prior. The USDA share of total applications decreased to 0.7 percent from 0.8 percent 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 4.13 percent, with points decreasing to 0.34 from 0.35 (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) increased to 4.08 percent from 4.06 percent, with points increasing to 0.30 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 increased to 4.04 percent from 4.00 percent, with points increasing to 0.35 from 0.29 (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 3.40 percent from 3.37 percent, with points increasing to 0.38 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 remained unchanged at 3.26 percent, with points increasing to 0.22 from 0.20 (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

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