Appraisal News and Business Tips

7-13-17 Newz// FTC vs. NC Fees, Zillow misestimates,Turbo-Charged Appraiser

FTC targets North Carolina Fee Survey

North Carolina currently considering establishing set fees for appraisals
 
Excerpt: According to the FTC, North Carolina’s proposed legislation carries many of the same issues as the laws in Louisiana.
In its comment, the FTC states that the bill’s method for establishing appraisal fees “is not mandated by – and, in fact, may be inconsistent with – federal law.”
The FTC also suggests that the bill “may have the effect of displacing competition for the setting of appraisal fees and ultimately harming consumers in the form of higher prices.”
More info here, including text of the bill, etc. and where to file a complaint.
Louisiana’s reply to previous FTC hassles here:
My comment:I have no idea why the FTC is going after states setting AMC fees. Seems like there are a lot of much bigger problems…

The Next Job Humans Lose to Robots: Real Estate Appraiser

Advances in big data at Zillow and elsewhere are helping automation creep into knowledge-based professions.

 

Excerpt: Twenty-five years ago, Brian Weaver was told at a seminar that the real estate appraisal profession would be killed off by technology in five years. It didn’t happen. But he now thinks the forecast wasn’t exactly wrong-just early.

https://www.bloomberg.com/news/articles/2017-07-11/the-next-job-humans-lose-to-robots-real-estate-appraiser 

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The Turbo Charged Appraiser – “Progress Slow on Robot Takeover” – A Blast From the Past by George Dell

Except: This is the headline from an article in the San Diego Union Tribune this morning.  The article went on to say, “Data complexities, trust issues, and the persistent need for human input restrain scaled-up automation.”
As a brand-new appraiser trainee, I was in awe of the office and the people.  And in particular, the backroom.  The backroom was the library and data room.  As large as some small homes.  It contained data.  Lots of data…
Read more at:
My comment: I love these two very different topics!! One is maybe the future and the other looks at data way back in the past from George Dell, stats and data guru!!

Appraiser Participation: If you want a voice.

Joshua Walitt
Excerpt: …the Power Of One (one person taking action) is a formidable force – especially when combined with many other individuals taking action towards the same end. During the question period after my talk, the following day at the conference, and in the months since, appraisers have asked me “What can I do to make necessary changes in my state?”
Read his suggestions here:

My comment: It is a lot easier to make an impact on state regulations than Fannie, Freddie, or federal regs!! See the link above for FTV vs. NC fees for some tips on how to tell them what you think.

In the paid Appraisal Today

 

Fannie and Freddie – what do they really say about risk scores, 1004mc, forms redesign, data discrepancies, etc.?

Excerpt: 
Message frequency by type
– Data discrepancy 46%
– Comp selection 10%
– Adjustments 43%
– Reconciliation 1%
Comp selection typically affects value, over or under valuation, so it is important even though it has a lower frequency.

Fannie sees comps 6-7 times on average. Comp includes the transaction, such as the sale of 123 Main St. for $XXX on XXX date.

Data discrepancy measured several different ways
1. They compare the subject and the comps from an appraisal:
Has the appraiser used this comp previously? Is it reported the same way? Most discrepancies are GLA, bedrooms, bathrooms, Condition(defaulting to 3 and 4) and Quality. Be sure to do absolute Q and C.
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Zillow misestimates, despite Big Data

 Excerpt: Despite millions of statistical models and proprietary data points behind Zillow’s price estimate (Z-est), the Z-est fails a typical real estate agent in predicting an ultimate home’s sales price.  How did we get here again with Big Data models, and how do such large-enough discrepancies occur?
My comment: Interesting and well written. From an academic statistics web site. Worth reading. If you like statistics math and equations, click on the Sequel link at the top of the page.

Appraisers May Be Holding Back The Housing Market, And That Might Be Okay

Excerpt: I want to warn you from the top, this is a highly speculative post in multiple directions at once. I have a theory as to what is holding back the housing market, and another theory as to why that might be a good thing. There isn’t a lot of data to back up either claim, and I wouldn’t elevate other above conjecture at this point. But stick with me anyway.
My comment: This is just an FYI as it was published by Forbes, which is widely read. Appraisers don’t agree, of course… 4 comments so far… Appraisers Are So Powerful!!!

Big Bathroom Data, Big Housing Results & Big Media Spamming Appraisers by Jonathan Miller

Lots of fun stuff in this post!! Scroll down to Appraiserville also…
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 1.4 percent from one week earlier

WASHINGTON, D.C. (July 6, 2017) – Mortgage applications increased 1.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 30, 2017.

The Market Composite Index, a measure of mortgage loan application volume, increased 1.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index decreased 0.4 percent from the previous week. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 6 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 44.9 percent of total applications from 45.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.2 percent of total applications.

The FHA share of total applications decreased to 10.2 percent from 10.3 percent the week prior. The VA share of total applications remained unchanged at 10.3 percent from the week prior. The USDA share of total applications increased to 0.8 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to its highest level since May 2017, 4.20 percent, from 4.13 percent, with points decreasing to 0.31 from 0.32 (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 $424,100) increased to its highest level since May 2017, 4.10 percent, from 4.09 percent, with points increasing to 0.23 from 0.20 (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 4.02 percent, with points decreasing to 0.33 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since May 2017, 3.43 percent, from 3.39 percent, with points decreasing to 0.32 from 0.33 (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 its highest level since March 2017, 3.37 percent, from 3.31 percent, with points decreasing to 0.22 from 0.25 (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.

2 Comments
  1. I get in from the mortgage bankers association every week. who knows ;>

  2. Ann, I agree with you in most of article, but I am not sure that Mortgage applications increased 1.4 percent. Please check that again.

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