Appraisal News and Business Tips

10-5-17 Newz//Increasing home prices in disaster-prone areas. USPAP and Desktop Evaluations

Home Prices Rising Twice as Fast in U.S. Cities with Highest Natural Hazard Risk Than in Lowest-Risk Cities

 Homeowners in Highest-Risk Cities Have More Equity, Longer Homeownership Tenures
 Appreciation Slower in Florida and Louisiana Cities with Highest Flood Risk, Bucking Trend

Excerpt:
ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, recently released its 2017 U.S. Natural Hazard Housing Risk Index, which found that median home prices in U.S. cities in the 80th percentile for natural hazard risk (top 20 percent with highest risk) have increased more than twice as fast over the past five years and over the past 10 years than median home prices in U.S cities in the 20th percentile for natural hazard risk (bottom 20 percent with lowest risk).

Click here to see a Heat Map of all U.S counties – what does your look like? Search by type of disaster. Plus lots more analysis. Very interesting!!

My comment: Overall high risk counties are scattered all over the country. The article mentions strong economies and scenic locations. I live in Earthquake Country. When I first started appraising here, I was surprised that it did not matter. There is no discount even for being on a fault line. Why? Lots of people want to live in the San Francisco Bay Area. The fault line closest to me (about 10 miles away) is on the top of hills with very good Bay views. There are 3 in the Midwest and east. The large New Madras earthquake fault area in the midwest is on the map as Moderate (last earthquake in the 1800s). Two other small areas in NC and PA are on the map.

The Changing Landscape of Residential Appraising –

USPAP and evaluations

By John S. Brenan, Director of Appraisal Issues, The Appraisal Foundation

 

Excerpts: “I received a request to perform a desktop valuation, based on information provided to me by my client. That information included public record data, a prior appraisal report, and observations from a real estate agent who performed an inspection on the property. The client provided a form to use for this assignment.”

Appraisers are utilized to help solve a problem. That problem is often a client’s need to understand the value of underlying collateral in order to make an informed lending decision. However, there are seemingly ever-increasing variations revolving around that central problem. Today, appraisers are asked to provide a multitude of assignment types with varying scopes of work and reporting requirements.

While some appraisers have resisted adapting to this new era, others have found opportunities that may not have been readily apparent in the past. Whether residential appraising today is good, bad, or somewhere in between is something for others to decide. What appraisers are allowed to do is a different question.

Worth reading at

My comment: Lots of appraiser discussions about using others to do the inspection and you do a desktop appraisal. I have been getting a few solicitations to do these appraisals. Since I am rarely contacted about lender appraisals, I assume this indicates there is lots more interest. Why? Decreases turn time, lenders’ Most Important issue.

FHFA Director Watt gives small glimpse into status of 3% down programs

Excerpt: Watt stated that in 2014, FHFA approved a limited program that allowed the enterprises to purchase mortgages with a 3% down payment.

Between 2015 and June 2017, the GSEs have purchased more than 130,000 mortgages with a 3% down payment. And, Watt said, “The program is continuing to grow.”

Watt also noted that the average loan amount has been about $180,000, and more than 95% of these borrowers were first-time homebuyers.

My comment: I have been hearing about this for a while. Finally we have some data!! This month’s issue of the paid Appraisal Today has an article “Fannie and Freddie Are Not Your Friend” by Barry Bates that discusses the relationship between FHFA and the GSEs.

Congress Must Tackle Housing Finance Reform

Recent House Financial Services Committee hearing on GSEs
Excerpt: The “Sustainable Housing Finance” hearing took place Oct. 3… Those of us who worry about another taxpayer bailout should be worried about efforts to lower down-payment requirements, raise the debt-to-income ratio, and divert funds to a housing trust fund that lacks accountability-all the while taxpayers who paid to bail out the GSEs in 2008 remain in harm’s way.
FHFA Director Watt (see above) spoke at this hearing.

To read more, including the comments submitted, and listen to the 4 hour hearing go to
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New In the This Month’s Issue of the Paid Appraisal Today

  • An Appraiser Gets Audited by the IRS! My Story… I had a random audit in July – the IRS looked at my entire return – 2 businesses plus rental real estate. Find out how to avoid the problems I had!!
  • Appraisals for estates and trust – the most popular non-lender appraisals Part 1 – No court testimony, No UAD, reviewers, etc. etc. Paid up front.
  • Fannie and Freddie are Not Your Friends!! by Barry Bates “Insider” comments, and fun images.
To read the articles, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.

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Appraiserville – Getting Paid, AMC Fees, Waive all appraisals

By Jonathan Miller

Getting Paid ” Many appraisers I know seem to like to work for free or provide credit to strangers.”

With mortgage fraud on the rise, how about waiving all appraisals? “(Corelogic announcements) clearly demonstrates the Waiver concept is a product of the recent refinance boom with AMC paying half the market rate.

AMC management fees exceeding the appraiser’s fee more frequently ” What other industry pays the paper-pushers more than their actual experts but the experts get blamed for being too costly?”

Scroll down the page to Appraiserville.
Check out the full blog post here:

My comments: Worth reading. I have written many times about getting paid in my Appraisal Today paid newsletter, including how to be sure you get paid when a client is going out of business. Very Important when business is declining significantly or an AMC is going out of business. How to make sure you are paid first!!

Commercial appraisal threshold increase – comments pro and con

Excerpt:
The comment period on the proposed rule to increase the commercial real estate appraisal threshold level closed Sept. 28, and the federal bank regulatory agencies received 70 comments.

Most of the comments were submitted by practicing real estate appraisers who oppose the increase and expressed concern about increased risk to the CRE market. They also challenged the use of existing appraisal threshold levels as the basis for inflationary increases and opposed the inclusion of construction loans for multifamily properties with four or fewer units.

However, state banking organizations and the organizations representing financial institutions expressed support for the increased CRE appraisal threshold level. Most also either expressed support for or called for further study of an increase to the appraisal threshold level for residential and business loans. AI and ASFMRA strongly oppose such an increase.

My comment: The residential threshold was set at $250,000 in 1989, but appraisals were still ordered. Why? Freddie and Fannie investors required appraisals. If this ever changes, there will be many fewer residential appraisals. Commercial appraisals are more risky than residential due to the higher loan amounts. Also, residential is one property type. There are many types of commercial properties.

SORRY, NO MORTGAGE APPLICATION MBA DATA THIS WEEK. DARN!!

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