Appraisal News and Business Tips

10-19-17 Newz// Appraisal Waivers, Crooked Houses, High-Low Home Prices

The Asymmetrical Charm of Crooked Houses

They’re like regular buildings, but with a twist.
Excerpt: THE BUILDINGS THAT OFTEN GET the most praise (one famed tower in Pisa not withstanding) are those that stand up straight, refuse to bend or bow over time. But those buildings are boring. The really compelling constructions are those buildings that, despite looking like they are slowly keeling over, continue to stand, and continue to be used.

Some whimsical tourist traps have been purpose-built at odd angles, but it’s the buildings that were never meant to lean that are far more fascinating. Whether due to construction errors, shifting ground, or just the accumulated weight of time, some buildings have become crooked masterpieces of architectural fortitude. Take a look at some of the most stunning crooked houses in the world.

My comment: Just For Fun!! Good fotos and descriptions.

$782,000 over asking for a house in Sunnyvale CA

The once modest community has become one of the Bay Area’s real estate hot spots
Excerpt: Your eyes do not deceive you: The four-bed, two-bath house – less than 2,000 square feet – listed for $1,688,000 and sold for $2,470,000.

“I think it’s the most anything has ever gone for over asking in Sunnyvale – a record for Sunnyvale,” said Dave Clark, the Keller Williams agent who represented the sellers in the deal. “We anticipated it would go for $2 million, or over $2 million. But we had no idea it would ever go for what it went for.”

The property attracted more than 20 bids, and the winning bid “wasn’t an outlier,” Clark said. “There were lots of people who gave very good, high prices” for the property, which he described as “nothing special, just a typical Sunnyvale house in a nice Sunnyvale neighborhood.”

My comment: I am so glad I don’t do appraisals in that area. I am about 30 miles away where we don’t get offers $200,000 over list!! I know what it is like to work in this type of market. I call them “auction values”.

8 Homes For Under $100,000

Excerpts: Yes, it’s possible to buy a home for the price of a kitchen remodel in some parts of the country. Naturally, some of the houses could use a refresh, but for the low, low list prices, you can budget for a renovation.

Low on price, these listings are high on charm.

Here are two:
227 S Western Ave, Chanute, KS Price: $74,900
What’s the deal: Here’s a home with character. This Victorian built in 1925 features 1,900 square feet of living space, including four bedrooms.

4024 N 44th St, Milwaukee, WI Price: $62,000
What’s the deal: A Cape Cod-style home in Wisconsin? That’s just one of the surprises. This stone home offers 1,366 square feet of living space, including a large living room, dining room, three bedrooms, and 1.5 baths.

Check out the houses at:

https://www.realtor.com/news/trends/8-homes-under-100k 

Agencies Issue Temporary Exceptions to Appraisal Requirements in Areas Affected by Severe Storms and Flooding Related to Hurricanes Harvey, Irma, and Maria

WASHINGTON – Responding to widespread damage caused by Hurricanes Harvey, Irma, and Maria, four federal financial institution regulatory agencies today took action to facilitate the recovery process by temporarily easing appraisal requirements for real estate-related financial transactions in areas declared to be a major disaster.

The agencies will not require financial institutions to obtain appraisals for affected transactions (1) if the properties involved are located in areas declared major disasters; (2) if there are binding commitments to fund the transactions within 36 months of the date the areas were declared major disasters, and (3) if the value of the real properties support the institutions’ decisions to enter into the transactions.

The exceptions apply to transactions in areas of Florida, Georgia, Puerto Rico, Texas, and the U.S. Virgin Islands and expire three years after the date the president declared each area a major disaster.  The exceptions are being made under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and its implementing regulations.

Financial institutions that use the appraisal exception must maintain information estimating the collateral’s value that sufficiently supports their credit decision to enter into the transaction.  The agencies will monitor institutions’ real estate lending practices to ensure the transactions are being originated in a safe and sound banking manner.

Link to press release with links to documents for more detail
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Survey Says Community Bankers Concerned About Appraisals

Excerpts: Bankers in Arkansas said that areas in which bankers see regulatory expectations as unreasonable, or where regulations are outdated, include appraisals and evaluations of real estate.

Connecticut community bankers suggested areas for immediate relief include increasing Currency Transaction Reporting (CTR) filing thresholds from $10,000 to $20,000 and increasing the appraisal threshold from $250,000 to $500,000.

North Carolina bankers said appraisals are also becoming a concern, as appraisers from outside the local market are overvaluing properties for other lenders, leading to additional competitive pressure.

Bankers in South Dakota said regulatory relief for community banks should include revision of appraisal thresholds and appraiser qualification requirements.
Click here for more info, read the full report, and post/read comments

My comment: Nothing new. They have been trying to get reduced requirements for quite a while. Another side effect of the shortage of appraisers willing to work for AMCs.

Misinterpreted CU Update Message in Last Week’s Email Newsletter – Data NOT Changed on Appraiser’s Subject and Comps

By Dave Towne

Excerpt: On 10/13/17, I had a phone conversation with a person inside a bank who has full knowledge of how FNMA’s CU works. This individual provided me with screenshots of CU data generated by an actual appraisal (without revealing the appraised property, value, ownership, etc). The call focused on how CU works and what this EDITING function can and will do, and won’t do.

The caller stated that the CU user (lender, etc.), or even CU itself (the giant data base in the sky), CANNOT MAKE CHANGES to the actual submitted report subject and comp data. This is what was misinterpreted in the FNMA message above. Report changes can only be done by the appraiser.

Read the full story here plus the comments.

My comment: too bad Fannie did not provide a better explanation. I guess they forgot that appraisers (and others) read these publicly available comments. The document also said that these edits had been going on for awhile. I read an online comment this week posted by a reviewer who gave a similar explanation.

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Mortgage applications increased 3.6 percent from one week earlier

WASHINGTON, D.C. (October 18, 2017) – Mortgage applications increased 3.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 13, 2017. This week’s results included an adjustment for the Columbus Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7 percent compared with the previous week. The Refinance Index increased 3 percent from the previous week. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 9 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 48.6 percent of total applications from 49.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.1 percent of total applications.

The FHA share of total applications increased to 10.4 percent from 10.3 percent the week prior. The VA share of total applications decreased to 10.5 percent from 10.6 percent 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) decreased to 4.14 percent from 4.16 percent, with points remaining unchanged at 0.44 (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 4.13 percent from 4.11 percent, with points increasing to 0.32 from 0.31 (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 remained unchanged at 4.00 percent from the week prior, with points increasing to 0.37 from 0.36 (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 3.45 percent from 3.44 percent, with points increasing to 0.43 from 0.36 (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 decreased to 3.31 percent from 3.33 percent, with points decreasing to 0.40 from 0.43 (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.

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