2 GREAT ways to get into trouble. Tales From Barry Bates

If you really WANT to get in trouble here are 2 ways to do it, (eventually) guaranteed to succeed.
Advertise your uniqueness!
More important than earning a living, providing support for your family or serving the general public is to let the world know who you really are!

When meeting a homeowner or commercial building owner for the first time, take a few minutes to explain your facial tattoos, your exotic mode of medieval dress and your political positions as shown by the 188 bumper stickers on your car. Some straights are freaked out by creativity, so it’s worth taking the time to
calm them down.

Pump that value!
It’s a “win win” for everyone! I mean, you’d think so, right? What refi borrower complains about a high appraisal? The lender sure won’t complain. Even in appraising for a loan to purchase, it will flatter the owner and facilitate the borrower’s deal, right?


To read the full Barry Bates blog post and interesting images plus add your comments, click here.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

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To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on Zillow sued, hybrid appraisals, mortgage origination stats, Covid tips for appraisers, etc.


Fannie Selling Guide Update for appraisals

Announcement SEL-2018-01: Selling Guide updates

Two appraisal changes:
– Remove the requirement for a field review on certain properties valued at $1,000,000 or more.
– Require lenders to choose the most reliable appraisal when two appraisals are obtained for one property.

– Detached Condo Projects
– Minor Litigation in Projects
Click here to read the announcement for more info


Cost vs. Value: The Home Improvement Projects With the Highest ROI in 2018

Excerpts: A strong housing market isn’t necessarily all good news for sellers. As evidenced by Remodeling magazine’s newly-released Cost vs. Value Report for 2018, average return on investment (ROI) for home improvement projects dipped across the board, with “upscale” projects taking the biggest hit.

The report, which measures the average cost of 21 popular remodeling projects and their average resale value one year later, found that garage door replacement has the highest ROI at 98.3 percent (up from 85 percent year-over-year). Backyard patio jobs garner the lowest ROI, at 47.6 percent (down from 54.9 percent year-over-year).

Read the full article here, plus the interesting comments:

Click here to “drill down” to the state and city data, including historical data plus methodology. Very interesting.

My comment: Of course, this is done by Remodeling Magazine… I have been following this report for many years. For my area, the results always seem a big strange ;>

Zillow sued over how it displays Zestimate home valuation tool in some partner listings

Excerpt: A group in New Jersey sued Zillow Group (a few weeks ago), alleging that letting some partners move the Zestimate valuation tool lower down on listings hurts competition and amounts to a violation of U.S. anti-trust laws.

In a suit filed Monday in U.S. District Court in New Jersey, EJ MGT sued Seattle-based Zillow Group over a home listing in Cresskill, New Jersey on Zillow. EJ MGT set the price for the eight-bedroom, 10-bathroom “palatial mansion situated on a private cliff” at just under $7.8 million, but the Zestimate for the home is only $3.7 million. In its complaint, EJ MGT alleges that several buyers were dissuaded from purchasing the home due to the discrepancy.

My comment: A few years ago I did about 15 appraisals for an estate, mostly small apartment properties. All were in Alameda where many apartments are conversions of single family Victorians. I will never forget that the attorneys asked me why my values were different than Zillow’s for each property. I tried very hard to be polite in my response.

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U.S. regulators ready to ease requirements for commercial appraisals per sources

 Excerpts: U.S. bank regulators plan to relax commercial real estate lending rules by allowing more deals to go ahead without an independent appraisal of the property’s value, according to several sources familiar with the discussions.

Under existing rules, commercial real estate worth more than $250,000 must have an independent third-party check on the property value before a bank can lend against it.

That threshold would double to $500,000 under reforms being drawn up by the Federal Reserve, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), according to industry and regulatory sources.

My comment: well written and worth reading. Includes all sides of the issue. This has been discussed for awhile. Problems with lack of commercial appraisers in rural areas. There are also problems with residential appraiser shortages – appraisal waivers being proposed.

Appraisal Today

Accurate Group launches portfolio valuation solution for capital markets – hybrid appraisals

Designed for asset managers, hedge funds, and investment banks and firms

Excerpt: The tool is designed for asset managers, hedge funds, investment banks, and other investment firms that have significant residential real estate and mortgage-related portfolio holdings.

My comment: I guess they don’t trust BPOs and AVMs much. Prefer licensed appraisers. Not a surprise!!

Hybrid Reports ASB Q&A

By Dave Towne
Excerpt: I have two issues with this Q&A document:
 (Q&A) does not discuss the appraiser’s true responsibility when completing certain kinds of these reports; for more on that see the additional info below; and in an abrogation of the appraiser’s responsibility to preserve “Public Trust” – the cornerstone of USPAP – it says a third party “field inspector” who provides information used in these new hybrid reports does not necessarily have to be named in the report, when in fact, their provided data is stated to be accurate and acceptable within the body of the report.

But then the document backtracks and says if the appraiser relies on the opinions and conclusions of the inspector regarding quality, condition and/or functional utility, this is ‘professional assistance’ and the inspector’s name (and description of assistance) must be disclosed – but according to the Q&A, the name/description disclosure only applies to an appraiser who is acting as the ‘field inspector’

Is there anyone besides me who questions this absurdity? That’s the basic problem with USPAP – it only applies to appraisers. If someone unlicensed as an appraiser ACTS and PERFORMS Appraisal Practice (as a ‘field inspector’ does) and contributes to the report preparation, that individual does not have to be disclosed.

Click here to read the rest of the article, plus the comments.

My comments: I guess I spent too many years (40+) doing interior inspections. I never could do “comp checks”, which are appraisals. I tried, but was not very good. I finally quit doing drivebys as I was not comfortable with the public records subject data available. USPAP has never required an inspection of the interior (or exterior) of the property. I would definitely prefer someone at least taking photos of the interior and listing property characteristics than using public records. It is your decision to do them or not. But, what did you think when you did comp checks? FYI, third party companies, not individuals, do these inspections.
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 7AM to noon, Pacific time.

Mortgage applications decreased 2.6 percent from one week earlier

WASHINGTON, D.C. (January 31, 2018) – Mortgage applications decreased 2.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 26, 2018.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 12 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index increased 15 percent compared with the previous week and was 10 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 47.8 percent of total applications, its lowest level since August 2017, from 49.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.7 percent of total applications.

The FHA share of total applications decreased to 10.7 percent from 11.4 percent the week prior. The VA share of total applications decreased to 10.1 percent from 10.9 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since March 2017, 4.41 percent, from 4.36 percent, with points increasing to 0.56 from 0.54 (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 $453,100) increased to its highest level since March 2017, 4.34 percent, from 4.31 percent, with points increasing to 0.40 from 0.38 (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 its highest level since September 2013, 4.40 percent, from 4.37 percent, with points increasing to 0.68 from 0.65 (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 its highest level since April 2011, 3.85 percent, from 3.81 percent, with points increasing to 0.60 from 0.52 (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 2011, 3.79 percent, from 3.70 percent, with points increasing to 0.41 from 0.39 (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.

Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
2033 Clement Ave. Suite 105
Alameda, CA 94501 Phone 510-865-8041
Fax 510-523-1138
Email   ann@appraisaltoday.com

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