Do Appraisers Need Magical Adjustments?

Excerpts: Airbnb, a short-term rental service, announced today it is partnering with some of the largest U.S. lenders to allow host income to be used in mortgage applications.

The company explained when its hosts apply for a refinance, they can include their proof of income from Airbnb in the application. The new partnership will allow lenders to consider Airbnb income when processing the application.

Worth reading at:

My comment: Lots of online comments on this top. From “I don’t care about airbnb” to “should definitely consider it” A few months ago I had a long discussion with another appraiser about the value of airbnb income for a duplex. The owner was renting both units on airbnb. The city where it was located was setting up restrictions on airbnb. Lots of issues. She decided that airbnb was business (going concern) short term income, not apartment rental income. A home here recently was listed with airbnb income. I am watching to see if it affects the value.

Excerpt: This bill, if signed into law, will allow lenders to bypass appraisals for any property with a ‘transaction value’ of $400,000 or less (this is moving the de minimus goal post) if the lender was unable to find an available appraiser to complete an appraisal “within a reasonable amount of time”… that time frame apparently as determined by a regulator agency with jurisdiction over the lender. The bill shows ‘exceptions’ to this as per other laws.

Definition of rural (from 1026.35(b)(2)(iv)(A) of title 12, Code of Federal Regulations) “A county is “rural” during a calendar year if it is neither in a metropolitan statistical area nor in a micropolitan statistical area that is adjacent to a metropolitan statistical area, as those terms are defined by the U.S. Office of Management and Budget and as they are applied under currently applicable Urban Influence Codes (UICs), established by the United States Department of Agriculture’s Economic Research Service (USDA-ERS). A creditor may rely as a safe harbor on the list of counties published by the Bureau to determine whether a county qualifies as “rural” for a particular calendar year.”

My comment: This is for commercial appraisals but could be expanded to residential. Could be scammed. Seems like it would be easy to say the appraisers they called said they could not do the turn time and would not accept the low fee requested.

WASHINGTON, D.C. (January 30, 2015) – WASHINGTON, D.C. (February 14, 2018) – Mortgage applications decreased 4.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 9, 2018.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 4 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 46.5 percent of total applications from 46.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.3 percent of total applications.

The FHA share of total applications decreased to 10.1 percent from 10.4 percent the week prior. The VA share of total applications remained unchanged at 10.1 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 ($453,100 or less) increased to its highest rate since January 2014, 4.57 percent, from 4.50 percent, with points increasing to 0.59 from 0.57 (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 rate since January 2014, 4.55 percent, from 4.47 percent, with points increasing to 0.47 from 0.44 (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 4.54 percent from 4.47 percent, with points increasing to 0.73 from 0.69 (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 rate since April 2011, 4.00 percent, from 3.92 percent, with points increasing to 0.65 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 5/1 ARMs decreased to 3.74 percent from 3.77 percent, with points decreasing to 0.37 from 0.42 (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