Appraisal News and Business Tips

4-19-18 Newz//Corelogic acquires a la mode, USPAP Q&A problems, Earth-Friendly Homes

Earth-Friendly Homes and Buildings for Earth Day, Sunday, April 22

Just For Fun!!

Click on the fotos of lots of ecofriendly buildings for more info. Fascinating, sometimes Weird, and Fun!!

A few: Mathematical Puzzle House, paper house, skyscrapers, Recycled Concrete Tube House, etc.

http://www.ecofriendlyhouses.net/ecofriendlyhouses.html

Appraisal Institute Requests Appraisal Standards Board to Rework Q&As

Excerpts: The Appraisal Institute in an April 13 letter to the Appraisal Standards Board formally requested changes to or the retraction of Q&A 2018-12, Employing an Extraordinary Assumption when a Client Provides Inspection Data and Q&A 2018-13, Appraisal Reporting – Certifications and Signatures.

The Appraisal Institute believes this advice is antiquated and out-of-step with appraisal practice and long-standing USPAP principles about not dictating the form, format or style of an appraisal report. Perhaps most concerning to AI is the apparent inclusion of additional requirements in this advice rather than in USPAP itself.

My comment: I completely agree with the AI’s issues with Q&A 2018-12 and -13. The certification issue has been around since USPAP required that the “previous 3 years” be included in the certification. The ASB needs to modify USPAP itself as I don’t think it addresses these current issues in appraising very well. Unfortunately, the new edition was effective 1/1/18. 2 years to wait.

Corelogic acquires a la mode, announced March 12, 2018

Link to a la mode’s Q&As, message from CEO and press release.
The Q&As are worth reading and discuss many appraiser issues.
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The Factual (Housing Wire reporter) view

Article discusses purchase of LandSafe Appraisal Services, FNC, and RELS, and Mercury Network (purchased Platinum Data Solutions and Appraisal Scope)

Worth reading to get the Facts about Corelogic purchases
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The Positive view:
Excerpt: I’m a positive guy by nature, but I’m also a realist. I fully understand the negative side to all this, and the justified worries that appraisers will have. The point is that – in just a few days – all of that negative stuff has been written about and discussed to death. That’s why I want to offer something different in this blog, in which I’m aiming to provide a little ray of sunshine on this whole issue. I want to draw your attention to three possible – and please note the word “possible” – silver linings to CoreLogic’s acquisition of a la mode.

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The (mostly) Negative view
Lots of negative comments, but some positive. 117 reader comments as of yesterday, both positive and negative. Also discusses the other forms software available.

Worth reading (or skimming) for different opinions, especially the reader comments including other forms software options
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My comments: If this came as a surprise to you, you’re not the only one. Even beta testers and employees did not know it was coming. I have read many comments online and in email discussion groups, mostly negative.

To me, the Big Issue is Data. (I am not an a la mode customer.) Corelogic is a data company and gets data from MLS and public records. Is Corelogic planning on using appraisal data, which many consider the best property data?

Here is what the Corelogic Q&A says: “a la mode, as part of CoreLogic, will continue to honor the product licensing agreement which outlines how we treat the data. We will continue to treat data securely and notify you to get your explicit agreement if something changes.” Read the fine print in your licensing agreement, especially in the tiny type sizes.
Should you switch forms software companies? I recommend waiting at least a few weeks. Whenever anyone asks me about this, I always say that “the best forms software is the one you already know”. But, maybe you have been thinking about switching for awhile, feel “betrayed” somehow by a la mode, worry about data, tech support, price increases, etc.

Most forms software companies started in the mid-1980s. I started back in the DOS days with Dynamic Computing forms software in 1986 when I started my business. It was based in Berkeley, CA 10 miles from my office. They were very slow to develop Windows based software so I switched to Clickforms, which was about 40 miles from my office. I am still using it and like it. I like local companies so I can go into their offices if I have a problem. At that time there were many forms software companies. a la mode, founded in 1985, had the lowest price and was getting an increasing market share back then and is currently over 50% or about 40,000 subscribers.

There are only a few alternatives: ACI, SFREP, Clickforms and Homeputer.  

Why one small bank (Tri Star) wants to bring real estate appraisals in-house

Source: American Banker
Excerpt: Should a bank be allowed to use its own staff to value properties if it believes that there aren’t enough appraisers in its market to meet demand or that outside appraisals have become too costly?

Those are questions a committee of the Federal Financial Institutions Examination Council will take up at a hearing April 22, and its ruling could have broad implications for both banks and the real estate appraisers they rely on to determine the value of their collateral.

Read discussion of Tri Star Bank appraisal waiver request for rural lenders from both lender and appraiser sides at:

Note: you may not be able to read this more than once, then you are asked to subscribe to American Banker

How to connect with appraisers online. What’s the best way for you?

In the paid Appraisal Today
Excerpt: I have been online since the first web browser, around 1995 and belonged to online discussion groups since 1993. It can take as much, or as little, time as you want. But, figuring out what is best for you can be difficult and time consuming. In this article I write about appraiser communication on LinkedIn, Facebook, forums, blogs, podcasts, Yahoo and google email discussion groups, etc. I also tell you about what the groups are like, how many members, etc. and how to manage your communication so you don’t get overwhelmed. 
 
Why connect with other appraisers online? There are many reasons, especially since many appraisers work solo: get and give advice, see if other appraisers are busy or slow, AMC/client issues, USPAP, Fannie, UAD, etc. You can do it any time, at your convenience. You can spend just a little time or lots of time.
To read the full article, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
 
If this article helped you get help with a tough appraisal, whether or not a potential new client is good to work for, or a new marketing idea, it is worth the subscription price!! 

$8.25 per month, $24.75 per quarter, $89 per year (Best Buy)  
or $99 per year or $169 for two years 
Subscribers get, FREE: past 18+ months of past newsletters 
To purchase the paid Appraisal Today newsletter go to
www.appraisaltoday.com/products   or call 800-839-0227. 
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If you are a paid subscriber and did not get the April 2018 issue, emailed Monday, April 2, 2018, please send an email to info@appraisaltoday.com  and we will send it to you!! Or, hit the reply button. Be sure to put in a comment requesting it.

Hottest and coldest luxury neighborhoods in America

Excerpts: In this era of intense partisanship and division, we can be grateful for the common denominators that bond us as Americans. Our national aversion to spiders, clowns, and trust falls. Our adoration of heroes, entrepreneurs, and puppies wearing Christmas hats. And, perhaps most of all, our endless fascination with luxury real estate.

Some of the most prestigious neighborhoods in the nation are seeing prices stagnate or fall after years of overbuilding-or because they simply ran out of land on which to erect new, extravagant homes. Foreign buyers in some perennially hot luxe markets have become more scarce. Meanwhile, neighborhoods that until recently weren’t considered the best of the best are taking off.

Interesting graphics plus discussions of the hottest 10 neighborhoods at:

Common Appraisal Errors (Part 2)

By Joshua Walitt, SRA, MNAA
 
Excerpts: Templates are a great way to ensure you are delivering an organized and thorough report for each and every assignment. Unfortunately, using templates can backfire in serious ways, which could lead to state sanctions in some circumstances.

Revision requests have a negative – and sometimes nasty – connotation. In my experience as a fee appraiser, however, I see revision requests as an opportunity to learn what level of detail and report content is appropriate for a particular type of intended user. In other words, what do lenders – or divorce attorneys or other types of users – need to know from my report?

Worth reading the entire article at:

Link to Part 1 – discusses adjustments, HBU and other topics. Worth reading

Credit easing, the inevitable cycle goes up as always

Lenders slowly easing credit standards, hits highest level since 2013
Credit availability still historically low
Excerpts: Lenders are slowly easing their credit standards as credit risk hit its highest level since 2013, according to the latest Housing Credit Availability Index from the Urban Institute

The Housing Finance Policy Center’s latest HCAI shows that mortgage credit availability increased for the second consecutive quarter, rising from 5.6% to 5.8% in the fourth quarter of 2017. This is the highest level of credit risk since 2013.

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Subprime mortgages make a comeback-with a new name and soaring demand

Excerpt: California-based Carrington Mortgage Services, a midsized lender, just announced an expansion into the space, offering loans to borrowers, “with less-than-perfect credit.” Carrington will originate and service the loans, but it will also securitize them for sale to investors.

“We believe there is actually a market today in the secondary market for people who want to buy nonprime loans that have been properly underwritten,” said Rick Sharga, executive vice president of Carrington Mortgage Holdings.

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 increased 4.9 percent from one week earlier

WASHINGTON, D.C. (April 18, 2018) – Mortgage applications increased 4.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 13, 2018.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6 percent compared with the previous week. The Refinance Index increased 4 percent from the previous week. The seasonally adjusted Purchase Index increased 6 percent from one week earlier. The unadjusted Purchase Index increased 7 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 37.6 percent of total applications, the lowest share since September 2008, from 38.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.6 percent of total applications.

The FHA share of total applications decreased to 10.6 percent from 11.0 percent the week prior. The VA share of total applications decreased to 10.4 percent from 10.9 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) remained unchanged at 4.66 percent, with points unchanged at 0.46 (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) remained unchanged at 4.53 percent, with points increasing to 0.38 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 increased to 4.70 percent from 4.66 percent, with points decreasing to 0.53 from 0.76 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 4.08 percent, with points decreasing to 0.47 from 0.50 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.94 percent from 3.93 percent, with points decreasing to 0.43 from 0.60 (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.
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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