Appraisal News and Business Tips

6-7-18 Newz//Square footage, Novelty Architecture, Appraisal Fraud

It’s not all about square footage in real estate

By Ryan Lundquist

Excerpt:
Myth: Extra square footage is always worth more.
Factors:
1) Single story vs two story
2) 55+ Community
3) Layout
4) Dangerous to always adjust

Worth reading, plus appraiser comments at:

Goofy Buildings: Revisiting the Heyday of California’s ‘Crazy’ Novelty Architecture – Giant hats, portly pigs, and drive-thru donuts.

Just For Fun!!

Excerpts: In the 1930s, a British traveler in Southern California wondered if the local architects had gone a little nuts. It was either that or he had stumbled into a fantasy universe. There was something trippy about the roadside shops he saw along the way…

The unusual businesses he saw weren’t on some Hollywood backlot, but were California’s classic coterie of mimetic architecture-that is, buildings shaped like, well, anything but buildings. According to Cristina Carbone, a professor of art and architectural history at Bellarmine University in Louisville, Kentucky, the practice dates back to at least the Renaissance.

Fascinating!! Lots of photos and interesting comments at:

Are You Committing Appraisal Fraud?

Excerpt: As appraisers, we cannot be bullied into doing anything that will violate the Uniform Standards of Professional Appraisal Practice (USPAP), Fannie Mae guidelines or FHA, VA and USDA requirements. Why would you take the risk when it is your name, signature and reputation that are on the line? I want to chuckle when I hear this excuse from AMCs asking me to bend the rules: “Our attorney said you should do it.” Just because someone is an attorney does not make them an expert in appraising or any of the rules and regulations that appraisers must adhere to. You are the expert…

Worth reading with 3 scenarios. Well written by a practicing appraiser involved in federal mortgage cases, as well as cases in front of state regulators.

http://www.workingre.com/are-you-committing-appraisal-fraud

My comment: I always tell appraisers “Don’t risk your appraisal license for one appraisal or one bad client.”

FHA Appraisal Training June 26, 2018 (Wait list)

Course Title: New
FHA Appraisals Training  (On-site only)
Date/Time:
Tuesday, June 26, 2018, 1:30 AM to 4:30 PM (Eastern)
Check-in begins 30 minutes before the start of the session.
Event Location:
U.S. Department of Housing and Urban Development
Richmond Field Office
600 East Broad Street, 3rd floor
Richmond, VA 23219
Registration Link:
Jurisdictional Host:
Philadelphia Homeownership Center
Description:
This free, on-site training will provide an overview of the appraisal requirements outlined in FHA’s Single Family Housing Policy Handbook 4000.1. The training will include discussions on the FHA Appraiser Roster and the appraisal validity period, as well as requirements for property inspections, manufactured homes, water and septic systems, and attic and crawl space inspections. This training is intended for appraisers, underwriters and lender management personnel with all levels of experience; however, other mortgage professionals may also benefit from attending.
Special Instructions:
Registration is required; seats are limited and available on a first-come, first-served basis. Attendees must provide a valid, government-issued ID at the guard station. For more information, contact Elizabeth Cahall at: PHOCevents@hud.gov
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Fannie: Inspection waivers, hybrids, UAD and forms changes –
where is residential lender appraising going?

 
In the paid Appraisal Today June 2018 issue
Excerpt: Freddie, there is a joint GSE (Fannie & Freddie) effort to redesign the current appraisal form (1004) underway. He described the current form as “archaic” and that they are in the first quarter of the first year of a three-year effort to revise the form (so they are at the very beginning of this process).

They are considering all options including that there might not be a form at all, but could even be some sort of online schematic or portal for a give and take of information. He said that the will be a lot of outreach to stakeholders and the pursuit of modernization will involve a lot of listening. He also mentioned that “big data is here to stay”.
To read the full article, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
 
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Can an Addition to a Manufactured Home be Included in the Living Area?

Excerpt: Homeowners of both manufactured homes and traditional stick build homes will often make improvements such as an addition to the original structure.   The question is can this addition be included in the GLA (gross living area) of the home?   The answer is yes if the following conditions exist:…..

Worth reading plus some good links at the bottom of the blog post.

https://dwslaterco.blogspot.com/2017/02/can-addition-to-manfactured-home-be.html

Evaluations, Coester, etc.

Housing Notes by Jonathan Miller
Latest topics:
– The Term “Appraisals” Bleeds Into The Term “Evaluations”
– Appraiser “Accounts Receivables” Alert: CoesterVMS One Step Closer to Death?

Scroll down to Appraiserville to read the analyses. Check out the fun videos and infographics on your way down the page… Plus some interesting links at the bottom of the page..

My comment: Rates are up and loans are declining. AMCs will be going out of business. Monitor your accounts receivable very closely. Don’t work for free if the AMC goes out of business.

Collaboration vs Confrontation – Real estate agents and appraisers

Excerpt: Certainly, a conflicted feeling exists when it comes to real estate agents and appraisers. Recently, I attended a networking event, hosted by a local real estate brokerage. Being as sociable as possible, I introduced myself to a few real estate agents in attendance. Most were kind and engaged in interesting conversations. Although unconfirmed, some agents appeared to be surprised and perhaps a bit perturbed by the mere presence of a real estate appraiser amidst a crowd of real estate agents. As the evening progressed, friendly banter revealed a bitter taste towards real estate appraisers who they blame for hampering market values.

Read the full article plus the appraiser comments at:

My comment: I use Realtor events for marketing my non-lender appraisals plus I tell them to contact me about various issues they have. I have been doing this since I started my appraisal business in 1986. I am almost always the only appraiser at the events.
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 
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Mortgage applications increased 4.1 percent from one week earlier,

WASHINGTON, D.C. (June 6, 2018) – Mortgage applications increased 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 June 1, 2018. This week’s results included an adjustment for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.1 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 4 percent from the previous week. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index decreased 8 percent compared with the previous week and was 9 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 35.6 percent of total applications from 35.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.1 percent of total applications.

The FHA share of total applications decreased to 9.7 percent from 9.9 percent the week prior. The VA share of total applications increased to 10.1 percent from 9.9 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) decreased to 4.75 percent from 4.84 percent, with points decreasing to 0.46 from 0.47 (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 $453,100) decreased to 4.70 percent from 4.73 percent, with points decreasing to 0.35 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.77 percent from 4.85 percent, with points decreasing to 0.70 from 0.88 (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 decreased to 4.21 percent from 4.24 percent, with points decreasing to 0.50 from 0.51 (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 decreased to 4.08 percent from 4.11 percent, with points decreasing to 0.41 from 0.62 (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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