13 Very strange bathrooms for appraisers

Excerpts: Under the new law… smaller banks and credit unions will now be free to waive an appraisal for rural properties valued under $400,000, when they can’t find an appraiser in a timely manner.

Most loans are sold into the secondary market. It is a fairly narrow provision. They are basically looking at rural areas where banks are holding the loans in their portfolio.

…continuing concerns with what has been a pendulum swinging back to regulatory relief and loosening risk-management requirements. This is part of that wave.

Read more here:

My comment: good analysis by Bill Garber of the Appraisal Institute. Worth reading.

Excerpt: Here are a few:

1. Pittsburgh, PA

Median home list price*: $179,950

Number of homes listed for $100,000 or less: 2,656

4. St. Louis, MO

Median home list price: $207,550

Number of homes listed for $100,000 or less: 2,227

My comment: None of the areas in the article are west of St. Louis. But, in some more rural areas in California (and other high cost states), you can get homes under $100,000. Few if any jobs and very, very long commutes though. Maybe good places for appraisers to retire ;>

——————————————————

Excerpt: An executive at a leading MortageTech company once told me, “Beware of a seemingly small rule change in a highly regulated market like mortgages. The impact can be deadly.” The Appraisal world is facing one of these changes. We see the new “registry” component of the Dodd Frank rollback as a potentially massive catalyst for consolidation in the fragmented appraiser and Appraisal Management Company (“AMC”) worlds. The forces bashing this industry have been relentless:

– Appraiser population demographics leading to supply “shocks”

Low margins and limited pricing power has advantaged only the largest providers

– Domineering government sponsored enterprise rule changes (GSEs – Fannie, Freddie)

– A fundamental change from a form-driven industry to more data-driven value proposition

– Looming disruptive technology innovations from drones to mobility

Worth reading plus the comments:

My comment: Very interesting business analysis of AMC changes due to registration costs per appraiser plus AMC consolidation. I don’t see much written about this.

My comment: Almost all want appraisers involved somehow. BPOs are not very reliable. AVMs are reliable only on certain types of properties. Hybrid appraisals seem more likely than waivers as an alternative. Seems like rural areas would be the most likely to need appraisals as there are few sales, AVMs don’t work, etc.

WASHINGTON, D.C. (June 13, 2018) – Mortgage applications decreased 1.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 8, 2018. Last week’s results included an adjustment for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 9 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index increased 9 percent compared with the previous week and was 0.2 percent lower than the same week one year ago.

The refinance share of mortgage activity remained unchanged from the previous week at 35.6 percent of total applications. The adjustable-rate mortgage (ARM) share of activity decreased to 6.8 percent of total applications.

The FHA share of total applications increased to 10.6 percent from 9.7 percent the week prior. The VA share of total applications increased to 10.7 percent from 10.1 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) increased to 4.83 percent from 4.75 percent, with points increasing to 0.53 from 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) increased to 4.74 percent from 4.70 percent, with points increasing to 0.37 from 0.35 (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 4.83 percent from 4.77 percent, with points increasing to 0.78 from 0.70 (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 4.23 percent from 4.21 percent, with points increasing to 0.51 from 0.50 (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 4.11 percent from 4.08 percent, with points
increasing to 0.56 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visitmba.org/WeeklyApps, contact mbaresearch@mba.org .

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.