Reconciliation – Paint a Picture with Words

By Rachel Massey, SRA
Excerpts: The reconciliation is precisely the place we want to avoid any boilerplate…Appraisers relationships with their clients has similarity with other relationships, but mainly in that we have to really communicate with each other to avoid misunderstanding. This goes for the engagement of services and why we are being hired in the first place, and also goes for communicating our assignment results. In this article, the focus is on the reconciliation section of a written report. Reconciliation for appraisers is very important.

Read the article, and the comments at:

My comment: Excellent, well written article, as usual, from Rachel Massey. FYI, Rachel is a regular contributor to the paid Appraisal Today.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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To read more of this 7-19-20 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 history of appraising, price declines, dining rooms, mortgage origination stats, etc.


The History of Appraisals

By Ed Pinto
Excerpt: Many say “history always repeats itself” and in the case of appraisals, it may be for the best. We sat down with Edward Pinto, the Co-Director of AEI’s Center on Housing Markets and Finance as he shares with us his discoveries from the original FHA forms.

Dating back to the 1900’s Ed found the tools needed to bring the appraisal process back to how they were originally called for – based off of the market value and the information proved by the expert, the appraiser.

Very interesting and worth reading:

My comments: I have published several articles in my paid Appraisal Today about the history of appraising, going back to the Bible: the Book of Moses!! I have been inspired to republish them in the September issue of the paid Appraisal Today.


Whale House

This stunning sea creature-shaped home blends into the landscape like a fantasy villa in Santa Barbara CA

Excerpts: Its somewhat whale-shaped exterior is made up completely of undulating rows of gray cedar shingles…

In the tradition of Spanish architect Antoni Gaudí, whose nature-based designs exemplified the Catalan Modernist movement in Barcelona, Carmichael was moved to design a home that did not detract from its natural surroundings, and in fact bowed to them.

Link to the home’s vacation rental web page with lots more fotos

Price declines?

The market is slowing (we’re not surprised)
By Ryan Lundquist

Excerpts: The market is slowing. Most who work in real estate have sensed this and felt a “disturbance in the force” so to speak (Star Wars). The signs are clear, but sellers are slow to catch on because they’re stuck on “hot” headlines.
Read more and see Ryan’s extensive graphs for the Sacramento market.

My comment: How do I know when the market is changing? I have never used closed sales – they are the past. I use listings and pendings first. Lots of listings and few pendings is a good indicator. Price drops. Days on market. Increases in expireds.

Of course, there can be significant submarkets, such as condos vs. townhomes vs. detached homes. Also neighborhood submarkets. In my city, detached home prices stabilized a while ago. Then townhomes, then condos started to stabilize.

The housing shortage may be turning, warning of a price bubble


Excerpt: The most competitive, tightest housing market in decades may finally be loosening its grip, and that could put pressure on overheated home prices. The supply of homes for sale in the second quarter of 2018, the all-important spring market, rose at three times the rate of the same period in 2017, according to Trulia, a real estate listing and research company.

Americans’ confidence in housing reaching a plateau
But there’s still optimism about direction of economy

Excerpts: Americans are growing less confident in housing, and experts wonder if, after years of climbing, their confidence is hitting a plateau.

Fannie Mae’s Home Purchase Sentiment Index dropped 1.6 points in June to 90.7, just after reaching new survey highs in both April and May.

“After several years of steadily climbing, HPSI’s slowing upward trend suggests the index may be reaching a plateau,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “Tight supply and lackluster income growth continue to weigh on housing activity, and consumer expectations for home price growth over the next 12 months have moderated.”

My comment: Prices go up and down. Some areas are more volatile than others. Prices go up and down in some markets regularly, such as mine, typically about 30%. Today is not at all like the 2008 crash, which was driven by subprime, sometimes fraudulent, loans.

The hottest housing market in the US is up 13% and now may be headed for a crash
Excerpt: Home prices in Washington state rose nearly 4 percent in the first quarter, the most in the nation, and more than 13 percent from one year ago.
Strong job growth and tight supplies have fueled the housing market, leading some to fear that it is a bubble.
Experts say the housing market is vulnerable to rising interest rates, job losses due to tariffs and local policies against development.
Good analysis. Worth reading.

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Quick Start – how to get non-lender work ASAP! Fed up with AMC hassles and low fees? Not sure what type of lender work is best for you?

Excerpts: Non-lender work is very different from lender work. You do appraisals. Following USPAP is typically the only requirement. No lender and Fannie Mae requirements, no UAD, no 1004MC. No reviewers, no underwriters, no AMC hassles. You are acting as a professional appraisal expert, not as an appraiser filling out a form in the “correct” way,  subject to arbitrary guidelines.

Fees are steady and higher than lender fees. When lender fees went way up and then dropped when it slowed down, my fees stayed up. I charge significantly more than AMCs pay, similar to the appraisal fees borrowers pay to lenders when they get a loan. Payment is collected at the door or in advance, or 50% at the door and 50% before appraisal is delivered.
In the April, 2018 issue of the paid Appraisal Today, available to paid subscribers.  
To read the full article, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
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GSE News

Court of Appeals declares FHFA (the GSEs regulator) structure unconstitutional

Majority opinion finds GSE regulator violates separation of powers

Excerpt: For the third time in recent memory, a government agency borne out of the housing crisis has been declared unconstitutional by a federal court.

The first two times it was the Consumer Financial Protection Bureau. But now, it’s the Federal Housing Finance Agency that has been found to be operating in violation of the Constitution.

The Court of Appeals for the Fifth Circuit ruled this week that the federal government’s regulator of Fannie Mae and Freddie Mac is not constitutionally structured.

Fed Chair Powell: GSE reform essential for U.S. economy
Testifies before Senate on current state of economy

Excerpt: During the hearing, Sen. Jon Tester, D-Mont., turned his focus on the housing industry, asking for Powell’s opinion on reform for the government-sponsored enterprises, Fannie Mae and Freddie Mac. Tester pointed out Fannie’s request for a draw from the U.S. Department of the Treasury of $3.7 billion earlier this year, asking what these requests mean for the economy.

And while Powell didn’t provide any specific details, he did say that he believes it would be healthy for the economy to see GSE reform move forward.

“It’s really important for the longer run that we get the housing finance system of the federal government’s balance sheet,” he said.

Our homes don’t need dining rooms

The entertaining rooms meant to make us social actually foster isolation

Excerpts: For a recent study, UCLA-affiliated researchers in fields ranging from anthropology to sociology used cameras to record in great detail how 32 dual-income families living in the Los Angeles area used their homes. Their findings link real data to something about which I have been yelling into the void for years: Nobody is actually using their formal living and dining rooms. Families actually spend most of their time in the kitchen and the informal living room or den.

Yet we continue to build these wastes of space because many Americans still want that extra square footage, and for a long time, that want has been miscategorized as a need…

One of the simplest reasons so many clamor for formal spaces is because they are a signifier of wealth and prestige, a sign of having “made it.”

Interesting. Worth reading?

My comment: I have always wondered why so many homes have dining rooms. They take up a lot of room in homes, especially small homes!!

Market Update: Interest Rates and Appraisal Volume

Excerpt: While there is no data on the number of appraisals performed annually, the result of these shifting market factors suggest that appraisal volumes have slowed slightly nationwide when compared to 2016, especially given the roll-out of Fannie and Freddie’s appraisal waiver programs. This hopefully should quiet the calls of an appraiser shortage, at at the very least discredit them. Overall, the data points to a healthy market for appraiser work nationwide over the next few years, barring any major upheavals in the real estate market or appraisal industry.

My comment: I will be writing more about non-lender work in my paid Appraisal Today newsletter. AMCs are not good clients. According to a recent McKissock survey, 42% of appraisers will be retiring in the next 10 years. I wonder how many are quitting because they hate working for AMCs. Who can train them with the very volatile AMC fees? I am 75 years old. I don’t know if I will still be appraising when I am 85 or older. However, I have not worked 10-12 hour days 7 days a week for quite a while. I started cutting back more when I turned 70 and started getting $3,000 per month Social Security and my taxes went way up. Every year I turn down more work.
In the paid Appraisal Today I wrote a long article with lots of graphs and analysis: What affects the volume of mortgage loans? (and appraisals)? Many topics were covered. 
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 
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 or send an email to . Or call 800-839-0227, MTW 7AM to noon, Pacific time.

Mortgage applications decreased 2.5 percent from one week earlier

WASHINGTON, D.C. (July 18, 2018) – Mortgage applications decreased 2.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 13, 2018. Last week’s results included an adjustment for the Fourth of July holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 22 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index increased 19 percent compared with the previous week and was 1 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 36.5 percent of total applications from 34.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.1 percent of total applications.

The FHA share of total applications increased to 10.6 percent from 10.0 percent the week prior. The VA share of total applications decreased to 10.2 percent from 11.3 percent the week prior. The USDA share of total applications decreased to 0.7 percent from 0.8 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 4.77 percent from 4.76 percent, with points increasing to 0.46 from 0.43 (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) decreased to 4.66 percent from 4.68 percent, with points increasing to 0.30 from 0.24 (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 decreased to 4.78 percent from 4.80 percent, with points decreasing to 0.69 from 0.75 (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 increased to 4.22 percent from 4.18 percent, with points decreasing to 0.42 from 0.46 (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 4.12 percent from 4.13 percent, with points increasing to 0.39 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged 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

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