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To read more of this 8-2-18 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 1004mc, USPAP, abandoned water parks, mortgage origination stats, etc.
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No more 1004MC for Fannie appraisals
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=====================================Trump administration (Treasury) calls for sweeping changes to financial ecosystem, including automated appraisalsExcerpt: The Trump administration on Tuesday called for a series of changes to the country’s financial and mortgage ecosystems that, if enacted, would supercharge the financial industry’s technological revolution, upend the current regulatory environment, and potentially change the face of mortgage lending.
Along those same lines, the Treasury also recommends that Congress consider changes to Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act, which governs property appraisals.
Specifically, the reports calls for changes to the appraisal laws that would increase the prevalence and acceptance of automated or “hybrid” appraisals conducted with the help of an automated valuation model.
My comment: WoW!! It was not announced in a Presidential Tweet and has a 223-page Report to the President
Read the full 223-page report, including the appraisal section (pages 103 to 107), for lots more info at:
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=====================================What Does “Objective” Mean?Does it mean objective analysis? Or does it mean objective appraiser?
This is the main difference between the Traditional Appraisal Process (TAP) and Evidence Based Valuation (EBV)©. The TAP is well defined in both USPAP (Appraisal Foundation) and in the Appraisal of Real Estate (Appraisal Institute): An appraiser must act competently and in a manner that is independent, impartial, and objective. (2018-2019 USPAP, in the preamble and as the definition of “appraiser)
The Appraisal of Real Estate first references the above USPAP concept, then uses the word “objective” or “objectively” numerous times in the same meaning – the objectivity of the appraiser, not the work. The appraiser is to produce believable, credible results. The appraiser is defined as being objective. This sets up a key difference for EBV (Evidence Based Valuation)©.
EBV© is based on modern principles of data science. The work methodology itself is objective. There are well-accepted principles of data science methodology. This is the science of data – rather than the belief of the appraiser.
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USPAP Enforcement GuideInvestigation Procedures and Types of Conduct
from Cases on File
Excerpt: URAR Field: City
If the property is close to the city line, make sure by viewing
plat that it’s on the right side! An appraiser out to inflate or deflate value will sometimes try to make the subject property appear better located than it actually is. License suspension and education (appraiser claimed ignorance). Appraiser characterized a Pittsburgh neighborhood as a detached, self-policing borough. It was geographically detached from the City of Pittsburgh but was city governed and policed. Identifying the location by neighborhood name (Overbrook) was misleading and made the location seem “fancier” than it was.
In the August 2018 issue of the paid Appraisal Today, available to paid subscribers.
To read the 15-Page Special Report discussing the URAR fields, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
If this article saved you from making a Big Mistake, it is worth the subscription price!!
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=====================================Relax, underwriters, it’s just ruralHow to maximize appraisal underwriting approvals in rural markets
Excerpt: Since rural markets commonly present appraisal challenges that are significantly less prevalent in urban markets, lack of underwriter familiarity with rural markets contributes to elevated first pass and overall appraisal denials. I refer to this phenomenon as Urban Projection – a process where underwriters unintentionally impose urban property expectations on rural markets. The result is loan delays, frustrated consumers, lost loans, rate lock complications, annoyed appraisers and lost productivity
Well written and worth reading:
My comment: Written by an appraiser (Adam Johnston, Chief Appraiser & Director of Investigations for Genworth Financial’s U.S. mortgage insurance business), for underwriters. I am sure they hate reviewing rural properties vs. suburban tract homes. |
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=====================================12 abandoned water parks around the world and the stories behind themJust For Fun!!Excerpt: Water parks offer a fun way to cool off on a summer day, but some have seen better days. From Lake Dolores Waterpark in Newberry Springs, California, to Aquaria Park in Ravenna, Italy, many have simply been abandoned .
My comment: For unknown reasons I am fascinated with abandoned properties ;>
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=====================================Young People Don’t Want Construction Jobs.That’s a Problem for the Housing Market.Excerpts:
The share of workers in the sector who are 24 years old or younger has declined in 48 states since the last housing boom in 2005, according to an analysis of U.S. Census data by Issi Romem, chief economist at construction data firm BuildZoom. Nationally, the share of young construction workers declined nearly 30% from 2005 through 2016, according to Mr. Romem.
While there’s no single reason why younger folks are losing interest in a job that is generally well-paid and doesn’t require a college education, their indifference is exacerbating a labor shortage that has meant fewer homes being built and rising prices, possibly for years to come.
Declining numbers of immigrant construction workers have also sapped builders of unskilled labor.
“Unlike they did in the halcyon days of the early 2000s, they aren’t going to hire workers who are going to come on the job and do on-the-job training with them,” he said.
My comment: developers of a former naval station in my city are having significant problems getting construction workers due to the local high housing costs, both rentals and home purchases. Their budgets keep going up and up as they compete for workers. Many workers commute from cities with a 2+ hour drive away, where they can buy a large new home at 50% or less of local prices for an old home. Some share an apartment with other workers or sleep in their cars. |
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====================================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 decreased 2.6 percent from one week earlierWASHINGTON, D.C. (August 1, 2018) – Mortgage applications decreased 2.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 27, 2018. The Market Composite Index, a measure of mortgage loan application volume, decreased 2.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 3 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 37.1 percent of total applications from 36.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4 percent of total applications. The FHA share of total applications increased to 10.4 percent from 9.9 percent the week prior. The VA share of total applications increased to 10.5 percent from 10.2 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 4.84 percent from 4.77 percent, with points remaining unchanged at 0.45 (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 4.76 percent from 4.72 percent, with points increasing to 0.37 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 remained unchanged at 4.78 percent, with points increasing to 0.74 from 0.73 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 4.29 percent from 4.23 percent, with points increasing to 0.53 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 5/1 ARMs increased to its highest level in the history of the survey, 4.17 percent from 4.09 percent, with points increasing to 0.32 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate increased 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. |
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