Here’s How America Uses Its Land

Excerpt: What can be harder to decipher is how Americans use their land to create wealth. The 48 contiguous states alone are a 1.9 billion-acre jigsaw puzzle of cities, farms, forests and pastures that Americans use to feed themselves, power their economy and extract value for business and pleasure.

One of the many interesting tidbits:
The U.S. is becoming more urban-at an average rate of about 1 million additional acres a year. That’s the equivalent of adding new urban area the size of Los Angeles, Houston and Phoenix combined. U.S. urban areas have more than quadrupled since 1945.

Click here for very interesting graphics and more analysis:

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Humor for Appraisers

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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.


No more 1004MC for Fannie appraisals

Date: 7/30/18 1:46
My note: This was posted in an appraiser yahoo email discussion group I have subscribed to since it started awhile ago. The person who sent it is very reliable. I have known him personally for many years. Below is the email. When I used to travel a lot to appraisal conferences, sometimes Fannie would make comments on significant changes. This was one of those comments. When I speak I am a lot more candid than when I write for unknown reasons. Maybe Fannie speakers do the same sometimes.
Posted discussion group message:
“I’m in Nashville at the National Appraisal Institute Conference. I just left a presentation given by the collateral policy managers at Fannie Mae and Freddie Mac.”

The Fannie spokesperson said that Fannie Mae has decided not to make the 1004MC a required from anymore; the change will be effective as of the new Selling Guide update, which is expected to come out next week.

I asked Freddie if they planned to drop the requirement as well? They said they had considered dropping it when the new reporting formats were finalized, but also said in light of Fannie’s announcement, they may not wait until the form-changes and adopt that decision sooner.

The Fannie spokesperson said that just because Fannie won’t requirement doesn’t mean a lender might not still want it. So, she warned not to expect all lenders to adopt the change instantly.

In my opinion, I think most lenders will opt out of the 1004mc form, but will require something else (data/analysis) in the report to support the market condition identification and adjustments (if warranted). So I don’t anticipate the need for market condition analyses to go away (and it shouldn’t, in my opinion) but I do anticipate more flexibility in the manner we (individual appraisers) want to present that data.”

What I think about 1004MC: The 1004MC forced appraisers to make market conditions adjustments, which lenders had to accept. When I started my appraisal business in 1986, I was told by local, well respected appraisers that lenders “did not want any time adjustments.” Apparently this had been going on for many years. During price declines in the 1990s, I personally knew appraisers who went out of business because they refused to not make time adjustments. All my lender clients allowed them or they were off my approved client list.

I started appraising in the 1970s at assessor’s offices. We were making 2% per month time adjustments. Guess I just got “bad training” for lender appraisals ;>

Appraiser comments: Of course, there were lots of appraiser comments. Dave Towne’s are below:
~1 Lenders and AMC’s (and the other gov’t agencies) won’t back down on requiring the 1004MC form in reports. So you will have to do it, regardless of what the GSE’s do.

~2 Some report users may design their own market conditions reporting form, and demand its inclusion in reports per their own assignment conditions.(One no-longer-in business-by that-name AMC did this in 2008, and demanded their form be included even after the MC form became mandated – until appraisers loudly complained.) These may not be acceptable to other lenders/users. So we could have a situation where multiple users have different forms required, which will greatly complicate completion of reports in a timely manner.

~3 The several report software providers may design something to replace the MC form, which you could then be used in reports. But if 4 (or more) different ones exist, the same situation as in #3 will occur.

~4 The GSE’s may have another form already prepared to replace the MC Form and will demand it be used instead. (By the way….”new appraisal report forms” to replace the current ones are nowhere ready to be released, at least from what the GSE’s have said in the past couple of months.)

~5 Smart, and well versed, appraisers will continue to provide supportable documents and analysis to show market trend activity – which they’ve already been including in reports as a substitute to the MC form. Appraisers who have not been doing this should take steps to learn how to document subject/comparable market trends that are specific to each assignment, and not just a regurgitation of ‘regional’ or ‘national’ trends data reported by others that may not directly apply to the appraisal assignment.


Trump administration (Treasury) calls for sweeping changes to financial ecosystem, including automated appraisals

Excerpt: 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:



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 Guide

Investigation 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.  

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Relax, underwriters, it’s just rural

How 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.


12 abandoned water parks around the world and the stories behind them

Just 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 ;>


Young People Don’t Want Construction Jobs.

That’s a Problem for the Housing Market.

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.


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 2.6 percent from one week earlier

WASHINGTON, 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.

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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