What kind of appraiser are you?

By George Dell
Excerpt: Let’s put aside the ‘art’ versus ‘science’ discussion, where the artists say: “No computer will ever replace the appraiser”, or “No amount of education will ever replace experience”. The other side seems a bit confused.  There are traditionalists.  And there are the “advanced” appraisers.  And there are the “vocational” appraisers, who don’t seem to care much about all of this.  They just want to push through as many reports as possible.  The skeptics tend to doubt some of the old theory, as well as some of the “new theory”. Traditionalist, advanced, vocational appraisers. What are you?

My comment: Worth reading. I am a “traditionalist/skeptic”. What are you?

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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To read more of this long blog post, click Read More Below!!

NOTE: Please scroll down to read the other sections of this long blog post onunique homes, proof of title , mortgage origination stats, etc.

The Most Astonishingly Unique Homes of 2018

Great Videos, Just for Fun!!

  • Frank Lloyd Wright Mayan inspired home
  • Dome Home, Hurricane Proof,  in South Carolina
  • Brady Bunch House in Southern California

My comment: Great to look at but don’t ask me to appraise them!!


Take a Look Inside Santa’s Home

Excerpt: “We’re excited to let kids around the world get a firsthand look at how Santa lives when he’s not out delivering presents,” said Zillow Brand President Jeremy Wacksman.

In order to calculate the value of Santa’s home, which is currently off the market, Zillow looked at comparable properties that are also in remote locations. Taking the median price of those homes, they added a “Santa premium” which brought the total value of the home to $764,389.

My comment: I love the “Santa premium”… lotsa comps??

FHA loan limits to increase in most of U.S. in 2019

Limits increase in more than 3,000 counties

Excerpt: The Federal Housing Administration announced its new loan limits for 2019, and it looks like most of the country will see an increase.

In high-cost areas, the new FHA loan limit ceiling increased to $726,525, up from $679,650 in 2018. The FHA will also increase its floor to $314,827, up from 2018’s $294,515.

These new loan limits will be effective for FHA loans assigned on or after January 1, 2019.

FHA is required by the National Housing Act, as amended by the Housing and Economic Recovery Act of 2008, to set single-family forward loan limits at 115% of median house prices, subject to a floor and a ceiling on the limits. FHA calculates forward mortgage limits by Metropolitan Statistical Area and county.

Fannie Mae: Lender pessimism grows as mortgage demand falls

Profit outlook for lenders falls for 9th consecutive quarter

Excerpt: Fannie Mae Senior Vice President and Chief Economist Doug Duncan said stressful conditions continue to hang over the mortgage industry.

“Lenders are reporting the lowest purchase mortgage demand expectations across all loans types and the worst refinance demand expectations for GSE-eligible loans in the survey’s five-year history,” he said.
For the eighth consecutive quarter, Fannie’s survey indicates that stiff competition among lenders was the primary reason for lower purchase mortgage demand. In Q4, demand came in at the lowest reading for any fourth quarter in the survey’s history.

My comments: Watch out for AMCs going out of business!! For lots of tips on how to get paid, evaluate your current clients, etc, read my article in the January 2019 issue of the paid Appraisal Today: “How to collect all your billings. Don’t work for free!!”.

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As of Dec. 11, 2018, the VA has dropped the requirement to include the 1004MC form in VA appraisal reports.

Excerpt: Effective immediately, VA no longer requires appraisers to include this form in all VA appraisal reports. However, the market trend information is still required within the appraisal reports.

Click here to download the 1-page announcement

Both the VA and the GSEs still require appraisers to analyze and comment on market conditions. No comments from HUD on FHA and USDA appraisals.

Proof of Title

Excerpts: Rebuilding New Orleans after Katrina often caused residents to be challenged to prove home titles back hundreds of years. That is because of community history stretching back over two centuries during which houses were passed along through generations of family, sometimes making it quite difficult to establish a paper trail of ownership…

From FHA: …you have only cleared title to the proposed collateral property back to 1803…

Reply: Your letter regarding title in Case No.189156 has been received. I note that you wish to have proof of title extended further than the 206 years already covered in the present application. I was unaware that any educated person in this country, particularly those working with real property, would not know that Louisiana was purchased by the United States from France in 1803, the year of origin of title identified in our application. For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by Right of Conquest from Spain…

My comment: I have seen this, or similar letters, before, but it is still fun to read!! We forget that Louisiana was once owned by France..
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 5.8 percent from one week earlier

WASHINGTON, D.C. (December 19, 2018) – Mortgage applications decreased 5.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 14, 2018.

The Market Composite Index, a measure of mortgage loan application volume, decreased 5.8 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 decreased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 7 percent from one week earlier. The unadjusted Purchase Index decreased 10 percent compared with the previous week and was 2 percent higher than the same week one year ago.

“Despite mortgage rates falling across the board last week to their lowest levels in three months, mortgage applications also declined, as more potential borrowers likely stayed away because of ongoing financial market volatility and economic uncertainty,” Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase applications decreased almost seven percent over the week and refinances decreased around two percent, led by a larger decline in government refinances compared to conventional refinances.”

Added Kan, “With rates continuing to slide lower, refinance borrowers with larger loan balances seemed more apt to take action. The average loan balance for refinance loans increased to its highest level since September 2017.”

The refinance share of mortgage activity increased to 43.5 percent of total applications, its highest level since February 2018, from 41.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.9 percent of total applications.

The FHA share of total applications decreased to 10.4 percent from 10.8 percent the week prior. The VA share of total applications decreased to 9.9 percent from 10.2 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to its lowest level since September 2018, 4.94 percent, from 4.96 percent, with points decreasing to 0.43 from 0.48 (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 its lowest level since September 2018, 4.74 percent, from 4.80 percent, with points decreasing to 0.26 from 0.33 (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 its lowest level since September 2018, 4.95 percent, from 4.97 percent, with points decreasing to 0.51 from 0.55 (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 its lowest level since September 2018, 4.37 percent, from 4.41 percent, with points decreasing to 0.37 from 0.44 (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 its lowest level since September 2018, 4.17 percent, from 4.24 percent, with points increasing to 0.42 from 0.34 (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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