Should we raise the deminimus to $2 million? Or $5 million?

By George Dell
Excerpt: To simplify this discussion, let’s note two facts:  Appraisers can perform ‘evaluations’, normally using the same scope of work as an unlicensed “evaluator”.  What’s the difference?  It appears to me that there is one key difference.  The question is then:  Which part of the service is not required?  Is it the integrity/ethics, or the performance (such as using the right data and analysis)?

It appears to me that since unlicensed persons can charge less, have less tax/fee burden (for licensing, education, and errors/omissions insurance- the less ethical, less responsible ‘evaluator’ can always outbid the licensed appraiser every time.

Read the full blog post and appraiser comments. What do you think? Add your comments.

My comments: Interesting analysis by George, of course!! Credit unions are proposing to raise the commercial deminimus to $1,000,000. I didn’t know they made commercial loans. Guess they forgot about the commercial crash in the late 1980s.
As long as Fannie and Freddie (and their investors) require res appraisals, it won’t have a big effect on residential. The FIRREA deminimus in 1989 was $200,000. No effect on much of anything, even though we thought the Sky Was Falling.

The usual Mortgage Cycle: Good Business = lower requirements. Bad Business = higher requirements.


Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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Pictures appear to show tax appeal officials asleep during protest hearings

Excerpt: AUSTIN(KXAN) – The chair of the board that settles disputes over property tax appraisals has agreed to reschedule hearings after getting pictures that purportedly show review board members sleeping during protest hearings.

KXAN obtained the photos that were included in a complaint letter from Pro Tax, a Texas firm that represents taxpayers challenging the Travis Central Appraisal District.

My comment: Sorta Just For Fun ;> Check out the fotos!!  Are they sleeping??


How the partial government shutdown is disrupting mortgage, real estate transactions (Jan. 14)

1. Fannie Mae, Freddie Mac will still process your loan (in most cases)
2. FHA loan closings could be delayed, but not VA loans
3. USDA loans will not be processed
4. Federal flood insurance is not affected
5. IRS income verification resumes, Social Security reporting delayed
Read the details here:

My comments: This does not include all the paycheck to paycheck employees who may have problems making mortgage payments (and buying food). This weekend I took a plane trip and thanked many of the TSA employees who were working. In my city we are donating to Coast Guard members (base is across the estuary from us) who are not getting paid.

Many IRS employees are not working. Little or no clarification on the 20% tax deduction for pass through businesses, including appraisal. Guess my tax person will have to “wing it”. Plus lots of other tax issues. When the last big tax cuts were done, 30 years ago, Congress clarified many of the issues before income taxes were due.

Moody’s: Shutdown Raises Lender Exposure to Risk (Jan. 10)

Excerpts: A new report issued by Moody’s Investor Service is warning that the partial federal shutdown will increase the level of mortgage-delivery risk for lenders, particularly non-bank mortgage companies.

Moody’s added that all residential mortgage lenders, including depository institutions, “face an increased risk of missing red flags on borrower quality, lapses that could lead to loans with higher risk of losses.” The secondary market could also be impacted in this environment.

“The shutdown is also negative for nonbank lenders, which currently make up approximately 60 percent of mortgage originations, because they will be unable to sell a small percentage of their loans (such as loans to federal workers because of the inability to verify their employment) during the shutdown to certain investors such as Fannie Mae and Freddie Mac,” Moody’s stated…
Lots more info plus link to full Moody’s analysis.

My comments: I hope these articles are irrelevant by the time you read them. I write up this newsletter on Wednesday and send it out at 5am Thursday. I kept thinking the shutdown was going to be over and did not write about this before. A Mess!!


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How To Get Non-Lender  Business By
Networking at Meetings!!

In the Paid Appraisal Today 
January 2019 issue
Excerpt: Why network at meetings?
Do you want any new good clients? Want to do some easy marketing? Would you like to have qualified prospects call you? 

Why network? You give business to people you know. If no one knows you, they can’t give you business or referrals. How do you hire an accountant, mechanic, or hair stylist? You know them or they are referred to you.

Most of my appraisal business is by referral. I get referrals from other appraisers, real estate agents, attorneys, accountants, and many individuals.

How do I get these referrals? I am well known in my city and in the
appraisal and real estate communities.
How did I build up this business? By going to meetings and
being active in associations. I don’t like “cold calling” prospects I don’t know. It is easier for me to meet people face to face.

This article has lots of tips on where to network, what to say to people at meetings, be a host not a guest, where to get more information, etc. I regularly attend meetings and almost always get a referral or an appraisal.


Don’t sit in your office waiting for the phone to ring!! Get out and network while other appraisers are doing nothing!!!

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Digital Transformation of the Appraisal Industry

By Jeff Bradford, Bradford Technologies
Excerpt: Well, as you might have guessed, more changes are coming and it’s technological for sure, but it’s not driven by an invention, such as when the digital camera was invented. Today it is demographics that is driving the change. The millennials are forcing businesses to change. It is estimated that at their peak, there will be 75 million of them. They are expected to be a larger force than the baby boomers. The millennials have never seen a fax or dot matrix printer. They only know mobile. They live in a digital world connected by their mobile phones, and they expect everyone they deal with to be digital as well. That includes the mortgage industry.

This group has given rise to the FinTech industry-startups that are out to disrupt the financial industry. Their aim is to make it easy to get a loan, make payments and do anything financial using their smart phone, and they don’t understand why an appraisal takes seven days. They certainly don’t understand why last year there were areas of the country where it took four to six weeks to get an appraisal.

Read this article and the appraiser comments.

My comment: I have been hearing Jeff speak at appraiser meetings for over 25 years. Excellent presentations. Now all of us can read what he says.

Residential appraisal startup Reggora raises $3M in seed round

Excerpts: The firm enters a fast-growing demand for automated appraisal services that several startups are rushing in to fill. Bowery Valuation, which last week announced a $12 million series A funding round, has focused on multifamily and mixed-use properties, and has signaled ambitions to expand its commercial appraisals business.

Led by CEO and co-founder Brian Zitin, the firm will indirectly compete against incumbent middle companies that provide appraisal software, such as CoreLogic

My comment: Last week I wrote about Bowery. Not many appraisers clicked through to read the articles. VCs are interested in automated valuations, not appraiser report valuations. Hmm…

How Are We Worth So Little?

By Jonathan Miller
Excerpt: An appraiser sent me the following email. It has become clear to me that the valuation industry that engages appraisers now places more value on the physical inspection than it does the actual valuation itself.

They can’t replicate the interior inspection so the valuation portion is where the fee shaving occurs and believe they can come up with the value themselves or find people that will work for wages that won’t attract people who are competent, but rather, people that are desperate.

Our industry has a weak voice, largely from a combination of self-loathing, ineffective trade group leadership and the shear nature of the largess of the financial institutions that lobby against us. We are the last resort for the consumer and taxpayer, but ultimately regulatory authorities have yet to prove they care.

Worth reading to see what is actually happening for $50 “appraisals” plus the appraiser comments, of course.

My comments: This is what appraisers are saying. Makes sense. Sorta hard to automate inspection. (But could use google earth, etc. when they get closer to real time.) Quite a contrast to the 2 articles above.

I am sooo glad I quit doing lender appraisals in 2005! There are non-lender appraisals available for those who want to quit lenders. Yes, it does require marketing. Cannot just “get on a list”. I have been writing about this since my first paid newsletter in June 1992. The IRS and judges in court will not accept AVMs!!

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 increased 13.5 percent from one week earlier

WASHINGTON, D.C. (January 16, 2019) – Mortgage applications increased 13.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 11, 2019.

The Market Composite Index, a measure of mortgage loan application volume, increased 13.5 percent on a seasonally adjusted basis from one week earlier to its highest level since February 2018. On an unadjusted basis, the Index increased 45 percent compared with the previous week. The Refinance Index increased 19 percent from the previous week to its highest level since March 2018. The seasonally adjusted Purchase Index increased 9 percent from one week earlier to its highest level since April 2010. The unadjusted Purchase Index increased 43 percent compared with the previous week and was 11 percent higher than the same week one year ago.

“Mortgage applications rose to their strongest level in years last week, with purchase applications rising to the highest since 2010, and refinance applications up to their highest level since last spring,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Uncertainty regarding the government shutdown, slowing global growth, Brexit, a more patient Fed, and a volatile stock market continued to keep rates from increasing. The spring homebuying season is almost upon us, and if rates stay lower, inventory continues to grow, and the job market maintains its strength, we do expect to see a solid spring market. The 11 percent gain in purchase volume compared to last year is a promising sign.”

Added Fratantoni, “Borrowers with larger loans tend to be more responsive to a given drop in mortgage rates, and we are seeing that so far in 2019. Furthermore, borrowers with jumbo loans are also more apt to take adjustable-rate mortgages as opposed to fixed-rate loans. Thus, it is not surprising to see the ARM share at its highest level since 2014. These borrowers may also feel more confident taking an adjustable-rate mortgage given the expectation of a more patient Fed.”

The refinance share of mortgage activity increased to its highest level since January 2018, 46.8 percent of total applications, from 45.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to its highest level since October 2014, 9.2 percent of total applications. The average loan size for refinance applications reached a survey high at $353,100.

The FHA share of total applications increased to 10.9 percent from 10.3 percent the week prior. The VA share of total applications decreased to 10.4 percent from 11.6 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) remain unchanged at 4.74 percent, with points decreasing to 0.45 from 0.47 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) increased to 4.53 percent from 4.52 percent, with points increasing to 0.31 from 0.28 (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 4.76 percent from 4.70 percent, with points increasing to 0.52 from 0.47 (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 decreased to its lowest level since April 2018, 4.13 percent, from 4.16 percent, with points increasing to 0.45 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 ARMs increased to 4.08 percent from 4.05 percent, with points remaining unchanged at 0.32 (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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