Write Like A Professional – Very Practical Writing Tips for AMC/underwriter questions
By Tim Andersen
Excerpt: QUESTION: I like to use the term, “in my professional opinion” as part of my reports. After all, I am a professional paid to express opinions. Recently, the reviewer for an AMC requested I remove that term from my report since, in her words, “…it has nothing to do with value”. Is the reviewer overreaching on this? The reviewer has the right to tell me if there is an error in my report, but not to criticize the language I use in my report. What should I do?
ANSWER: As Gertrude Stein was supposed to have said upon seeing Oakland, California for the first time: “There’s no there there!” For good or ill, the same may be said about many real estate appraisal reports and the convoluted language they insist on using…..
Excellent and practical. To read more click here
My comment: this is the best article I have ever seen for practical tips on how to reply to AMC/underwriter questions with lots of examples.
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 on unusual stairways, AVMs, non-lender clients, non-disclosure states, mortgage origination stats, etc.
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What I think about bifurcated appraisals
Have you ever done a comp check for a mortgage broker or lender in the past? They are appraisals. You only have public records and maybe MLS. You may have driven by the property, but probably not.
What about drivebys? You drove by the outside, but never saw the rear or interior.
With bifurcated appraisals, at least you have photos, measurements of the exterior, descriptions of what the exterior and interior rooms look like, etc.
What about having trainees do them, under your supervision? A great way to get new appraisers started. I spoke with one appraiser who is doing this.
All appraisers rely on public records, MLS photos and descriptions, etc. We don’t know how accurate this data is.
Check out the company doing bifurcated appraisals and their forms software data handling. Do not work for one that requires that you manually fill in a 1004P, for example. How long have they been in business? Are there appraisers in management?
Whether or not you do them is a business decision. They are less risky than comp checks and drivebys. You have more information, assuming they do not make up the photos, sketch, etc.
The Bottom Line: appraisers don’t like change, just like most people. Some adapt, some decide not to change.
Moody’s – Automated valuation models for home appraisals a mixed bag for RMBS credit quality
Excerpt: Mortgage lenders are increasingly incorporating automated valuation models (AVMs) to value properties. This shift would mitigate some risks but create others compared to appraisals on loans that underlie residential mortgage-backed securities (RMBS), according to Moody’s Investors Service.
In some areas, AVMs are less useful than “insider” knowledge of the local market in locations where sales price data are not publicly available. In addition, some AVMs lack the property-specific data that appraisers gather with on-site visits.
The lack of standardization of models and data access among AVM providers’ models and data access could lead to inconsistent valuations for RMBS that rely on multiple AVMs. And the models have not been tested.
“While errors were found in the use of appraisals in the middle of the last decade, root causes have been addressed though legislation and other operational improvements,” says Moody’s Vice President Lima Ekram. “In contrast, AVMs have not undergone stressed economic cycles and thus the need for corrective action, if any, is still unknown.”
For more info click here
My comment: the full report was only available to Moody subscribers. Worth reading this excerpt though. FYI, Moody’s Investors Service, often referred to as Moody’s, is the bond credit rating business of Moody’s Corporation.Real estate appraiser wins invasion of privacy lawsuit against CoesterVMS
Brian Coester admitted to hacking into an appraiser’s personal email. Now a judge says he’ll pay damages
Excerpt: According to court documents, the drama started when Skapinetz sent an email to a client at Finance of America in which he described Coester’s business as a “criminal and fraudulent company” and attached documents pertaining to an ongoing legal battle between Coester and a third party.
The recipient then forwarded that email – sent through Skapinetz’s personal Gmail account – to Coester, who enlisted the help of a development contractor to investigate the identity of the email’s author, as the email address did not make that readily apparent.
To read more of this very interesting story, click here
To read the memorandum opinion from the court, plus lots of details click Here
Per Dave Towne: Brian Coester still has active appraisal licenses: MD, expires 10/30/19; WI, expires 12/14/19; MI, expires 7/31/20. It will be interesting to see if any are renewed.
My comment: Who knows if Coester has any money, but it is good to get the very positive results of the lawsuit.
Just For Fun!!
Excerpt: There’s all sorts of beauty and wonder in the mundane. But among the blog standard bits of everyday architecture that can take on an incomparable mystique, you can’t beat the humble stairway. Whether it’s a staircase built into the natural scenery to help navigate a treacherous ascent, a secret municipal stairway tucked into a tight alley, or a grand staircase welcoming visitors to a monument or museum, there’s a simple, haunting appeal to a good staircase.
To scroll through all the fotos click here Stairways for everyone new to very old, in many countries. Fascinating!!!
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Communicating With Non-lender Clients Is Different Ann O’Rourke’s Interview with Dustin Harris on the Appraiser Coach Podcast
Thinking about doing non-lender work, but not sure if it will work for you? It is very, very different than lenders. This recording has lots of practical advice.
Click here to listen to the FREE interview that discusses the difference!
Ann O’Rourke joins us again (it has been a while) to talk about non-lender work. Specifically, she wrote an article in Appraisal Today that all appraisers either in or thinking of getting into the non-lender side of valuation should read. Why communication is different with non-lenders.
Brief Excerpts from the podcast:
Professional vs. non-professional clients – the difference
How to get non-lender business
You make lots of decisions that lenders make for you, such as:
- Turn time
- What is in the report
- Type of report
- Effective date of appraisal
- etc. etc.
To read the long article on this topic, plus 2+ years of previous issues, subscribe to the paid Appraisal Today. If this article helped you get one non-lender appraisal, it is worth the subscription price!!
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The 12 States Where Home Prices are Secret
Excerpt: Full disclosure of sales prices makes real-estate markets more efficient, meaning people are less likely to pay wildly low or high prices, explained Manhattan real estate appraiser Jonathan Miller. Since New York City co-op data became public, he said, “people are better informed. One-bedrooms sell for $900,000—you’re not likely to have outliers like $500,000 or $2 million.”
Interesting comments. To see the infographic and read more click here
My comment: Job security for appraisers!!
Fannie Appraiser Update June 2019
- Highlighting residential appraiser careers
- UAD and appraisal form redesign update
- Appraisers play an important role in property data collection
- Appraiser quality monitoring and the use of appraiser trainees
- Value representation and warranty relief
Includes bifurcated appraisals,using trainees, form redesign, UAD, etc.
Mortgage applications increased 1.3 percent from one week earlier
WASHINGTON, D.C. (June 26, 2019) – Mortgage applications increased 1.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 21, 2019.
The Market Composite Index, a measure of mortgage loan application volume, increased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index increased 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 9 percent higher than the same week one year ago.
“Markets last week reacted to a more dovish FOMC statement and forecast, with Treasury yields falling after the meeting. Mortgage rates dropped again for most loan types, which led to an increase in refinance activity, partly driven by a 9 percent jump in VA applications,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The 30-year fixed rate has now dropped in three of the last four weeks, and at 4.06 percent, reached its lowest level since September 2017. Despite these lower rates, purchase applications decreased 2 percent, but were still considerably higher (9 percent) than a year ago.”
Added Kan, “Now at almost the half-way mark of 2019, we have generally seen a stronger purchase market than last year, despite still-tight existing inventory and insufficient new construction.”
The refinance share of mortgage activity increased to 51.5 percent of total applications from 50.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.5 percent of total applications.
The FHA share of total applications increased to 9.6 percent from 9.4 percent the week prior. The VA share of total applications increased to 12.5 percent from 11.9 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.06 percent from 4.14 percent, with points decreasing to 0.35 from 0.38 (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 $484,350) decreased to 4.00 percent from 4.04 percent, with points remaining unchanged at 0.24 (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 4.01 percent from 4.12 percent, with points decreasing to 0.36 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 15-year fixed-rate mortgages decreased to 3.40 percent from 3.50 percent, with points decreasing to 0.31 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 5/1 ARMs increased to 3.50 percent from 3.45 percent, with points increasing to 0.29 from 0.23 (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 94501Phone 510-865-8041 | Fax 510-523-1138