Appraisal News and Business Tips

11-22-19 Newz: Appraisal Fees – Previous Careers – Dungeon

What Was Your Previous Career Before You Got Into Appraisal?

Excerpts:

The Top 3

  • Real estate sales (14%)
  • Mortgage lending (8%)
  • Insurance (5%)
  • Assistant or admin work (5%)
  • Banking (1%)
  • Others: 63%

To read more, click here Check out the respondent comments and a list of some of the many previous careers

My comment: I was a chemist before I started appraising. Really like learning about science in school, but 7 years of lab work was too boring. I felt trapped inside. Saw an ad for “appraiser assistant” at the local county offices. “Work in the field.” I had never heard of it, so read a book about it at the library (1974). I got the job and still love appraising!! I didn’t see many science careers on the “Other” list. But, I think it prepared me well for appraising as I was trained to be very objective and analytical.

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Very Quiet and Very Noisy Places

Noisy Neighbors: Highways, Hospitals and Stadiums

Excerpt: Counter to the idea that big cities are noisy, most of America’s noisiest neighborhoods are in small or mid-sized metro areas. The top noisy neighborhoods are in Milwaukee, Rochester, Oklahoma City, Tulsa and Laredo – a far cry from bustling mega metros like New York City and Los Angeles. Still, large metros do have noise. New York’s Chinatown, Little Italy, NoHo, Greenwich Village and Lower East Side average around 57 decibels – between the noise level of a rainy day and a typical conversation – and about half the time, they’re even louder. The New York metro as a whole averages much quieter: 43 decibels – about the volume of a refrigerator hum.

To read more, click here

My comments: Noisy locations can affect value. A few examples I have appraised: next to a freeway on ramp, ambulance sirens near hospital emergency departments, etc. I have a decibel meter app on my iphone which I use regularly to test for decibel levels. I used to live next to a very noisy neighbor also ;> One of my brothers used to live in a semi-rural area about 50 miles north of where I live. Very quiet. I had some difficulty sleeping as it was so quiet!

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A Spot in Washington Is One of Only 12 Silent Places Left in the US

Excerpts: And according to Hempton, there are only between 10 and 12 places left in the United States where you can find natural silence. Aside from the Hoh Rainforest, he lists the Boundary Waters Canoe Area in Minnesota and Haleakala National Park in Hawaii as two others. The rest, Hempton keeps to himself, opting to protect their silence by protecting their identities.

To read more, click here

My comment: I think about the lack of quiet spaces a lot…. Vehicle noise seems to be everywhere.

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Whatever Happened to the ‘Sex Dungeon’ House in Pennsylvania?

Excerpts: A vanilla home in the suburbs outside Philadelphia with a sexy secret in its basement whipped up a storm earlier this year when it went up for sale.

The listing photos prominently featured a lavish BDSM “sex dungeon” outfitted with top-of-the-line implements for a kinky night (or day!) in.

When the listing agent, Melissa Leonard, snagged this one-of-a-kind property, she decided to simply lean in, without hiding the basement from prying eyes. She felt that the space, and all of its accoutrements, was too much to spring on unsuspecting buyers without warning. Her decision to present the house without sparing a single detail helped to make the home a viral sensation…

In just a few days, the sex dungeon house became a national story. We reached out to Leonard again to ask what became of the home after the listing vanished this summer.

To read more, click here

My comment: Lots of fotos and comments!! House never sold and is a weekend rental now. Did not include interior fotos so this email would not be rejected ;>

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TRID and Fixed Appraisal Fees – What you can do

Ever accepted an appraisal from an AMC and found out that it was much more complicated and needed a higher fee? With TRID, the fee could not be changed.

CFPB to consider changing or eliminating TRID rule

Excerpt: s looking for recommendations to improve the assessment plan and recommendations for modifying, expanding or eliminating the TRID rule, among other questions.

For more details (not about appraisals)  To read more, click here

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From Denis Desaix (from email discussion group – National Appraisers Forum):

If TRID is eliminated, something else will take its place, so it isn’t like we are going back to the wild, wild, west days.

One of my biggest gripes about TRID was that it put the appraisal fee in what is known as a no-tolerance fee. Since the consumer does not have the opportunity to shop for this service themselves, TRID required the quote to be very, very firm (changes were possible but the risk of getting a complaint was great).

The consumer should get a quote on their disclosure papers prior to going forward with the transaction, but the appraisal fee should always be subject-to any situational changes that occur (like complexity or lack of availability due to high-demand). TRID created a risk high enough to effectively put the appraisal fees in stone.

If we allow appraisal fees to be assignment-specific (situational) then this will also allow for a true cost-plus system to exist. I’ve advocated for this type of system for a long time: AMCs can compete among themselves on their fees with lenders and appraiser fees are separate from that dynamic. This would eliminate the potential of AMCs looking for the lowest-cost provider in order to maintain their profitability. Fee competition will still exist (which it should, if you ask me) but the AMC won’t have to squeeze out its necessary profit from the appraisal fees it collects.

Most of the middle- and senior managers/owners of AMCs that I know would love to have a cost-plus system. They would much rather bid their services separately and not have it bundled in a larger contract that includes the appraiser fee.

We’ll see if that shakes out but regardless, if they are going to re-open TRID and examine it, now is the time to try to get the appraiser fee out of the no tolerance bucket.

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From Dave Towne (by email):

Comments can be submitted to the following addresses, until Jan. 21, 2020:

You may submit comments, identified by Docket No. CFPB-2019-0055, by any of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov Follow the instructions for submitting comments.

• Email: 2019-RFI-TRID@cfpb.gov. Include Docket No. CFPB-2019-0055 in the subject line of the email.

• Mail/Hand Delivery/Courier: Comment Intake – TRID Assessment, Consumer Financial Protection Bureau, 1700 G Street, NW, Washington, DC 20552

Read more in this PDF

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Disability – your greatest risk

Many appraisers worry about the risk of getting sued on an appraisal, but one of your greatest risks is becoming disabled and unable to work. To appraise at your full capacity, you have to be able to walk, hear, and see.

If disabled, you may be able to continue working, but at reduced capacity. Or, you may not be able to do field work but you can do desktop appraisals and reviews. But, you will probably not be able to work at all for a period of time.

Since appraisers spend a lot of time driving, getting in an auto accident is a much higher risk than for people working in an office. Other risks include getting injured during an inspection, plus the risks we all have of a serious medical problem.

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Extensive Reports on Rise of Non-Bank Lending 

By Rob Chrisman

Excerpts: If you worked for a lender who was originating $500 million a month in home loans but only had a net worth of $1 million, would you be nervous? Would your company have enough capital for a couple buybacks? Warehouse banks and investors don’t allow that kind of leverage, but nonbanks traditionally are worth less than banks which usually have hundreds of millions or billions in assets. And this hasn’t escaped the notice of regulators…

(Nov.14) the Federal Deposit Insurance Corporation (FDIC) released a multi-part analysis of changes in the U.S. banking system since the 1950s, especially changes occurring since the financial crisis in 2008. “These analyses address the shift in some lending from banks to nonbanks; how corporate borrowing has moved between banks and capital markets; and the migration of some home mortgage origination and servicing from banks to nonbanks.”

For more info, click here Very good report links.. Scroll down the page to the “Rise of the Nonbanks” Section

My comment: I have been watching the rise of the non-banks, such as Quicken Loans for awhile, but was waiting for some more analysis before writing about it.

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The traditional Thanksgiving dinner in a formal dining room may be becoming a thing of the past as buyers embrace more casual open concept living spaces.

Zillow research finds the share of for-sale listings mentioning open concept layouts – in which walls are removed to combine the kitchen, living room and dining room into a single great room – has more than doubled since 2015, while the share of listings mentioning a formal dining room has slightly dipped.

Among the top 35 metro areas, homes for sale with formal dining rooms continue to be more common and more expensive than homes with open concept layouts. But the price difference has been cut in half, and the gap in the share of listings has considerably shrunk over the past five years.

It isn’t clear whether open concept layouts are becoming more common or if they have simply become a more popular selling feature and therefore are mentioned more often in listings and command a higher price.

To read more, click here

My comment: Finally found something related to real estate and Thanksgiving ;>To read more, click here

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Mortgage applications decreased 2.2 percent from one week earlier

WASHINGTON, D.C. (November 20, 2019) – Mortgage applications decreased 2.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 15, 2019. This week’s results include an adjustment for the Veterans Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 14 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week and was 152 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 7 percent from one week earlier. The unadjusted Purchase Index decreased 8 percent compared with the previous week and was 7 percent higher than the same week one year ago.

“U.S. and China trade anxieties and protests in Hong Kong pulled U.S. Treasuries lower last week, and the 30-year fixed mortgage rate followed the same path, dipping below 4 percent,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Despite lower rates, mortgage applications decreased 2.2 percent, driven by an 8 percent slide in refinance activity. Rates have stayed in the same narrow range of around 4 percent since July, so we may be starting to see the expected slowdown in refinancing as the pool of eligible homeowners shrinks.”

Added Kan, “Purchase applications were 7 percent higher than a year ago, which adds another solid data point to the recent increases in new home sales and housing starts. There may be signs that housing inventory is starting to meaningfully rise, which will help with affordability and provide more choices for potential homebuyers.”

The refinance share of mortgage activity decreased to 59.5 percent of total applications from 61.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.6 percent of total applications.

The FHA share of total applications decreased to 13.0 percent from 13.1 percent the week prior. The VA share of total applications increased to 12.9 percent from 12.7 percent the week prior. The USDA share of total applications remained unchanged 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 3.99 percent from 4.03 percent, with points increasing to 0.33 from 0.31 (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 3.93 percent from 3.98 percent, with points increasing to 0.28 from 0.22 (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 3.80 percent from 3.85 percent, with points increasing to 0.32 from 0.28 (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 3.43 percent, with points increasing to 0.31 from 0.28 (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 3.51 percent from 3.40 percent, with points increasing to 0.23 from 0.17 (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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Ann O’Rourke, MAI, SRA, MBA

Appraiser and Publisher Appraisal Today

2033 Clement Ave. Suite 105, Alameda, CA 94501

Phone 510-865-8041

Email  ann@appraisaltoday.com

www.appraisaltoday.com

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