Appraisal News and Business Tips

12-6-19 Newz: Appraisal Shelf Life – AVMs – Neighborhood Analysis

What’s the Shelf Life of An Appraisal?

Except: All of this has let me to the question du jour. What is the shelf life of an appraisal? I am asked on a regular basis, “How long the appraisal is good for?”. The simple answer is, one day. Namely, the effective date of the report. Real estate appraisals reflect the appraiser’s opinion of value of the property being appraised, based upon a specific point in time. Why?

Real estate values are changing every day. Like food, there are external forces that affect the value of a home, and how rapidly it changes. Does that mean that the appraised value will be dramatically different the day after the effective date of the appraisal? Probably not. However, no appraiser can see into the future to know what tomorrow will bring.

To read more, see fotos and comments click here

My comment: I love these very creative articles. I have no idea how he does mashups of appraisals and all types of other topics! Plus I thought I understood food shelf life. Now I know a lot more ;> Creative videos and animated gifs, etc. Lotsa fun!!

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U.S. regulatory panel flags non-bank mortgage lenders as potential risk

Excerpts: A U.S. regulatory panel is recommending increased federal and state oversight of nonbank mortgage lenders and servicers, saying for the first time in a report on Wednesday that their growing presence in the sector may threaten financial stability…

Nonbanks originate 51% of all new mortgages compared with just 10% at the height of the subprime mortgage crisis in 2009…

To read more, click here

My comment: Do appraisals for Quicken Loans and other non-bank lenders? If so, be careful. Remember the subprime crash when everyone seemed to be looking at appraisers as the “bad ones”?

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FHA loan limits increasing for almost all of U.S. in 2020

11 counties will actually see loan limits decrease

Excerpts: Thanks to increases in home prices in 2019, the Federal Housing Administration loan limit will increase for nearly all of the country in 2020.

According to an announcement from the FHA, the 2020 FHA loan limit for most of the country will be $331,760, an increase of nearly $17,000 over 2019’s loan limit of $314,827..

for those approximately 70 “high-cost” counties, the FHA’s 2020 loan limit will be $765,600, an increase of nearly $40,000 over 2019’s total of $726,525.

For more info and links to counties click here

My comment: More FHA appraisals!!

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Multi-Display on One Large Curved Monitor

By Dave Towne

Excerpt: …If you’ve been considering replacing multiple individual computer monitors with ONE large screen monitor, you may want to have software which allows individual ‘monitors’ showing different screens to be displayed on the one monitor.

As most of us know, multiple monitors allows us to be more efficient during report production, reducing or eliminating the need to switch back and forth between various web sites we need to use.

For more info, click here

My comment: Something for Christmas for you (and your business)???

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Getting too many ad-only emails?

4 ways to get only the FREE email newsletters 

and NOT the ad-only emails

Click here for the list of 4 ways plus information on why I take ads, etc.

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Marketing with holiday gifts and cards –
An Easy and Most Excellent marketing tool!!

Excerpt: Get some cards at the office supply store now before they are almost gone!!

When we worked for lenders and mortgage brokers, we often had personal relationships, which included in-person deliveries of gifts, etc. With AMCs it is much more difficult, but a personal holiday email can work.

Gifts delivered works well for non-lender clients. However, be careful when sending to government agencies (see below).

These are an easy ways to say “thank you” for appraisal business, being very helpful on an appraisal, etc.

In the past I used to get many holiday cards from vendors, other appraisers, etc. Sometimes I would get a gift such as a Starbucks gift card. But, this has slowed way down in recent years as a residue of the recession I guess. If you send something, it will be remembered.

I am working on my printed Holiday Cards now!!

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My real estate mind never shuts off

By Ryan Lundquist

Excerpt: My real estate mind never shuts off. Even when I’m on vacation I can’t help but notice interesting things and think through value issues. Anyway, last week I took a family road trip through Southern California and here are some things that caught my eye. Enjoy if you wish…

1) Vibrant colors: Imagine this pink color in a newer tract subdivision of stucco boxes with earth tones. In that scenario the market could have a negative reaction to such a loud color, but in certain areas vibrant colors are accepted. This reminds us the market isn’t the same in every location or price range. By the way, check out this pink house near Austin in case you missed it earlier this year.

For lots more comments and Fun Fotos, click here

My comment: My appraiser mind also never shuts off. When traveling I have to check out the local real estate ads. Plus what I see driving around!

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A Perspective on AVMs

By Paul Chandler

Excerpt: Given that you are contending big data and artificial intelligence are much better today and you use FSD (Forecast Standard Deviation) as a test to validate models, has your research shown that FSDs are improving over the years?…

Given models have not shown any improvement in FSD over recent years, while big data, computing power, and artificial intelligence is growing and improving, should clearly signal to regulators and policy makers that the science and math used to support collateral lending decisions to ensure a safe and sound economy are not as good as the AVM salesman would try to have us believe.

To read more, click here

My Comment: This post has comments on a recent CRN meeting. I have known Paul for many years. He is very savvy. I only attended one CRN meeting many years ago, but I was considered a “reporter” and was not allowed to attend any more. They are worthwhile.

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What is so Important About the Damn Neighborhood Analysis that the Reviewer Nicked me for it?

By Tim Andersen, MAI

Excerpt: Question: in a recent review of one of my appraisal reports, the reviewer said my neighborhood analysis was poor. I asked what that meant and she indicated I should familiarize myself with Fannie Mae’s requirements for a NEIGHBORHOOD ANALYSIS. She also indicated what I had in my report was just a recitation of facts, but (a) lacked any analysis of neighborhood trends and (b) therefore I did not analyze the neighborhood sufficiently to reconcile my conclusions of the neighborhood trends and its effect on both my highest and best use conclusion and my final value opinion. I came in just over the contract price. What does the reviewer want from me? I did what I always do in an appraisal! Help me!

For the answer, click here

My comment: Tim always has great answers for appraiser questions! He is a regular contributor to the paid Appraisal Today, with articles on USPAP 2020-2021, state board problems, etc.

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Mortgage applications decreased 9.2 percent from one week earlier

WASHINGTON, D.C. (December 4, 2019) – Mortgage applications decreased 9.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 29, 2019. This week’s results include an adjustment for the Thanksgiving holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 9.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 38 percent compared with the previous week. The Refinance Index decreased 16 percent from the previous week and was 61 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index decreased 33 percent compared with the previous week and was 24 percent lower than the same week one year ago.

“U.S. Treasury rates stayed flat last week, as uncertainty surrounding the U.K. elections offset positive domestic news on consumer spending,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Despite the 30-year fixed rate remaining unchanged at 3.97 percent, mortgage applications fell last week, driven down by a 16 percent drop in refinances. Purchase applications were up slightly but declined 24 percent from a year ago. This week’s year-over-year comparisons were distorted by Thanksgiving being a week later this year.”

Added Kan, “The purchase market overall looks healthy as we enter the home stretch of 2019. The seasonally adjusted purchase index was at its highest level since July, as a combination of wage gains, slower home-price appreciation, and slightly easing inventory conditions continue to support increased activity.”

The refinance share of mortgage activity decreased to 59.0 percent of total applications from 62.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 4.8 percent of total applications.

The FHA share of total applications increased to 12.0 percent from 11.7 percent the week prior. The VA share of total applications decreased to 12.7 percent from 14.1 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) remained unchanged at 3.97 percent, with points increasing to 0.32 from 0.30 (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 $484,350) increased to 3.91 percent from 3.87 percent, with points decreasing to 0.26 from 0.29 (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 3.83 percent from 3.79 percent, with points increasing to 0.31 from 0.23 (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 3.37 percent from 3.38 percent, with points increasing to 0.28 from 0.27 (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 3.28 percent from 3.42 percent, with points increasing to 0.27 from 0.22 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

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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