Fannie Appraiser Update December 2019
- Multiple parcels
- Significant appraisal defects
- How are you modernizing?
- How appraisal waivers fit with our risk mindset
To read more, click here
To go to Fannie’s Appraiser Page, click here
Lots of info, including their updates. I use it a lot. Read this month’s newsletter and the old newsletters.
My comment: Some useful info in the Update. Of course, appraisers are worried about appraisal waivers. Fannie has a short explanation about the risk and when they are used. I have known for decades that some properties were low risk and appraisals were not really “necessary”. Especially with a low LTV, good credit, etc. CU has so much data now it is much easier to make a determination. Bifurcated are coming. Fannie decided to postpone them without an appraisal, but I am sure this is the future.
VA Issues Guidance on Bifurcated Appraisals
by Isaac Peck
Excerpt: In June 2019, Congressional Bill H.R. 299, the Blue Water Navy Vietnam Veterans Act of 2019, included this provision: “The Secretary shall permit an appraiser on a list developed and maintained under subsection (a)(3) to make an appraisal for the purposes of this chapter based solely on information gathered by a person with whom the appraiser has entered into an agreement for such services.
… the outside “person” the appraiser contracts with to gather information must be “an individual who may perform appraisal-related work in compliance with VA policies, USPAP, state, and local laws,” such as “another VA fee panel appraiser licensed in that jurisdiction, a non-VA fee panel appraiser licensed in that jurisdiction, or an appraisal trainee/apprentice registered or otherwise authorized to provide valuations in that jurisdiction.”
To read more, click here
Lots more details than the brief Housing Wire article I recently linked to. Worth reading, even if you don’t do VA appraisals for the bifurcated comments
Buyer Beware The Technology
By Steve Smith MAI, SRA
Excerpt: …loan production appraisals have long had a form. Tens of thousands of appraisers have made a living filling out the form. Now, the users of appraisal services are using advanced technology to marginalize their need for appraisers. After all 98% of the time they simply hit the Sales Price or higher. Who needs them on a Sale?
Well, what if the buyer is uninformed and not operating in their own best interest. What if the buyer has had their Hot Buttons pushed to get them to sign up for the purchase; and are silently waiting for the appraisal to come in to find out If it was worth it? ? ? (Gulp, OMG, no one told me, yikes).
When markets are hot, agents are really, really good at pushing hot buttons and getting buyers to bid full price or over bid…
To read more, click here
My comment: I have known Steve for many years and have taken some of his classes. He is very active on my favorite email chat group National Appraisers Forum. For more info on the group, click here
Old Habits & Past Mistakes
By Mark Skapinetz
Excerpt: Learning from your mistakes is all part of the change. You can’t change past mistakes, but you can certainly make sure the future doesn’t include them…
See, we as appraisers are creatures of habit. Well, let me rephrase that, we as humans are creatures of habit and even with a change for good your old habits seem to stick around. The saying “Old Habits Die Hard” is used to say that it is hard to stop doing things that one has been doing for a long time. Let me tell you that this is 100% true. You see, even when you make a change in your life, whether it be to stop smoking, hit the gym, find better clients, or respond to that annoying email, you tend to still lean on what you were accustomed to instead of developing a new way to either approach that task or respond to it.
To read more, click here
My comments: I have been saying this for a long time. When you get upset, who loses? You do. Upset, can’t concentrate, complain to family, friends and other appraisers (especially online). Stress is very bad for your body and your mind. Independent fee appraisers choose who they work for and what appraisals they accept. No excuse.
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Recent Articles on How to Make More Money in Your Appraisal Business!!
• Lots of ways to cut costs, and increase profits and cash flow
• Most appraisers focus on completing appraisals, not the business side of their companies, and make less money
• 2019 year-end tax planning for appraisers. It’s not too late to save on your 2019 taxes
• Who’s on your Approved Client list and why? Don’t work for low fees with lots of hassles!
• New Year’s Resolutions. Set goals for 2020 and how you will accomplish them
When I got my MBA in 1980 I started looking at everything from a business point of view. Can’t seem to shut it off. Even in restaurants I have to look at the menus, table layout, service, etc. ;>
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Affordable Mansions?! Top 10 Cities Where Big Homes Sell for Small Sums
Excerpt: Much like “jumbo shrimp,” “civil war,” or “working vacation,” the phrase “affordable mansion” seems the most moronic of oxymorons. But we’re here to tell you: It’s a real thing! Contrary to popular belief, buying a great big house of your own does not require a winning Mega Millions ticket or fat trust fund. You just need to look in the right places.
Here are a few:
- Dayton, OH Median mansion price: $629,000
- Louisville, KY Median mansion price: $765,000
- 10. Little Rock, AR Median mansion price: $875,000
For more info,and fotos click here
My comment: nothing on the West Coast, of course.. Median price in my area is around $800,000. I keep telling myself those mansions require too much maintenance and need a cleaning staff to keep them tidy. But…. I secretly would love to own one ;>
A Malibu house shaped like a pyramid seeks $2.3 million
Excerpt: Designed and built by a husband and wife team of engineers in 1982, the two-story pyramid at 24861 Rotunda Mesa Road has 3,727 square feet of living space. The house contains three bedrooms and bathrooms, an open floor plan and an infusion of spiritual elements.
Among these is a front door with a round glass panel that depicts a repeating pattern of circles around a central point. In addition to that symbol known as the Flower of Life, there’s an inlay analemma solar calendar on the stone floor of the great room.
To check out the fotos (especially the interior) etc, click here
What is “retirement” for appraisers??
An Appraiser’s Full Circle
By Mike Foil
Excerpt: A couple of years ago, I asked my brother who had just closed his business, “How do you know when you are done and it’s time to retire?” He answered, “When it is time, you will know.”
There are considerations: health, finances, what to do, and the passion you still have for appraising. I’m turning 70 in a few months and enjoy good health. We see a path financially without the need for appraisal fees; however, having just received payment for the last file in accounts receivable did put a stamp of finality on the decision. I have ‘projects’ to work on: thinning trees and brush on four acres I want to split into three building sites, writing a study on “The Salvation of the Soul,” and family time (wife, kids, and 16 grandkids). As for my passion for appraising, it is gone.
To read more, click here
Appraising in Retirement
by Isaac Peck
Excerpt: According to the Appraisal Institute’s latest Valuation Professional Factsheet (Dec. 2018), over 70 percent of all licensed or credentialed appraisers across the U.S. are over 50 years old, with over 20 percent being over 66 years old. As appraiser demographics continue to shift older and grayer, some within the industry have predicted sharp declines in the number of practicing appraisers as they begin to retire. However, as the numbers show, appraising appears to be an optimal career to continue part time, in retirement.
Melvyn Wolf, a Certified Residential appraiser, licensed in Illinois and Wisconsin, is one such appraiser. Born in 1942, Wolf is 77 years old and has been a real estate appraiser for 33 years. He says he will continue appraising as long as he is physically fit and in good health. Here’s his story.
To read more, click here
My comments: The July 2018 issue of Appraisal Today had my article: “Retirement for fee appraisers: when, why, and lots of options”. I discussed when to take social security, fixed costs, burnout, spouse retirement, etc. Also, for self employed people what does retirement mean? For appraisers, including myself, often you gradually cut back on appraisals. I am 76 and started Social Security at age 70. It is currently $3,470 per month and 85% taxable. It goes on top of my business income and puts me in a high h marginal tax rate. I can’t cut back easily on my newsletter business, so I do fewer appraisals.
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 email@example.com . Or call 800-839-0227, MTW 7AM to noon, Pacific time.
Mortgage applications increased 3.8 percent from one week earlier,
WASHINGTON, D.C. (December 11, 2019) – Mortgage applications increased 3.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 6, 2019. The results for the week ending November 29, 2019 included an adjustment for the Thanksgiving holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 3.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 47 percent compared with the previous week. The Refinance Index increased 9 percent from the previous week and was 146 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 0.4 percent from one week earlier. The unadjusted Purchase Index increased 35 percent compared with the previous week and was 5 percent higher than the same week one year ago.
“Low mortgage rates continue to be the trend as 2019 comes to an end, and mortgage applications responded accordingly last week, rising 3.8 percent. The 30-year fixed mortgage rate remained under 4 percent for the fourth straight week, and rates for FHA loans declined close to their lowest level of the year. The decrease in FHA rates led to a 27 percent jump in refinance applications for those loans, and their share of refinance activity – at 14 percent – was the highest since 2016,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase applications were down slightly, but were 5 percent higher than a year ago, which is in line with the gradual growth in the purchase market seen throughout this year.”
Added Kan, “The November jobs data showed increased payroll gains and low unemployment, which means conditions remain favorable for steady purchase growth in the coming months.”
The refinance share of mortgage activity increased to 62.4 percent of total applications from 59.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.0 percent of total applications.
The FHA share of total applications increased to 13.9 percent from 12.0 percent the week prior. The VA share of total applications decreased to 12.4 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) increased to 3.98 percent from 3.97 percent, with points increasing to 0.33 from 0.32 (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) decreased to 3.90 percent from 3.91 percent, with points increasing to 0.27 from 0.26 (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 3.79 percent from 3.83 percent, with points decreasing to 0.27 from 0.31 (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 remained unchanged at 3.37 percent, with points increasing to 0.30 from 0.28 (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 3.52 percent from 3.28 percent, with points decreasing to 0.24 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
Please Note: MBA Offices will be closed Tuesday, December 24, 2019 and will reopen on Thursday, January 2, 2020. Due to the holiday, the results for the week ending December 20, 2019 will be released on December 26, 2019. Results for weeks ending December 27, 2019 and January 3, 2020 will be released on January 8, 2020.
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