Excerpt: Believe or don’t believe. Is there a parallel between appraisals and how people respond to pandemic warnings? Defiant vs. Compliant Appraisers?

Appraisal reviewers decide whether an appraisal is “worthy of belief” (“credible”) or not. Similarly, people decide whether to believe in the need for public health orders.

Steven Dinkin (president of the National Conflict Resolution Center) recently had some observations on the public’s response to the pandemic, dividing people into two groups: defiant or compliant. What is interesting is that each group has a belief that their thinking is the right thinking. Their opinion is the right opinion.

Let’s look first at the “defiants.” Some of these are defiant out of economic necessity – money. The need to eat can trump health risk. (Especially if the health risk is to other nameless strangers. “They have to take care of themselves.”) Guess what – food on the table comes first…

To read more, click here

My comment: I see a lot of appraiser comments online on both sides of controversial issues, including sometimes “sharp words”. Fortunately, almost all online appraisal places I go are moderated. Very negative or “flaming” posts are deleted. Sometimes appraisers are removed from the group after a few warnings.

The June issue of the monthly Paid Appraisal Today will have an article on this topic: “How to connect with appraisers online. What’s the best way for you?” I last wrote about this in January 2018. There have been a lot of changes since then!!

George Dell had a much longer article in the May issue of the Paid Appraisal Today.

Strange Appraisal Terms(Opens in a new browser tab)Humor

What to Do When Your Appraisal Is Under Review(Opens in a new browser tab)

Which Appraisal Clients are used the most?(Opens in a new browser tab)

To read lots more in this appraisal post, click read more below!!

To read about House with a BSDM basement, sales going over list price , mortgage lending forecasts, COVID Modified Scope of Work requirements, etc. scroll down the page! To read about Covid and Appraisers, go to my new Covid blog at covidscienceblog.com

Subscribe to this blog (upper right of this page) and get all the posts when they are posted!!


Mortgage refinancings set to surge to a 17-year high

Lenders probably will originate $1.5 trillion in refis, a 51% jump from 2019, Fannie Mae says

Excerpt: Even as other parts of the economy tank, lenders will originate $1.5 trillion in refis in 2020, a 51% jump from 2019, according to the forecast. That would be the highest level since 2003 when $2.5 trillion of mortgages were refinanced, according to data from the Mortgage Bankers Association.

The lowest interest rates on record will bolster refis after the Federal Reserve began buying mortgage-backed securities to stimulate bond demand and grease the wheels of the credit markets. The average U.S. rate for a 30-year fixed mortgage fell to an all-time low of 3.23% at the end of April, according to Freddie Mac.

It’s probably heading even lower, according to the Fannie Mae forecast. The average rate probably will be 3.2% in the second quarter, down from 3.5% in the first quarter, and drop for the rest of the year.

To read more, click here

My Comment: And I thought my 3.5% rate loan was a low rate!! Everyone should refi!! Appraisers will be very busy!! Maybe more lenders will order external and desktop appraisals.


Will Sex Sell? BDSM Dungeon in Arkansas Basement

Excerpts: A hidden door gives access to the dungeon, leading down a spiral staircase. At the bottom is a full nightclub, outfitted with an entertainer’s pole, along with custom-BDSM furniture Shayne made himself.

The couple says the neighborhood is quiet and an excellent place to raise a family.

Some of their neighbors know about the dungeon, and a few have been invited over. The space isn’t a dirty secret, and the couple is happy to talk about it with anyone who shows interest.

Despite the fact that the surrounding community is largely conservative, Shayne says the couple has had “zero negative feedback ”

For more info and lotsa fotos click here


HUD Extends Appraisal Inspection Options Until June 30

Dated: May 14, 2020

Excerpt: The extension of Appraisal guidance in Mortgagee Letter 2020-05 is effective immediately for appraisal inspections completed on or before June 30, 2020.

The guidance is included in Mortgagee Letter 2020-14.

To read more, click here

My comment: You may consider not doing FHA appraisals as they take more time in the house and are more risky for your health and safety. The less time the lower the risk.Getting too many ad-only emails?


Appraisal Today newsletter

Fannie Changes for appraisers – what they are
and what they mean for you

The COVID Modified Scope of Work requirements are a significant change for appraisers


  • Why was the modified scope of work set up by Fannie?
  • When will we go back to the way it was before?
  • Should you do interior inspections?
  • Should you do exterior and desktops?
  • Problems with exterior only
  • Who decides what type of appraisal is done?
  • What types of statements should be in your appraisals and where should you put them?

I only have room in these email newsletters for links and a few comments about all the changes. I research and analyze the changes including what they mean for you. I attend many webinars (average 3 a week), watch videos, speak with “insiders” and read extensively about the issues. I can help you understand what is happening and,

more important, help you decide what is best!

To read the full article, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.

If this articles helped you understand the changes and what they mean for you, it is worth the subscription price!!Not sure if you want to subscribe?

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Click here for more info!If you are a paid subscriber and did not get the May issue, emailed Friday, May 1, 2020, please send an email to info@appraisaltoday.com and we will send it to you!! Or, hit the reply button. Be sure to put in a comment requesting it.


What’s happening in your market? Down, Up, Or Who Knows??

May 14, 2020 By Ryan Lundquist

Excerpts: Surprised. That’s how many people seem to feel about the housing market since it’s way more competitive than we thought it would be for a pandemic. In fact, some buyers think they’re about to score the deal of a century until they start shopping and realize we don’t have that sort of market right now.

Look, I’m not wearing rose-colored lenses. I’m not saying the housing market is perfectly healthy or there aren’t glaring red flags on the horizon. I’m just saying there is a sense of shock right now that the market has felt as strong as it has for these past two months.

Two quick things:

1) Imposing headlines: There are lots of sensational headlines, but we need to be cautious about imposing them on the market. What I mean it’s easy to read a headline about the housing market being doomed because of XYZ, and then we expect to see certain trends in the local market. My advice? Look to local data instead and let the numbers form your perception and narrative of the market.

2) Be objective: Every week there’s a new viral idea about the future, but we have to wait and see what happens.

To read more and see how Ryan explains his market with graphs and a video click here

My comment: Ryan is the only appraiser I know who regularly posts in his blog about how to analyze market conditions with text, tables, graphs and videos of his frequent presentations.


Bidding wars in a pandemic? Housing is heating up fast

May 20

Excerpts: More than 41% of homes faced a bidding war in the four weeks ending May 10, according to Redfin. That’s up from just 9% in January, before the pandemic hit the U.S…

After the housing market nearly shut down in April, competition is back with a fury.

States are loosening social distancing restrictions and homebuyers are rushing to open houses again. The trouble is, they’re not finding much to buy.

To read more, click here


NAR National Housing Forecast 2020: Ups and downs as housing markets find their footing in response to COVID-19


  • Home price growth will flatten, with a forecasted increase of 1.1 percent
  • Inventory will remain low, but the rate of decline steadies and the mix of homes for sale shifts toward greater availability of lower-priced homes
  • Mortgage rates remain low and may slide under 3 percent by the end of the year
  • Home sales are constrained by low inventory and diminished seller and buyer confidence as the effects of COVID linger in the labor market
  • Buyers seeking affordability and space drive interest in the suburbs

Written by NAR’s Chief economist. Good analysis of market factors n a national level.

To read more, click here


Mortgage delinquencies nearly double in April on COVID-19 shock

About 3.6 million borrowers were past due in a tally that includes forbearances.

Excerpt: 3.6 million homeowners were past due on their mortgages as of the end of April, the largest number since January 2015.

The number includes both homeowners past due on mortgage payments who are not in forbearance, as well as those in forbearance plans who did not make an April mortgage payment

At 6.45%, the national delinquency rate nearly doubled (+3.06%) from March, the largest single-month increase ever recorded, and nearly three times the previous single-month record set back in late 2008

Delinquency increases in Nevada (+5.2%), New Jersey (+5.1%), and New York (+4.9%) led the states, while Miami (+7.2%), Las Vegas (+6.2%) and New York City (+5.4%) topped the 100 largest metro areas

To see the graphs and tables click here


My comments on the stories above:

I am hearing savvy real estate agents say that virtual tours are okay. Our California stay-in-place orders now allow 2 people to go inside a listing, being careful with masks, sanitizer, gloves, etc.

Of course, we all remember the big crash of 2007-2008, but that was very, very different than today. Back then, appraisers had been trying to tell everyone that the home values were too high, mostly due to mortgage broker pressure for high appraisals. Plus, of course, inflated borrower incomes due to fake small businesses, etc. Appraisers have experience with home prices going up and down, for various reason. But 2008 was the first time since the Great Depression that prices all over the country were affected. That’s why the data scientists missed it. Did not include Great Depression data.

But, today is very, very different. No one knows when the pandemic will be over. We have not had a pandemic in this country since 1918. No data on home prices, etc. from that time plus very limited data of any kind except number of deaths.

The effects of the current pandemic on home values is very unpredictable. There are too many factors: unemployment rate high (especially for lower wage jobs), companies going out of business, etc. Plus, what will happen when unemployment runs out and people have no money to buy food or pay rent? On the other side are those who are doing well financially, including residential lender appraisers in essential businesses. Or, people working at home getting full salary. Opening up of the economy in many areas is another unknown factor.

People with home mortgages (especially if government backed) can use forbearance for up to a year and add the missed payments to their mortgage balances. What effect will this have? The significant lags in getting unemployment payments started is a big problem for some people now. One of my nephews finally got his started after waiting for 3 months. He was almost out of money.

I was expecting price declines, like most people. In my market, spring is always the best time to sell. But, our inventory has been very low for quite a while. Looking at the ratio of listings to pendings today show a lot more pendings than listings. Some sales are going over list price. This varies by sales price and neighborhood of course. Also, condos vs. detached homes.

In other markets in California, prices are declining slightly. It varies a lot around the country.

The July paid Appraisal Today newsletter will focus on how to figure out your local market and what to put into your report. Some are suggesting that the 1004mc is useful in today’s market to get an overall picture. We went through the 2008 mess, when many appraisers missed (or did not report) declining prices. We know what to do. Keep a close watch for any signs of price declines. Or, any market changes.

DO NOT SAY IN YOUR APPRAISALS “I DON’T KNOW THE EFFECT OF THE CORONA VIRUS” WHEN YOU DO (OR SHOULD) KNOW WHAT IS HAPPENING NOW” Report what you see today. Even if there are no listings, pendings, sales or expired. Do a broker survey and see what they say. Include it in your appraisals.

I will have some advice in the June newsletter about what to say in your appraisals.

I am so glad I don’t do relocation appraisals any more, when you are required to forecast 90 to 120 days in the future!!


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 www.mbaa.org 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 info@appraisaltoday.com . Or call 800-839-0227, MTW 7AM to noon, Pacific time.

Mortgage applications decreased 2.6 percent from one week earlier

WASHINGTON, D.C. (May 20, 2020) – Mortgage applications decreased 2.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 15, 2020.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 6 percent from the previous week and was 160 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 6 percent from one week earlier. The unadjusted Purchase Index increased 6 percent compared with the previous week and was 1.5 percent lower than the same week one year ago.

“Applications for home purchases continue to recover from April’s sizeable drop and have now increased for five consecutive weeks. Purchase activity – which was 35 percent below year-ago levels six weeks ago – increased across all loan types and was only 1.5 percent lower than last year,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Government purchase applications, which include FHA, VA, and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months. As states gradually reopen and both home buyer and seller activity increases, we will be closely watching to see if these positive trends continue, or if they reflect shorter-term, pent-up demand.”

Added Kan, “Despite mortgage rates remaining close to record-lows, refinance activity slid to its lowest level in over a month. The average loan amount for refinances fell to its lowest level since January – potentially a sign that part of the drop was attributable to a retreat in cash-out refinance lending as credit conditions tighten. We still expect a strong pace of refinancing for the remainder of the year because of low mortgage rates. With many homeowners still facing economic and employment uncertainty, these refinance opportunities will allow them to save money on their monthly payments, which can then be used to help other areas of their budgets.”

The refinance share of mortgage activity decreased to 64.3 percent of total applications from 67.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.2 percent of total applications.

Looking at the impact at the state level, here are results showing the non-seasonally adjusted, week-over- week percent change in the number of purchase applications from Washington, California and New York:

The FHA share of total applications remained unchanged from 11.5 percent the week prior. The VA share of total applications decreased to 13.4 percent from 13.7 percent the week prior. The USDA share of total applications increased to 0.7 percent from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.41 percent from 3.43 percent, with points increasing to 0.33 from 0.29 (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 $510,400) decreased to 3.66 percent from 3.69 percent, with points increasing to 0.37 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 30-year fixed-rate mortgages backed by the FHA increased to 3.46 percent from 3.37 percent, with points increasing to 0.33 from 0.21 (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 2.88 percent from 2.92 percent, with points decreasing to 0.27 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 decreased to 3.19 percent from 3.26 percent, with points decreasing to -0.05 from 0.04 (including the origination fee) for 80 percent LTV loans. The effective rate decreased 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

1826 Clement Ave. Suite 203 Alameda, CA 94501

Phone 510-865-8041

Email  ann@appraisaltoday.com 


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