Excerpts: Residential appraisers will often — if not just about always — have their work reviewed by another appraiser. Usually, this is a routine procedure that the original appraiser barely notices. Sometimes, the review appraiser will come back with requests for extra information, or doubts, that the original appraiser might find annoying. To be sure, the reviewer’s questions might sometimes seem nit-picky, and answering them can distract from other work. However, the issues the reviewer raises almost always turn out to be legitimate. What to Do When Your Appraisal Is Under Review
We asked review appraiser Doug Nakashima (Glenview, Illinois) for advice on how to make reviews as painless as possible if you’re the one being reviewed.
Topics:
- Remember that reviewers are on your side
- Look out for these common points of contention
- Avoid future revision requests
To read more, click here
My comments: Sorry, no comments section for ranting, etc. ;>
If you’re doing AMC work, the tough appraisals tend to go to reviewers. The first “reviews” are from underwriters, clerks, computer software, etc.
I don’t know of any other profession where almost all reports are reviewed by clients. Personally, I think it has resulted in appraisers being overly critical of other appraisers’ work, state boards sometimes being too aggressive, etc. Worse, some appraisers try to send in reports with as as few “problems” as possible, to minimize call backs and doing whatever it takes.
Review appraiser liability(Opens in a new browser tab)
Appraisal Process Challenges(Opens in a new browser tab)
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NOTE: Please scroll down to read the other sections of this long blog post on VA appraisals, appraisers in a new movie, 8 private islands, using graphs, mortgage origination stats, Covid tips for appraisers, etc.
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Have You Reviewed these Sales? (Part 2)
Handling ROVs and Alternative Sales Requests
Excerpt: Why is this such a hot button issue for appraisers? Precisely because these types of requests are becoming more and more commonplace in the industry, especially in the current market environment. With inventory currently low in most market areas, amidst an elevated level of demand, appraisers are increasingly facing a barrage of additional sales and reconsideration of value (ROV) requests from AMCs and underwriters.
This not only saps the appraiser’s time by having to repeatedly explain and address a laundry list of inapplicable comparable sales, but it also places undue pressure on the appraiser. So let’s take a closer look at what rules are in place to protect appraisers and clarify the first story.
Fannie and VA requirements plus lots of issues are discussed.
To read more plus any appraiser comments , click here
My comment: Link to first article, published in June, 2020, is in the top line of the text with a few comments near the bottom. I am sooo glad I my appraisals almost never get reviewed!! I had a few reviewed by the IRS. Vacant land with highest and best use issues, of course.
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Podcast: A Look Into the VA with James Heaslet
Excerpt: Interview with James Heaslet, Supervisory Appraiser of the VA, on what’s happening at the VA today and how appraisers can get involved. How would an appraiser apply to be on the VA panel? What is the Tidewater Initiative? How is the VA handling the current pandemic? These questions and much more have been answered by James Heaslet while sharing his expertise on the VA. Length is 32 minutes.
Worth watching. Very informative. Good speaker.
To read more, click here
My comments: Scroll down to the second video image. He speaks in front of a bookcase, as many people do. I always keep looking at the bookshelves (or the cat, stuff on the wall, messy desks, etc) when at zoom meetings and meetups. Are the bookshelves real or virtual backgrounds??
When I used to attend a lot of appraisal national conferences, I regularly spoke with the VA Chief Appraiser, now retired. I learned a lot about VA loans. I have never done VA appraisals, but have written about them in my paid newsletter and interviewed a lot of VA appraisers.
I keep telling appraisers that VA is the best client for residential lending appraisals. Their mission is to help all military personnel help buy houses, not just make money by closing loans. In my area, there are relatively few VA loans due to high housing prices so I never applied to be on their panel.
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Appraisers Featured in “The Con” Docu-Series
Excerpt: The Con is a 5-part series in-depth investigation into the 2008 financial crisis. If you attended the Appraisers Economic Forum, better known as AppraiserFest, in San Antonio, Texas back in October 2018, you may recall a couple of guys with video cameras. Many of the appraisers attending were interviewed for this production.
The 5 part docu-series premiered August 5, 2020 and runs through September 7. Part 1 is free. $20 for the other 4 parts. Appraisers are in part 2.
From Phil Crawford, the AppraiserFest organizer.
“There has never been any movie or series that documents the significant importance of the Appraisal profession like The Con.”
“Thank you Bill Black, Patrick Lovell and Eric Vaughn and congratulations to the appraisers who were featured in the series. You are all Appraiserfest heroes!”
Lots of appraisers are seen in pan shots and some appraisers are featured speakers.
To watch Part 1 for free and the other 4 parts for $20, click here
To find out how this happened, watch Phil Crawford’s Recent Voice of Appraiser (Aug 7, 2020) connecting to the radio station from his new home studio. This is his first recording after 4 months due to the pandemic. 32 minutes. First 12 minutes are about The Con Movie.
My comment: Just Watch It!! When have appraisers been in a movie or documentary relating to their role in the 2008 Mess or Any Mess or Anything at All? The only one I know of was a Sopranos’ episode where Tony was “pressuring” the home appraiser.
Appraisers kept saying mortgage brokers and some lenders were getting high appraisals and were threatening appraisers with no more work if they did not do what they wanted. Some appraisers went out of business because they refused to lie about market conditions when prices were dropping. A friend worked for a while in a business staffed with CPAs making up bogus businesses so borrowers could qualify for loans. I worked for local lenders and never did mortgage broker work, so I was lucky. Getting too many ad-only emails?
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Increase Profits In Your Appraisal Business!!
Most appraisers are very busy and are billing out lots of appraisals. But, can you increase your profits (income after expenses) by dumping low paying and/or big hassle AMC clients,, cutting your costs, etc.?
Lots of ideas in articles in the Paid Monthly Appraisal Today Newsletter, such as:
• Practical tips you can use today for getting more appraisals done and make money
• Staying positive with AMC hassles.
• Most appraisers focus on completing appraisals, not the business side of their companies, and make less money
• Who’s on your Approved Client List and why? Don’t work for low fees with lots of hassles!
• “Retirement” for fee appraisers: when, why, and lots of options
• E&O Insurance Update – Where to Get E&O insurance, State Board Complaints, Your Biggest Risks, Etc.
• Lots of ways to cut costs, and increase profits and cash flow
• How to use less gasoline and save money today!
• Disability – your greatest risk
• How to collect all your billings. Don’t work for free!!!
To read the full articles, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
If this article gave you one good idea about increasing your profits, it is worth the subscription price!!
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9 Private Islands Priced Below $400,000
Take a break and dream about escaping from your daily life!!
Excerpts: You don’t have to be a millionaire to isolate yourself on your own private island. In fact, you can separate yourself from the mainland for a lot less than you might expect.
Come sail away to a bungalow on a 3-acre island in the middle of a freshwater lake in Florida, retreats in both Maine and Minnesota, and a romantic getaway for two in New York.
Here is one (photo above):
Private Island, Tower, MN
Price: $398,500
Lake Vermilion cabins: One of the larger islands on our list, this property on Lake Vermilion spans more than 5 acres. It includes a vintage boathouse, a guest cabin, and a two-bedroom main cabin. The parklike grounds are filled with white pines and rock outcroppings.
To read more, click here
My comment: I live on a much larger mostly developed island with about 78,000 people. I want My Own Private Island to Escape To!!
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Excerpt: The “hidden factor” may be that the GSEs and banks would love to have appraisers (or others) collect and improve data — while automated algorithmic programmatic whizbangs would do the rest. The improved data is collected and computated. Faster, cheaper, and under better control of the users. (You want to read my earlier earlier thoughts on hybrid appraisal? Start Here)
For this discussion, let’s include this ‘hidden’ aspect of what we called hybrid appraisals. So, we have a: data collection person, local (appraiser) analysis, and central (GSE) analysis.
To read more, click here
My comment: Per the recent Fannie Update, discussed in the previous free email newsletter, it looks like Fannie is returning to hybrids. They stopped working on it a while ago. I suspect it is because the Covid alternate appraisals (exterior only and desktop) where the home owner takes interior photos and appraisers interview the home owner are doing very well.
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Make a Box and Whisker Graph Your Friend!
By Tim Andersen, MAI
Excerpts: Consider the lowly box-and-whisker (B&W) graph. From any spreadsheet program, it is easy to make (it is part of the graphing function). You’ll find it easy to read, too. Clients generally understand it since it so clearly announces its own purpose. From it, the appraiser gets an instant picture of the high and low extremes of a neighborhood’s comparable and competitive sales, as well as where most of those sales lie within an indicated range.
Use of a B&W graph aids the appraiser to communicate what the 1004 form wants in the neighborhood analysis. This is a quote directly from Fannie’s Selling Guide (Trends of Neighborhood Property Values, Demand/Supply, and Marketing Time):
“…lenders must confirm that the appraiser analyzes listings and contract sales as well as closed or settled sales, and uses the most recent and similar sales available…When completing the One-Unit Housing Trends [the appraiser] must reflect those properties from the same segment of the market as the [subject]. This ensures that the analysis being performed is based on competitive properties…” (italics added).
To read more, click here
My comment: Short and easy to read. Tim is “the” USPAP expert and consults with appraisers, especially regarding state board complaints. He writes articles for my paid Appraisal Today. He also has very, very creative titles for his writings! After 45 years of appraising and lots of statistics classes, I had never heard of a box and whisker graph, but I love the name now ;>
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Fauci Tracker
Fauci says despite the upcoming election, science will not be politicized. August 13, 2020 (video interview – 13 min. 27 sec.)
When people ask me about the best source of scientific information on Covid, I always say Dr. Fauci. He is a very reliable source for the “big picture” including forecasts, but interviews with him can be hard to find. I will now let readers know how to find them. He is an “insider” who is on the White House Coronavirus Task Force, plus does Covid vaccine research in his lab.
I have been obsessed with the science of Covid since January. I listen to podcasts, read articles (and the original reasearch studies), and watch video interviews. But, I like to write longer articles with lots of details. Fauci explains topics so everyone can understand what is happening now and his forecasts for the future.
Here is the most recent very good interview on PBS Newshour August 13, 2020. He hits all the hottest topics: school re-opening, vaccines, when will the pandemic end, etc. I don’t always agree with what he says (I am a little more optimistic than him), but I agree with everything in this interview.
Click here to watch the interview and read about what he said.
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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 increased 6.8 percent from one week earlier
WASHINGTON, D.C. (August 12, 2020) – Mortgage applications increased 6.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 7, 2020.
The Market Composite Index, a measure of mortgage loan application volume, increased 6.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6 percent compared with the previous week. The Refinance Index increased 9 percent from the previous week and was 47 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 22 percent higher than the same week one year ago.
“Mortgage rates fell across the board last week, as investors grew less optimistic of the economic rebound given the resurgence of virus cases. Loan types such as the 30-year fixed, 15-year fixed, and jumbo all reached survey lows. Refi activity responded to these lower rates, with the refi share reaching almost 66 percent of all applications, its highest level since May. And the refi index jumped 9 percent, reaching its highest level since April, as both conventional and government applications for refinances increased,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Home purchase activity continued its strong run with a 2 percent increase over the week and was up around 22 percent compared to the same week a year ago. While this was still positive news for the purchase market, the gradual slowdown in the improvement in the job market and tight housing inventory remain a concern for the coming months, even as low mortgage rates continue to provide support.”
The refinance share of mortgage activity increased to 65.7 percent of total applications from 63.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 2.7 percent of total applications.
The FHA share of total applications increased to 10.4 percent from 9.6 percent the week prior. The VA share of total applications increased to 11.4 percent from 11.2 percent the week prior. The USDA share of total applications remained unchanged 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 3.06 percent from 3.14 percent, with points decreasing to 0.33 from 0.39 (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 3.40 percent from 3.51 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 30-year fixed-rate mortgages backed by the FHA decreased to 3.23 percent from 3.27 percent, with points decreasing to 0.33 from 0.42 (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 2.67 percent from 2.73 percent, with points decreasing to 0.35 from 0.37 (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 3.00 percent from 3.09 percent, with points increasing to 0.30 from -0.03 (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
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