Question: Can it count in the square footage?
By Ryan Lundquist
Excerpts: Can you include it in the square footage? I get questions like this almost every week. Is it okay to count an accessory dwelling in the living area? What about a pool house? How about a man cave or she shed? Let’s talk about this.
The straight dope: It’s tempting to lump something else in the backyard into the square footage, but that’s not appropriate per ANSI measuring standards. Suppose you have to walk outside of the house into something else that is not directly accessible to the house. In that case, we’re really dealing with something that isn’t considered to be a part of the main house…
To read more, click here
My comments: Written for homeowners, but has some good remarks on square footage, such as “lumped square footage” in MLS. What is Included in Appraisal Square Footage can be tricky and controversial. It can also vary by geographic area.
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NOTE: Please scroll down to read the other sections of this long blog post: Appraisers sues for overtime, Appraisal bias?, Fees, Strange house, Covid tips for appraisers, mortgage loan origination stats, etc.
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Commercial Appraisal Firm Sues Former Staff Appraiser for Taking Clients, and Appraiser Sues Back for Not Being Paid Overtime
The New Normal for Appraiser Employment Litigation??
By Peter Christensen
Excerpt: … The first signs that overtime litigation would become a widespread and significant legal problem for appraisal firms (and AMCs) came in 2012. As appraisers were being laid off at some large firms and suits started being filed. Then, in 2013, a collective action seeking unpaid overtime was filed against Bank of America and its AMC/appraisal firm LandSafe Appraisal Services
To read more, click here
My comments: I have been writing about these issues since I started my paid monthly newsletter in 1992. I have free article on independent contractors and other related topics at www.appraisaltoday.com/biz-tips
The article is a bit “dense” with legal discussion but worth reading. Not paying overtime and “stealing” clients are topics that have been around for a long, long time. I monitored my appraisal employees to ensure they did not work over the allowed hours per week, so I did not have to pay them overtime.
Be sure to check out the Web site links at the top of the article page: blog, resources, education, etc.
Why is Only One Side of This Story Being Told? Appraisers and alleged racism
Excerpts: There are always two sides to every story; however, understanding is a three-edged sword: your side, their side, and the truth in the middle.
Recently, a wave of news stories about racism in the appraisal profession was brought on by a couple in Jacksonville, Florida. That couple, Abena Horton, a black woman, and her husband Alex Horton, a white male, made claims that an appraiser who first appraised their home came in low on the appraisal due to her race…
Over 30 appraiser comments. To read more, click here
My comment: Of course, appraisers are blamed. I have written about this recent controversy in these email newsletters and my paid monthly newsletter. There was redlining here and in many places up until the 1970s, of course. Appraisers worked for lenders who redlined. But that has significantly changed, especially with Fair Lending laws and regulations. I purchased a home here in 1995 that still had redlining in the title report: No orientals or Negroes allowed to own or live there except as servants. They are still in the title reports, but there has been efforts to make them easier to remove.
Appraisal Organizations Join Forces to Support Training, Ethics to Combat Bias Oct. 16, 2020
Excerpts: “the professional organizations pledge to develop training programs for appraisers covering unconscious bias issues, helping to increase awareness by connecting the appraisal community with thought leaders on bias and discrimination”.
“Acknowledging that bias exists is but one small step. Together with our partners, we commit to doing the hard work of educating our members about the various ways bias can affect their work, and provide them the tools necessary to overcome bias….”
To read more in the press release, click here
My comments: I am waiting to find out about appraiser bias from the appraiser associations. I don’t know what they would say or teach. Of course, there is Black racism here on many levels, starting with 1619 when the first slaves arrived here. It is our Original Sin.
I am prejudiced against young black men, although I was raised to treat everyone equally with no prejudice. I found out about myself many years ago when I was on criminal jury duty. A young black man, the defendant, walked in, and I thought he was guilty immediately. I asked to be excused from the trial while sitting in the jury box. I was very embarrassed and upset. I don’t ever act on my prejudice, but I can still feel it. For example, I don’t go to the other side of the street when I see a young black man approaching, but am still a bit nervous. I could use help overcoming this.
But, I don’t think this ever affected my appraisals. I worked for many years in neighborhoods, in Oakland CA, that had many Black residents.
In another instance relating to jury duty, I realized that I was opposed to the death penalty. The juror questionnaire asked about the death penalty. I knew then that I could never sentence someone to death no matter who it was or what they did. Previously, I supported the death penalty.
I have only served on a jury a few times, but it was very worthwhile. I consider it my responsibility as a citizen of the U. S. and never try to “avoid” it.
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2020 New Articles
- But Fannie Mae says I don’t have to do the Cost Approach!!
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Is It Creepy To Live in a Place Where Coffins Are Sold?
Excerpts: An old stone building just outside Pittsburgh with more than 6,400 square feet of space could be a great candidate for conversion into a single-family home. But it might give you the heebie-jeebies.
Built in 1930, the building on Seventh Street in McKees Rocks, PA, has been a funeral home for decades.The first floor functions as the current funeral home space and measures 4,400 square feet.
To read more and see photos, click here
My Comments: Don’t ask me about the highest and best use!!! It can be done, but lots of time thinking and working on it. This is my first pre-Halloween link. I don’t know about trick or treaters, or parties, but it is Still Halloween!!!
New Appellate Decision – Louisiana Real Estate Appraisers Board (LREAB) v FTC
By Peter Christensen
Excerpts: A federal appellate court – the U.S. Court of Appeals for the 5th Circuit – has issued a decision in the long-standing fight between the Louisiana Real Estate Appraisers Board (LREAB) and the U.S. Federal Trade Commission about “customary and reasonable” appraisal fees. I’m venturing here to provide a short, understandable, unbiased summary of the litigation and what this latest court decision means…
Even without a final order on the issue of whether LREAB engaged in unlawful price-fixing, state appraiser boards in other states already seem to have been hesitant with regard to aggressive application of their own customary and reasonable fee rules/regulations. This appears particularly true in other states in which “market participants” – appraisers – serve on boards with power to discipline AMCs.
To read more, click here
My comment: Peter has lots of good information, classes, etc. at www.valuationlegal.com
COVID-19 Recent posts covidscienceblog.com
New this week:
Don’t Mess With Dr. Fauci! – 10-25-20 13 min. 28-second segment on 60 Minutes.
Excerpt: The interview is very personal and includes his wife (a bioethicist), who seldom speaks. He and his wife have had death threats, and his adult children have been harassed.
Fauci mentions the White House “super spreader” plus other sorts of politically related topics. He has always been No Politics Allowed. However, a Trump ad used a quote, out of context, that he supported Trump. I guess almost everyone has some things they cannot take without speaking back!
To watch the interview and read more, click here
Note: Worth waiting for 30 second ad to finish.
Overweight Covid Risk Get your BMI to find out!
Updated from last week’s email newsletter on this topic.
More than one-third of adults in the United States are obese. In the United States, 36.5 percent of adults are obese. Another 32.5 percent of American adults are overweight. In all, more than two-thirds of adults in the United States are overweight or obese.
Very interesting podcast discussing obesity and overweight in the U.S. and all over the world “Obesity and Overweight COVID-19 Risks” Plus related article and link to research.
To read more, click here
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 firstname.lastname@example.org . Or call 800-839-0227, MTW 7AM to noon, Pacific time.Mortgage applications decreased 0.6 percent from one week earlier
WASHINGTON, D.C. (October 21, 2020) – Mortgage applications decreased 0.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 16, 2020.
The Market Composite Index, a measure of mortgage loan application volume, decreased 0.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index increased 0.2 percent from the previous week and was 74 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 26 percent higher than the same week one year ago.
“Mortgage rates increased last week, with the 30-year fixed rate climbing 2 basis points to 3.02 percent – the highest since late September. Despite the uptick in rates, refinance activity held steady, with FHA refinance applications posting a 17.6 percent increase, helping to offset declines in the other loan types,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Homebuyer demand remains strong this fall, but purchase applications did decrease 2 percent, with both conventional and government purchase activity taking a step back. Given the ongoing housing market recovery and low rate environment, both purchase and refinance applications remained robust compared to a year ago, rising 26 percent and 74 percent, respectively.”
The refinance share of mortgage activity increased to 66.1 percent of total applications from 65.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 1.9 percent of total applications.
The FHA share of total applications increased to 11.8 percent from 10.7 percent the week prior. The VA share of total applications decreased to 12.6 percent from 13.4 percent the week prior. The USDA share of total applications decreased to 0.5 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) increased to 3.02 percent from 3.00 percent, with points increasing to 0.36 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 $510,400) increased to 3.33 percent from 3.30 percent, with points decreasing to 0.30 from 0.35 (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 remained
unchanged at 3.12 percent, with points remaining unchanged at 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 2.61 percent from 2.59 percent, with points decreasing to 0.31 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 2.86 percent from 2.63 percent, with points remaining unchanged at 0.58 (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.
Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501