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6 Appraiser Tips on Increasing Productivity
6 Ways to Streamline Your Appraisal Workflow
#6. Reduce revision requests
A revision will waste 15 minutes minimum. To reduce revision requests, track your clients’ common questions, and include that information in all reports when applicable. If you work for a lot of different lenders or do a lot of appraisals for lending-related purposes, those clients and intended users are probably asking some of the same questions over and over.
For example, if your clients often ask about septic, go ahead and include a comment about the septic system in your initial report. In other words, answer the question before they ask it.
My comments: Short and well written, worth reading. I have been writing about time management in my Appraisal Today monthly newsletter since June 1992, the first issue. Saving time is a very hot topic now when everyone is very busy. All of my many articles are available free to paid subscribers. They are much longer than this blog post, of course.
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To read more of this long blog post with many topics, click Read More Below!!
NOTE: Please scroll down to read the other topics in this long blog post on Fannie News on Forms and UAD, September Fannie Update, Bias (again), unusual homes, mortgage origination stats, etc.
What’s happening with the UAD and Forms Redesign?
Fannie Mae and Freddie Mac are continuing to work with the industry on the Uniform Appraisal Dataset (UAD) and Forms Redesign initiative.
Here are two ways to learn more about what’s happening with the initiative.
A Conversation About Top UAD Topics: Fannie Mae and Freddie Mac experts Ken DeFeo and Sean Murphy discuss some of the most common industry questions about the UAD work. They explain why it’s being updated and describe some of the key benefits for appraisers, lenders, and other industry stakeholders.
Updated UAD timeline: Fannie Mae and Freddie Mac have updated the UAD redesign timeline to reflect the latest estimates for high-level milestones. Publication of the UAD specification, which will enable software vendors, lenders, and other industry stakeholders to start the planning and implementation process, is estimated to occur in the third quarter of 2022.
Development of the specification and other work on this multi-year industry project continues, with limited production expected to begin in 2024.
My comments: The above is a copy of a Fannie email I received on September 23. I’ve been hearing and writing about this for quite a while. Looks like finally, we have some information on what is happening. The 2005 forms are very outdated. UAD specifications have many problems, including the somewhat obscure codes that are used. Lots of changes are needed!
September Fannie Appraiser Update
Are you accounting for changing market conditions?
HOA, condo, and co-op special assessments and deferred maintenance
AQM letters for improbable appraisal volumes
We want to hear from you about bias (bias survey)
A few excerpts:
We analyzed all appraisals submitted to the Uniform Collateral Data Portal® since February 2021 and found that when Property Values were marked Increasing, only a small fraction included time adjustments.
We have long required that appraisals of condos address special assessments and deferred maintenance because those factors can significantly impact value, marketability, and homeownership sustainability.
Appraisers performing an improbable volume of appraisals may receive letters from Fannie Mae’s Appraiser Quality Management (AQM) team reminding them of their duty to properly disclose any professional assistance, including allowing trainees to sign reports.
Many of the conversations on this topic (Bias) have excluded appraisers. To help us address appraisal bias from all perspectives, we need your input. Click here to answer this anonymous survey about racial bias in appraisals. You may share the link with others. The survey closes on October 3, 2021.
My comments: Short, well written, and worth reading. Excellent advice and reminders of Fannie’s requirements. I have been hearing for a while about appraisers not making market conditions adjustments. I had no idea the increasing prices box on the form was checked with no time adjustments. Now we have some data and analysis.
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Racial and Ethnic Valuation Gaps In Home Purchase Appraisals
Freddie Mac, Sept. 20, 2021
Excerpts: analysis shows that appraisal values are more likely to fall below the contracted sale price of a home in census tracts with a higher share of Black and Latino households, resulting in an appraisal gap. The extent of that gap increases as the percentage of Black and Latino individuals in the census tract increases. The research is based on 12 million appraisals for purchase transactions submitted to Freddie Mac between 2015 and 2020 through the Uniform Collateral Data Portal…
Differences in comparable sale distances, comparable reconciliation, variances in comparable sale prices and possible systematic overpayment for properties by minorities can explain only a modest amount of the observed appraisal gaps for the minority tracts.
My comments: We need access to the GSE appraiser and appraisal data to do our own research!! Will appraisers be eliminated, and AVMs take over? Hybrid/bifurcated will be used, so appraisers never go into houses? See the recent ASC Roundtable below.
Appraisal Subcommittee Fall Roundtable
September 22, 2021
Building a More Equitable Appraisal System to address historical and contemporary factors that have contributed to the inequities challenging the appraisal system today.
I attended this meeting live two days after the Freddie report above was released. I was hoping it would not be another appraiser bashing.
I will never forget the US House Financial Services Committee Hearing on Appraisals on June 20, 2019. The appraisers giving testimony were blindsided by Perry’s Brookings Institute research that there was systemic bias (low valuation) in the real estate transaction market. I attended the meeting live online.
A few tidbits from the ASC Roundtable:
Jim Park’s (with the ASC), final statement: this event started with appraiser bashing and ended with us agreeing we need to work together to find solutions.
The first speaker, Jillian White, SRA, had personal examples. The agent said the marketing time was 3 days. After 110 days, no offers. The agent suggested removing all photos with Black persons. Got an offer very quickly. Refi appraisal was $100,000 low. She requested an ROV and got the value raised. Black homeowner.
4 of the 5 main speakers were Black, including the ASA’s CEO and EVP. The Appraisal Institute’s president was White, of course.
Some speakers focused on unconscious bias.
The banker speaker suggested using the Cost Approach, used for commercial properties such as sports stadiums due to lack of comparable sales. Comps are the “problem.” He did not mention land values.
Hybrid/bifurcated with the appraiser never seeing the inside of the home.
To get a trainee job, you have to know an appraiser. Not a good method. No one mentioned that lenders trained almost all appraisers before the early 90s. What are lenders doing now? The Appraisal Foundations’ training plan, PAREA (Practical Applications of Real Estate Appraisal) has not been implemented by anyone so far.
My favorite speaker was Cate Agnew, a commercial appraiser. “We are beat up and helpless.” Appraisers need to be part of the solution. “Never waste a good crisis.” 1. Get GSE data so we can analyze it. Send a letter about it to your senator or representative. 2. Be willing to take a risk. 3. Ask lenders for more information on assignments to avoid any bias. Lenders need to recognize and find tools for appraisers and challenge low appraisals. AVMs can give data to appraisers, so we don’t miss a comp. Appraiser judgment cannot be replaced.
The zoom video and audio were recorded and hopefully will be available next week. I will put the link in next week’s newsletter. There were over 400 attendees. Many appraisers commented in the chat section. There were some familiar names.
Creepy Doll House
1616 Abadie Ave, Metairie, LA Price: $149,500
Why is it #1 in Realtor.com’s 10 most popular weekly listings. The answer is simple: creepy dolls. When presented with a run-down home, an agent made the best out of a dire situation. Clicks (and an offer) soon followed.
Built in 1966, the now-decrepit dwelling is unremarkable beyond the pair of creepy dolls positioned throughout the listing photos for maximum effect. And as is the case with many homes that have seen better days, the three-bedroom, 1,370-square-foot house is being sold as-is. We assume that includes the dolls.
My comments: I hope you don’t have any bad dreams!! Yes, it is pending. Yes, it is creepy. But it looks like it might not smell really bad. I have appraised lots of hoarder homes. But only a few where I had to go in and out, taking a breath after a few minutes being inside. That is my Bottom Line ;>
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. I have been following this data since 1993. 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 7 AM to noon, Pacific time.
Mortgage applications increased 4.9 percent from one week earlier
WASHINGTON, D.C. (September 22, 2021) – Mortgage applications increased 4.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 17, 2021. The previous week’s results included an adjustment for the Labor Day holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 4.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 16 percent compared with the previous week. The Refinance Index increased 7 percent from the previous week and was 5 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 12 percent compared with the previous week and was 13 percent lower than the same week one year ago.
“There was a resurgence in mortgage applications the week after Labor Day, with activity overall at its highest level in over a month, and purchase applications jumping to a high last seen in April 2021,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Housing demand is strong heading into the fall, despite fast-rising home prices and low inventory. The inventory situation is improving, with more new homes under construction and more homeowners listing their home for sale. Despite this week’s increase, purchase applications were still 13 percent lower than the same week a year ago.”
Added Kan, “Homeowners acted while rates remained low at 3.03 percent. This week’s refinance gain of 7 percent was driven heavily by an increase in FHA and VA applications.”
The refinance share of mortgage activity increased to 66.2 percent of total applications from 64.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 2.9 percent of total applications.
The FHA share of total applications increased to 11.5 percent from 9.9 percent the week prior. The VA share of total applications increased to 10.4 percent from 10.2 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) remained unchanged at 3.03 percent, with points decreasing to 0.30 from 0.32 (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 $548,250) decreased to 3.11 percent from 3.13 percent, with points increasing to 0.25 from 0.21 (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 3.07 percent from 3.04 percent, with points decreasing to 0.25 from 0.27 (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 remained unchanged at 2.34 percent, with points decreasing to 0.24 from 0.29 (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 2.51 percent from 2.68 percent, with points increasing to 0.12 from 0.11 (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.