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NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, Fannie new desktop form, GSEs to use desktops for purchases loans, Time management, Freddie Secret, Liability, mortgage origination stats, etc.
Avoid Time Leaks and Get More Appraisals Done
by Marty Hamilton
Be Ruthless With Your Time
Excerpt: First off, you’re not Genghis Khan, don’t be ruthless with the people around you. A recent study of office workers found that most workers only have about 72 minutes of uninterrupted time each day. Quick math – that’s only about 15% of an eight-hour workday. And it’s even less for people who don’t work typical hours.
When you understand how little time you actually have to work it’s easier to put things into perspective. With that in mind, you can ruthlessly decide on your top priority. Now you can focus on bigger-picture goals.
If you overestimate the time you have to get work done each day, you may also underestimate time leaks. Small time and energy leaks have bigger consequences than you probably realize. The time you spend finding your keys. The email you replied to immediately, even though you could wait. The perfect tweet that takes 10 minutes to craft (you know the one with the clever images and wordplay). These superfluous things can disrupt your flow and sap your energy. And the next thing you know, you’re waking up at three a.m. to get some time to yourself.
To read more, click here
My comment: Some good tips and resources in this short Datamaster blog post. Leaking time is a Big Mess for me :< Where did my time go today, yesterday, and the past hour??
FHFA to make desktop appraisals (not hybrids) permanent for purchase loans: Freddie and Fannie in 2022
FHFA Acting Director Sandra Thompson also announced expansions to the eligibility requirements for refinance programs geared toward low-income borrowers, speaking at the annual MBA conference on October 18, 2021
Both Fannie Mae and Freddie Mac will allow appraisals to be conducted remotely, using public records such as listings and tax appraisals, for purchase loans starting in early 2022.
Allowing desktop appraisals was one of a number of short-term appraisal flexibilities the agency announced in March 2020. Those flexibilities expired earlier this year. But the regulator was apparently moved by feedback it received after its December 2020 request for information on appraisal processes.
“This can help each appraiser complete more loans in a day, and it can also help rural communities more readily obtain a necessary appraisal when the borrower is purchasing a property,” said Thompson. “This certainty should allow lenders, borrowers, and appraisers alike to take advantage of the efficiency gains that desktop appraisals can provide.”
Thompson also announced that Fannie Mae and Freddie Mac would expand the eligibility requirements for refinance programs geared toward low-income borrowers.
To read more from the Housingwire article, click here
To read the full Prepared Remarks of Sandra L. Thompson, Acting Director, FHFA,
Click here Relatively short.
Online appraiser comment:
A new desktop appraisal form was adopted by both GSEs last summer (Freddie Mac calls the form 70D, Fannie Mae calls it 1004 Desktop).
An appraiser studying the details in the SOW and certs in the new desktop form (70D/1004 Desktop) will note at least one significant change- it requires a full floorplan, not just an exterior sketch. This reflects the technologies that have become available that make obtaining a floorplan via scanning with a mobile device relatively easy.
That form was not available for use for COVID flexibilities, as the flexibilities were adopted several months prior to the new desktop form being available in appraisal software.
My comments: Lenders did not do many Covid desktop (or bifurcated) appraisals, except in the northeastern states and a few other states. Most lenders required full appraisals. I quit doing desktop appraisals many years ago. I became an appraiser to work in the field, not at a desk. My appraisals would be much more reliable if I saw the inside of the property. I sometimes wish I was able to do them, especially on those easy suburban tract homes! I have spent 45 years working in the field and guess I can’t adjust to desktops. Also, it often seems like homes look better in photos than in real life, especially if they need work, so someone else taking the interior photos would not work for me. Too Old School I guess. I tried doing “comp checks” (with backup files) in the past but they were always so far off from my full appraisals that my clients quit asking for them.
I like making it easier for lower-income borrowers to refinance with lower interest rates loans as it will reduce their monthly housing costs.
Devoted Husband Builds a Rotating House So His Beloved Wife Can Have a Constantly Changing View
Just For Fun – Watch the house spin at different speeds!!
Devoted husband Vojin Kusic built a lovely house in Srbac, Bosnia for his beloved wife Ljubica that has a green facade, a red roof, and a screened-in porch that sits on an axis that rotates around the open space of their farm.
Situated in fertile plain in northern Bosnia near the town of Srbac, the house spins around a 7-meter axis designed by Kusic, with the view of cornfields and farmland changing to forests and the river at a desired speed. Kusic said that the house can make a full circle in 24 hours when it is set on the slowest speed but while at the fastest spinning, it turns around in 22 seconds.
To read more and watch the 50 second video with different rotation speeds, click here
My comment: I have seen pictures of rotating houses, much more complicated and expensive, but never saw a video with a great story about why it was built!
Appraisal Advice You Can Use Today!!
Practical Appraisal Tips in recent articles
• The Angry Property Owner – What to Do?
• How to Handle Angry Borrowers and Agents
• How to Reduce Your Appraisal Stress. Don’t let clients “Push your button”
• Rising Markets: When My Subject is the New High Sale
• When is It Not Ok to Use a Sale Within a Mile?
• Is It Okay to Compare Two Detached Units With Two Attached Units?
• Don’t Use Weighted Average (automated valuation) From Your Appraisal Forms Software Without Additional Reconciliation Analysis
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THE REASON WHY THERE ARE SO FEW RESIDENTIAL APPRAISER TRAINEES: LENDERS WON’T LET THEM DO APPRAISALS UNTIL CERTIFIED! LENDERS CAN START SOLVING THIS PROBLEM TOMORROW!!
COMMERCIAL TRAINEES CAN WORK ON LENDER APPRAISALS DOING RESEARCH, SPREADSHEETS, INSPECTIONS, ETC. THEY DON’T HAVE TO BE CERTIFIED TO DO APPRAISALS.
I recently got an email from someone wanting to become an appraiser. I get these all the time and assumed it was for residential. When I replied a week later, he had several interviews and one job offer for a commercial appraiser trainee position within about a month. I warned him to be sure the company did not focus on lender appraisals, which tend to have fast turn times and low fees. I have heard about poor-quality appraisals for a while from commercial review appraisers.
I studied science in college and spent my afternoons in labs. After I graduated, I was started in a toxicology lab and did not need training. Appraising is very different. Your employer has to train you. You take appraisal classes, which do not offer any “how to” training. The only appraisal class I took with any field work was at a local junior college when I first started appraising. We had to do an appraisal for the class.
I would have never started appraising without a staff job at an assessor’s office. Before licensing, almost all appraisers were staff appraisers, trained mostly by lenders. Lenders outsourced training to fee appraisers when licensing started, which did not work out well. I trained two residential appraisers, who quit appraising during the bad downturns when I did not have enough work for them.
MBA forecast: Purchase originations to grow 9% next year, but refis to plunge 62%
Excerpt: A new forecast from the Mortgage Bankers Association (MBA) predicts that purchase mortgage originations will climb by 9% annually to reach a record volume of $1.73 trillion in 2022. This rise in purchase activity, however, will be accompanied by a sizable plunge in refinance originations, which the MBA projects to drop by a whopping 62% next year.
The trade group presented its 2022 outlook at its 2021 Annual Convention & Expo in San Diego, briefing an intrigued gathering of industry stakeholders about what to expect next year. The plummet in refinancing would bring refi originations to $860 billion in 2022, down from $2.26 trillion this year. Together, the forecast purchase growth and refi decline in 2022 would combine for an overall volume of $2.59 trillion in mortgage originations, a 33% drop from 2021.
To read more, click here
My comment: Fannie has been using waivers for purchase loans. so there are fewer appraisals done. Some refi appraisals will still be needed. Maybe there will be more lower-income people who can refi to a lower rate. See the FHFA announcement above that included the desktop appraisals.
Freddie Mac Appraisal Secret! No Sharing!
By Tim Andersen, MAI
Excerpt: (9.5-minute podcast) This Freddie Mac appraisal secret was not all that hard to uncover. Really! But, since we are all appraisers, and are all in the same boat, I figured, why not share it? As I just wrote, this secret is not part of real estate appraisal QE or CE. There are plenty of webinars and seminars out there that hint at this secret, true. But, insofar as I can tell, this is the only place to get this secret unadorned. You won’t find this secret rendered this simple, this straightforward, in any other place on the internet. You won’t find this secret in any real estate appraisal text. Not even in the Freddie Mac Single-Family Seller/Servicer Guide.
To watch the video and find out about The Secret click here
My comments: Very interesting, and different, typical for these podcasts. Tim is a USPAP Expert, helps appraisers do better reports so they keep out of trouble, is a regular on the Clubhouse’s Real Estate AppraisalTalk shows every week, and teaches USPAP. He is a regular contributor to the monthly Appraisal Today newsletter.
HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan applications. 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 decreased 6.3 percent from one week earlier
WASHINGTON, D.C. (October 20, 2021) – Mortgage applications decreased 6.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 15, 2021.
The Market Composite Index, a measure of mortgage loan application volume, decreased 6.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week and was 22 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 12 percent lower than the same week one year ago.
“Refinance applications declined for the fourth week as rates increased, bringing the refinance index to its lowest level since July 2021. The 30-year fixed rate has increased 20 basis points over the past month and reached 3.23 percent last week – the highest since April 2021. The 15-year fixed rate increased to 2.54 percent, which is the highest since July,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase activity declined and was 12 percent lower than a year ago, within the annual comparison range that it has been over the past six weeks. Insufficient housing supply and elevated home-price growth continue to limit options for would-be buyers.”
The refinance share of mortgage activity decreased to 63.3 percent of total applications from 63.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 3.3 percent of total applications.
The FHA share of total applications remained unchanged from 10.2 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) increased to 3.23 percent from 3.18 percent, with points decreasing to 0.35 from 0.37 (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 $548,250) increased to 3.26 percent from 3.22 percent, with points increasing to 0.33 from 0.29 (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 decreased to 3.17 percent from 3.20 percent, with points increasing to 0.32 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 increased to 2.54 percent from 2.48 percent, with points remaining unchanged at 0.29 (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 3.09 percent from 3.08 percent, with points increasing to 0.30 from 0.26 (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