V.A. as a Model for Appraisals
by Isaac Peck
Step Above the Rest
It’s not a secret that being on the V.A. appraiser roster is a coveted position for most residential appraisers. So, what exactly makes the V.A. so special?
Rocha (V.A. appraiser) says the V.A. is a step above the rest primarily because of the following criteria.
V.A. wants a good quality panel
V.A. pays higher appraisal fees
V.A. delivers fast turn times to veterans
V.A. doesn’t use Appraisal Management Companies (AMCs)
V.A. has a program that encourages the use of trainees
V.A.’s Tidewater Program is fair to all sides
Fees, Turn Time, and Quality
The first four criteria are certainly related and are worth examining together. For starters, the fact that the V.A. does not use AMCs allows them to pay more directly to the appraiser, according to Rocha. “Instead of AMCs, the V.A. has a Portal which is really streamlined and easy for stakeholders to use. We can communicate in that Portal and it sends it out to all parties and keeps everyone in close communication,” says Rocha.
To read more, click here
Proposal to Eliminate the V.A. Fee Panel
Excerpt: On May 1,8, 2022 the Subcommittee on Economic Opportunity held a legislative hearing on the Discussion Draft of H.R. 7735, Improving Access to the V.A. Home Loan Act of 2022… It would require the V.A. to consider when an appraisal is unnecessary and when a desktop appraisal should be used and, a move from the V.A. Fee Panel to a lender select program. Mortgage Bankers Association advocated for the proposal. Appraisal Institute opposed it.
To read more, click here
My comments: V.A. is the best lender client for appraisers. You are working for the veteran to be sure they do not overpay, find out about problems, etc. You are not working for a lender who just wants to make the loan.
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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 No more floor plans?, non-lender appraisals, hurricane with and surge risks, unusual homes, mortgage origination stats, etc.
Half House in Toronto
Excerpts: Built sometime in the late 19th century, a Victorian-era row house was constructed on St. Patrick Street in the middle of Toronto. The house was one of six identical and connected homes on what was then called Dummer Street, and they were numbered like this: 52 1/2, 54, 54 1/2, 56, 58, and 60.
Little by little, each of the houses were demolished as owners gave in and sold. But one owner—the Valkos family at 54 ½ St. Patrick—never did.
So, when the time came, developers tore down the surrounding (and connected) properties, which meant they literally sliced and diced, disconnecting the 54 ½ property from the rest, giving it a look like one whole house had been cut in two.
To read more and see more photos click here
Floor Plans Could Be an Issue in Appraising
By Dave Towne
Excerpt: Supreme Court Rejects Floor Plan Case; Appraisers Vulnerable
The Supreme Court on June 27 rejected a case involving the use of floor plans in marketing materials. Multiple real estate firms petitioned the court to review the case, contending the Eighth Circuit incorrectly ruled that using floor plans in marketing materials constituted a copyright violation. In April, the Appraisal Institute, ASA, and other organizations joined an Amicus Brief filed with the Supreme Court over concerns that appraisers could be sued for making floor plans of a home.
To read more and see more photos click here
The Floor Plan Court Case – What You Need to Know
Video – 30 minutes
By Peter Christensen, Founder of Valuation Legal
Excerpt: Peter discusses the current court case related to floor plans that could potentially impact appraisers.
What is this court case? How could appraisers be impacted by the outcome? How will tech companies that help create floor plans be impacted? These questions and much more will be answered.
To watch the video, click here
My comments: I listened to the video. Understandable and worth listening to. It affects Real estate agents, appraisers, home builders, and anyone who uses floor plans for business purposes. The GSEs require floor plans for desktop appraisals. I wonder what they are thinking. Cubicasa provides a floor plan plus square footage. Many appraisers, including myself, don’t include floor plans with walls, doors, etc., unless there is a functional problem.
Should you do non-lender appraisals? Pluses and minuses of many types of non-lender appraisals.
Excerpts: Business is down and many appraisers are thinking about doing non-lender appraisals. Working for lenders is very different from working for non-lenders. For example, AMCs have requirements from Fannie and many lenders, but most non-lender clients have fewer requirements that seldom change. USPAP has your requirements.
Estate and Trust. Date of death.
Fees are well above typical lender fees, paid in advance or at the door. No AMCs. No bid requests are emailed to a large number of appraisers.
The effective date can be the date of death or the date you see the property. Find out which one, sometimes both. Often the most difficult part is finding out what the property was like on the date of death. Appraisals are also needed for dividing up assets or for purchase by a beneficiary.
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If this article helped you decide about doing non-lender work, it is worth the subscription price!
Bridge House in Vancouver, Canada
Excerpts: Bridge House is a concept of a cliff house that is formed in two floors as a separate unit with two concrete cores on both sides of the cliff. Vertical accessibility through the elevator as well as the visible stairs, which initially shows itself as a suspension and after passing through the semi-open space, reaches the upper unit and the roof.
There are two pools on the roof of the upper unit, one for the upper unit and the other for the lower unit. The upper unit overlooks the pool through a large frame. The lower unit also has a view of its pool through the roof so that in the interior we can have a combination of light that has passed through the water to the interior with a view from the pool to the inside and also from the inside of the pool.
To read more and see many photos click here
My comment: Fantastic photos inside and outside!
Nearly 33 Million and 7.8 Million U.S. Properties at risk of Hurricane-force Wind and Storm Surge Damage, respectively
Excerpts: New York City and Miami have the most homes at risk of storm surge damage with the highest total reconstruction cost value.
Metro Area and State Implications
CoreLogic examined the top 15 metropolitan areas and states with the greatest number of SFRs and MFRs (Multi-family) at risk for storm surge and wind damage:
The New York City metro area has the greatest risk, with nearly 900,000 SFR and MFR homes with nearly $433 billion in RCV (Reconstruction Cost Value) at risk of storm surge damage and more than four million SFR and MFR homes with more than $2.2 trillion in RCV at risk of wind damage.
The Miami metro area follows, with nearly 770,000 SFR and MFR homes with nearly $193 billion in RCV at risk of storm surge damage and more than two million SFR and MFR homes with more than $521 billion in RCV at risk of wind damage.
At a state level, Florida, Louisiana, and New York have the greatest number of SFR and MFR homes at risk of storm surge damage with more than three million; nearly 911,000; and more than 600,000 homes at risk, respectively. Texas tops the list for hurricane wind risk with more than 8.8 million homes at risk.
To read more, click here
My comments: In the past, most hurricane damages were from strong winds and ocean waves hitting shorelines. Now, with higher ocean water levels, the damage is also from storm surges, where ocean waves go up rivers and meet the rainwater coming downstream causing flooding inland. High tides also make the surges stronger.
6 Mansion Problems You’re Glad You Don’t Have To Deal With
3. Paying high property taxes
Once you’ve saved up the thousands for a down payment on a mansion and managed to move in, don’t forget to budget for the sky-high property taxes you’ll be paying for as long as you own the home. “Property taxes can eat you alive,” says Alicia Chmielewski, who specializes in luxury real estate auctions. “I’ve seen mansions that are $1,000 per day just in property taxes alone.”
4. Hiring a housekeeping staff
More square footage means more rooms to clean and more carpets to vacuum. The idea of six bathrooms might have sounded amazing—until the moment you find yourself scrubbing six toilets. According to HomeAdvisor, hiring someone to clean a 4,000-square-foot home costs around $240 a month. For an 8,000-square-foot house, you’re looking at $480.
To read more, click here
My comments: I regularly include links to mansions in these email newsletters. I always think about the maintenance costs. Scary. I pay my house cleaner $220 per month for my small house. Not even considering landscaping, plumbing, and other maintenance costs.
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.
My comments: Rates are going up. Some appraisers are very busy and others have little work. Varies widely around the country. Appraisers make more money when refis are strong.
Mortgage applications decreased 5.4 percent from one week earlier
Mortgage applications decreased 5.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 1, 2022. This week’s results include a holiday adjustment to account for early closings the Friday before Independence Day.
The Market Composite Index, a measure of mortgage loan application volume, decreased 5.4 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 decreased 8 percent from the previous week and was 78 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index increased 7 percent compared with the previous week and was 17 percent lower than the same week one year ago.
“Mortgage rates decreased for the second week in a row, as growing concerns over an economic slowdown and increased recessionary risks kept Treasury yields lower. Mortgage rates have increased sharply thus far in 2022 but have fallen 24 basis points over the past two weeks, with the 30-year fixed rate at 5.74 percent,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Rates are still significantly higher than they were a year ago, which is why applications for home purchases and refinances remain depressed. Purchase activity is hamstrung by ongoing affordability challenges and low inventory, and homeowners still have reduced incentive to apply for a refinance.”
The refinance share of mortgage activity decreased to 29.6 percent of total applications from 30.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 9.5 percent of total applications.
The FHA share of total applications remained unchanged at 12.0 percent from the week prior. The VA share of total applications decreased to 11.1 percent from 11.2 percent the week prior. The USDA share of total applications remained unchanged at 0.6 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.74 percent from 5.84 percent, with points increasing to 0.65 from 0.64 (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 $647,200) decreased to 5.28 percent from 5.42 percent, with points increasing to 0.44 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 30-year fixed-rate mortgages backed by the FHA decreased to 5.60 percent from 5.62 percent, with points decreasing to 0.89 from 1.15 (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 4.96 percent from 5.06 percent, with points decreasing to 0.68 from 0.72 (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 4.62 percent from 4.64 percent, with points increasing to 0.72 from 0.72 (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.