Appraisers Share Their Best Tips for Working with AMCs
Excerpts: In a nutshell, our survey respondents recommended that you should:
1) do your research and get to know the AMCs,
2) build a relationship with them,
3) treat the relationship as a partnership, and
4) prioritize communication.
Build a relationship
“Be personable so they remember you.”
“Make yourself known by being efficient as well as timely with your reports. Be friendly—even when you feel like the UW’s question may be redundant or was already answered in the report. I promise you that this will make you known in your area.”
“Have a very responsive credo. Keep them up to date in every step of the report so that they can keep the Lender (and the Buyer/Seller/Realtor/Closing Attorneys when applicable) all in the loop on the progress of the report. Remember when they look good and trust you—you look good
Communicate, communicate, communicate!
“Update the orders quickly.”
“Keep them informed.”
“Always communicate—even if it feels like too much. Our office updates AMCs on every scheduling attempt with details, every inspection appointment set and completion, and any materials needed ASAP in the assignment. They really appreciate it, and it ensures you can complete assignments on time as you had planned (no one likes waiting for a legal description only to have it show up on your day of 4 inspections!). It’s truly a win-win.”
“Stay in communication. Appraisers tend to get annoyed with constant emails from the AMC about inspection date, completion, report submission, etc. I make it a point to update them and answer their emails ASAP. In my opinion, that’s good business. And if you do need more time, more info, they are more willing to oblige.”
To read more, click here
My comments: Read this blog post with practical tips from practicing appraisers. It can help you get more business from AMCs (and other lender clients). Savvy appraisers I know who mostly do non-lender work also have a limited number of carefully vetted AMCs they work for, plus a few local lenders and “private” lenders.
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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 AMCs, non-lender appraisals, liability, ROVs,unusual homes, mortgage origination stats, etc.
2 Pyramids for $675K in North Carolina
Excerpts: One (blue) is the main living area, and the other (red) is more of a garage. Both pyramids are listed together for $675,000.
The three-bedroom, 5.5 bath, blue pyramid measures 3,687 square feet, and everything is above ground. 18.07 acre lot.
Architect James Kluttz designed the place for himself and his family in 1987. He died in 1995, before he was able to complete his vision for the red pyramid. “It was more of a garage to the original architect (with) over 3,000 square feet of unheated square footage that’s not counted in the square footage of the actual house,” Baucom explains.
“The bottom-level concept is open flow,” Baucom (agent) explains. “You don’t really feel like you’re in a pyramid unless you go into some small rooms off to the side where the ceiling flows from the pyramid.”
To read more click here
To see 45 photos in the MLS listing click here
The Impact of Flood Risk on Property Values – A Case Study in Miami
NOTE ON IMAGE ABOVE: Flood Zones A and AE are the highest risks.
Excerpts: In this study, we aim to quantify the impact of flood risk on the value of a property in Miami. We selected Miami because it is one of the coastal cities that are most vulnerable to hurricanes. We look at how much the value of a property would change if it were in a flood zone, and in the next blog, we will expand our study using more granular flood risk scores beyond the traditional in/out of flood zone.
The above analysis clearly indicates a property in flood zones sells for less and appreciates slower over time than a similar property outside flood zones, given everything else is equal, in Miami.
Is there any way to mitigate the risk and improve the property value? Building homes at a higher elevation will help. Regression results suggested that every foot of elevation can increase home value by 1.6% in a non-coastal flood zone.
If not in a flood zone, every mile away from the 100-year floodplain can add 2.2% value to property. Being close to a fire station is another advantage since the fire service provides a vital role in responding to flood events.
To read more and see the graphs and data tables, click here
My comments: Very interesting. A bit technical to read, but the graphs and tables are excellent. GIS can really help. I recently attended a local CE session on wildfire risk effects on values using similar techniques. The academic researcher “scraped” data from many sources that went way beyond MLS and public records.
Communicating with non-lender clients:
Very, very different from lenders!!
Here are a few of the differences discussed in the article:
How got your name
Appraiser list Internet, referral, previous client
Lender wants fast You decide
Property inspection date
Lender wants soon You decide
Date of inspection You decide
Can be multiple dates
Can be current, past, or future
Type of appraisal form report
Standard GSE forms You decide
Do not use lender forms
Type of report
Lender decides You decide
Certification and Limiting Conditions
Printed on appraisal form You decide
Use of appraisal
Mortgage Lending You decide
Communication about Appraisal and Report
Lender decides You must match to client
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Lender Liability for a Negligent Appraisal? Buyer-Borrower Remorse
By Peter Christensen
Excerpts: As residential property prices plateau or decline in various markets and as borrowers have financial problems with fewer financing options, there are more legal claims being filed by borrowers against appraisers and lenders in relation to appraisals for loans made in recent years. Essentially, the cases are situations of “buyer-borrower remorse.” Leaving aside the appraiser’s potential liability, does a mortgage lender have liability to the borrower for a negligent appraisal?
An Ohio appellate court recently said “no.” It ruled that the lender did not owe the borrower a legal duty to assure that the independent appraiser’s valuation was correct.
In this particular case, the appraisal was ordered to determine whether PMI could be removed on a loan – which would save the borrower from having to pay that premium. The appraisal, however, came in to too low to support PMI removal. The borrower filed suit against the lender, contending that there were errors in the appraisal, and that the lender owed her “a duty to act in her best interests and correct errors in the appraisal report.”
To read more, including the full legal document and appraiser comments, click here
My comment: Many are predicting “buyer remorse” lawsuits from the days of multiple offers on houses and sales prices way over the list price. As usual, appraisals are “bad” if we are low or high. Everyone is “wants a number” :<
Mortgage Borrowers Can Challenge Inaccurate Appraisals Through the Reconsideration of Value Process
October 6, 2022, Consumer Financial Protection Bureau Blog Post
Excerpts: Accurate appraisals are essential to the integrity of mortgage lending. Overvaluation can decrease affordability, make it harder to sell a home or refinance, and increase the risk of foreclosure. Undervaluation can prevent a homeowner from accessing accumulated equity, whether through sale or a home equity loan. Both over- and under-valuation keep individuals, families, and neighborhoods from building wealth through homeownership.
Homebuyers and homeowners can ask for a lender to reconsider a home valuation the consumer believes to be inaccurate. This process is often referred to as a “reconsideration of value” or “ROV.” Borrowers can point out, for example, factual or other errors or omissions, inadequate comparable properties, or provide evidence that the appraisal was influenced by prohibited bias.
To read more, click here
My comment: This may or may not increase ROVs. For more info read How to Respond to ROV Requests: Updated Guidance, click here
9 Stunning Homes Built Into Cliffs
Excerpts: From the Slovenian Kamnik Alps to Calamuchita Valley in Argentina, these homes come with incredible views — if you don’t mind the heights
“Living on the edge means constructing places in the most challenging locations, and, in many cases, in the middle of unspoiled nature.” With both the physical challenge and being tasked with finding a dialogue with nature that doesn’t harm the environment, bringing these homes into existence is only that much more impressive. “It is fascinating to study the latest examples and see how various architects around the globe come up with ingenious ideas and observe the way the discipline evolves,” Toromanoff (book author) says.
To read more and see photos of 8 more cliff-side homes, click here
My comments: Fascinating! Scroll down the page to see the photos and brief comments. Great places to visit, but I may get a bit nervous living on the edge of a cliff…
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.mba.orgwww.appraisaltoday.com/order Or call 510-865-8041, MTW 7 AM to noon, Pacific time.
My comment: No one knows the future of mortgage interest rates: up or down or stable? Some appraisers are very busy, and others have little work. Varies widely around the country. Rate changes are relative to the previous rates.
Mortgage applications decreased 0.5 percent from one week earlier
Mortgage applications decreased 0.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 28, 2022. This week’s results include revised data to reflect an update to last week’s survey results.
The Market Composite Index, a measure of mortgage loan application volume, decreased 0.5 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 85 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 41 percent lower than the same week one year ago.
“Mortgage applications declined for the sixth consecutive week despite a slight drop in rates. The 30-year fixed rate decreased for the first time in over two months to 7.06 percent, but remained close to its highest since 2002,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Apart from the ARM loan rate, rates for all other loan types were more than three percentage points higher than they were a year ago. These elevated rates continue to put pressure on both purchase and refinance activity and have added to the ongoing affordability challenges impacting the broader housing market, as seen in the deteriorating trends in housing starts and home sales.”
Added Kan: “With most homeowners locked into significantly lower rates, refinance applications continued to run more than 80 percent below last year’s pace, while the refinance share of applications was 28.6 percent – the fifth straight week below 30 percent.”
The refinance share of mortgage activity increased to 28.6 percent of total applications from 28.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 11.8 percent of total applications.
The FHA share of total applications decreased to 13.5 percent from 13.9 percent the week prior. The VA share of total applications decreased to 10.3 percent from 10.7 percent the week prior. The USDA share of total applications remained unchanged at 0.5 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 7.06 percent from 7.16 percent, with points decreasing to 0.73 from0.88 (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)increased to 6.55 percent from 6.53 percent, with points increasing to 0.7 from 0.68 (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 6.70 percent from 6.79 percent, with points decreasing to 1.18 from 1.59 (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 6.37 percent from 6.39 percent, with points decreasing to 1.05 from 1.52 (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 5.79 percent from 5.86 percent, with points increasing to 0.9 from 0.88 (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.