Cosmetic vs. MPR Repairs: Guidance for FHA Appraisers

By: McKissock

Excerpts: If you are appraising a property that needs some cosmetic repairs but meets FHA minimum property requirements (MPR) in its current condition, you should make the appraisal “as-is.” Here is some guidance on cosmetic repairs vs. MPR repairs.

Topics include:

  • When can an FHA appraisal be completed “as-is” vs. “subject to”?
  • Cosmetic repairs Examples
  • MPR repairs Examples
  • Conditions that require inspection Examples

To read more, click here

My comments: If you do FHA appraisals, read this blog post. Photos and lots of examples. I quit doing FHA appraisals in the mid-1980s because of the inspection requirements compared to conventional appraisals, that did not have the requirement.

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Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on appraisal “modernization”, bias hearing, bad appraiser, USPAP, unusual homes, mortgage origination stats, etc.

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Appraiser pleads guilty in $1.3B fraud scheme

Walter Roberts II of North Carolina faces five-year maximum sentence

Excerpts: An appraiser in North Carolina is set to face the music after conspiring in a massive $1.3 billion tax fraud scheme.

… Roberts faces a maximum of five years in prison and will be sentenced in six months.

The fraud started in 2008, one year after Roberts became a licensed appraiser, according to court documents and statements. In 2007, he started appraising conservation easements, which are specified areas of land earmarked for environmental conservation. Owners with conservation easements can claim an income tax deduction.

From 2008 to 2019, Roberts fraudulently inflated the value of at least 18 different easements by violating industry norms and making false statements. He also manipulated or used manipulated data to hit a target appraisal value communication by unnamed co-conspirators to achieve a certain tax deduction.

The impact of the fraud is staggering, especially since Roberts inflated the value of some appraisals by at least 70 percent…

To read more, click here

My comments: For more info, google his name and add appraiser. Conservation easement appraisals are a definite risk for appraisers. Over time, many have been significantly over-valued per the IRS. They are not easy to do. I decided not to do them many years ago. Best to do a lot of them and become an expert or none.


Glorious Gilded Age Mansion for $29.9M Is Washington DC’s Most Expensive Home

Excerpts: Completed in 1881, the 23,600-square-foot mansion is divided among commercial spaces on the first two floors. A residential penthouse is situated on the top two floors.

A three-year renovation, ending in 2009, converted the upper floors into the 7,000-square-foot penthouse. The space offers four bedrooms, five full bathrooms, and lots of living and entertaining space.

“There’s an atrium, multiple sitting rooms off of the atrium, a humongous dining room, and a humongous living room, so yes, I would say there’s plenty of entertaining space,” Heider (listing agent) says.

“There’s nothing [else] in this city that offers a private rooftop pool overlooking one of the most charming circles in the city,” Heider says, adding that the pool and accompanying outdoor kitchen are only for Blaine Mansion penthouse residents.

“Imagine yourself being able to go out on your rooftop and be in the pool, drinking a margarita and overlooking DuPont Circle. Right now, nothing compares to it.”

The property also comes with 14-vehicle parking capacity.

To read more and see lots of photos, click here 

My comment: Really stands out from the modernized buildings nearby! I lived in Washington, DC, until I was 9 years old. My mom used to take me regularly to Dupont Circle to play. I don’t remember much about what it was like there, but I remember Dupont Circle Park.


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Purchase and Sale Agreements

By Tim Andersen, MAI

Excerpt: Should appraisers get a copy of the purchase and sale agreement?

Some appraisers feel that lenders should not provide them with the purchase and sale contract. Then that contract does not serve to color, cloud, or otherwise bias a value opinion.

Let’s take a look at it from basically both sides. Appraisers analyze the purchase and sale contract to amass and verify data to have detailed data to use in the analytics of future assignments.

Purchase and sale agreements are also a great source of data relative to the subject, which might serve as a verified and personally inspected comp in a future assignment. Remember, we rarely get to inspect comparables.

Over time, a great deal of research has indicated that well over 90% of appraisals come in at or above the purchase and sale contract. This suggests that appraisers are indeed letting that contract price function as a target the lender expects the appraiser to reach and then support.

We all know this is true.

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Jonathan Miller testifies at ASC hearing on appraisal issues: bias and barriers to entry 

C-SPAN Video is approximately 3 hours with a 17-minute break

The Appraisal Subcommittee (ASC) held a second hearing on challenges facing the appraisal industry, including barriers for entering the profession and racial bias in home appraisals. The panel’s first hearing on such topics occurred in January 2023.

To listen and read the hearing transcript click here

My comments on the video: Usually, on these long hearings, it is hard to stay awake waiting until the section you want to hear. This video is very easy to use, plus text is available. You can search for people and speakers. 6 video segments on specific topics.


Jonathan Miller on his experience at the hearing

Excerpts: On Friday morning, I was one of five expert witnesses (and the only as an appraiser) to testify on the topic of appraisal bias in front of the Appraisal Subcommittee (ASC). The witnesses waited together in the green room, plus additional TAF staff. We had a delightful conversation – everyone was very friendly and a pleasure to be with, given the adversarial nature of our looming testimony.

It’s a three-hour hearing, but if you are connected to the appraisal industry in any way, I encourage you to listen. You can hear my opening statement at about the 26-minute mark. The text on the C-SPAN website was generated from unedited closed captions. Here was my formal statement, but since the timing was strictly limited to 5 minutes, I read this abbreviated version, which in hindsight, was better and more to the point. (Editor note: links are in the text


Morgan Williams, General Counsel, National Fair Housing Alliance – He was a compelling witness – he drove home that he wanted access to anonymized loan-level data to determine the potential valuation bias.

Angela G. Jemmott, Bureau Chief, California Bureau of Real Estate Appraisers, Member of the Association of Appraiser Regulatory Officials. She was a powerhouse of testimony, advocating practicum solutions in addition to PAREA.

To read a lot more of Jonathan Millers interesting comments, click here


Rocket Mortgage offers new 1% down home-loan program

Excerpts: Rocket Mortgage recently introduced ONE+, a new 1% down home loan program that will dramatically increase access to homeownership for millions of low-to-moderate-income earning Americans, the company has announced.

With ONE+, Rocket Mortgage stated that a homebuyer is only required to make a down payment of 1% of the purchase price and they will cover the remaining 2% needed to reach the required threshold for conventional loans. In addition to reducing upfront costs, Rocket Mortgage says ONE+ completely eliminates the expensive monthly mortgage insurance fee for the client —which is traditionally required if the buyer places less than 20% down on their purchase.

Designed to help everyday Americans achieve homeownership, Rocket Mortgage stated that ONE+ is available to homebuyers purchasing single-family homes—including manufactured homes—whose income is equal to or less than 80% of their area median income (AMI). With this expansive AMI eligibility, the company estimates that more than 90 million people can meet the income requirements for this program—based on publicly available income data.

To read more, click here

My comment: Hopefully, they will use full appraisals because of the increased risk!


The Next Generation of Appraisals: Revolutionizing Real Estate Valuation with Computer Vision

By Tony Pistilli

Excerpts: Before you get too worried and quit reading, let’s all agree computer vision is unlikely to replace appraisers. I believe it will only make them more accurate and more efficient. Think of computer vision as a calculator. Sure, you can use pencil and paper and divide 1,024 by 82 and come to the correct number, but there are calculators that allow us to do that much faster and with more consistent accuracy – that’s what computer vision will do for appraisers.

While computer vision holds tremendous potential for real estate appraisers, I believe several potential challenges need to be addressed. The need for standardized data formats is paramount, consistent taxonomies in MLS, and between inspection forms and appraisals. Additionally, ensuring the proper use of computer vision technologies and maintaining transparency in the valuation process are critical aspects that should be carefully addressed by state, federal and financial institution regulators and also addressed in USPAP.

To read more, plus the 20+ most negative appraiser comments, click here

My comments: The accuracy of any AI depends on the data.

As we all know, MLS, Public records, etc. are not always accurate for a property. AI has to be trained on good data.

MLS videos and photos taken by agents tend to leave out any defects or problems. They are sales persons, of course. They disclose them in the seller’s disclosure statement, hopefully! I wonder if the home would be overvalued?


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, click here.  

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 go to Or call 510-865-8041, MTW, 7 AM to noon, Pacific time.

My comments: Rates are going up and down. Some appraisers are very busy, and others have little work. Varies widely around the country.


Mortgage applications decreased 4.6 percent from one week earlier

WASHINGTON, D.C. (May 24, 2023) — Mortgage applications decreased 4.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 19, 2023.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week and was 44 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 decreased 5 percent compared with the previous week and was 30 percent lower than the same week one year ago.

“Mortgage applications declined almost five percent last week as borrowers remained sensitive to higher rates. The 30-year fixed rate increased to 6.69 percent, the highest level since March,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Since rates have been so volatile and for-sale inventory still scarce, we have yet to see sustained growth in purchase applications. Refinance activity remains limited, with the refinance index falling to its lowest level in two months and more than 40 percent below last year’s pace.”

Added Kan, “Investors remained attuned to the uncertainty around the U.S. debt ceiling and communication from several Federal Reserve officials last week, which sent Treasury yields higher, along with mortgage rates. Economic data released over the past week have also pointed to a still-resilient economy. The housing market received positive data on new residential construction – which is seen as a key solution to the lack of housing inventory.”

The refinance share of mortgage activity remained unchanged at 27.4 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.7 percent of total applications.

The FHA share of total applications increased to 12.5 percent from 12.0 percent the week prior. The VA share of total applications increased to 12.5 percent from 12.2 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 ($726,200 or less) increased to 6.69 percent from 6.57 percent, with points increasing to 0.66 from 0.61 (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 $726,200) increased to 6.57 percent from 6.46 percent, with points increasing to 0.57 from 0.38 (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 increased to 6.56 percent from 6.39 percent, with points increasing to 1.24 from 0.97 (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 increased to 6.15 percent from 5.96 percent, with points increasing to 0.72 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 5/1 ARMs increased to 5.73 percent from 5.71 percent, with points increasing to 1.19 from 1.10 (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
Phone 510-865-8041

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