Lenders Not Using AMCs for Appraisals

By: McKissock June 23, 2023

Excerpts: Some appraisers seek alternate ways to find work outside of appraisal management companies (AMCs). One strategy is to pursue opportunities to be engaged directly by financial institutions and banks by being included on their fee panel. To help you get started, we asked our appraisal community, “What advice can you offer on how to identify financial institutions and banks that engage appraisers directly, without involving AMCs?” Here’s what they said.

Below are helpful tips on how to find financial institutions and banks that engage appraisers directly on fee panels. In a nutshell, our survey respondents recommended that you should:

Look for small, local banks and lenders.
Network to build relationships.
Join the Mercury Network.
Simply ask around!

To read more, click here

My comments: Short and worth reading. When I started fee appraising in 1986, my first client was a small local bank with a few nearby branches. After AMCs took over, the bank continued to do their own appraisal management. Their volume went up and down with mortgage rates, but they always had some appraisals to fee out. Even today, their regular fee appraisers get some work.

Famed Rotating Home in California On the Market for $5.3M

Excerpts: Can’t decide which room in this La Mesa, CA, house has the best view? Just wait. It’ll change.“It rotates 360 degrees—both counterclockwise and clockwise—and the plumbing and electrical all rotate together,” explains listing agent Melvina Selfani, of Top 1% with Century 21 Affiliated.

The architectural marvel, known as the Rotating Home, sits high on Mount Helix.

The second floor is approximately 5,100 square feet, including about 1,400 square feet of deck space, which also rotates.The lower level has a garage (with show spaces that rotate 180 degrees, of course) and a guest suite. There is also 1,200 square feet of fixed, nonrotating deck on the lot that is just more than a half-acre.

Inside, there are four bedrooms and three bathrooms. The home can rotate completely in 33 minutes at the fastest setting, or it can take up to 24 hours at the slowest speed, powered by simple controls in a closet. The place can also remain stationary.

To read more and see lots more photos, click here

My comment: I wish there was a video of it rotating!! I have seen photos of other rotating homes but nothing as appealing as this one.

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Uniform Appraisal Dataset Redesign Additional Documentation

June 28, 2023

The Uniform Appraisal Dataset (UAD) and Forms Redesign team has released additional documentation to support ongoing implementation efforts. These resources supplement the initial documentation that was released in March 2023 to kick off industry development and preparation for the new appraisal dataset and report.

Additional Uniform Residential Appraisal Report (URAR) examples for various property types. This link has sample appraisals.
Reference Guides for the Restricted Appraisal Update Report and Completion Report to provide guidance on entering information and how it will be displayed.
Updated Style Guide to provide an additional font option for rendering the URAR.

To read more, click here (scroll down the page to the Additional Documentation section.)

My comments: Update from March 2023. Most, or all, of the files are large zip files.

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Why Higher Mortgage Rates Don’t Always Lead to Declining House Prices

First American Blog June 26, 2023

Excerpts:“Nominal house prices need to adjust to the reality of higher mortgage rates for the housing market to become more affordable and balanced, but a fundamental housing supply shortage is keeping a floor on how low house prices can go.”In April, housing affordability improved relative to one month ago, as two of the three key drivers of the Real House Price Index (RHPI), income and mortgage rates boosted house-buying power by 2.3 percent.

Median household incomes increased by 0.1 percent compared with March, while mortgage rates dipped by 0.2 percentage points. Nominal house price growth was up 0.4 percent compared with one month ago, but it was not enough to offset the affordability boost from rising incomes and falling rates. Nominal house price growth has re-accelerated in recent months and even reached a new peak in April.

To read more, click here

My comment: Interesting discussion of The Big Question – Changes in Housing Prices!

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Highest and Best Use vs. Market Value

By Timothy Andersen, MAI

Excerpts: There are numerous definitions of market value. For purposes of this monograph, please assume the standard Fannie Mae definition (here by reference). But what stands out are the first seven words of Fannie’s definition: “[m]arket value is the most probable price…,” (emphasis added) a definition that places value firmly on the pedestal of sales price. The idea that price and value are not synonymous is valid, one this monograph refutes.Any monograph such as this must end where it began. It began with a summary of the definitions of highest and best use versus the definition of market value. These definitions, prima fasciae, are at odds with each other. How can market value be a function of price since price is not value? Then, how does highest and best use, which assumes the highest value, have anything to do with the most probable [sales] price?

To read more, click here

My comments: Tim is definitely a USPAP expert and a regular contributor to the monthly Appraisal Today. In the July issue, he writes about Fannie Mae 1004 and USPAP – Neighborhood.

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Connecticut ‘Bridge House’ Suspended Among the Trees for $497,000

The innovative Cedar Bridge House, designed by architect Wilfred Armster, appears to float among the trees.Built in 1983, the two-bedroom residence has been on and off the market over the past three years, with an original list price of $530,000. As several calls to the listing agent have gone unreturned, we (and social media) are left wondering why this modern marvel hasn’t sold.

The unconventional, bridge-like design features 2,118 square feet of living space filled with skylights and windows. The stylish kitchen has granite counters, a wine cooler, and high-end stainless-steel appliances, according to the listing. The minimalist living room offers a sleek fireplace.The primary bedroom includes access to one of two decks. A third deck boasts a hot tub and views of the 3-acre lot.

To read more and see more photos, click here

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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 www.appraisaltoday.com/order 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.

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Mortgage applications increased 3.0 percent from one week earlier

WASHINGTON, D.C. (June 28, 2023) — Mortgage applications increased 3.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 23, 2023. This week’s results include an adjustment for Juneteenth holiday.The Market Composite Index, a measure of mortgage loan application volume, increased 3.0 percent on a seasonally adjusted basis from one week earlier.

On an unadjusted basis, the Index decreased 8 percent compared with the previous week. The Refinance Index increased 3 percent from the previous week and was 32 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index decreased 8 percent compared with the previous week and was 21 percent lower than the same week one year ago.

“Mortgage rate changes varied across loan types last week, with the 30-year fixed rate increasing slightly to 6.75 percent. The spread between the jumbo and conforming rates widened to 16 basis points, the third week in a row that the jumbo rate was higher than the conforming rate. To put this into perspective, from May 2022 to May 2023, the jumbo rate averaged around 30 basis points less than the conforming rate,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.

“Purchase applications increased for the third consecutive week to the highest level of activity since early May but remained more than 20 percent lower than year ago levels. New home sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home market. Existing-home sales continued to be held back by a lack of for-sale inventory as many potential sellers are holding on to their lower-rate mortgages.”

The refinance share of mortgage activity increased to 27.2 percent of total applications from 26.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.1 percent of total applications.

The FHA share of total applications decreased to 12.9 percent from 13.3 percent the week prior. The VA share of total applications increased to 12.2 percent from 11.9 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.75 percent from 6.73 percent, with points remaining at 0.64 (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 6.91 percent from 6.80 percent, with points increasing to 0.69 from 0.49 (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 6.63 percent from 6.74 percent, with points increasing to 1.08 from 1.03 (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 6.23 percent from 6.26 percent, with points decreasing to 0.69 from 0.71 (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 increased to 6.28 percent from 6.09 percent, with points decreasing to 1.02 from 1.40 (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.

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Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501
Phone 510-865-8041Email ann@appraisaltoday.com www.appraisaltoday.com

By Ann O'Rourke on July 1, 2023 / appraisal, appraisal business, Fannie Forms / Leave a comment

Tags: appraisal, appraisal business, Fannie forms

Lenders Not Using AMCs for Appraisals