The End of Home Appraisals?

By Jeremy Bagott, MAI

Excerpts: In his 1946 essay “Politics and the English Language,” the late British novelist, essayist and critic George Orwell examined the connection between political orthodoxies and the debasement of the English language. In a truly Orwellian move, mortgage giant Freddie Mac recently announced its intent to censor an arbitrary collection of words such as “desirable,” “safe,” “well-kept,” “student” and “crime” when they appear, in any context, in the hundreds of thousands of appraisal reports it relies on in mortgage underwriting. It would be hard to make this up.

As with all banned words, Freddie’s list will lead to the need to ban additional words over time as appraisers, expunging the word “desirable,” will find synonyms when analyzing market reaction to the views of two homes or to the cul-de-sac location of a home versus the midblock location of a comparable. When discussing how market participants view side-by-side school districts, appraisers will figure out they can use synonyms like “advantageous,” “preferable,” or “beneficial” instead. Soon, these words, too, will need to be banned. In a college town, the banned word “students” will become “matriculants,” a word that will likewise need to be banned.

The attack on the protected speech of independent appraisers erodes their ability to describe how the properties they appraise relate to the preferences of market participants. The censorship is part of a march toward what appraiser and podcaster Phil Crawford has coined “universal basic home value” – a utopian vision among idealogues in which government technocrats dictate the supposed value of a property using algorithms and machine learning. The censorship began with Fannie Mae, and has now predictably spread to Freddie Mac.

To read more plus appraiser comments, click here

My comment: Worth reading. Lots more AMC/lender appraisal correction requests. Last week’s email had a discussion of the “words” which got a lot of clicks by appraisers wanting more information.

Appraisal Business Tips 

Humor for Appraisers

Fannie: Words and Phrases in Appraisals

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NOTE: Please scroll down to read the other topics in this long blog post on non lender appraisals, USPAP, Bias, real estate market, mortgage rates, unusual homes, mortgage origination



Modern Home Nestled Amid the Trees of Texas Hill Country

Glass house on a limestone shelf 20 feet above a creek,

Excerpts: After buying 10 wooded acres on a steep slope along a creek in Austin, Mary Mandel and Jaime Delgado had to decide exactly where to put their house. “We didn’t want to look out over the trees,” Mandel says, explaining, “We wanted to be in the trees. We wanted to see owls nesting on branches and red-tailed hawks bathing in the creek and bobcats chasing rabbits. We wanted to have an intimate relationship with nature.”

But, Mandel says, “there was only one place where I knew we would be able to achieve that, and it was the most challenging part of the site to build on”—a limestone shelf, known as the rimrock, 20 feet above the creek and more than a quarter mile from the nearest road.

Once the site was chosen, Bercy and Chen developed a plan to break the 3,000-square-foot house into three main volumes. Inside the house, nearly all the furniture was custom-made

To read more and see lots of photos click here 

My comments: I want this house!! From Architectural Digest, with lots of descriptions and photos of the exterior and interior.


Inflation and the Real Estate Industry: Mid-Year Analysis 2023

By: McKissock July 26, 2023

The latest installment of The Full Measure with Kevin Hecht. Uncover current economic trends and insights—written from an appraiser’s standpoint—in this mid-year analysis for 2023.

Excerpts: As we hit the mid-year mark of 2023, it’s time to assess the real estate industry’s performance so far. It has been an eventful year, with various economic factors to evaluate as we head into the latter half. The forthcoming Federal Open Market Committee (FOMC) meeting, prospective interest rate hikes, robust employment figures, and slowing inflation all hint towards economic stability. However, high mortgage rates and limited affordable inventory keep exerting pressure on potential homebuyers. Unless there are improvements in affordability and inventory, the market dynamics will likely stay consistent.

Inflation and its impact on the real estate sector

The inflation rate has been trending downward recently, with June 2023 witnessing the smallest annual increase since March 2021. The Consumer Price Index (CPI) rose by 0.2% in June, representing the fourth instance in seven months when the monthly growth in CPI fell below the Federal Reserve’s annualized 2.2% target. This marked its slowest annual growth rate of 4.8% since October 2021. If this trend persists, we may see the annual rate of change dip to a low of 1.9%, a level last seen in February 2021.

Despite the broader deceleration, housing inflation remains a primary contributor to overall inflation, responsible for over 70% of the headline inflation increase. However, the Federal Reserve’s ability to tackle rising housing costs is constrained by the scarcity of affordable supply and escalating development costs.

To read more, click here

My comment: written by an appraiser who is also an Adjunct Professor of Economics at Maryville University.


Staying positive with low fees, slow business, and declining full appraisals

Excerpt: Appraisal businesses, particularly for residential lending, have always been very cyclical and stressful, depending on mortgage rates. With AMCs taking over residential appraisals starting in 2008, there is much more additional stress from fee competition, which had never occurred before, even during the down cycles.

Humans, including appraisers, don’t like change. Overcoming negative attitudes can be done, but is sometimes difficult.

Positive vs. negative attitudes towards your business

For all business owners, seeing the glass as half full rather than half empty is critical for success.

I regularly receive phone calls and emails from appraisers bitterly complaining about the lack of business. This attitude is not good for anyone who wants to continue appraising, but is particularly bad when business is slow and you are trying to be an optimist.

Become an optimist

Maintaining a positive attitude is very important to being happily self-employed. All appraisal practices have bad periods. Sometimes they last for quite a while. But, maintaining a positive attitude can seem impossible.

Anticipate mortgage interest rates going down. Avoid pessimistic people including appraisers. Listen to motivational recordings or read a book on it. They really help. Take charge of your business. Don’t let it run you.

To read more about this topic, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.

If this article, in the March 2023 issue helped you understand how being positive can help your business and personal life, it is worth the subscription price!


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If you have any comments or info on any topics, please hit the reply button!! I’m always looking for something new ;>

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USPAP and Verification

By Timothy Andersen, MAI, MSc., CDEI, MNAA Timothy Andersen, MAI, MSc., CDEI, MNAA


Question: “A reviewer just called me. She indicated that USPAP required me to provide verification of the sales data from two different sources. I asked the reviewer to show me where this requirement was in USPAP. The reviewer did not answer my question (or apparently, appreciate my attitude in asking it), but indicated that unless I complied with her “request” in a hurry she would send a report off to the state for review and possible discipline. As you might imagine, that got my attention. Where in USPAP does it say I have to confirm my sales data with two different sources? I don’t want to make this mistake again. Help!”

Answer: No, USPAP does not state that. Your reviewer is not qualified to tell you what USPAP does and/or does not contain.

The current Fannie Mae Selling Guide has hundreds of references to “verify”, or “verification”. However, none of these refers to an appraiser verifying data of any kind.

On the other hand, the FHA/HUD 4000.1[II.D.4.(3)(c)] makes it clear the appraiser “… must verify the characteristics of the transaction (such as sale price, date, seller concessions, conditions of sale) and the characteristics of the comparable property at the time of sale through reliable data sources.

To read more, click here

My comments: Tim is my top go-to USPAP expert and regularly contributes articles to the monthly Appraisal Today. For more info on Tim, plus the consulting services he offers help appraisers do better reports and stay out of trouble.


Barbie’s Malibu DreamHouse is back on Airbnb

Excerpts: While in the DreamHouse, guests will have the opportunity to live in technicolor by:

Taking a spin through Ken’s awesome wardrobe to find their best beach fit. Look out Barbie, Ken’s got quite the closet too!

  • Channeling their inner cowboy and learning a line dance or two on Ken’s outdoor disco dance floor or performing a sunset serenade on Ken’s guitar
  • Challenging their fellow guests to a “beach off” with plenty of sunbathing and chillaxing by the infinity pool
  • Taking home a piece of the Kendom with their very own set of yellow-and-pink Impala skates and surfboards

My comments: I could not resist a Barbie Post!!

After taking a break between pickleball games last week, one of our regular players said she went to the Grand Opening nearby of the new Barbie movie. She had some shoes appropriate clothing and made a hat and other accessories. Everyone at the movie was decked out in Barbie attire. All pink, of course. She’s a clinical psychologist. Ya never know who is a Big Barbie Fan ;> I graduated from high school in 1961 and missed Barbie that started in 1959.

I want to see the movie, but will probably stream it as I don’t have any pink clothes or shoes. Many people I know have seen it, women and some men. Some have seen it more than one time. I was very surprised that it was so popular and controversial.

I’m not going to the Oppenheimer movie as those days were very scary to me as a child: nuclear bomb practice by hiding under our desks at school in the 1950s. The Bay of Pigs in 1961 and worrying about a nuclear attack coming from Cuba to Oklahoma somehow.

To read more, click here

To see lots more photos inside and outside, click here


Rate-lock tipping point: Homeowners are nearly twice as willing to sell if their mortgage rate is 5% or higher – Jul 31, 2023

New Zillow survey finds 80% of mortgage holders report having a rate of less than 5%:

Excerpts: new Zillow® survey has identified the mortgage rate tipping point that makes homeowners more likely to move, which is key in unlocking the housing market and slowing price growth. Homeowners with a mortgage rate above 5% are nearly twice as likely to say that they plan to sell their home than those paying a rate below 5%.

Zillow’s survey finds that about 80% of mortgage holders reported having a rate of less than 5%, and about 90% have a rate of less than 6%. Almost one-third reported a rate of less than 3%. I have a 3.5% loan on my duplex ($125,000). I will never give it up.

There is reason to be optimistic that more homes could hit the market in the next few years. Zillow’s survey finds that nearly one-quarter of homeowners are considering selling their home in the next three years or currently have their home listed for sale (23%), which is significantly higher than the 15% of homeowners who said the same one year ago. The share is even greater among mortgage holders who have a rate above 5%. Nearly 40% of those homeowners say they would consider selling their home in the next three years (38%).

To read more, click here

My comments: No sales = no comps. These markets are very difficult to appraise in because of the lack of data. Lower rates will help with more sales. Most residential appraisals were refis until rates went way up.


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 3.0 percent from one week earlier

WASHINGTON, D.C. (August 2, 2023) — Mortgage applications decreased 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 July 28, 2023.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week and was 32 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 26 percent lower than the same week one year ago.

“Mortgage rates edged higher last week, with the 30-year fixed mortgage rate’s increase to 6.93 percent leading to another decline in overall applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The purchase index decreased for the third straight week to its lowest level since the beginning of June and remains 26 percent behind last year’s levels. The decline in purchase activity was driven mainly by weaker conventional purchase application volume, as limited housing inventory and rates still close to 7 percent are crimping affordability for many potential homebuyers. The refinance market continues to feel the impact of these higher rates, and applications trailed last year’s pace by over 30 percent with many homeowners not looking for refinance opportunities.”

The refinance share of mortgage activity increased to 28.9 percent of total applications from 28.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.5 percent of total applications.

The FHA share of total applications increased to 13.3 percent from 12.7 percent the week prior. The VA share of total applications decreased to 11.6 percent from 12.1 percent the week prior. The USDA share of total applications increased to 0.7 percent from 0.5 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 6.93 percent from 6.87 percent, with points increasing to 0.68 from 0.65 (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) decreased to 6.89 percent from 6.90 percent, with points decreasing to 0.58 from 0.64 (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 increased to 6.85 percent from 6.80 percent, with points increasing to 1.05 from 1.03 (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 6.39 percent from 6.37 percent, with points increasing to 0.78 from 0.75 (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 6.18 percent from 6.01 percent, with points decreasing to 1.16 from 1.25 (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.

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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