Newz: GSE New Market Conditions Policy, State Board Complaints, Waivers
December 6, 2024
What’s in This Newsletter (In Order, Scroll Down)
- LIA ad – Navigating Value Revisions in Appraisals
- Market Trends and Market Conditions Adjustments.
- A Ferrari Inspired Masterpiece With 20K square Feet of Luxury Resort Amenities Listed at 55 Million in Delray Beach FL
- November 2024 Real Estate Market Update By Kevin Hecht
- 5 Tips to Handle Appraisal Board Complaints
- Correcting the Record: Accurate Group’s Commitment to Compliance and Industry Excellence
- FHFA’s Massive Expansion of Appraisal Waivers: What It Really Means
- Mortgage applications increased 2.8 percent from one week earlier
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Market Trends and Market Conditions Adjustments
Working through the new Market Conditions policy and advisory from Fannie Mae
By Ken Dicks
Excerpts: Did Fannie Mae just throw a wrench into how residential appraisal reports for mortgage transactions are completed with their recent announcement on Market Conditions?
As an appraiser, it is highly likely at some point you will see the following or a similar request soon after your appraisal is submitted to your client, or even months after your appraisal is accepted by your client: Please provide support for your market conditions adjustment conclusions.
Appraisal Quality Control and Appraisal Quality Assurance create a revision request minefield filled with Lender and Investor tailored appraisal reporting requirements and preferences. Review of the appraisal reports is required by the lender or whoever the lender chooses to delegate this requirement to (i.e. Appraisal Desk, AMC, etc.).
As a practicing appraiser, the announcement and accompanying exhibit prompted a series of questions in my mind.
- Does Fannie Mae want to see this specific graph in all appraisals?
- What does USPAP say?
- What level of data and analysis does an appraiser need to present when providing support for market conditions adjustments?
The following is where I have arrived at developing answers:…
To read more, Click Here
My comments: Worth reading the full article, plus the appraiser comments.
I am so glad I have not done any GSE appraisals since 2008! I don’t care what the GSEs say. I comply with USPAP. Of course, I always make market adjustments on my residential appraisals or explain why no adjustments was needed. It is the only dollar adjustment I make on non-lender forms unless the subject has an unusual feature requiring research and analysis.
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A Ferrari Inspired Masterpiece With 20K square Feet of Resort Amenities Listed at $55 Million in Delray Beach FL
Excerpts: 7 bedrooms, 11 baths, 20,723 sq.ft., 2.51 Acre lot, Built in 2024
Casa Maranello, an extraordinary residential masterpiece and one of the most distinguished estates in the United States. This ultra-luxury Italian contemporary residence is situated in the exclusive Stone Creek Ranch of Delray Beach, Florida, and is a true paradise for Ferrari enthusiasts.
This trophy estate epitomizes ultra-luxury with a timeless contemporary design and unmatched sophistication. Crafted with the finest materials, equipped with lavish amenities, and infused with the passion of a Ferrari collector, this estate is a seamless blend of elegance and innovation.
For the Ferrari aficionado, the estate’s 12-car gallery garage is a dream realized, showcasing automotive masterpieces with style and reflecting the Ferrari-inspired legacy that sets this home apart.
To read more, Click Here
To see the listing with 122 photos, Click Here
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November 2024 Real Estate Market Update
By Kevin Hecht
Excerpts: In the wild world of real estate, the market sometimes feels like a snow globe—just when you think things have settled, someone gives it a good shake. This November, the housing economy is anything but calm. Mortgage rates are playing an unpredictable game of limbo, builders are cautiously optimistic yet slowing down, and inventory shortages are keeping buyers on edge.
For appraisers, the challenge isn’t just interpreting the numbers—it’s navigating the emotions, expectations, and economic ripples that come with them.
If the housing market were a soap opera, the Fed’s rate cuts would be the season’s biggest plot twist. This November, the Federal Reserve continued its easing cycle with a 25-basis-point rate cut, bringing the Federal Funds Rate to 4.5%-4.75% (realtor.com). While buyers and sellers hoped this move would send mortgage rates tumbling, the reality has been more complex. Long-term rates like mortgages don’t always follow the Fed’s lead, and this time is no exception.
1. Mortgage Rates: The Drama Continues
Appraisers, take note: With buyers hesitant to lock in loans at these rates, the volume of purchase-related appraisals may remain subdued for now. That said, be prepared for a potential rise in refinance appraisals as rates inch downward.
2. Existing Home Sales: A Flicker of Life
3. New Home Sales and Construction: Slowing Down But Not Out
4. The Housing Shortage: A Persistent Challenge
5. Looking Ahead: The Fed’s Next Moves
Final Thoughts: Appraising in an Ever-Changing Market
November has shown us that the housing market is as complex and unpredictable as ever. For appraisers, the challenge lies not just in interpreting market data but in connecting it to the real-world decisions of buyers, sellers, and lenders.
Whether it’s navigating the impact of rising rates, adjusting to regional variations in sales activity, or understanding the nuances of housing supply shortages, your role as an appraiser has never been more critical.
To read more, Click Here
My comments: I read many articles about these topics, but this is the only one focusing on what it means for appraisers. Read the topic details and, more important, what they mean for appraisers.
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New in the December 2024 issue of Appraisal Today
Pay by December 31 at midnight and get a Tax Writeoff
for Your 2024 Taxes!
- 2024 Year end tax planning for appraisers. You can still save on your 2024 taxes!
- The Elasticity of Demand and Market Data Adjustments, By Steve Smith, MAI
- Marketing with holiday gifts and cards. – An Easy and Excellent Marketing
- Appraisal: Profession, Industry or Trade? By Martin Wager, ASA, IFA, MNAA
What’s in the articles?
- Lots of advice on tax planning. One good tip will pay for the newsletter.
- Demand and Adjustments – interesting comments from a long time expert appraiser.
- Gifts and cards – the easiest marketing I have ever done. I have been doing it for over 30 years.
- What is appraisal? A very controversial topic. Discussions started in 1932.
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5 Tips to Handle Appraisal Board Complaints
By Kevin Hecht
Excerpts: Every appraiser dreads opening their mail to find that an appraisal board complaint has been filed against them. Yet, it happens more often than you might think. Appraisal board complaints often arise when the receiving party doesn’t like the outcome of the report. Allegations may include bias, failure to disclose a material fact affecting price, or inappropriate use of comparable properties. Whatever the nature of the complaint, it’s critical to handle it professionally and efficiently.
This is not the time to put your head in the sand. Disciplinary actions can affect your license, your livelihood, and even your ability to work in other states. Instead, follow these five actionable tips to address the matter head-on and resolve it as quickly as possible.
Tip 1: Understand the Nature of the Complaint
Tip 2: Engage Professional Assistance
Tip 3: Gather Evidence and Documentation
Tip 4: Communicate Clearly and Proactively
Tip 5: Learn from the Experience
Final Thoughts on Appraisal Board Complaints
Whether you engage an attorney, an appraisal consultant, or both, assembling the right team of professionals is critical to navigating an appraisal board complaint. By understanding the complaint, gathering evidence, and communicating clearly, you can handle the process confidently and protect your career.
To read more, Click Here
My comments: When I receive calls from appraisers with difficult issues. I sometimes recommend declining the assignment, before or after accepting it. I always say “Do you want to risk your appraisal license for this appraisal.”
When I get that “funny feeling” about what the client wants, I decline the assignment. I learned this the hard way decades ago – by not declining and it turned into a mess.
The article did not mention contacting your E&O company. I always recommend doing this. They may have attorney recommendations for handling your case. Also, Tim Andersen, MAI consults with appraisers who have state board complaints or want to avoid complaints.
For more info on Tim, Click Here
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Correcting the Record: Accurate Group’s Commitment to Compliance and Industry Excellence
By: Accurate Group, LLC
Excerpts: We were understandably offended by the article published last week on AppraisersBlogs and eAppraise.com, titled “Accurate Group’s Appraiser Selection Practices Expose Troubling Industry Tactics”. The article constructs a false and unfair picture of Accurate Group’s appraisal assignment practices and integrity. As one of the nation’s leading appraisal management companies (AMCs), we take great pride in our commitment to compliance and the delivery of high-quality services.
The accusations made in the article are not just incorrect—they are deeply misleading and damaging, not only to Accurate Group but to hundreds of professionals who work diligently to uphold our high standards.
We want to emphasize three key points upfront: Accurate Group does not interfere with appraiser independence, we do not request appraisers to appraise properties at stated values, and we do not prioritize low fees over quality appraisers.
To read Accurate Group, LLC’s full response, Click Here
My comments: I wrote about this topic in last Friday’s email newsletter. The original appraisersblogs post was deleted this week.
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FHFA’s Massive Expansion of Appraisal Waivers: What It Really Means
by Isaac Peck, Publisher WorkingRE
Excerpts: On October 28, 2024, the FHFA proudly announced at the MBA Annual Convention in Colorado that it was significantly expanding the eligibility criteria for both appraisal waivers and waivers + property data collections deployed by Fannie Mae and Freddie Mac (the Government-Sponsored Enterprises, or GSEs)—in lieu of traditional appraisals.
Risks to the System
Mark Calabria, former Director of the FHFA and currently a senior advisor at the Cato Institute, finds this move by current FHFA leadership irresponsible. It’s not that he is opposed to all waivers; as FHFA Director during the COVID-19 pandemic, he approved expanding them for public health reasons, a decision not everyone agreed with, but which he takes ownership of now. “I will take ownership of what we did during the pandemic. In 2020, there were significant concerns about appraisers going into homes and the expansion of waivers was meant for public health purposes. The waivers were meant to be temporary and we made sure there were mechanisms in place to study the performance of loans that were granted waivers,” Calabria says.
But things are different now. There is no public health emergency, and the guardrails that accompanied the COVID-19 waivers are being abandoned, according to Calabria. He believes this is because GSEs see the appraisal process as adversarial to home sales rather than a vital part of the process.
Gaming the System
Ed Pinto, Senior Fellow and Codirector of the American Enterprise Institute (AEI), agrees with Calabria that expanding the use of waivers is risky. While Pinto says it will be hard to predict exactly how many additional waivers will result from this expansion, it is easy to see how the FHFA’s move allows players in the real estate market to game the system, which he argues will ultimately hurt the buyers, sellers, and appraisers.
How It Works
It may come as no great shock that Lyle Radke offers a different viewpoint to Pinto’s and Calabria’s assessments. As principal of collateral risk at Fannie Mae, Radke says this change in policy around waivers and LTV is not as substantial as many stakeholders are making it out to be.
To read more, Click Here
My comments: Very comprehensive article of the issues. AEI has been regularly reporting on waivers data and analysis for a long time. For more info, Google AEI waivers.
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Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501
Phone: 510-865-8041
Online: www.appraisaltoday.com
Posted in:
adjustments,
AMCs,
appraisal how to,
state appraiser regulators,
waivers 
