Wholesale lender has AMC-free appraisals

UWM launches AMC-free appraisal program to coordinate appraisals in-house

Excerpt: The Pontiac, Michigan-based wholesale lender will instead coordinate appraisals in-house, contracting with appraisers directly, offering appraisers and brokers a way to bypass AMCs altogether, which UWM CEO Mat Ishbia characterizes as “middlemen.”
During a Facebook Live address, Ishbia proclaimed that while AMCs add value to the industry, appraisals have been a stumbling block for the mortgage industry.
“It’s going to be cheaper for consumers and more money for appraisers because there’s no longer going to be a middleman with UWM Appraisal Direct,” Ishbia said.
To read more, click here
——————————————
Comments from Rob Chrisman’s daily email mortgage newsletter 9-13-21
Critics wonder if appraisers will sign up for UWM’s program, or any program for that matter, given the amount of business licensed appraisers have already. AMCs take about $125-150, maybe as much as $200. If a company like UWM offers $150 more than AMCs to take their orders, does it come with a price, such as an appraiser saying they won’t do business with other AMCs? Stay tuned!
To read lots more, click here Search for appraisals.
————————————————
Comments from AppraisedValue (Housing Wire) email with comments. No link available.
The larger question is whether UWM’s direct-to-appraiser approach will be attractive enough to keep appraisers too busy to work with AMCs and whether other lenders will follow suit. As our story notes: Likely the strongest incentive for appraisers is that UWM will pass along the full appraisal fee paid by the borrower. And, while AMCs have been dogged with allegations of late pay, UWM will pay appraisers the next business day after a successful appraisal completion. 
Still, some AMCs, such as Class, have already instituted a process to pay appraisers within 24 hours. And some lenders don’t want the headache of bringing valuation in-house.
My comments: I like what UWM is doing, of course. As we all know, there are much more significant problems with AMCs than money, such as long lists of requirements, including everything from every lender they work for!

Appraisal Business Tips

Humor for Appraisers

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

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 Fannie and Bias, real estate market changing?, appraisal business, unusual homes, mortgage origination stats, etc.

Read more!!

Fannie and ADUs

Fannie and ADUs

Video/Slides
Excerpt: Accessory dwelling units (ADUs) are becoming more and more common. Want to brush up on your knowledge of Fannie Mae’s ADU policy? Take this short elearning course to explore information about ADUs, including requirements, construction types, and how to report ADUs in an appraisal report.
To watch, click here
Note: use two arrows at the lower right to move between slides.
My comments: I received an email notification of this on 8/24/21. Worth watching. Well done. Of course, ADU requirements vary by location. They are more being built in many areas of the country. I was recently listening to an appraisal online discussion. Appraisers were from all over the country and some had appraised homes with ADUs.
My MLS recently added a section on ADUs. Not many sales there yet, but anything can help!! In my city, most new ADUs are behind a large home. Many of the owners plan on living there when they retire and renting out the much larger home. Over the past few years, the local planning and building departments have become much easier to work with. Some local MLS listings mention “ADU possible”, a relatively new trend.

Appraisal Business Tips 

Humor for Appraisers

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

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 97 year old appraiser, unusual homes, mortgage origination stats, etc.

 

Read more!!

What should appraisers look for in a sales contract?

What should appraisers look for in a sales contract?

By Steven W. Vehmeier

Excerpt: When should we analyze the contract?

Looking at the sales contract early on allows the appraiser to identify any “subject to” items or other conditions that could influence the value conclusion.

However, reviewing the contract early might also put the sales price in the back of the appraiser’s mind. And although it shouldn’t, it may unintentionally influence the appraiser’s comparable selection and eventually impact a direction in value.

Maybe looking at the sales contract only after developing the appraiser’s opinion of value would help avoid the above concern?

To read more, click here

My comment: Some interesting, and maybe controversial, ideas. Short and worth reading.

Appraisal Business Tips 

Humor for Appraisers

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

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 unusual homes, AMCs, appraiser survey on the future, real estate market, waivers, turn times,mortgage origination stats, etc.

Read more!!

Subjective Language in Appraisals

Appraisal Business Tips 

Humor for Appraisers

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

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 unusual homes, bias, Airbnb, reconciliation, appraisal business mortgage origination stats, etc.

Read more!!

What is an Appraisal “Inspection”?

Appraisal Inspection Vs. Home Inspection

Excerpts: Why are these roles often confused? What is an Appraisal “Inspection”?

The root of many misconceptions about the appraisal inspection is the word “inspection” itself. It is true that as part of the appraisal process, the appraiser might perform some sort of onsite quality, condition, and functional utility survey of the property to determine its relevant characteristics and if it meets certain standards. For example, to the general public, the FHA requirements that an appraiser must operate certain systems in the home (plumbing, electrical, HVAC) seems similar to what a licensed home inspector does.

The Oxford Online Dictionary defines inspection as: “Careful examination or scrutiny”

Merriam-Webster’s Online Dictionary defines inspection as:

“The act of looking at something closely in order to learn more about it, to find problems, etc.; the act of inspecting something”

It’s somewhat of a benign definition, is it not? There’s nothing really scary there, yet many appraisers attempt to avoid confusion, and (potentially) limit their liability, by avoiding use of the word “inspection” entirely. Many appraisers use euphemisms for this term in their appraisal reports, such as “property visit” or “viewing.”

Even FHA got into the euphemism game with the publication of Handbook 4000.1, which went into effect in 2015. The words “inspect” or “inspection” generally do not appear in reference to an appraiser’s obligations. Instead, the words “observe” and “observation” are used.

To read more, click here

My comments: USPAP has never required an inspection. USPAP defines “Personal Inspection” as the following: a physical observation performed to assist in identifying relevant property characteristics in a valuation service.”

The word “inspection” is used in various locations, such as Advisory opinion A02, including Minimal level of Inspection.

The fourth exposure draft for the 2023 version has Section 1: “Review of Requirements about Disclosing a Personal Inspection.” Final comments deadline is today, July 23, 2021.

Revised FHA Handbook 4000.1 effective 9/14/15. Are you ready for the changes? Get the facts!!

Appraisal Business Tips 

Humor for Appraisers

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

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 bedroom closets, Updated FHA 4000.1, bias, unusual homes, mortgage origination stats, etc

 

Read more!!

Appraiser Client Relationships are Very Important

Relationships… The Lost Art

Mark Skapinetz

Excerpts: Relationships. It’s a lost art of business when it comes to the appraiser profession…

From 2009 to about 2019, I was doing Lender appraisals, and deep down, something was missing. I would only be talking to customer service reps, people overseas that the AMCs subcontracted out to review work, and I had no one to go to with my issues and ideas. I know nothing about these people, and they don’t know anything about me.

Building this referral or relationship business wasn’t going to be easy, and it most certainly wouldn’t include any lenders that used AMCs for their ordering process. I needed to look elsewhere for this to happen. Where did I go? I went to the Realtor Facebook groups, Investor groups, and recently, I went to the new platform called clubhouse.

To read more, click here

My comments: I started my business in 1986 and mostly worked for lenders, but also worked for a wide variety of other clients: relocation companies, attorneys, private sales, estates, title companies, etc.

I quit doing residential lender appraising in 2005, before the crash. I had personal relationships with all my local and non-local, lender clients. Very few revision requests (wrong address, missing value, etc.) and no competitive bidding, etc.

Most of my referrals have been from local real estate agents or my website. I went on our weekly broker open house tours almost every week since 1990 and was active in the local association of Realtors.

I have been writing about non-lender appraisals since I started my paid newsletter in 1992 and have spoken to appraisers all over the U.S. and Canada about appraisal marketing.

Appraisal Business Tips including Marketing 

Humor for Appraisers

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

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 Crazy real estate market, bias, liability, unusual homes, mortgage origination stats, etc.

Read more!!

Drainage Problems Can Damage Foundations – Appraisers Check It

Watch out for drainage problems when doing your appraisals!! 

When I first heard about the collapse of the Florida condo tower, I immediately thought about a drainage problem. Previous engineering reports revealed the problems – pool leaks, water not draining properly, etc. The condo building was constructed before building codes were changed to help avoid their problem. No one knows why the building started collapsing. Drainage Problems Can Damage Foundations

Limestone is under all of Florida. In parts of South Florida, the porous limestone is not good for foundations as there is less soil covering the limestone. I have seen many videos of saltwater intrusion flooding streets. The water came up through the limestone, caused by sea-level rise.

—————————-

I always check for any drainage problems at homes. They are relatively easy to spot and can cause significant damage. I appraise many hillside homes, which can easily have problems. I look at where the gutter water drains and how it is moved away from the foundation. Sloping floors are another indication of possible foundation problems.

When I go into an unfinished basement, I look for water problems. One good indication is that everything is raised from the floor. Also, water stains on the lower part of the concrete. The water is coming through the foundation. A sump pump can help.

————————–

Properties I have appraised with obvious drainage problems:

– 2 story home on a hillside. Saw radiating cracks inside on both floors in the same corner. At the corner outside of the home was a small round drainage catchment about 1 ft. in diameter, without a way to drain it away from the house. The water came through the rear of the foundation because there was no drainage system.

– Home on a hillside that was moving down the hill. Standing water under the house. Unlevel floors. Big foundation cracks. Known area of problems. Relocation appraisal with two appraisers. The other appraiser did not mention anything.

Note: A good fix for hillside homes is a “french drain” in the ground that takes the water to the sides of the home, with plastic pipe to keep the water from the sides of the foundation.

– Duplex I own on a mostly level site. Tenants mentioned water coming inside the garage on one side. They had moved everything near that side of the garage off the floor. Both units were on level ground with raised foundations. The front garage was on a slight downslope. I replaced the gutters and drains so the water drained away from the foundation. I regularly check for any problems during the winter rains. No foundation damage, fortunately.

————————————–

To read an excellent article on how and why concrete fails, Click here.

Modern concrete lifespan is roughly 50-100 years. The Florida condo building is 40 years old. “Concrete is poured around steel rebar, which gives it tensile strength. But tiny cracks — found in all concrete — cause water to start rusting the steel, which then expands, cracking the concrete.”

Photos of the Surfside basement taken before the collapse show steel rebar breaking all the way through the concrete to the point at which it is fully exposed to the salty and humid Florida air.”

We definitely have a significant infrastructure problem. Replacing concrete is very expensive: building foundations, bridges, freeways, etc.

I have watched several documentaries about what happens if there are no humans to maintain buildings, roads, bridges, etc. The roofs fail first, and water comes inside. Concrete and steel are damaged by water. Roads break down. Bridges collapse. When doing appraisals, I always tell the owners to be sure their roof does not leak. When they see stains in the ceilings, the roof has already started leaking.

Read more!!

Appraiser Capacity During the Pandemic

Spotlight: Appraiser Capacity During the Pandemic

June 16, 2021 

By Danny Wiley, Senior Director of valuation for Single-Family Credit Risk Management

Excerpt: 2020 – and the early part of 2021 – have shone a bright light on a topic that’s been a growing concern – appraiser capacity. While the scope of that concern has been different throughout the country in recent years, it’s now been brought to the forefront for every state. The pandemic fueled regulation which lowered already-low interest rates and, for a portion of homeowners, home-improvement-related refinances combined with additional factors to create a perfect storm for record appraisal volume – without a corresponding increase in the number of licensed appraisers.

The majority of the states comprising the list of the top 10 highest average GSE appraisals per appraiser were often situated in the western part of the country – and also, not surprisingly, included some of the more populated states, including California, Texas, Michigan, Arizona and Colorado. This group ranged from Ohio (165 average appraisals per appraiser), Illinois (171) and New Jersey (174) at the low end to Utah (233) and Texas (207) at the top end. Overall, the appraisers on this list were averaging about 14-19 appraisal per month from 2012-2019.

As you can see, the workload quickly escalates at this end of the spectrum – and, as you’ll find out below, 2020 showed us that a perfect storm of factors can make the situation much worse.

To see more graphs and read more, click here

My comments: Maybe someday lenders will allow trainees to sign. The Very Best Way to solve the appraiser shortage. The significant AMC hassles mean appraisals take more time.

A subscriber called me recently. She got a request for an appraisal of a home with a subsidized purchase price (Low-moderate income). The AMC appraisal request did not disclose this. She left messages to 5 of the AMC reviewers and did not get a callback. I suggested telling the AMC to get another appraiser. The easiest reason is usually to say she is not competent as the reason.

I have appraised them before. They are complicated. Typical restrictions on price if sold, etc. I was working for a local lender and contacted the very experienced chief appraiser to see what they needed and if they want to lend on these types of properties. Many appraisers are giving up on working for AMCs and quitting or retiring.

 

Appraisal Business Tips 

Humor for Appraisers

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

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 unusual homes, marketing, appraisal bias,mortgage origination stats, etc.

Read more!!

Zoning and Appraisals

The Infamous History of Zoning in the Housing Industry (Video)

Excerpts: History of zoning in the housing industry and how past practices shape the problems we are currently experienced today.

What was the purpose of zoning in the very beginning? How exactly were these practices harmful to people of color? What are some of the problems we see today because of this? These questions and much more will be answered.

To watch the video, click here

My comment: A controversial topic. Today this often involves “downzoning,” allowing for properties to have more than one unit or more density – apartments, condos and townhomes.

Experts Say Zoning Changes Are Most Effective Path to Boost Housing Supply for a More-Balanced Market

Excerpt: A Zillow survey of economists and other real estate experts finds high costs are expected to slow construction and may lower homeownership among today’s 30-somethings. Relaxing zoning rules is what the panel says would be most productive to increase new housing supply.

Other ways include:

  • Ease the land subdivision process for landowners
  • Relax local review regulations for projects of a certain size
  • Accelerate adoption of new construction technologies (e.g., modular building, 3D printing of certain components)

To read more, including details and the full list of survey suggestions, click here

Zoning in the Appraisal Process

Appraisal Business Tips 

Humor for Appraisers

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

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 unusual homes, slowing market?, appraisal business, mortgage origination stats, etc.

Read more!!

Appraising vs. the Public Good?

Has Appraising Failed the Public Good?

by Steven R. Smith, MSREA, MAI, SRA

Excerpts: The term Public Good is in the opening paragraph of the Uniform Standards of Professional Appraisal Practice (USPAP). An appraiser friend once wrote that our regulations and guidelines are intentionally ambiguous—and that may be. But what is crystal clear to me is that the industry has put the interests of its clients before the public good.

The Public Trust statement and the Ethics Rule have been largely ignored over the years with loan production put first…

What can an individual appraiser do to support the public good, even before they start an assignment? For me, the answer always has been to appraise the client and the appraisal assignment. There are some clients and assignments that simply should be avoided because of the wants, needs and desires of the client, with respect to the assignment results.

To read more, click here

My comments: I have known Steve Smith for a long time. To read more comments from Steve and other savvy appraisers, join the National Appraisers Forum, an email discussion group. I have been a member since it started. It is my “go-to” resource for appraisal topics. Moderated. Very different from Facebook and other appraiser online discussion groups where filling out forms and dealing with AMCs are discussed.

The future of residential appraising

Appraisal Business Tips 

Humor for Appraisers

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

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 unusual homes, appraiser diversity, Cost Approach, liability, mortgage origination stats, etc.

Read more!!