What type of heater is needed for a loan?March 22, 2018 By Ryan Lundquist
Excerpt: A guy wants to sell, but his central system is broken, so he has space heaters in each room. Does that work? Is it going to fly for a loan? What’s an appraiser going to be looking for when it comes to a heat source? Let’s consider some thoughts from Fannie Mae, HUD, local code, and different lenders.
Very well written, comprehensive and worth reading at:
My comment: I appraise a lot of Victorians, built when they were heated by fireplaces. Many added a floor heater on the first floor with no other heating source, including no heating on the second floor. The easiest way is to put baseboard electric heaters in the bedrooms, assuming electrical has been upgraded. I regularly get asked by local real estate agents about lender requirements. Now I know what to tell them!
Covid-19 Residential Appraisers Tips on Staying Safe For Covid Updates, go to my Covid Science blog at covidscienceblog.com 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 , weird decor, hidden factors that affect value, mortgage origination stats, Covid tips for appraisers, etc. Read more!! → |
If you really WANT to get in trouble here are 2 ways to do it, (eventually) guaranteed to succeed
Advertise your uniqueness!
More important than earning a living, providing support for your family or
serving the general public is to let the world know who you really are!
When meeting a homeowner or commercial building owner for the first time,
take a few minutes to explain your facial tattoos, your exotic mode of medieval
dress and your political positions as shown by the 188 bumper stickers on your car. Some straights are freaked out by creativity, so it’s worth taking the time to
calm them down.
When I was Chief Appraiser for The Money Store, I got a call from a
prospective borrower in one of the northern rural counties of California. I had just
added another appraiser to the panel in an effort to improve coverage. The borrower reported that although the appraiser was pleasant of demeanor and appeared to be knowledgeable, there was no question that she was living in her car.
When I called her, I had to cite that stuff in USPAP that talks about inspiring trust of appraisers among members of the public, and told her to reapply to the panel when she would be able to present a more conventional appearance. I didn’t hear from her afterwards, but, sure enough, she was a duly certified California appraiser.
Pump that value!
It’s a “win win” for everyone! I mean, you’d think so, right? What refi borrower
complains about a high appraisal? The lender sure won’t complain. Even in
appraising for a loan to purchase, it will flatter the owner and facilitate the
borrower’s deal, right?
Actually, wrongamundo, Buckwheat. By far, the most frequent complaint I
saw while at BREA (California Bureau of Real Estate Appraisers) was inflation of value, tendered by the lender, the buyer, the seller, etc.
I recall one respondent, who appraised exclusively for VA lenders, assuring
me that he considered it his duty to make sure that if the veteran really wanted the property and his valuation could make it happen, he would find legitimate
comparable sales to support that sale price.
What was unclear was his understanding of the word “legitimate”. I guess it’s tough when another couple of grand is added to the price just for the VA guarantee, but doable, certainly, for someone with such a holy mandate.
As an 11-year Army veteran myself, I let him know that I appreciated his
devotion to cause, but I had to tell him that he was a crook. And that he should
reexamine his assumption of duty during his license suspension, during which he
had to find 25 hours of courses on ethics.
Editor’s notes: this is a very brief excerpt from Barry’s article in the December 2017 issue of the paid Appraisal Today newsletter. Click the graphic below for more info on the newsletter. Barry has had a wide variety of appraisal jobs over the past 40+ years, including a state regulator investigator. He is now retired from appraising but still giving his opinions!! Contact him at barrettbates@gmail.com
By Barry Bates
The appraisal client is always the intended user.
A lovely concept out in the ether somewhere, but hardly ever the case in practice. The client (who engages the appraiser) is a lending technician or AMC drone; the intended user is an underwriter, servicer or portfolio manager. (This assumes the fact that only about 10% of appraisals are ever done for anybody other than a mortgage
company.)
Pretending that they’re the same person (based on the legal concept of a corporation as a person, which facilitates all kinds of evil) allows the left hand, which is handing out cash, to avoid confronting the fact that the right hand is removing money from the borrower’s savings account.
USPAP is intentionally not specific
Finally, the old TAF argument in support of USPAP that its lack of specificity
is only the result of trying to avoid “micro-management” of the appraisal process is just what we former Army wiretappers used to call “cover noise”. It screens from hearing the fact that as it stands, USPAP can be used either to exonerate or
execute an appraiser on political motives regardless of the issue at hand. That’s
why more procedural detail is needed, not less.
Appraiser Judy fails the geocompetence test when she gets a citation from
her state for not having a subscription to local MLS. Yet when appraiser Willie
walks when he fails to check online sources or MLS after the property owner assures him the property is not publicly listed for sale. This same thread of delusion seems to run throughout USPAP, undoubtedly promulgated by crusty old MAIs. If any carbon-based life form tells you something, it’s okay to believe it’s true without any further investigation. Just throw in an extraordinary assumption, even though it’s invalid because it’s impossible or unreasonable.
Another reason for more specificity is the utter failure of the HVCC /Dodd-Frank AMC experiment. Instead of being coerced by a mortgage broker,
today’s appraiser is systematically coerced by onerous documentation
requirements, intimidating email, multiple requests for reconsideration and
arbitrary blacklisting. Appraisal quality is depressed by AMC expropriation of what
was once 50% of a normal appraisal fee. Moreover, residential fees in general
haven’t changed for 20 years.
2 GREAT ways to get into appraisal trouble. Tales From Barry Bates
Covid-19 Residential Appraisers Tips on Staying Safe
For Covid Updates, go to my Covid Science blog at covidscienceblog.com
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