bias

Appraisal Errors from Reviewers and State Boards

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NOTE: Please scroll down to read the other topics in this long blog post on grow your business, fix your templates, unusual homes, mortgage origination stats, etc.

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Frank Lloyd Wright’s Iconic Carmel-by-the-Sea House Sells for $22 Million

The 1,400-square-foot property sold for its eight-figure asking price

Excerpts: Though Frank Lloyd Wright has long been admired for his ability to artfully integrate his iconic structure’s into the natural world, you’ll only find one near the ocean: the Mrs. Clinton Walker House. Located on Carmel Point near Carmel-by-the-Sea—a celeb-favored California enclave—the one-of-a-kind home..

Della Walker—widow of Minneapolis lumber executive Clinton Walker—wrote to Wright in 1945 asking him to take on the seaside project. As a woman living alone, she noted that she hoped for privacy and protection, and “a house as enduring as the rocks but as transparent and charming as the waves and delicate as the seashore.”

To read more click here

My comments: I have been to Carmel many times as I used to live in nearby Salinas. It is a Very Special Place.

Local appraisers told me about the street numbering: A unique characteristic of Carmel-by-the-Sea is that there are no street addresses. Properties are identified, for example, as being on the “west side of San Antonio Street, 3 houses south of 12th Avenue”. In addition to this, many owners give their homes a name. Wonder what AMCs think about that!

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Black-Owned Homes Appreciated Fastest In The Pandemic – Zillow research

Black Americans’ housing wealth has made strides, but remains well below that of the typical U.S. household

Excerpts:

The ratio between Black home values and home values overall is closing.

Black home values increased faster than home values for all other races over the course of the pandemic, giving an equity boost to Black homeowners.

Black home values appreciated 42.5% from pre-pandemic to January 2023, compared to 38.2% for overall home values and 37.8% for white home values.

Some markets saw extraordinary growth in Black home values over the pandemic. In Detroit, a market that has struggled with the lasting effects of redlining and thus is no stranger to housing inequalities, Black home values have increased 51.7% and the ratio of Black home values to home values overall has moved up nine percentage points since February 2020. Other markets in the Midwest, such as Kansas City, Chicago, Cleveland, Milwaukee and Louisville, also saw large improvements over this period to the Black home value ratio – all seeing the ratio increase at least five percentage points.

The West Coast didn’t see the same progress.

To read more about Zillow research, click here

To see the original redlining maps click here

To read more detail on Bay Area racial discrimination, click here

My comments: Good to see some positive data on Black homeownership. Near where I live, there is one of the highest patterns of racial segregation in California. Substantial redlining started in the 1950s, supported by FHA and appraisal associations. It stopped in the 1970s, but the damage was done.

My previous home had a deed restriction saying that “Negroes and Chinese” could not purchase the house. They could only be servants. This was very common in the San Francisco Bay Area. Removing them from the deeds was difficult. Passed in 2022, a new bill requires the removal of ‘racial covenants’ from California property records.Click here for the 4 ways, plus information on why I take ads, etc.

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New in the March issue of Appraisal Today

How to use less gasoline and save money with today’s high gas prices!

We all drive. Some of us drive a lot. Some use pickup trucks, and some use high-mileage cars. Gasoline is costly. You can save money by getting more miles per gallon, whatever type of vehicle you drive.

Many years ago, long before hybrids, a friend of mine won a “highest mileage” contest. How did he do it? He kept a steady low speed as possible, avoiding stopping whenever possible and accelerating very slowly.

I have always used these techniques when I am low on gas and not near a gas station. Now, I am trying to change my driving habits to do it even more because it saves so much money with current gas prices and doesn’t cost me anything except a bit of time lost.

When researching this article, I found that there were others advising this technique.

To read more about saving money on gasoline, plus 3+ years of previous issues, subscribe to the paid Appraisal Today.

If this article helped you save money when driving, 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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Even in a Competitive Market, Here’s How Appraisers Can Grow Their Businesses

Excerpt: I believe that there are many industries and other lines of business that an appraiser can serve. The mortgage origination line of business is just one of them. I’ll point to some other opportunities in a moment, but none of them will be accessible to an appraiser who feels their only purpose is to serve the mortgage origination industry.

I don’t think of our work confined to an “appraisal industry” because I consider the business of providing valuation services, including real estate appraisal reports, to be a profession. We are not limited to providing services to a single industry, but rather are free to serve a wide range of businesses and industries, provided we can demonstrate competency and professionalism in our activities, upholding the confidence and trust required of the profession.

Trust and confidence are key to appraiser success and they have to be earned.

To read more, click here

My comments: Some interesting ideas from a 30 year appraiser.

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What to Do When You’re Looking for Something to Do – Fix Your Templates!!

By Craig Capilla,Attorney

Excerpts: Ask yourself when you last read through the boilerplate language in your report template. I mean really read it, line by line, word by word. The answer might surprise you.

Well, I can tell you based on the reports that come across my desk that the answer won’t have been recent.

I’m writing this in the year 2023 but still receiving reports invoking the departure rule. Dated boilerplate language is everywhere I turn. Inconsistent and contradicting language abounds. Addenda attesting to the validity and acceptability of digital signatures is still prevalent.

And if you understand a semi-competent attorney can start to pick and prod at those kinds of inconsistencies to make the listener question your competency, wait until I tell you what they can do with a zoning classification that hasn’t been used in 15 or more years, or competing statements about the intended use of the appraisal.

The language that exists in your own report is probably the first place you should turn to tighten up your practice and reduce your risk.

To read more, click here

My comments: Read this article for more practical ideas while business is slow. This applies to both lender and non-lender appraisals. Very easy to do. Definitely good suggestions. I have seen some of the above in recent lender appraisals.

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White House Replica in Indiana Listed for $8.4 Million

Excerpt: Designed to replicate 1600 Pennsylvania Ave. in Washington, DC, this White House–inspired home boasts an eye-popping 33,547 square feet of living space.

The five-bedroom mansion sits on a spectacular 45-acre lot. A two-story entry features double curved staircases and ornate columns. There are six fireplaces, a billiard room, two offices, a media room, and a vault with a wine cellar.

The property also comes with an 11,000-square-foot space that could be turned into a car museum, indoor event center, or recreational sports area. There are also four horse barns with living quarters, a riding arena, a guesthouse, and garages for up to 26 cars.

To read more and see lots of photos, click here

Scroll down the page to the Number 1 listing. To see the MLS for the property, click on the address

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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.>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 decreased 5.7 percent from one week earlier

Mortgage applications decreased 5.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 24, 2023.

The Market Composite Index, a measure of mortgage loan application volume, decreased 5.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 6 percent from the previous week and was 74 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 44 percent lower than the same week one year ago.

“The 30-year fixed rate increased to 6.71 percent last week, the highest rate since November 2022, which drove a 6 percent drop in applications. After a brief revival in application activity in January when mortgage rates dropped to 6.2 percent, there has now been three straight weeks of declines in applications as mortgage rates have jumped 50 basis points over the past month,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Data on inflation, employment, and economic activity have signaled that inflation may not be cooling as quickly as anticipated, which continues to put upward pressure on rates.”

Added Kan, “Both purchase and refinance applications declined last week, with purchase index at a 28-year low for a second consecutive week. Purchase applications were 44 percent lower than a year ago, as homebuyers again retreat to the sidelines as higher rates crimp affordability. Refinance applications account for less than a third of all applications and remained more than 70 percent behind last year’s pace, as a majority of homeowners are already locked into lower rates.”

The refinance share of mortgage activity decreased to 31.8 percent of total applications from 32.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.1 percent of total applications.

The FHA share of total applications remained unchanged at 12.1 percent from the week prior. The VA share of total applications decreased to 11.6 percent from 12.0 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.6 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 6.71 percent from 6.62 percent, with points increasing to 0.77 from0.75 (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)remained at 6.44 percent, with points decreasing to 0.49 from 0.53 (including the origination fee) for 80 percent LTV loans. The effective rate remained the same from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.45 percent from 6.39 percent, with points increasing to 1.19 from 1.16 (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 6.13 percent from 5.98 percent, with points remaining at 0.93 (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 5.73 percent from 5.66 percent, with points decreasing to 0.86 from 0.97 (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 510-865-8041

Email ann@appraisaltoday.com

www.appraisaltoday.com

What is Your Appraiser Level? Why Does It Make a Difference?

By Ann O'Rourke on February 24, 2023 / appraisal business, bias / Leave a comment

Tags: appraisal business, bias

What Level Appraiser Are You?

Beginner, Intermediate, or Pro?

By McKissock

Excerpts: How do we measure ourselves?

What is the mark of an appraiser who is at the top of his or her “game”? Is it the letters behind the name (MAI, SRA, etc.)?

The key is not the letters but the competency or skill. For example, are you competent to prepare an entire appraisal from start to finish? You might answer, “Absolutely!” But what if the appraisal form was completely blank with no boilerplate text? Do you still feel the same level of assuredness? What if you could not use the URAR form at all, but still had to produce an appraisal report that could stand up in court? Are your legs shaking? These questions help us to start to gauge our current level.

A Level 1 appraiser checks boxes. A Level 2 appraiser adds explanations, graphs, and charts to those boxes. And a Level 3 appraiser knows how to think outside the checkboxes altogether. A pro-level appraiser may use a form. However, she is not bound by it; she can prepare a narrative report if it is needed or preferred. In addition, he understands the principles of USPAP and never stops improving his craft.

To read more good ideas, click here

My comments: Most appraisers are not busy. Now is the time to increase your appraisal skill level. There are AMCs who want appraisers to do the “tough ones,” not just those with the lowest fees. They will pay good fees. Non-lender appraisals, with higher fees, also require a higher skill level.

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NOTE: Please scroll down to read the other topics in this long blog post – Bias, Cost cutting, slow business, unusual homes, mortgage origination stats, etc.

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

FHA Handbook 4000.1 Appraisal Changes

By Ann O'Rourke on January 27, 2023 / AMCs, appraisal business, bias, FHA, non-lender appraisals / Leave a comment

Tags: AMC, appraisal business, bias, FHA, non-lender appraisals

FHA Handbook 4000.1 Appraisal Changes

By Dan Bradley

Excerpts: On January 18, 2023, HUD issued an announcement regarding revisions made to Handbook 4000.1. According to the announcement, the revisions included “enhancements and revisions to existing guidelines and various technical edits.”

The most significant of these revisions was the elimination of the requirement to include the 1004MC form as an attachment to the appraisal report.

Changes to the Handbook also include several other minor, but nevertheless meaningful, edits and clarifications to FHA appraisal requirements, including:

Under “Attic Observation Requirements,” a clarification was made regarding the appraiser’s obligation to “safely” access the attic. The language requiring a minimum “head and shoulders” access into the attic was deleted.

Under “Crawl Space Observation Requirements,” significant revisions were made, including removal of a bullet point list of MPR/MPS criteria for the crawl space. Also, language requiring a minimum “head and shoulders” access into the crawl space was deleted.

The changes outlined in the Handbook may be implemented immediately but must be implemented for FHA cases assigned on or after April 18, 2023.

To read more, click here

My comments: Many thanks to McKissock for telling us what we need to know. Includes a link to the “redline” version of 4000.1 so you can skip over most of it. Scroll down to “Updates, Revisions, Notifications” to get the redline versions.

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NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, mortgage origination stats, etc.

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So Many Appraisal Cost Approach Questions

Cost Approach – When to Use in Appraisals

By Ann O'Rourke on August 26, 2022 / appraisal business, appraisal how to, bias, cost approach, Fannie, george dell, non-lender appraisals / Leave a comment

Tags: appraisal business, appraisal how to, bias, cost approach, Fannie, George Dell

Fannie Mae and the Cost Approach

Excerpt: We often receive questions from appraisers regarding Fannie Mae and the cost approach. For example: “I’m appraising a property and have been instructed to comply with Fannie Mae guidelines. I understand that Fannie Mae requires the sales comparison approach, but what if there aren’t enough good comps? Can I use the cost approach as the primary method of valuation?”

Answer: No!

In order to comply with Fannie Mae guidelines, the sales comparison approach must be the primary method used to determine the value. In fact, Fannie Mae will not purchase a mortgage on a property if the cost approach is the primary or only method of valuation used.

Quite simply, if there isn’t enough data for the appraiser to develop a reliable opinion of value by the sales comparison approach, the mortgage will not be marketable to Fannie Mae.

However…

To read more, click here

My comment: I included this article plus the one below, which both address the Cost Approach’s common appraisal questions.

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The Cost Approach: An Underutilized Approach to Value

Excerpt: In residential appraising, the cost approach and the income approach have in many cases become less utilized in favor of sole reliance on the sales comparison approach.

There are occasions when the income approach can be the primary indicator of value for residential properties, such as developments with a high percentage of homes owned by investors.

The fact that Fannie Mae won’t accept reports that rely solely on the cost approach, with a few rare exceptions, doesn’t mean that approach can’t be the primary indicator of value. It just means Fannie Mae won’t buy that loan.

To read more, click here

My comments: I started with an assessor’s office in the 1970s. At that time, my county was changing from only using the Cost Approach for decades to a sales-based approach. I never liked to use only the Cost Approach when I started doing fee appraisals.

In my area, there are very few land sales. There has not been one for over 20 years in my city. Depreciation is always iffy when appraising Victorian homes built before 1915.

But, I always use the Cost Approach for new construction to determine the financial feasibility of custom homes. I use a few land sales from other cities. If the new proposed home is on a vacant parcel, I go back to when the parcel was purchased, sometimes many years ago, and do a market condition adjustment.

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NOTE: Please scroll down to read the other topics in this long blog post on Bias complaint, George Dell, Get a Google Business Profile, unusual homes, mortgage origination stats, etc.

Appraisers: How to Spend Less Time on Email

By Ann O'Rourke on August 12, 2022 / appraisal business, bias, new appraisers, non-lender appraisals, real estate market / Leave a comment

Tags: appraisal business, bias, mortgage loan volume, real estate market

Appraisers: How to spend less time on Email

Excerpts: Many appraisers report that they’d like to spend less time on email. The task of providing status emails eats up time in the workday and tends to be more complex and time-consuming than typing a quick email reply. Status requests from AMCs typically require you to log in to their system and go through the process of updating the order status on their website. Simple enough, but if you are doing this several times a day for multiple orders, it interrupts your workflow and decreases your productivity.

2. Only check email twice a day, at designated times

Set aside two short time windows for email (15 or 30 minutes each). Do not read or reply to emails outside of those time windows. For the rest of the day, turn off email notifications on your phone, etc., so that incoming emails won’t interrupt your work. You can add a note to your email signature letting people know that they can reach you by phone if they need to get in touch on an urgent matter.

To read all 7 ways, click here

My comments: I regularly write about managing your emails in my monthly newsletter, including getting to Inbox Zero. This blog post is the best I have ever read, as it is specifically for practicing appraisers.

How to Manage Your Email

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NOTE: Please scroll down to read the other topics in this long blog post on mortgage rates history, declining prices on high end homes, bias, unusual homes, mortgage origination stats, etc.

Residential Appraisals and Airbnb Income?

By Ann O'Rourke on June 3, 2022 / appraisal how to, bias, real estate market / Leave a comment

Tags: appraisal how to, bias, real estate market

Residential Appraisals and Airbnb Income?

By Julie Friess, SRA, AI-RRS, MA

Don’t get caught like a deer in the headlights! State appraisal boards ARE disciplining appraisers across the country for improperly using the business income (Short term Rental – STR) from Airbnbs on the residential 1007 Fannie Mae form.

Lenders and AMCs want residential appraisers to value these properties as both the real estate and the business values of these properties – Wrong!!

Some of the topics:

• USPAP issues

• GRM is an Income Approach that applies to homes with long long-term tenants, not homes with many Short Term Rentals.

• Functional Obsolescence

• External Obsolescence

• Covid-19 Pandemic and Airbnb’s

The photo below has an exterior entrance to a bedroom, typical for an Airbnb remodeling.

To read more, click here

My comments: This mainly applies to cities where many homes are being converted to Airbnbs, including exterior doors for bedrooms (see foto below) and expanding the number of bedrooms. In popular vacation areas, such as Sedona, AZ, where Julie lives, investors purchase homes and do extensive remodels to turn them into Airbnbs with Airbnb management companies handling everything for them (clean up, new furnishing, and renting).

Julie does not include short-term rental income (STR) in her appraisals of homes with Airbnbs. I posted her article on my website so that everyone can read it. I have a few of my comments, of course!! I’m a commercial appraiser and know how hotels and Bed and Breakfasts are appraised. The appraisals include separate values for real estate, fixtures, and Going Concern (business income and expenses).

Julie speaks about this topic regularly on our weekly Clubhouse meetup, Real Estate Appraisal Questions, every Thursday at 2 PM Pacific Time (audio-only social media). All the sessions are recorded. The May 12, 2022 session was “Residential 1004/1007 Form Appraising & AirBnB Income”.

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NOTE: Please scroll down to read the other topics in this long blog post on real estate market changing, appraisal bias research, unusual homes, mortgage origination stats, etc.

Borrower Keeps Calling Appraiser

By Ann O'Rourke on May 13, 2022 / appraisal how to, bad appraisers, bias, Freddie, hybrid appraisals / Leave a comment

Tags: appraisal how to, Bad appraiser, bias, Hybrid appraisals

Borrower Keeps Calling Appraiser

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NOTE: Please scroll down to read the other topics in this long blog post on appraisals under contract price, bias, vacant land, hybrids, fannie bad appraiser list, unusual homes, mortgage origination stats, etc.

The future of residential appraising(Opens in a new browser tab)

Appraisers – The Past and The Future

By Ann O'Rourke on April 8, 2022 / appraisal, appraisal how to, bias, Clubhouse, real estate market / Leave a comment

Tags: adjustments, appraisal, appraisal how to, bias, CLUBHOUSE, real estate market

Appraisers – The Past and The Future

The Path that Brought Us Here

by Richard Hagar, SRA

Excerpts: A wise man by the name of Jim Irish, former chief appraiser for the Federal Reserve Bank out of Topeka, Kansas, once told me something very profound: “The government is rarely proactive but always reactive.” Translation: laws, rules, and guidelines are usually developed after a problem smacks us upside the head. Since hearing this, I have found that it also applies to large enterprises.

Appraisers continued to tell lenders that they drove by each of the comparables used in the report. Years later, when lenders, Fannie Mae, Freddie Mac, FHA, and the VA spot-checked reports, they found out that the condition or location of many comparables didn’t match what was reported. So, the reactive response was to require the appraiser to affirm, under penalty of perjury (which stands to this day), and provide original photographs of each comparable.

Failure to inspect triggered client engagement letters stating the absolute requirement to personally inspect each of the comparables, provide original photographs, and create a system that inspects the photographs and can tell when a photograph is used twice or sourced from the MLS or county—clients know who’s lying to them and fees are lower because of it.

To read more, click here

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Prepare for Change

by Richard Hagar, SRA

Excerpts: In my career, I’ve been through four major changes in the market and our business, so what’s about to happen isn’t my first rodeo. I’m going to point out some things that will make a few people angry. However, I’m trying to help by pointing out how you can become better and profit from the change.

Waivers

Both Fannie Mae and Freddie Mac allow “appraisal waivers” (loans where no appraisal is required), and in the past, waivers were limited to fewer than 5% of the loans they purchased from lenders. However, their waivers have increased to 48% of their loan purchases over the past year. Imagine that 48% of the loans no longer require an inspection or appraisal.

Prior to 2022, Fannie Mae’s UAD system reviewed approximately 20,000 appraisals a day produced by approximately 40,000 appraisers. This indicates that appraisers were providing one appraisal every other day. Now, consider that waivers reduce the rate to an appraisal once every 4 days. Ouch.

To read more, click here

My comments: I have known Richard Hagar for a long time. He can sometimes be negative or even harsh but has good ideas

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NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, bias, Old comps, investor purchases, mortgage origination stats, etc.

PAVE Appraiser Bashing

By Ann O'Rourke on April 1, 2022 / ANSI, bias, desktop appraisals / Leave a comment

Tags: ANSI, bias, desktop appraisals, Fannie

PAVE Action Plan to Advance Property Appraisal and Valuation Equity

By McKissock, March 23, 2022

Two of the more controversial recommendations:

Excerpts:

Inform Federal Housing Administration (FHA) borrowers about the process to request a reconsideration of a valuation when the initial valuation is lower than expected.

Perhaps the most far-reaching recommendation for action is number 1.6, which states, “Develop a legislative proposal that modernizes the governance structure of the appraisal industry to improve transparency and public participation in the establishment of appraisal standards and appraiser qualification criteria, and to advance diversity in the profession.” Translation: Amend FIRREA to remove references to The Appraisal Foundation and transfer the Foundation’s authority to write appraisal standards and qualifications to the Appraisal Subcommittee or another federal government entity.

As of this writing, no proposed legislation related to the PAVE recommendations has been introduced. Because committees in both the Senate and the House are holding hearings, a bill (or, more likely, bills) can be expected very soon. Stay tuned.

Short and worth reading. To read more, including links to the full PAVE report and the summary, click here

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AEI’s Comments on PAVE Report

Excerpt: The Brookings and Freddie Mac studies are not based on rigorous data analysis. Most importantly, they conflate race with socio-economic status (SES), i.e. income, buying power, marriage rates, credit scores, etc. Race-based gaps found in the Brookings and Freddie Mac studies either entirely or substantially disappear when adjusting for differences in SES. Furthermore, our analyses show that similar gaps are present in majority White or White-only tracts across different SES levels, raising serious questions regarding a race-based explanation.

To read more, click here

My comment: American Enterprise Institute is a conservative “think tank” and has also supported the appraisers’ side on other issues.

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Congress Committee Meetings on Appraisal Bias

Strengthening Oversight and Equity in the Appraisal Process

Thursday, March 24, 2022

Senate Committee on Banking, Housing, and Urban Affairs

Appraiser Witness: James Park, Executive Director Appraisal Subcommittee

To watch, click here

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Devalued, Denied, and Disrespected: How Home Appraisal Bias and Discrimination Are Hurting Homeowners and Communities of Color Tuesday, March 29, 2022

House Financial Services Committee

Appraiser speakers:

Pledger M. Bishop, III, President, Appraisal Institute
David S. Bunton, President, The Appraisal Foundation
Dean Kelker, Senior Vice President and Chief Risk Officer, SingleSource Property Solutions, on behalf of the Real Estate Valuation Advocacy Association

To watch, click here

My comments: I was not able to watch either of these meetings before writing this newsletter.

Jonathan Miller attended the virtual March 24 meeting and had comments on the March 24 and 29 hearings. To read his comments, click here Scroll down to “James Park”

His blog post for today (usually sent around 11 AM EST) may have comments on the March 29 meeting. To read his comments, click here. Search for “devalued” (Hopefully, this link works.)

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NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, 1004/Desktops, mortgage origination stats, etc.

Desktop appraisals – Lots of Info Available!

By Ann O'Rourke on March 25, 2022 / bias, desktop appraisals, Fannie, FHA / Leave a comment

Tags: ANSI, bias, desktop appraisals, Fannie, FHA

Desktop appraisals – Lots of Info Available
Fannie and Freddie started using Desktops on March 19, 2022

Both a floor plan and a building sketch with dimensions and GLA calculations are required. ANSI is not required.

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March 2022 Fannie Mae Appraiser Update:

Link to March Appraiser Update, click here:

Link to “About Desktop Appraisals” PDF with 5 pages of information, click here Watch the Noble Appraiser explore the benefits of performing desktop appraisals:
The Desktop Appraisal Discovery Link to Noble Appraiser on desktops video, click here

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McKissock: Fannie Mae and Freddie Mac Desktop Appraisals: Your Questions Answered

Excerpts: In January 2022, Fannie Mae and Freddie Mac announced a desktop appraisal option that goes live in mid-March 2022. In various articles and opinion pieces, some claim that desktop appraisals will solve the appraiser shortage and modernize the appraisal process, while others claim that they will cause the demise of the appraisal profession.

Here are a few of the 16 questions answered

What is a desktop appraisal?
Does USPAP require me to complete an inspection?
What data sources are used for identifying the subject’s relevant characteristics?
Are there any state restrictions?
Must I be competent in the subject’s market area?
Are extraordinary assumptions allowed?
Does the limited scope of work mitigate my liability?
Won’t these types of valuations be risky for the lender

To read more, click here

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Bradford Software Webinar Floor Plans for Desktops – Discover Your Options with 7 Floor Plan Providers March 24, 2022 (1 hour, 34 minutes), with comments from Scott Reuter of Freddie Mac.

It was recorded and is available at https://vimeo.com/692030955

I did not have time to watch it yesterday.

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My comments on the above resources: What’s the best resource(s) for you?

Noble appraiser video is short (3 min. 34 seconds) understandable and very informative. Fannie Mae is “the source” for desktops. McKissock’s Q and A post is well written, understandable with short answers.

Bradford’s video has demos of 7 app providers for floor plans and sketches.

If lenders will use them much is very uncertain. The Covid desktops were never widely adopted. No one knows now which cell phone apps will be used, who will use them, and their accuracy (tested by an independent company). Minimum of an IPhone 12 Pro, with LIDAR camera. Appraisers who have tested them say the floor plans are good, but sketches with dimensions and floor plans may not be accurate on complicated home designs.

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NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, lender bias, ANSI, FHA class, mortgage origination stats, etc.