Appraisals and Water Frontage

Appraisals and Water Frontage

Steven W. Vehmeier

Excerpts:

What about an off-site water view?

In a large townhouse-style condominium complex, there were only eight units that had water views. The view was of a section of the Intracoastal Waterway. It was from the second floor only, and over a six-foot high concrete block wall and across an open field. The builder charged more for those units because of the partial view.

My research discovered that the open field had just been purchased by a group that was building a four-level high-and-dry boat storage building. That bit of news made quite a few folks very unhappy and had a distinct impact on the value of those units. The moral of this story is that when you see open land between your subject property and the water, review ownership and the local building and zoning department’s comprehensive land use plan.

Water rights play a major role

With many water fronting properties, the topics of “riparian and/or littoral rights” (and the “prior appropriation doctrine” in the western states) come into play, along with several other issues. Those topics are fodder for other lengthy blog posts all by themselves. Appraisers should familiarize themselves with their state laws regarding water frontage and related rights, as they can vary from state to state.

Among the rights that come with real property ownership is the right to exclude others. When oceans, lakes, bayous, estuaries, rivers, streams, and ponds are involved, this right is a large part of what property purchasers are paying for.

To read more, click here

My comments: Worth reading, especially the last section “Final thoughts on the topic.”

I have lived in my island city for 42 years and had two waterfront homes, with docks, during the first 30 years. Both had many water related issues. One was on a tidal canal and built around 1943. Over time many homes along the waterfront, including mine, had non-permitted structures built over the water. The canal was owned by the state with an unclear easement for building beyond the rear lot line. The property owners asked me to do appraisals on the homes, including the rear structures but did not like my very high fee. It was so complicated the state and the city gave up trying to straighten it out.

The other home, built in 1946, faced a small bay off an outlet to a large part of San Francisco Bay. The large rear part of the lot was owned by the state and the city, which was leased to the homeowner. When the state said they were considering giving public waterfront access along the rear of all the homes unless we paid an annual lease fee, based on the extra lot square footage, we agreed to pay it.

I always wondered what other appraisers thought about these issues. They may not have even recognized or asked about them. Appraisers called very rarely.

I will never forget one of my first house appraisals here. The owner said it had a Bay view but did not mention you had to stand on the toilet to see through the window. After that, I told them the view had to be from a chair that you sat in!

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Solar Hemicycle–style Home Waterfront Home in Virginia Beach

Excerpt: The home was built in 1959 and is located on a 6-acre lake waterfront a few blocks from the Atlantic Ocean. The property’s list of amenities includes docks, decks, and piers spanning Crystal Lake. Four bedrooms and three bathrooms with 3,020 sq. ft.

The home’s materials list includes glazed brick and cypress; The roof is of copper; Inside and out, its earth tones are FLW-friendly, with muted reds and yellows topping the list and enhanced by accents, cabinetry, and paneling in various woods. The architecture of the house is expressed in the long, graceful curves that define the living area; Inside, the shared spaces feature a corner fireplace/fire as a centerpiece.

A long brushstroke of a curve opens the house through several doors to the lakeside patio. The tiered outdoor living area begins there, extends to a deck with a fire facility on a low landing, and ends at the dock and pier. An art studio is located in the middle of the beach excursion.

To read more, click here

To see a short video, click here

My comment: Definitely use CubiCasa for measuring ;>

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6121-08106624
© Masterfile Royalty-Free
Model Release: Yes
Property Release: No
Businessman working in office, Leipzig, Saxony, Germany

Maintain that Workfile

By Frank Gregoire

Excerpts: After receipt of a consumer or lender complaint (and often a Fannie Mae “tip”) against an appraiser licensee, among the first items requested by the regulatory agency or investigator is the appraiser’s workfile. If the complaint is a lawsuit, in many situations, a copy of the workfile must be turned over to the plaintiff or their counsel as part of the discovery process. When that complaint or lawsuit is filed against you, are you able to reconstruct what you did, how you did it, based on the contents of the workfile? All the appraisal experience in the world and assertions your opinions and conclusions are correct and accurate cannot help if you did not prepare and did not maintain that workfile.

Unfortunately, for many appraisers, preparation, and maintenance of the workfile is viewed as an inconvenient burden rather than a means of protection. Some mistakenly believe a copy of the appraisal report or review, along with a single data sheet for each of the comparable sales included in the report is adequate. Please examine the full text of the Record Keeping Rule for the minimum requirements. For certain, the attorneys handling the license complaint or civil suit against you have a copy and know what they expect. Wouldn’t it make sense to throw them off their game by maintaining a workfile with much more information, data, and support than they expect to see?

To read more, click here

My comments: Well written and worth reading. Frank Gregoire started appraising in 1977 and is very knowledgeable. He lives in Florida with has many waterfront homes.

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Are you thinking about doing non-lender appraisals?

What type of non-lender work is best for you?

I have been writing about non-lender work since 1992 in my monthly newsletter.

My articles discuss how they differ from lender work, the pluses and minuses, and how to market your services. I have done all the non-lender work I write about. Over time, I figured out which ones I like the best. From the day I started my business in 1986, I have always accepted non-lender appraisals.

Before spending a lot of time trying to get business, I strongly recommend reading some of my articles to see what appeals to you. They are all very different from lender appraisals. No AMCs, no Fannie/VA/FHA guidelines, usually no reviews, no CU. Higher fees that are much more stable than AMC fees.

A few of my articles:

  • Should you do non-lender work? Pluses and minuses of both lender appraisals and different types of non-lender appraisals.
  • Communicating with non-lender clients is very, very different than lenders!

To read lots more about non-lender appraisals, including many marketing tips, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.

If this article helped you decide about doing non-lender appraisals, it is worth the subscription price!!

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What’s the difference between the Appraisal Today free weekly email newsletters in this blog and the paid monthly newsletter?

Click here for more info!

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When mortgage rates last soared this much

Inflation ended 1986 at 1.1% — the lowest in two decades. By April 1987, inflation hit 4%.

Excerpt: History lesson?

Just like 2022, the 1987 story reminds us that all good things tend to end.

That’s not “gloom and doom” thinking; it’s a realistic assumption that human nature tends to go overboard when wallets are flush — and then reality pops. One reason for such pragmatism is the Fed’s odd role of being the adult in the room.

When times are economically slow, the Fed’s like a bartender — liberally spiking the economy with its stimulant of choice, cheap money.

But then when things get a bit frothy, the Fed turns into the party pooper — acting like a responsible tavern owner, it puts a chill on the economic fun with its “last call” action of hiking those same rates.

To read more and see an excellent graph from 1970 to today, click here

My comments: I recently read an article in my local newspaper about the differences between inflation and mortgage rates over time.

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Columbia, Maryland’s Quirky Street Names

From Nodding Night Court to Dove Sail Lane, the town’s address choices are both practical and poetic.

Excerpts: The street names in Columbia, Maryland, were drawn from art and literature. “Satan Wood Drive,” however, was the result of a typo. It was supposed to be named “satin wood” for a line from an Amy Lowell poem.

“Turn left off Windharp Way onto Deep Calm. (No, not ‘Street’ or ‘Court,’ just ‘Deep Calm.’)” Anyone asking for directions through Columbia, Maryland’s residential neighborhoods could be forgiven for thinking a helpful local was pulling their leg.

But this suburb between Baltimore and Washington, home to just over 105,000 people, really does have some of the wildest place names in America. Here, otherwise typical split levels and townhouses line Empty Song Road and Crazy Quilt Court, in neighborhoods with names like “King’s Contrivance” and “Hobbit’s Glen.”

The Columbia Archives provides an online, searchable database for local residents (and curious non-locals) to look up the origins of the community’s place names. Links in article.

The Faulkner Ridge neighborhood in Columbia, Maryland, is filled with street names drawn from William Faulkner’s novels.

To read more, click here

My comments: Worth reading. Fascinating story! There is an O’Rourke St. about 15 miles from where I live. What strange street names have you seen? I wonder what reviewers (human or computer software) think of these unusual names. Have to be careful when typing them to avoid typos!Two Trends Slowing Housing Market Normalization

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Existing Homeowners, the Immovable Object

June 20, 2022

Excerpts: You can’t buy what’s not for sale — and existing homeowners have little incentive to relieve the supply pressure, keeping a lid on housing market normalization.

Many existing homeowners are rate locked in to historically low, sub-3 percent mortgage rates, and now that rates are rising, there is a financial disincentive to sell their homes and buy a new home at a higher mortgage rate. The golden handcuffs of low mortgage rates prevent more supply from reaching the market.

Seniors choosing to age in place, rather than downsize or move to another home, further limits housing supply. A 2019 study from Freddie Mac shows that if adults born between 1931-1959 behaved like earlier generations, they would have released nearly 1.6 million additional housing units to the market by 2018.

To read more, click here

My comment: I was born in 1943. No way I’m giving up my 2.5% rate on my place to buy another home! I would not be interested in buying any other real estate now. Addicted to low rates!! I purchased my current home in 1985 at a 15% rate which was a low rate then. Rates went up to 18% during the early 1980s.

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Desktop Appraisals Information Sources

With business projected to decline significantly, maybe it’s time to consider desktops (and hybrids) now. Good current information in the three sources below.

Top Questions Appraisers Have About the New Desktop Appraisal Rules

By John Dingeman, Chief Appraiser Class Valuation

Excerpts: Before the announcements from Fannie and Freddie, it was anticipated that desktop appraisals would only be accepted for loans with a maximum of 80% loan-to-value ratio (LTV), where buyers were making at least a 20% down payment. However, the new guidelines apply to properties with up to 90% LTV. For appraisers, this means they’ll have the option to conduct a desktop appraisal much more frequently than they might have thought.

To read more, click here

My comments: Well written and worth reading. Dingeman is very knowledgeable on this topic. Class Valuation AMC does many desktops and hybrids.

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Three 1-hour webinars on Desktops and Hybrids

  • Q&A with Freddie and Fannie – Lyle Radke and Scott Reuter
  • Appraisers who do desktops and hybrids
  • Desktop and Hybrid Tech Products

To watch the webinars, go to www.youtube.com and search for appraiser elearning.

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Fannie Appraiser Update June 2022

Desktop topics include:

  • Use of third-party data in desktop appraisals,
  • Extraordinary vs. ordinary assumptions
  • Verification vs. re-creation.

It also includes Appraiser Quality Management.

To read more, click here

 

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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, go to www.mbaa.org

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 issue go to https://www.appraisaltoday.com/products.htm or send an email to info@appraisaltoday.com . Or call 800-839-0227, MTW 7AM to noon, Pacific time.

My comments: Rates are going up. Make money while you can!!

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Mortgage applications increased 4.2 percent from one week earlier,

according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 17, 2022.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week and was 77 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 8 percent from one week earlier. The unadjusted Purchase Index increased 6 percent compared with the previous week and was 10 percent lower than the same week one year ago.

“Mortgage rates continued to surge last week, with the 30-year fixed mortgage rate jumping 33 basis points to 5.98 percent – the highest since November 2008 and the largest single-week increase since 2009. All other loan types also increased by at least 20 basis points, influenced by the Federal Reserve’s 75-basis-point rate hike and commentary that more are coming to slow inflation,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Mortgage rates are now almost double what they were a year ago, leading to a 77 percent drop in refinance volume over the past 12 months.”

Added Kan, “Purchase applications increased for the second straight week – driven mainly by conventional applications – and the ARM share of applications jumped back to over 10 percent. However, purchase activity was still 10 percent lower than a year ago, as inventory shortages and higher mortgage rates are dampening demand. The average loan size, at just over $420,000, is well below its $460,000 peak earlier this year and is potentially a sign that home price-growth is moderating.”

The refinance share of mortgage activity decreased to 29.7 percent of total applications from 31.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 10.6 percent of total applications.

The FHA share of total applications increased to 12.0 percent from 11.8 percent the week prior. The VA share of total applications decreased to 10.7 percent from 11.7 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 ($647,200 or less) increased to 5.98 percent from 5.65 percent, with points increasing to 0.77 from 0.71 (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 $647,200) increased to 5.49 percent from 5.25 percent, with points decreasing to 0.45 from 0.54 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 5.62 percent from 5.36 percent, with points increasing to 1.18 from 1.00 (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 5.05 percent from 4.79 percent, with points increasing to 0.86 from 0.80 (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 4.78 percent from 4.57 percent, with points increasing to 0.84 from 0.80 (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

CubiCasa – Home Measurement From Inside A House

CubiCasa and a Desktop Mess – an appraiser’s experience

By Jamie Owen

Excerpts: I called the listing agent on the property I was to appraise and asked if they knew how an appraiser might go about obtaining a floor plan (for my desktop appraisal). She had no idea and had never heard of this type of thing being needed. I was really at a dead end here. I called the bank and explained the situation. They ended up converting the assignment to a traditional type of appraisal so that I could just make the inspection myself.

I called the chief appraiser of the bank that ordered the appraisal. I know him well and have worked together with him on some complex assignments. He said the whole thing is a mess. Some appraisers are submitting reports where they have the listing agent hand-draw the interior walls on copies of the county auditor’s sketch outline. This is also a no-no. Fannie Mae will accept nothing hand-drawn in terms of the sketch…

I decided to test CubiCasa. I downloaded the software to my iPhone 11… I must tell you that I was very impressed! The scan took 15 minutes to do. By the way, I measured the home also. It took about 15 minutes for me to measure the home. But it would have taken a lot longer if I had to add walls and doors!

In less than a day, the sketch was sent to me via email, and it was awesome! It was professional-looking and had all the data that I needed. Its measurements were within 15 square feet of mine on a home that was just over 2,400 square feet. It also broke down the square footage of each floor and the dimensions of each room and its gross living area calculations.

I have been using it and then comparing my measurements with its measurements. It is consistently within 1-3% of my measurements. The 3% variance is with larger homes with complex angles and tricky areas to measure. In my view, that’s pretty good!

To read more and see a fun video and animated gifs, click here

My comments: Desktop appraisals are a new type of assignment for appraisers. I wrote about CubiCasa and Desktops in recent newsletters. I tested it and spoke with knowledgeable people. I am using it. No more exterior measurements!

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 Retirement, real estate market changes, ANSI, Appraising luxury homes, unusual homes, mortgage origination stats, etc.

Read more!!

Green Home Appraisals – Ideas for Appraisers

5 Tips for Appraising Green Homes

By McKissock

Excerpts:

1. Consider each home on a case-by-case basis

You must independently determine whether there is sufficient information available to develop a reliable opinion of market value for each individual property. That will depend on the extent of the differences between the green home and other types of houses in the neighborhood. It will also depend on the number of such properties that have already been sold in the neighborhood.

5. Compare improvements to those in the neighborhood

Any improvements should conform to the neighborhood in terms of age, type, design, and materials used for their construction. If there is market resistance to a green home property because its improvements are not compatible with the neighborhood or with the requirements of the competitive market because of adequacy of plumbing, heating, or electrical services; design; quality; size; condition; or any other reason directly related to market demand, address the impact to the value and marketability of the subject property.

To read more, click here

My comments: I have “Mediterranean” (mild) weather, without much solar. If you live in an area with high summer and/or low winter temperatures, there are probably more solar installations. Many classes are offered by various appraisal CE providers. Check with education providers, such as McKissock, the Appraisal Institute, and local offerings.

What are Pass through Bedrooms for 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 desktops, nonbanks, alternative financing, unusual homes, mortgage origination stats, etc.

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Read more!!

Does A “Crazy” Neighbor Lower Value?

Does A “Crazy” Neighbor Lower Value?

By Jamie Owen
Excerpts: It’s tax appeal season, and I’ve had several homeowners say that they feel their neighbors are negatively impacting the value of their homes for different reasons. Is that the case? Can that be the case?
The homeowners of one property stated that their neighbors are a nuisance. My clients said that one of their neighbors has people coming and going until late in the evening, most evenings. They also complained about there being noisy. Additionally, they claimed that the neighbor directly behind them is not a very nice person and is always causing neighborhood trouble.
Meanwhile, in a different neighborhood, a different homeowner claimed that their home was suffering a loss of value due to their neighbor’s home not being kept up and needing repairs and updates on the exterior. The neighbor’s property is an eye-sore.
The long-winded point I am trying to make is that the appraiser will need to find some evidence to support the claims that a neighboring property is really creating a loss in market value to its neighboring properties.
To read more, and see some fun animated gifs and videos, click here
My comments: As always, Jamie often writes about appraisal topics from a different “angle”! I have a crazy next-door neighbor also, who waits for me to come home to “attack” me with some perceived problem… since 1986 when I purchased the property.

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 waivers, Desktops, real estate market, Clubhouse, unusual homes, mortgage origination stats, etc.

Read more!!

Crazy Appraisal Stories! We all have them!!

Crazy Appraisal Stories!

Excerpts: Not Just Measuring Homes and Taking Pictures
I went to appraise a home for a movie producer in Brentwood, California. I knocked on the door, and one of the producer’s boyfriends opened the door and invited me in. He was completely naked. He told me that whatever I do, don’t let the cat out. As I went room to room taking photos, I met another naked boyfriend. He also told me not to let the cat out. As I went to the second floor of the house, I met the producer who was also naked. He told me again, “don’t let the cat out.”
I’m approaching the rear patio door to take pics of the rear of the house. Outside I see a beautiful pure-bred Persian cat. I know I didn’t let the cat out but I sure as hell better get it back in the house. I started chasing the cat in the rear yard. Finally, I grabbed it, but not before it ripped my blouse and caused my hands to bleed. Huffing and puffing from the chase, I tossed the cat back into the house and closed the door. A few moments later one of the naked boyfriends came over and said “that’s the neighbor’s cat. Get him out of the house.” I then had to chase the cat again. Finally, I caught the cat and put him out of the house. I was left there panting with a torn blouse and bleeding hands, thinking appraising homes is definitely not just measuring homes, taking pics, and typing up forms.
-Mary Cummins
To read more, click here
My comments: Just For Fun! We’ve all got these stories!

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 Desktops, Future of appraising, Cubicasa, ANSI, unusual homes, mortgage origination stats, etc.

 

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What is a “good” appraiser?

8 Characteristics of a Successful Real Estate Appraiser

Excerpt: Here are two:
Unbiased
The ability to form an unbiased, objective opinion of value is absolutely essential in this line of work. According to this survey, many appraisers agree that this is the single-most-important trait you need to have as a real estate appraiser. In order to provide trustworthy results and uphold the integrity of the appraisal profession, you must be unbiased. Otherwise, you risk losing your professional reputation.
Analytical
It’s important for appraisers to be analytical, as each appraisal assignment will require thorough analysis and critical thinking.
To read more, click here
My comments: I was hooked on science in my first science class: high school biology. I studied biology and chemistry in college. I learned to be objective and unbiased, analytical, and open to almost any possibility. I have used these skills in appraising. I have always been curious, which keeps me up on what is new and other ways of looking at appraising a property. As far as I know, relatively few appraisers have science degrees.

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 Real estate market changing?, appraisal  modernization, expert witness, desktop appraisals, cubicasa app, unusual homes, mortgage origination stats, etc.

 

Read more!!

PAVE Appraiser Bashing

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.)

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, 1004/Desktops, mortgage origination stats, etc.

Read more!!

Desktop appraisals – Lots of Info Available!

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.

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, lender bias, ANSI, FHA class, mortgage origination stats, etc.

Read more!!

Fannie’s New Desktop Appraisal FAQs

Fannie’s New Desktop FAQs

Timeline and 19 FAQs From an email received 3-8-22
“Desktop appraisals will be offered in Desktop Underwriter® (DU®) for eligible transactions starting March 19. Are you ready?
We’ve updated the About desktop appraisals fact sheet with an expanded frequently asked questions section.
Thanks to all the appraisers, AMCs, and lenders who submitted questions, and please continue to Contact us with your appraisal related comments and questions.”
To read the FAQs, click here
My comment: Reading the original Fannie document is good, such as a timeline list, additional verifications, inspections, CU, etc.
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McKissock has an excellent blog post answering many practical questions, including some in the Fannie FAQs and many other questions.
Topics include:
  • 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?
  • What is the difference between a sketch and a floor plan?
  • How do I get a floor plan?
  • Does the floor plan need to be verified?
  • Does the property need to be measured per ANSI measurement standards per Fannie Mae’s requirements?
To read more, click here
My comment: Read both the Fannie FAQs and McKissock blog post. How often will desktops be used? It will take a while before they may be widely adopted. See last week’s newsletter. When are we going to get some ANSI FAQs????

Appraisal Business Tips 

Humor for Appraisers

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Fannie Wants Desktop Appraisals with Floor Plans

Fannie Mae and Freddie Mac to launch remote desktop appraisals in 2022

Desktop appraisals with floor plans

Excerpt:
Beginning March 19, 2022, Fannie Mae and Freddie Mac will accept remote desktop appraisals nationwide on eligible transactions without the appraiser ever stepping foot on the subject property, the Federal Housing Finance Agency (FHFA) announced.
To read more, click here
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Link to FHFA announcement 10/18/21 with more information,click here
My comments: When they submit loan applications, lenders receive a list of appraisal types available for their loans, including waivers. Lenders did not widely choose the desktop Covid appraisals. They preferred full appraisals.
I ran an ad for Cubicasa (floor plan app) on Tuesday this week and got some appraiser complaints. I will be testing it soon and hopefully will be able to use it in my appraisals.
Many anticipate that lender adoption will be slow, including Lyle Radke from Fannie and a group email posting from an appraiser who recently attended a state Mortgage Bankers’ meeting. He said:
“I was on a 4 appraiser panel with +/-60 LO’s representing 20 different lenders. I asked for a show of hands-on how many would be offering Desktop or Hybrid appraisals on March 19… There was not a single hand raised. “
“When we discussed the Desktop and Hybrids, most had no idea about the differences in the two products… All 4 of us thought that the turn time “might” be reduced by 1-2 business days. So, based on a small sample, this may not be as much of a problem as some appraisers think. “

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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, tech forecast, ANSI, bias, AVMs, mortgage origination stats, etc.

 

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