9-1-16 Newz:: Statistics humor, Abandoned islands, USPAP 2nd draft

Why Not to Trust Statistics – Humor

Statistics cartoons. Just for Fun!!

Mean, median, range, correlation, variance, correlation coefficient. Amazing what you can do with stats!!

Can’t describe it. Just click here for the cartoons.

https://mathwithbaddrawings.com/2016/07/13/why-not-to-trust-statistics/ Thanks to Joe Lynch for this great link!!

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The Incredible Ruins of 12 Abandoned Islands

Excerpt:

Of all the many places around the world that have been abandoned by their inhabitants and left to slump into obscurity and ruin, islands seem among the most unlikely. What’s not to love about an island? Yet there are dozens of isles scattered throughout the world’s oceans that have been deserted by their residents and left all but forgotten.

Frozen in time with nothing but a story to tell, many of these ghost islands have taken on an eerie and enticing second life in their desertion and disrepair. Here are 12 abandoned islands in the Atlas, each of which has a intriguing story behind its decline.

Good photos and comments. Just scroll down the page.

http://www.atlasobscura.com/articles/the-incredible-ruins-of-12-abandoned-islands

My comment: I live on an island in San Francisco Bay. Definitely very different mentality than non-islanders. I hate leaving the island. For the past two years, almost all my appraisals have been here. When I travel, I always go to any nearby accessible islands..

Read more!!

8-11-16 Newz//How to fix the appraiser shortage now, Photo blurring, Gold medal for town planning in 1936 Olympics

America’s First Medal at the Nazi Olympics Was For…Town Planning

Excerpt: Yes, from 1928 until 1948, town planning was an actual Olympic sport.

Town planning fell under an “architectural design” category at the Olympic art competition. The field that year was dominated by German entries. Yet the first U.S. medal of the Olympics went to Lay, a New York architect, for his ambitious blueprint to modernize Marine Park in Brooklyn.

http://www.atlasobscura.com/articles/americas-first-medal-at-the-nazi-olympics-was-fortown-planning

My comment: I love these Obscure Olympic Facts ;>

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Photo blurring gone waay overboard!!

Excerpt: At issue was the ubiquitous “client requirement” involving digital masking of people from images. While lenders and AMCs wave the Fair Housing penalty flag in order to assure compliance; there is NO such law. Never has been.

Lenders need to re-examine the reason for all of these pointless and invasive interior shots. They add nothing meaningful to the file. Nobody is laying out mortgages for Beanie Baby collections and bad drapes. So why are appraisers wasting megapixels on decorating images?

AMCs are on notice to cease demanding and insisting that appraisers do digital staging. That is clearly in violation of Illinois law.

Click here to read the full article plus the comments, of course…

http://appraisersblogs.com/digital-staging-amc-fair-housing-myth

My comment: Blurring interior pictures on walls, personal objects, etc. seems very excessive. Don’t know about rooms with strange devices and chains hanging from walls and ceilings, etc ;> Maybe appraisers will only be able to appraise vacant homes with nothing in them without getting requests for blurring. This applies only to AMCs doing business in Illinois, but maybe the AMCs will quit doing it in other states.

Read more!!

8-4-16 Newz// Data verification, AMCs-percent of work, Drones

Collection and Verification of Residential Data in the Sales Comparison Approach

Appraisal Practices Board, Issued June 30, 2016, First Exposure Draft

Deadline for comments is August 12, 2016

The document includes examples for lender and non-lender work plus references to lender requirements. Extensive discussions on scope of work for different types of assignments, such as relocation, individuals, effect of zoning, estates, etc. as well as verification sources, etc. etc.

Excerpt:

Example 2 – Client: Conventional Lender Effective Date: January 20, 2015

After the four siblings receive a market value range of $139,000 to $155,000 from the appraiser, they compare this range to a $140,000 cash offer they received from a buyer who was willing to close in one week. The siblings accepted the offer because they were motivated to sell. This new buyer purchases the residence on January 15, 2015, for $140,000 cash and then decides to finance the residence with a conventional loan. In this instance, the client is the lender.

For this assignment, the lender has specific requirements regarding what data points to verify and with whom the appraiser should verity those data points. The lender also has guidelines such as the minimal number of comparable sales the appraisal will report, and a time frame within which those comparables sold. The appraiser accepted the lender’s specific requirements and produced credible assignment results within these parameters. The final opinion of market value was $150,000, with an estimated exposure time of six months.

Every client and assignment condition will have different requirements for how much sales data is collected and how that data is verified. This can include using different sources, using different levels of verification, and concentrating on the verification of different data points. The overall goal for verification is to verify data to a level that is necessary for credible assignment results, not to necessarily verify all data and certainly not to verify all data to the same level. Different levels of verification are acceptable based on assignment conditions, availability of data, and the relevance of each data point.

https://appraisalfoundation.sharefile.com/share?cmd=d&id=s58e5be211d044a79#/view/s58e5be211d044a79

My comment: Finally the APB has something useful and practical for residential appraisers!! Be sure to read and comment on this 52-page draft. Worthwhile reading. Very comprehensive on this important topic. Discusses lender issues, including CU. I have not read the entire document but plan on reading it very soon.

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How Dirt Houses Became Beloved By The Tiny House Movement

Meet the wondrous cob.

Excerpts: It’s likely that earthen homes were among the oldest structures ever built by humanity. There are a few different techniques and many names for a building made mostly of, well, dirt, but the one that’s caught on in this recent revival of the material comes from England: Cob.

See the photo of: Ancient cob high-rise buildings in Shibam, Yemen.

Very interesting and detailed with photos:

http://www.atlasobscura.com/articles/how-dirt-houses-became-beloved-by-the-tiny-house-movement

Read more!!

What percentage of your work do you receive from AMCs?

My comment: Looks like there are some appraisers who don’t work for AMCs. I had expected higher percentages that worked mostly for AMCs.  Now that business is strong, some appraisers don’t work for AMCs, or take less work from them. When business is slow, they do more work for AMCs.

Bracketing and USPAP

There Go My Brackets
From the Illinois Appraiser June 2016
Excerpt:
Is it a USPAP violation to fail to bracket or end up with a tight bracket?

USPAP is silent on bracketing. For that matter, so is Illinois law. Here’s what Fannie Mae says;
“When there are no truly comparable sales for a particular property because of the uniqueness of the property or other conditions, the appraiser must select sales that represent the best indicators of value for the subject property and make adjustments to reflect the actions of typical purchasers in that market.”

Not a word about bracketing.
While comforting for an underwriter to see the collateral fall snugly into place, bracketing is still a guideline. This hasn’t stopped AMCs and lenders from complaining to the Board about missed brackets or huge ranges. There just isn’t a law against having a sloppy bracket, nor should there be.

Something else from Fannie Mae;
“It should be noted that the indicated value in the Sales Comparison Approach must be within the range of the adjusted sales price of the comparables that are reported in the appraisal report form.”

Read here for the full article:

Check out the other very interesting articles such as AMC fair housing Myths and Evaluations. Link to original newsletter.

My comment: I have never “bracketed” anything except the value, when I used to do appraisals for Fannie Mae loans. I have no idea why lenders are requiring bracketing for everything with an adjustment. Just another Stupid Scope Creep I guess. Works ok in conforming tracts with lots of sales and minimal adjustments, but goes downhill quickly after that. Of course, the entire appraisal review-by-computer assumes that all houses are in conforming tracts. As do the Fannie forms, of course.
AT_final_rev_newslet

6-30-16 Newz // Most dangerous roads-Fees going up-Brexit and mortgages

The most dangerous places to drive in the world

Take a break and check out these places…

Excerpt:

Driving can be dangerous, and every one of us who attempt to control those speeding steel boxes of ours will, at some time or another, experience a dangerous or life-threatening situation. But the truth is, despite the occasional error of judgement or climate, driving in the US is largely safe, and you will most likely get to your destination calm and in one piece (or just in one piece, because traffic, right?). The world, however, is not the US, or even western Europe. And as you will see, driving styles, laws, and road conditions vary so much, that what might be an everyday commute for a native of Afghanistan would be a death-defying (or outright death-inviting) thrill ride for a driver in the Land of the Free.

http://www.grunge.com/15503/dangerous-places-drive-world/

My comment: Guess I won’t complain (as much) about getting stuck between 2 giant big rigs on the freeway ;>

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Complaints about high appraisal fees and long turn times

RAISE YOUR FEES!!!

Appraisers Remain Under Siege – Jonathan Miller

(Scroll down the page past the second graph)

Excerpt:

Here is a series of feedback from Rob Chrisman in his must read newsletter on the mortgage industry. It is a heavily read source of in-the-trenches mortgage insights that I subscribe to. He gave me permission to share his recent content on the appraisal industry and will share more of it in the coming weeks. I inserted my thoughts following each quote:

“And appraisals are always a hot topic. I received this note from an originator. “Our appraisal environment is out of control. Appraisals we used to get in 1-2 weeks have quickly gone to 3-4 weeks. Appraisals that were just $400 are now $550 and sometimes up to $1,100 for FHA and conventional appraisals. With the rules regulating appraisers on how to become an appraiser and how appraisers have to monitor everything an apprentice appraiser does, it is causing our homebuyers hardship. With the appraiser’s current workloads and the amount of appraisers we have lost in recent years, there is no motivation to bring apprentices on (due to those regulations), leaving the current appraisers working night and day to keep up with their workloads. That is also causing them to keep moving up the appraisal fees (basically rush fees to keep pushing who can pay the most up the line).”

Miller’s comments

It’s called “market forces” and because the AMC movement has gutted the industry, there are much fewer competent appraisers left. And please lay off the “hardship” angle. It’s tired and worn out. Mortgage rates are at historic lows and with the Brexit they will likely stay that way for a while. As I have said before, there is not a shortage of appraisers, there is a shortage of appraisers willing to work for half the market rate.

Worth reading, especially for Jonathon’s comments. http://www.millersamuel.com/note/june-24-2016/?goal=0_69c077008e-ca10724b99-116855313

Link to Chrisman article – scroll down the page to “And appraisals are always a hot topic”

http://www.robchrisman.com/2016/06/11/june-11-letters-notes-on-password-protection-mechanics-liens-and-the-current-state-of-the-appraisal-business/

My comments

Why are complaints about appraiser fees and turn times increasing so much? Supply and Demand. AMCs and lenders not allowing trainees to sign on their own – no new appraisers. AMCs trained their appraisers to bid against each other. Now, they are getting payback.

The Appraisal Foundation is frantically trying to reduce requirements for appraiser licensing in response to the current appraiser shortage. But, the problem is that lenders will not allow trainees to sign on their own. There was no shortage in the last boom prior to 2008.

In all the previous boom periods, since lenders started using appraisers in the 1930s, the increase in volume was handled by hiring armies of trainees who left the profession when business slowed down. Prior to licensing, lenders did this. After licensing, fee appraisers did it. But, soon after 2008 lenders would not allow trainees to sign on their own, so there was no one to handle the increase in business.

When AMCs took over appraisal ordering, many experienced appraisers left the profession due to low fees, increasing lender requirements, hassles, etc. Some stayed, who had direct lender clients or were willing to work for AMCs.

The AMC fee model is a bidding system, with AMCs often looking for the lowest bid. Now, sometimes they spend days looking for an appraiser who will work for low fees. Some of us have finally adapted by significantly increasing our fees.

AMCs have trained us to bid against each other. Even when business is very strong, AMCs continue to try to get low fees. Finally, after 8 years of this, appraisers have realized that when there is a shortage of appraisers we can increase our fees. We finally learned about Supply and Demand. This never occurred before.

Many appraisers (and other business owners) have great difficulty turning down work, even with low fees. After years of telling appraisers to raise their fees, finally some appraisers are listening.

Read more!!

6-23-16 Newz:: San Francisco under water – Funny owner DIYs – C/R complaints

 In 100 Years, $77 Billion Worth Of San Francisco Property Could Be Underwater

Excerpts:

Around the city, more than 200,000 commercial and residential buildings-along with major infrastructure like the airport-are at risk from either temporary flooding or permanent loss due to sea level rise if the city does nothing to prepare. Even more dangerously, the risk extends well inland, and isn’t limited to property directly on the coast.

Armed with the new maps, San Francisco is currently creating a strategy to try to save as much property as possible. “It’s almost inevitable that, in the end, the plan will be a combination of multiple approaches,” says VanderMarck. “One approach in some areas will be to surrender to the fact that seas are rising-it’s impractical, either economically or for other reasons, to try to defend against that in certain areas.” In other places, the city may build higher walls or other defenses.

In the Ocean Beach neighborhood, for example, it’s likely that the city will reroute portions of the road that’s currently along the water, replacing some areas with open space, while also building up dunes and protecting some infrastructure like a wastewater tunnel. On Treasure Island, where the city is planning to build a new sustainable community, any new housing will be set back from the water, with parks along the edges-parks that very likely will be reclaimed by the bay.

My comment: FEMA is rezoning all the coastal properties in the U.S., including my small island city in San Francisco Bay. Of course, the big complaint was having to buy flood insurance for those who have mortgages….

Check out the full article and the very interesting graphics:

http://www.fastcoexist.com/3060770/in-100-years-77-billion-of-san-francisco-property-could-be-underwater

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Not C/R fees? File a complaint with the FDIC!!

Excerpt:

Here is what VaCAP received from an appraiser who reached out to the FDIC:

I just had a call from an extremely pleasant lady named Susan Welch from the FDIC Consumer Response Center (1-800-378-9581). I had sent a note over regarding an AMC attempting to get me to sign a “Base Fee Letter” agreeing to a drop of my base fee for full appraisals to $325 from $400-500. She said the FDIC is VERY interested in hearing from appraisers regarding AMCs paying low fees. As you know FDIC regulates the banks, who are responsible for third party oversight with AMCs they engage. FDIC wants Regulation Z to be followed and will enforce it for appraisers.

Incidentally I opted to have them proceed while keeping me anonymous, a la whistle blower status. Susan said she would be surprised if they had not investigated this within 90 days.

FDIC bank examiners will contact the bank involved and look at their procedures for engaging appraisers, look at fees appraisers are actually paid versus what is considered C&R based on things like the VA sheet and go from there.

Click here for more info plus read the comments:

http://appraisersblogs.com/low-amc-fees-fdic-appraisers-regulationz

Read more!!

6-16-16 Newz//Appraiser Stalker -Mansion under $100,000 -Safest states -SBA loans

Mansion under $100,000

Mansions cost millions, right? Well, not necessarily. This week’s most popular home on realtor.com® is a mansion priced under a million. In fact, it’s priced below $100,000.

Yes, it’s in Toledo; and yes, it needs some work to bring it into fighting shape. But still, a mansion with a five-digit price tag is a rare beast indeed. The listing agent told us a recent open house attracted more than 1,000 people over two days. He added that this mansion would be worth millions if it were in a major coastal metro-making it a savvy purchase for a buyer who doesn’t mind summering on the Maumee River.

Scroll down the page to Number 1. FYI, Number 3 – Amityville Horror House for $850,000

http://www.realtor.com/news/trends/most-popular-homes-mansion-under-100k

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Twinkies Enabled the Sale of the Playboy Mansion

By Jonathan Miller

Excerpt:

It’s been a confusing week for me.

I’ve been trying to reduces the sugar in my diet and I actually feel much better. But then I was interviewed by the Wall Street Journal about the recent sale of the Playboy Mansion in Holmby Hills, Los Angles, California. Apparently the next-door neighbor who restarted the Hostess brand purchased the $200 million listing for more than $100 million but the price was not disclosed.

In other words, the sale of Twinkies made this all possible.

Read the full commentary and scroll down the page for interesting comments on free appraisals, purple formica, value of a bedroom, etc.

http://www.millersamuel.com/note/june-10-2016/?goal=0_69c077008e-bfd1d18c9f-116855313

Read more!!

6-9-16 Newz:: Expandable Space Station, Turn times, FHA news  

Time-lapse video of the International Space Station expandable habitat

Excerpt: On Saturday, May 14, NASA successfully completed the deployment of the first expandable habitat on the International Space Station. With help from the ground, NASA astronaut Jeff Williams began inflating the Bigelow Expandable Activity Module (BEAM) at 9:04AM ET.

He opened the valve 25 times to inject air into the module in short bursts, according to NASA. Time in between allowed the BEAM to expand and stabilize, as the NASA and Bigelow Aerospace teams monitored the module’s internal pressure. The BEAM was expanded to its full size seven hours later, at 4:10PM ET.

http://www.theverge.com/2016/5/30/11812844/this-time-lapse-video-of-the-beam-inflating-on-the-international-space-station-is-awesome

My comment: WoW!!!

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United States Spy Town Auction

It’s not the first time that an entire American town has gone on the auction block, but it might be the most unusual. Sugar Grove Station, West Virginia was originally a United States Navy military base to support part of the National Security Agency’s surveillance operation. Though the array of giant parabolic dishes that continue to track location and content of international telecommunications activity is still in operation and not part of the sale, they are completely obscured from view behind thick forest on their ridgetop one mile distant. When it became unnecessary to house related analytical staff at the base, it was retired in the fall of 2015 and put up for auction to the highest bidder over $1 million.

Built between 1960 and 2014, the fenced and gated rural town has private full-service utilities to support as many as 500 people on over 120 acres. Included are 80 homes on tree-lined residential streets in like-new condition, a swimming pool, bowling alley, youth daycare center, community center with fireplace which was designed to function as a restaurant with bar, a gym, full-sized indoor basketball court, tennis and racquetball courts, a football field, large playground with kiddie pool, and twelve guest cabins for visitors. There are also several large buildings for multiple use as well as a four-section hobby building for working on cars, woodworking shop and other creative pursuits. For community safety, a police station and fire station are already in place.

https://www.toptenrealestatedeals.com/homes/weekly-ten-best-home-deals/2016/06-06-2016/1/ 

https://en.wikipedia.org/wiki/Sugar_Grove_Station

Read more!!

6-2-16 Newz -Zestimate way off on Zillow CEO’s home, The Most Mansions, Replace Dodd-Frank?

Zillow CEO sold his home for 60% of the Zestimate.

There is nothing wrong with Zestimates, unless you want to know what your home is worth.

From Jonathan Miller’s Housing Notes

Note: Scroll down the linked page to read this section

Excerpts:

The day after the home sold for $1,050,000, the Zestimate showed a value of $1,750,405. This indicates that their CEO took a 40% haircut on the value of his home which was exposed to the market for a reasonable time and sold for 19% below its list price. But of course he didn’t dump the property. It couldn’t have been worth anything close to the Zestimate since the property was exposed to the market for a reasonable period of time and sold well below the list price which was well below the Zestimate.

The people at Zillow are smart and built a strong ground breaking brand, but that doesn’t always mean they are making the right decisions. Little did I know, when I met one of the founders at a party the day before they launched a decade ago, how much disruption they would cause. I innocently asked the question, “So, what do you do?” And in the response I heard things like “Expedia” and “Rhymes with Pillow.” Their intro to the public began with the “Zestimate” which unleashed a property narcissism within us as we have checked the value of our homes and compared those values to the houses of friends, colleagues, neighbors, celebrities, etc. That search tool was later de-emphasized as they focused on listings and building a nationwide property database.

Read this Most Interesting article, including Miller’s “insider” comments at:

http://www.millersamuel.com/note/may-27-2016/?goal=0_69c077008e-65219836a6-116855313

 

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Also, read this article from Inman about Zillow:

Excerpt:

Citing the chasm between the sales price of Rascoff’s former home and the property’s Zestimate may be one way for real estate professionals to show clients that Zestimates are, as Zillow says, only a conversation starter for pricing a home, not the final word on its value.

Philip Gray, a San Leandro, California-based appraiser, is taking this approach. Bringing up the Zestimate of the property Rascoff recently offloaded will help him deal with the frequent pushback he receives from homeowners “who think Zillow is the magic 8-ball,” he said.

https://www.inman.com/2016/05/18/zillow-ceo-spencer-rascoff-sold-home-for-much-less-than-zestimate/

My comments: One of my most popular blog postings, even today, is from a few years ago, is about Zillow. I regularly have people tell me what Zillow said their house was worth. Of course, I say that it is not very accurate, but it is hard for an appraiser to compete with a free “number”. Guess maybe I should write up something for consumers. Now I have something to say ;>

Read more!!