Appraisal News and Business Tips

Mortgage applications

7-28-16 Newz Origin of tiny houses – HUD warning letters – FHA transfers

The Surprising Origins of the Tiny House Phenomenon

Why ancient hermits are the key to understanding our tiny home obsession

Excerpts”

Invariably, someone will remind you that civilization emerged from tiny houses-caves, yurts, tents, wigwams, igloos, grass huts, and so forth.

These early antecedents are beside the point. Sioux, Samoans, and Inuits were not offered more spacious alternatives. But people who opt for tiny houses-meaning the kind that tug at heartstrings and star on cable-generally choose to live small. The reasons aren’t just practical, but also ethical and emotional.

the true parents of tiny-house living are hermits. From the ancient Chinese Taoists in mountain caves to the Desert Fathers of third century Christianity and onward (the word “hermit” derives from the Greek word for “desert”), hermits were the first people to actively downsize to confined, remote, and minimally furnished living spaces.

Read the full story here:

http://www.curbed.com/2016/7/13/12162832/tiny-house-history-hermits

My comment: The most interesting article I have read on tiny houses. Of course, I started sailing sailboats in the early 1970s. Living aboard a sailboat is the Ultimate Tiny House!! Narrow and long but very portable… Another good link from Jonathan Miller…

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FHA Case Transfer, issued July 26, FHA INFO #16-49

Mortgagees should note the following about case transfers relative to appraisal reports in both the EAD (electronic appraisal delivery) portal and FHAC:

Read more!!

7-21-16 Newz//Bracketing-AMC staff appraisers-Appraiserville

8 Spooky New York Places That Should Be in the New Ghostbusters Movie

There’s something strange in these neighborhoods.

Excerpt: Here is one, but you gotta see the photos and the other 7!!

The Morris-Jumel Mansion

On a hill overlooking the Harlem River, the stately Morris-Jumel mansion is not only Manhattan’s oldest home but supposedly one of its most haunted. Its macabre history started after owner Stephen Jumel died in 1832. His wife Eliza was rumored to have had a hand in the death-there was some suspicion afoot that she orchestrated the carriage accident that killed him….

Take a break from typing appraisal reports and check it out!!

http://www.atlasobscura.com/articles/8-spooky-new-york-places-that-should-be-in-the-new-ghostbusters-movie

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The Shrinking of the American Lawn

As houses have gotten bigger, yard sizes have receded. What gives?

Excerpts:

The American house is growing. These days, the average new home encompasses 2,500 square feet, about 50 percent more area than the average house in the late 1970s, according to Census data. Compared to the typical house of 40 years ago, today’s likely has another bathroom and an extra bedroom, making it about the same size as the Brady Bunch house, which famously fit two families.

This expansion has come at a cost: the American lawn.

As homes have grown larger, the lots they’re built on have actually gotten smaller-average area is down 13 percent since 1978, to 0.19 acres. That might not seem like a lot, but after adjusting for houses’ bigger footprints, it appears the median yard has shrunk by more than 26 percent, and now stands at just 0.14 acres. The actual value lies somewhere between those two numbers, since a house’s square footage could include a second (or third) floor. Either way, it’s a substantial reduction.

Read the full story at: Very interesting!!

http://www.citylab.com/navigator/2016/07/the-shrinking-of-the-american-lawn/490157/

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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?

Read more!!

7-15-16 Newz//CU Crumbles-Refi mania-Urbanization since 3700 BC

The history of urbanization, 3700 BC – 2000 AD

Watch as the world’s cities appear one-by-one over 6,000 years

Fascinating!! Take a break from appraising and check this out!!

By 2030, 75 percent of the world’s population is expected to be living in cities. Today, about 54 percent of us do. In 1960, only 34 percent of the world lived in cities.

Urbanization didn’t begin in the 1960’s. But until recently, tracking its history much further back than that was a challenging task. The most comprehensive collection of urban population data available, U.N. World urbanization prospects, goes back only to 1950. But thanks to a report released last week by a Yale-led team of researchers, it’s now possible to analyze the history of cities over a much longer time frame.

http://metrocosm.com/history-of-cities/

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419.99 Mile Marker

Just For Fun

When zealous marijuana enthusiasts kept stealing the “Mile 420” highway marker, the State of Colorado got creative.

Another obscure factoid from atlasobscura.com ;>

Since the recreational use of marijuana was made legal in Colorado in 2012, the “Mile 420” post became a hot commodity. So hot, it kept disappearing – and the Colorado Department of Transportation got tired of replacing it.

Check out the photos (and try not to click on too many of the other weird stuff) at:

http://www.atlasobscura.com/places/41999-mile-marker

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Refis skyrocketing per Zillow – Brexit

Read more!!

7-7-16 Newz// Comp photos cost -Tech trends in 1776-Data and Scottish Scoundrel

The Scottish Scoundrel Who Changed How We See Data

When he wasn’t blackmailing lords and being sued for libel,

William Playfair invented the pie chart, the bar graph, and the line graph.

Excerpts:

Today, graphs and charts are seen as more efficient than words, letting us gulp information rather than sip it. For a large chunk of European history, though, this was far from the case. As statistician Howard Wainer explains in Graphic Discovery, 18th century academics actually looked down their noses at anything that resembled a picture.

Into this void stepped Playfair, a man with very little regard for tradition. Born in Scotland in 1759, Playfair was a kind of Forrest Gump of the Enlightenment, rubbing shoulders with the era’s many giants, switching careers at the drop of a hat, and throwing himself headlong into history-changing events, from the storming of the Bastille to the settling of the American West.

His graphical inventions, like many of his endeavors, were inspired by a certain disrespect for limits. He wasn’t so much an inventor as an intellectual remixer, taking bits and pieces of different people’s ideas and piecing them together into useful wholes.

http://www.atlasobscura.com/articles/the-scottish-scoundrel-who-changed-how-we-see-data

My comment: Fascinating! Plus a very entertaining writeup. Another good one from www.AtlasObscura.com – one of my favorite web sites!!

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8 Hottest Tech Trends in 1776

1. Underwater Warfare

4. Indoor Plumbing

5. High Tech Major Appliances

Read more!!

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!!

5-26-16 Newz AQB college degree .Living tree architecture .AMC violations

8 Extraordinary Pieces of Architecture Grown From Living Trees

Excerpt:

We usually use trees as building material in the form of struts and planks. But all over the world, people have found ways to create dwellings, bridges, and sculptures out of trees without even cutting them down. Using trees to create living structures is much slower to build (read: grow) than traditional methods, but it creates some truly fantastical natural creations. Take a look at some of the world’s coolest feats of arbortecture.

http://www.atlasobscura.com/articles/8-extraordinary-pieces-of-architecture-grown-from-living-trees

My comment: All I can say is WoW!! Great photos plus some text info. Just Click On It!!

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Celebrity names not adding to appeal for home buyers?

May. 16, 2016 – 3:00 – Douglas Elliman Broker Chris Leavitt on the challenges celebrities face trying to sell their homes.

Very funny commercial before the short 4 minute video – Fox news.

Another great one from Jonathan Miller. I guess he watches a lot of tv and tweetlings, when not doing lotsa graphs and other stuff ;>

http://video.foxbusiness.com/v/4895807387001/celebrity-names-not-adding-to-appeal-for-home-buyers

Read more!!