Appraisal News and Business Tips

Posts Tagged appraisal regulations

3-22-18 Newz//The Way Things Used To Be, Can the Appraisal Profession Be Saved?, Cultural/Religious Effects on Value

Can the Appraisal Profession be Saved?

By George Dell, MAI, SRA
Excerpt: What does it mean “Can the profession be saved?” Does anyone else care except us?

The second question first. Who might care? Clients who have developed a trust for you and who are comfortable with the traditional ways of doing things. There is a group of us and of them who like doing things as always. It’s comfortable, requires little change, and is a ‘safe’ way of doing things.

But who might not care? We can break these down into two subgroups: 1) those that dislike our getting in the way of their deal; and, 2) those who genuinely want something different, more modern. For now, let’s dismiss the first group, and consider those who do want a better product, a better service.

What do you think? Post your comments!!

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2-22-18 Newz//ASB Meeting Live Streaming, McMansions, Risky Appraisal Alternatives

Who Ordered All the McMansions? 10 Cities Where They’re Piled Highest

Excerpt: You know them when you see them.

The imposing, ostentatious structures looming over surprisingly wee plots of land. The crazily mismatched architectural styles. The hipped roofs, gabled roofs, and pyramidal roofs-all on the same house! The bank columns. The front yard Romanesque fountains. The puzzling profusion of window sizes and types. The gigantic, two-story front doors.

Click here for more info and where there are lots of them:

https://www.realtor.com/news/trends/metros-with-most-mcmansions

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2-15-18 Newz//Fannie Appraiser Webinar, Magical Appraiser Wand, Refis Dropping

The Magical Appraiser Wand

By George Dell
 
Excerpt: Can you just give me some magical software which will calculate my adjustments?

I get asked questions like this often. Can you just show me how to do a graph a client wants? Can you just give me your class stuff so I don’t have to come all that way? So often, the question degrades into something like “Why does the regression software give stupid answers?” I pushed the magic button!

People do not like the answer. You’re paid to do an analysis, not wave a magic wand, or push a magical appraisal button. We have another name for that, it’s called an AVM.   In addition to a point value prediction, AVMs can be tested for reliability. This is called the FSD (Forecast Standard Deviation). The AVM. It gets results. It’s fast. It’s cheap. And it provides a measure of reliability – the FSD.

Why would a client want something slower and more expensive with no measure of reliability? Why hire a pesky appraiser?

Click here for the answer!!

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2-1-18 Newz//Fannie Selling Guide Update, Zillow sued, Cost vs. Value Remodeling

Fannie Selling Guide Update for appraisals

Announcement SEL-2018-01: Selling Guide updates

Two appraisal changes:
– Remove the requirement for a field review on certain properties valued at $1,000,000 or more.
– Require lenders to choose the most reliable appraisal when two appraisals are obtained for one property.

Also
– Detached Condo Projects
– Minor Litigation in Projects
Click here to read the announcement for more info

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1-18-18 Newz//Hybrid Appraisal Rejected, Scope Creeping, UsPaP False Assumptions

Scope Creep – Head’em Off at the Pass!

By George Dell
Excerpt: Why do we have scope creep?
Possible answers include:
– The reviewer or clerk has to justify their existence;
– There is genuine concern about something;
– The work should’ve been there in the first place;

It’s important to remember that our entire system of appraisal production and review is belief-based.  It must be “worthy of belief.”  We have no objective standards.  Your work must be subjectively “credible” in the mind of the reader.

Read this short, interesting blog post at:

My comment: George Dell writes regularly for Appraisal Today. His articles are much longer than his blog posts, often expanding on a blog post.

UsPaP – A few of the more obvious false assumptions

By Barry Bates

Excerpt from blog post

The appraisal client is always the intended user.

A lovely concept out in the ether somewhere, but hardly ever the case in practice. The client (who engages the appraiser) is a lending technician or AMC drone; the intended user is an underwriter, servicer or portfolio manager. (This assumes the fact that only about 10% of appraisals are ever done for anybody other than a mortgage company.)

To read the full post, click here

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10-12-17 Newz//FHA-Appraisers responsible for water quality reporting?, Hybrid appraisal survey

New CU 4.2 makes it easier for lenders to change comp and subject data. MI companies can access CU

Excerpts: During the weekend of Dec. 9, we will implement Collateral Underwriter® (CU™) 4.2, (which includes) the ability to edit the subject and appraiser-provided comparable sales property characteristics. CU 4.2 will also provide mortgage insurers (MIs) with access to CU. Lenders will be able to give their MI risk partners access to appraisal-specific data by providing them the Doc File ID generated at the time of appraisal submission.

Comparable Sales Review Edit Feature
The ability to edit subject and appraiser-provided comparable sales property characteristics (currently available via the pencil icon in classic CU) will be added to the Comp Review page. Clicking on the pencil icon in the Edit column of the comparable sales review table will open the Edit Property Characteristic pop-up. If there are data errors or missing data elements, the edit feature can be used to modify the data elements and rerun the model with the revised data.
Click here to read the full release
My comment: Lenders have been able to change subject and comp data and now it will be easier? I didn’t know that they are able to change the data now. MI companies have access to CU? What about appraisers?

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10-5-17 Newz//Increasing home prices in disaster-prone areas. USPAP and Desktop Evaluations

Home Prices Rising Twice as Fast in U.S. Cities with Highest Natural Hazard Risk Than in Lowest-Risk Cities

 Homeowners in Highest-Risk Cities Have More Equity, Longer Homeownership Tenures
 Appreciation Slower in Florida and Louisiana Cities with Highest Flood Risk, Bucking Trend

Excerpt:
ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, recently released its 2017 U.S. Natural Hazard Housing Risk Index, which found that median home prices in U.S. cities in the 80th percentile for natural hazard risk (top 20 percent with highest risk) have increased more than twice as fast over the past five years and over the past 10 years than median home prices in U.S cities in the 20th percentile for natural hazard risk (bottom 20 percent with lowest risk).

Click here to see a Heat Map of all U.S counties – what does your look like? Search by type of disaster. Plus lots more analysis. Very interesting!!

My comment: Overall high risk counties are scattered all over the country. The article mentions strong economies and scenic locations. I live in Earthquake Country. When I first started appraising here, I was surprised that it did not matter. There is no discount even for being on a fault line. Why? Lots of people want to live in the San Francisco Bay Area. The fault line closest to me (about 10 miles away) is on the top of hills with very good Bay views. There are 3 in the Midwest and east. The large New Madras earthquake fault area in the midwest is on the map as Moderate (last earthquake in the 1800s). Two other small areas in NC and PA are on the map.

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9-28-17 Newz//Fees up or down?, Credit easing, San Francisco Castle

Albion Castle – A 140 year old castle with underground caves hidden in San Francisco.

Just For Fun!!

Excerpt: When Bill Gilbert was growing up near Candlestick Park, all the kids said that Albion Castle was haunted. Gilbert himself wasn’t sure, but every time his parents took him to eat at the at the old Dago Mary’s restaurant across the street, he would look at the gates that front the 145-year-old stone structure and wonder. Little did he know that as an adult, he would own the keys to the castle (literally).
My comment: It was listed in 2009 for $2,950,000 (a very bad market). The six-story square tower has four bedrooms, two bathrooms and 1,436 sq.ft. It sold for 11/2011 for $890,000 and has been rehabbed. It needed a lot of work!!
———————————————-
Info on the history and historic photos

My comment: It was listed in 2009 for $2,950,000 (a very bad market). The six-story square tower has four bedrooms, two bathrooms and 1,436 sq.ft. It sold for 11/2011 for $890,000 and has been rehabbed. It needed a lot of work!!

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7-20-17 Newz// Fannie data, USPS gyrocopters, Costar data

When the U.S. Postal Service Used Gyrocopters to Deliver the Mail The flying machines hopped from roof to roof of post offices.

Excerpt: Sensing opportunity, the United States Postal Service-then the U.S. Post Office Department-decided to invest in the new technology. In 1937, Congress appropriated money to fund a series of experiments on autogyro mail delivery, and within a year the first flight-from Bethesda, Maryland to Washington, D.C.-was made.

My comment: Check out the photos (no videos in 1937). Very interesting!!

Why Fannie Mae Shouldn’t Keep Data Secret

Excerpt: Today’s lenders have access to massive amounts of data. According to (Richard) Hagar, government lenders have access to every recorded sale in most every county across the U.S. via information providers like CoreLogic. He believes appraisal adjustments should be cross-checked against sales metrics of the five million home sales that occur each year.
However, appraisers typically use Multiple Listing Service (MLS) for residential appraising. Data provided by MLS may vary from information shown by providers like CoreLogic. MLS has more detailed information that county records don’t contain. Oftentimes, though, MLS contains errors or missing data. In other words, both types of systems have errors, but not necessarily the same errors.
My comment: Controversial topic!! Fannie says that they want appraisers to be objective, not using Fannie’s data. For example, appraisers changing their building sketches to match public records sq.ft. to avoid underwriter/review hassles. I remember CMDC books (in california) back in the 1980s where appraisers submitted the first pages of their appraisals to go into a shared appraiser database. Before appraisers could get MLS access. Seems like that was okay…

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