Appraisal News and Business Tips

Posts Tagged appraiser shortage

6-22-17 Newz//McMansions .Credit Risk Increasing .Freddie – No Appraisals

What If McMansions Ruled the World?

Excerpt: Whether on the gleefully snarky blog McMansion Hell or in haunting photos of cul-de-sacs abandoned during the recession, McMansions-those ersatz chateaux of modern suburbia-are frequent targets of urbanists’ ire, derided as symbols of the wastefulness and isolation of suburban sprawl.
But what if the McMansion could be put in the service of urbanism instead?
My comment: Fascinating!!
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Appraiserville

Housingwire Gave Appraisers A Long Overdue Win

By Jonathan Miller
Excerpt: After a snarky trying-to-be-coy blog post that tried to win on a technicality that there was an appraiser shortage, many appraisers, including myself, took to the streets (the comments section) to voice our outrage. It was based on an amazingly misinformed Urban Institute post that doesn’t understand the appraiser role in mortgage lending, which was even more infuriating.
Housing Wire’s editor reached out to Jonathan Miller for the appraisers’ side of the story – He handed our long besieged industry a rare “win, include” and I am grateful for his honesty and for the opportunity to voice my view on their platform.

Read more!!

6-8-17 Newz// Appraisal Waivers, Blue Bathrooms, Corelogic buys Mercury Network

 The Sunken World Hiding Under the Water’s Surface

27 drowned places that used to be above ground.
Excerpt: here is an entire submerged world hidden just below sea level, largely out of sight to terrestrial beings today. The Earth’s shores are lined with sunken cities, flooded crypts, drowned forests, and submerged structures that have been lost underwater over the millennia, overtaken by nature or human development.

Rising sea levels and flooding caused by earthquakes, landslides, changing tides, melting glaciers, or manmade dams have wiped entire villages off the map. And sometimes, when the water recedes, these submerged cities and landscapes reemerge from the depths, an eerie glimpse at the invisible sunken world.

http://www.atlasobscura.com/lists/sunken-cities-flooded-drowned 

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Appraiser shortage = appraisal waivers??

Excerpt:
Key government agencies finally addressed the critically growing appraisal shortage crisis that’s hampering the mortgage process, highlighting two alternative options to help areas that are facing a shortage.
Particularly, the alternative options are aimed at helping rural areas that are struggling with the availability of state certified and licensed appraisers.

Read more!!

3-30-17 Newz: Corelogic Taking Over?, Oldest Living Things, NAR Appraiser Survey

The Oldest Living Things in the World

Fifteen places to find some of the most ancient life on Earth.

Just For Fun ;>

Excerpt:
On every continent on the planet you can find ancient lifeforms that have been living for thousands, or in some cases tens of thousands of years, their lifespans varying wildly depending on the type of organism.
Many of these are trees. Earth is dotted with ancient trees representing the oldest individual examples of their species, the most elderly of which have been around for between 2,000 and 5,000 years, providing food and shade for some of the earliest human civilizations.
But the real longevity champions of the plant world are clonal colonies, a Utah aspen colony is up to about 80,000 years old!
 
My comment: And I thought California’s 4,800 year old bristle cone pine tree was old! This email newsletter would be a lot more boring without atlas obscura!! Somehow uspap, etc. can be sorta boring ;>
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Corelogic taking over? Lots of data, AMCs, MLS, education…

Excerpt: This morning, as I do every morning, I made some coffee and began work on one of the two appraisal reports that were soon to be due. The first was for an AMC known as Speedy Title and Appraisal Review Services. This appraisal management company is owned by CoreLogic. From their website…

Read more!!

3-2-17 Newz .Appraiser identity theft .Data shows no appraiser shortage

HUD Fraud Alert: Appraiser Identity Theft

 Excerpt: Most of the schemes happened when an FHA roster appraiser provided his or her personal identification number (PIN) for the desktop appraisal software to a colleague or supervisor. Providing the PIN was often rationalized because

* It was needed to keep the process timely,
* A fast turnaround was requested by the lender, or
* It was a contingency for when the roster appraiser was away or unavailable.
While these actions may seem innocent enough, they raise severe risks for misuse because the appraiser can never be sure the PIN will only be used with his or her knowledge and for legitimate purposes. Over the last couple of years, OIG has received more than a dozen reports of identity theft by colleagues or supervisors. Following are some case examples of the various schemes.
The identity theft examples were in IL, CA and WA
Click here to read the 2-page Fraud Bulletin:

My comment: Read the bulletin for more info. There was a lot of this reported when trainees were used in the last boom. All the appraisers were sentenced to 3-5 years in prison.

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How much value does a huge backyard shop add?
Another good post from Ryan Lundquist!!

Read more!!

2-23-17 Newz// Transportation failures, Polluted Cities, Appraisers Age

With Trump changes in the news, guess I need to put something in this email newsletter ;>


Big Banks Could Get Back in the Mortgage Market in a Big Way
Excerpt: For the past six years, there has been a quiet revolution in the mortgage market: Big banks like JPMorgan (NYSE: JPM), Bank of America (NYSE: BAC) and Citibank (NYSE: C) have moved out and nonbank lenders such as Quicken, loanDepot and Caliber Home Loans have moved in – in a big way.
The revolution went largely unchallenged, but that may be about to change if the Trump administration removes regulations on the big banks and stops sending bad loans back to the banks for repayment. Deregulation would open the door for big banks to move back in.
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The Least Polluted U.S. Cities (and the Dirtiest)
Least polluted
1-Naples FL
2-Salem OR
10 – Salinas CA
Most polluted
1-Philadelphia PA
2-Los Angeles CA
10- Milwaukee WI
My comment: Worth reading. Very interesting results and a well written article!!
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5 Spectacular Transportation Failures

Read more!!

10-27-16 Newz//Red lining maps, Fannie-no appraisals needed, Garage conversions

The Coolest Empty Buildings in America

They’re weird, amazing, and available.

Excerpt:

If you’ve got a few million bucks to play with, you’ll find that the country is littered with remarkable empty structures in various states of disrepair, just waiting for enterprising new owners with big dreams and deep pockets. Here are five of our current faves.

Here are a few:

Miami Marine Stadium: Miami, Florida

“Superman Building”: Providence, Rhode Island

Michigan Central Station: Detroit, Michigan

www.citylab.com/design/2016/10/the-coolest-empty-buildings-in-america/499049/

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Fannie’s Property Inspection Waiver (no appraisal) effective 12/10/16 for all lenders

Notice dated 10/24/16. I suspected that this was where Fannie was going with UAD and CU. Refis only.. for now. $75 to waive the appraisal requirement. Fannie has been testing it for awhile with some lenders. You may see this referred to as “Day 1 Certainty”, the name Fannie has chosen.

Link to the 2 page fact sheet: https://www.fanniemae.com/content/fact_sheet/property-inspection-waiver-fact-sheet.pdf

Thanks to Dave Towne for this very interesting news!

My comment: I will have an article on this topic for my November newsletter, out November 1, including relevant details and what this means for you. Very interesting.

WHAT DO YOU THINK? POST YOUR COMMENTS AT www.appraisaltodayblog.com !!

Read more!!

9-22-16 Newz: Appraisers in the news, Coester lawsuit, Miniature homes

The Revolutionary Concept of Standard Sizes Only Dates to the 1920s

Nearly everything in your home is a certain size, thanks to German architect Ernst Neufert.

Excerpt: Almost every kitchen counter in the United States is 36 inches tall. And 25 inches deep. Eighteen inches above the counters are the cabinets, which are 16 inches deep.

Where do these sizes and dimensions come from? Have they always been so exact?

Building standards, as these numbers and rules are often known, are everywhere, helping shape everything from your kitchen cabinets and the sidewalk in front of your house to the layout of your favorite restaurant. Despite their prevalence, building standards really only came into being in the last century. A major turning point in their wild proliferation arrived in the 1920s, when the German government made the then-radical decision to standardize the size of office paper.

My comment: Fascinating!! Lots more info and images at the link below.

http://www.atlasobscura.com/articles/the-revolutionary-concept-of-standard-sizes-only-dates-to-the-1920s

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What does the CU interface look like to underwriters?
Below are links to see. Here’s a tidbit – 50% of appraisals have no or 1 messages.
Learn More About Collateral Underwriter’s Powerful Features and New Look

Do you have questions about using Collateral Underwriter® (CU™)? Register to attend the upcomingAsk the Expert webinar on September 27, 2 p.m. to 3 p.m. ET. Additional webinars and eLearning courses are available on the CU web page.

Have you heard about CU’s easier-to-use design and layout coming later this year? Check out the preview. You can also view the new CU infographic for an overview of CU’s powerful features. CU gives you the feedback you need, when you need it, with a CU risk score, alerts, and messages provided real-time in the Uniform Collateral Data Portal® (UCDP®). For all the latest news and resources, visit the CU web page.

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Scheer Motion to Dismiss Coester vs Scheer Lawsuit

Excerpt: More CVMS Fraud and Coester’s Fraudulent Activities Revealed

Robert Scheer, former Coester Senior VP, has filed a motion to dismiss Coester vs. Scheer lawsuit. There are also whispers in the appraisal community that Brian Coester’s motion to dismiss the lawsuit against him was denied. Looks like Scheer vs. Coester lawsuit is going to trial. Scheer continues to reveal more dirt against Coester while appraisers continue to flood social media with comments, and sometimes with humorous reactions…

This article includes the motion to dismiss.

http://appraisersblogs.com/cvms-fraud-coester–scheer

Previous post on this topic: Coester Allegedly Engaged in Fraud Sued by Former Senior VP

http://appraisersblogs.com/Coester-VMS-lawsuit-fraud-forgery

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Dollhouse Real-Estate: Inside the Elite Market for Miniature Homes

Priced as high as hundreds of thousands of dollars, these elaborate dollhouses count sex therapist Ruth Westheimer and a member of Qatar’s royal family as collectors

Excerpt: This Victorian-style home features four bedrooms, one bathroom and ornate period details like a clawfoot bathtub, crystal chandeliers and mahogany fireplaces. It is currently on the market, fully furnished, for $149,000. Since the home is roughly 18 square feet, the price comes to about $8,278 per square foot.

http://www.mansionglobal.com/articles/39456-dollhouse-real-estate-inside-the-elite-market-for-miniature-homes

My comment: Thanks to Jonathan Miller for this Fun Link!!

Doll houses will never be the same for me ;>

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Coming in the October 2016 issue of Appraisal Today

How to get higher appraisal fees !!!

 Topics include:

  • Why AMC fees started going up last year.
  • Comparison of AMCs, direct lenders and non-lender fees. Why they are very different.
  • How to find out what AMCs are say they are paying and what appraisers are really getting.
  • Lots of fee negotiating tips

 Not just a lot of ranting. Practical advice on how to successfully make more money during this Boom that will not last forever.

To read the full article, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.

$8.25 per month, $24.75 per quarter, $89 per year (Best Buy)

or $99 per year or $169 for two years

Subscribers get, FREE: past 18+ months of past newsletters plus 4 Special Reports, plus 2 Appraiser Marketing Books!!

To purchase the paid Appraisal Today newsletter go to

www.appraisaltoday.com/productsor call 800-839-0227.

 If you are a paid subscriber and did not get the September 2016 issue, emailed September 1, 2016, please send an email to info@appraisaltoday.com and we will send it to you!! Or, hit the reply button. Be sure to put in a comment requesting it ;>

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APPRAISERS IN THE NEWS. THE ARTICLES BELOW ARE ABOUT FEES, TURN TIMES, APPRAISER SHORTAGE, ETC. THEY WERE WRITTEN FOR LENDERS, REAL ESTATE AGENTS, HOME OWNERS, AND THE GENERAL PUBLIC. All allow comments, which can be very interesting!!

5 things to consider about higher appraisal fees and longer turn-times By Ryan Lundquist. Written for real estate agents and home owners

Excerpt: 4) Not Getting All the Money: A loan officer I spoke with was frustrated that his Borrowers were paying $550 for conventional appraisals and $750 for jumbo appraisals – and still experiencing longer turn-times. When he told me the Appraisal Management Company (AMC) he uses though, that’s where the problem comes in. This AMC regularly pays appraisers $350, which means they’re pocketing 40% of the fee the Borrower thinks is going to the appraiser. A few days ago on Facebook there was an appraiser who had an offer from an AMC to appraise a property for $850, but the AMC was charging the Borrower $1,385. Let’s remember appraisers are supposed to be paid “customary and reasonable” fees under Dodd-Frank, but a reasonable fee is what the appraiser gets – NOT what the Borrower pays.

My comments: Well written – for real estate agents and home owners, but has good explanations for everyone. (Ryan’s blog is primarily marketing for his appraisal business.) This article also discusses the decline in the number of appraisers in California, with data, but is relevant for many other states.

http://sacramentoappraisalblog.com/2016/09/20/5-things-to-consider-about-higher-appraisal-fees-and-longer-turn-times

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Appraiser Shortage? By Greg Stephens, SRA, MetroWest AMC

Reprinted from a June 2016 mortgage magazine. Written for lenders.

Excerpt: A topic very relevant to mortgage professionals has been receiving increasing attention lately-the question whether there is or is not a shortage of appraisers? Regulators, as well as market participants, have been weighing in, and depending upon who you talk to, the answers vary. The problem so far is that most of the discussion has been anecdotal.

What also needs to be included in stakeholder discussions on the topic is the status of future appraisers in the pipeline to replace the aging population of practicing appraisers.

To answer the question-not only whether there is a current shortage, but also if there is the potential for a shortage either in the near future (three to five years) or perhaps even longer, I conducted some in-depth research to glean as much factual information as possible.

My comments: This article has some good data on declines in number of trainees, problems with ASC data,lenders not allowing trainees to sign on their own, etc. Written for mortgage lender publication. Of course, it does not discuss low fees, scope creep, and treating appraisers “poorly” as a reason for the shortage of appraisers willing to work for many, or all, AMCs.

http://www.nationalmortgageprofessional.com/news/60306/appraisal-industry-update

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Need an appraisal right away? It may cost more than you’d expect. By Ken Harney. Written for the general public. Syndicated in national newspapers.

Excerpt: The problem is part work overload, part resentment over fees. In many markets, diminishing numbers of experienced appraisers are available – and willing – to handle requests for their work on tight timetables and at fees sometimes lower than they earned a decade or more ago.

The net result: The system is getting gummed up. …. A recent survey of agents by the National Association of Realtors found that appraisal problems were connected with 27 percent of delayed closings, up from 16 percent earlier this year.

In some cases, panicked lenders and management companies are offering appraisers fat bonuses and “rush fees” to meet deadlines. The extra charges can range from $200 to $1,000 or more, turning $500 appraisals into $1,200 or $1,500 expenses, which typically get paid by home buyers.

My comment: Harney has been a nationally syndicated real estate columnist for a long time.

https://www.washingtonpost.com/realestate/need-an-appraisal-right-away-it-may-cost-more-than-youd-expect/2016/09/12/5ce8fa98-790c-11e6-bd86-b7bbd53d2b5d_story.htm

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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 https://www.mba.org

Note: I publish a graph of this data every month in my printed newsletter, Appraisal Today. For more information or get a FREE sample issue go to www.appraisaltoday.com/productsor send an email to info@appraisaltoday.com . Or call 800-839-0227, MTW 8AM to noon, Pacific time.

WASHINGTON, D.C. (September 21, 2016)

Mortgage applications decreased 7.3 percent from one week earlier,

according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 16, 2016. The prior week’s results included an adjustment for the Labor Day holiday

The Market Composite Index, a measure of mortgage loan application volume, decreased 7.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 15 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week to the lowest level since June 2016. The seasonally adjusted Purchase Index decreased 7 percent from one week earlier. The unadjusted Purchase Index increased 15 percent compared with the previous week and was 3 percent higher than the same week one year ago.

 

The refinance share of mortgage activity increased to 63.1 percent of total applications from 62.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.4 percent of total applications.

 

The FHA share of total applications increased to 10.2 percent from 9.6 percent the week prior. The VA share of total applications decreased to 11.6 percent from 12.0 percent the week prior. The USDA share of total applications remained unchanged from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since June 2016, 3.70 percent, from 3.67 percent, with points increasing to 0.38 from 0.36 (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 $417,000) increased to 3.69 percent from 3.64 percent, with points decreasing to 0.29 from 0.36 (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 3.56 percent from 3.50 percent, with points decreasing to 0.23 from 0.27 (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 2.99 percent from 2.97 percent, with points increasing to 0.35 from 0.34 (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 2.96 percent from 2.87 percent, with points

decreasing to 0.26 from 0.37 (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.

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!!

How to fix the appraiser shortage now!!

CLARIFICATION:
Until I wrote this post, I had been saying that AMC low fees and hassles were the main cause of the current appraiser shortage. Many appraisers won’t work for AMCs. Others left the profession because they would not work for AMCs.

I was wrong. The major factor is that trainees cannot sign on their own until certified. There is no other way to manage the huge ups and downs in volume of lender appraising. Prior to HVCC, this had been done for decades.

If this cannot be fixed, lenders will try to get their regulators to require fewer appraisals by using AVMs, BPOs, etc. They have always wanted this.  Their reason now: too few appraisers causing purchases to be delayed. 

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The residential lender appraisal system is broken.

The problem is NOT primarily low fees, licensing requirements, college degree, aging appraiser population, reluctance to hire “competitors”, etc.

The Problem: for the first time, there is no way to bring in trainees during boom times to sign on their own.

Since the 1970s, when Freddie and Fannie started and refis accelerated, lender volume had huge ups and downs, depending on interest rates. Lenders hired armies of trainees and laid them off when business slowed down. During the last big boom prior to the mortgage meltdown, fee appraisers hired the trainees and let them go. Now, very few appraisers are hiring trainees, except friends and relatives.

Lots of complaints now about the appraiser shortage. The Appraisal Foundation is considering lowering licensing requirements for certified appraisers. But, this will take years to change.

If lenders accept licensed appraisers, who do not need a college degree but need 150 hours of college classes, this will really help. A minimum of 12 months and 2000 hours of experience is required. The certified appraiser requirements will not have to be reduced. Certified res is 2.5 years of experience.

The AQB experience requirements are the minimum. I am in California, which has the AQB requirement: “Personally inspect the property with the Trainee until the supervisor determines the Trainee is competent to make unsupervised inspections, in accordance with the Competency Rule of USPAP for the type of property being appraised.” Some states have gone way beyond this, requiring the supervisor to inspect the subject with the trainee for the two years of experience. e supervision.

Lenders who want to switch from conventional and FHA will not be able to use licensed or trainees, of course. But, this is much, much better than weeks of delays getting appraisals, especially for purchases.

AQB requirements

Residential (AL) 150 hours, covering specific modules including the 15-hour National USPAP Course (or its equivalent as determined by the AQB); and 30 semester units of college-level education, OR an Associate’s degree or higher (in any field). 2,000 hours and encompassing no less than 12 months of acceptable appraisal experience. Any non-complex 1-4 family property with a transaction value up to $1 million; and non-residential property with a transaction value up to $250,000


Certified Residential (AR) 200 hours, covering specific modules, including the 15-hour National USPAP Course; and a Bachelor’s degree or higher. 2,500 hours and encompassing no less than 2.5 years (30 months) of acceptable appraisal experience. Any 1-4 family property without regard to transaction value or complexity; and non-residential property with a transaction value up to $250,000.


Of course, for existing appraisers, this is a boom time with no new competitors entering the business. Fees are increasing dramatically and have increased this much in the past.

3-17-16 Newz .Pulling permits .Fannie FAQs .Refi revival

Appraisal and Property Related Frequently Asked Questions (FAQs)

February 12, 2016

This FAQ document provides responses to common questions related to Fannie Mae’s property eligibility and appraisal policies. Following the FAQs, the Attachment on page 10 provides Guidelines for Using Market Conditions Addendum to the Appraisal Report (Form 1004MC).

https://www.fanniemae.com/content/faq/appraisal-property-report-faqs.pdf   

My comments: This document does not have a lot of new material, but it is always good to read this so you can cut and paste some of Fannie’s comments into your reports as an explanation. In this month’s paid Appraisal Today I had two articles on the 1004mc form:

1004MC – the good, the bad, and what Fannie says

Statistical errors in the 1004MC by George Dell, MAI, SRA – He has been fighting with Fannie since the form was first required in April 2009

 More articles are coming soon in the paid Appraisal Today on how to handle the issues.

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Tiny ‘Harry Potter-looking’ homes under construction in North Texas

Excerpt:

Builder Rudy Rivas’ newest house would fit inside the master bedroom of the custom homes he constructs in North Texas.

The average new home being built in America is more than 2,700 square feet – the biggest ever.

So why’s a Dallas custom builder starting a 180-square-foot house?

Read more!!

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