Posts Tagged mortgage lending

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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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Neighborhood Boundaries for Appraisals

By Ann O'Rourke on January 28, 2022 / adjustments, ANSI, appraisal classes, appraisal how to, bias / Leave a comment

Tags: adjustments, ANSI, appraisal how to, bias, Fannie, mortgage lending

Gentrification, neighborhood boundaries, and bias

By Ryan Lundquist

Excerpts: Photo used with permission (thanks, Vicky).

Sometimes, crossing the street can make all the difference for value. In short, if we don’t understand where a neighborhood starts and ends, we might choose the wrong comps.

Q&A #3 How do we know neighborhood boundaries?

Okay, this is a big question, and it could easily be a dissertation. For starters, let’s consider what Fannie Mae says about neighborhoods:

Fannie Mae: “The appraiser should provide an outline of the neighborhood boundaries, which should be clearly delineated using ‘North,’ ‘South’, ‘East,’ and ‘West’. These boundaries may include but are not limited to streets, legally recognized neighborhood boundaries, waterways, or other natural boundaries that define the separation of one neighborhood from another. Appraisers should not reference a map or other addendum as the only example of the neighborhood boundaries.”

Other thoughts (mine): I think sometimes we focus only on major streets, but let’s also consider school boundaries and even how neighborhood associations or city websites define areas. But also, where would residents themselves draw the lines? And where would buyers be hunting for a home before shopping somewhere else? All these things could be clues.

To read more and see lots of maps and graphs, click here

My comments: Excellent analysis of specific neighborhood boundaries with maps and graphs, of course. Worth reading. The Jan. and Feb issues of the monthly Appraisal Today has this article: Does my neighborhood really need to be analyzed? Parts I II By Tim Andersen, MAI. The best neighborhood explanations I have ever read!!

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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, ANSI, bias, smells, mortgage origination stats, etc.

Which Appraisal Clients are used the most?(Opens in a new browser tab)

Should Appraisers Pay to Be on AMC List

By Ann O'Rourke on August 28, 2020 / adjustments, AMCs, appraisal business, appraisal management company, cost approach, COVID, Fannie, fauci, new appraisers / Leave a comment

Tags: adjustments, appraisal business, appraisal management company, Coronavirus, Fannie, mortgage lending, mortgage loan volume, new appraisers, unusal homes

By Dustin Harris

Excerpt: Should appraisers pay to be on an AMC’s approved appraiser list? Is this one way to get new clients? If an AMC solicited you, would you check it out?

Now, I work for some AMCs that, frankly, you might not choose to work for. That’s fine. It’s a choice we all make. Understand that most of the areas I work are rural, so AMCs are generally willing to pay more because of this. Some AMC are very demanding. Yet, when I meet those demands, I get a lot of well-paying jobs from them.

To read more, plus lots of appraiser comments, and listen to the podcast, click here

My comment: A never-ending very controversial topic ever since AMCs took over residential lender appraisals after the mortgage crash around 2008!

Review appraiser liability(Opens in a new browser tab)

What to Do When Your Appraisal Is Under Review

By Ann O'Rourke on August 14, 2020 / appraisal business, Coronavirus, cost approach, COVID, liability, state appraiser regulators, unusual homes / Leave a comment

Tags: appraisal business, Hybrid appraisals, mortgage lending, statistics, unusal homes, va

Excerpts: Residential appraisers will often — if not just about always — have their work reviewed by another appraiser. Usually, this is a routine procedure that the original appraiser barely notices. Sometimes, the review appraiser will come back with requests for extra information, or doubts, that the original appraiser might find annoying. To be sure, the reviewer’s questions might sometimes seem nit-picky, and answering them can distract from other work. However, the issues the reviewer raises almost always turn out to be legitimate. What to Do When Your Appraisal Is Under Review

We asked review appraiser Doug Nakashima (Glenview, Illinois) for advice on how to make reviews as painless as possible if you’re the one being reviewed.

Topics:

Remember that reviewers are on your side
Look out for these common points of contention
Avoid future revision requests

To read more, click here

My comments: Sorry, no comments section for ranting, etc. ;>

If you’re doing AMC work, the tough appraisals tend to go to reviewers. The first “reviews” are from underwriters, clerks, computer software, etc.

I don’t know of any other profession where almost all reports are reviewed by clients. Personally, I think it has resulted in appraisers being overly critical of other appraisers’ work, state boards sometimes being too aggressive, etc. Worse, some appraisers try to send in reports with as as few “problems” as possible, to minimize call backs and doing whatever it takes.

Appraisal Process Challenges(Opens in a new browser tab) Read more!! →

Favorite parts of the appraisal process

By Ann O'Rourke on July 17, 2020 / adjustments, appraisal business, Coronavirus, humor, Mortgage applications, mortgage loan volume, square footage, Strange homes / Leave a comment

Tags: adjustments, appraisal business, Coronavirus, humor, mortgage lending, square footage, strange house, unusal homes

What’s your favorite part of the appraisal process?

Excerpt:

Number 1. Data collection and property description (38%)

“The best part is the property review. I enjoy seeing what people have done to their properties and talking to them about their homes.”

“I enjoy viewing/observing the subject home.”

“Detective work”

“Each dwelling is different, and not every appraiser takes the time to clarify the differences in the dwellings. The quality, the construction, the egresses, and especially the correct way to calculate GLA or measure a dwelling.”

Number 2. Data analysis (27%)…

To read more about favorites, click here

My comment: I love working in the field, so my choice is Number 1. But, my very best choice is getting paid ;>

Which Appraisal Clients are used the most?(Opens in a new browser tab)

What is the farthest you have traveled to complete an appraisal and still be considered geographically competent?(Opens in a new browser tab)

Appraisal Process Challenges(Opens in a new browser tab)

Crazy Appraiser Stories!!(Opens in a new browser tab)

What’s the appraisal definition for suburban?

By Ann O'Rourke on July 10, 2020 / adjustments, appraisal business, Appraisal Foundation, Coronavirus, Fannie, forecast, george dell, Mortgage applications, real estate market, USPAP, weird properties / Leave a comment

Tags: adjustments, appraisal business, Appraisal Foundation, appraisal how to, Coronavirus, Fannie, Fannie forms, mortgage lending, mortgage loan volume, USPAP, weird properties

Excerpts: The U.S. hasn’t had a formal definition for what constitutes a suburb. A new data analysis comes closer to defining America’s most popular neighborhood type. (Suburban appraisal definition is tricky.) What’s the appraisal definition for suburban?

The United States is a land of suburbs, with just one problem: No one’s quite clear what a “suburb” is.

It’s a question of semantics with real-world implications, as government programs, political campaigns and developers try to spend money in the “suburbs,” where a majority of Americans say they live despite the category having no formal definition.

For some people, it’s obvious: A suburb is a smaller city on the periphery of a larger city. Or it’s a sprawling neighborhood filled with vast swathes of single-family homes. Still other more dated conceptions of suburbia in the popular mind involve the people who live there: allegedly white, middle class and socially homogenous.

Now a new team of researchers believe they’ve cracked the code…

To read more, click here

My comments: Of course, if you do residential lender appraisals this is a Very Big Issue due to lender “requirements” such as no rural properties. Lots and lots of online discussion about this for a long time. Post this topic on your favorite Internet chat site or email list… and wait for the wide variety of opinions!!

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My Favorite Definitions

(This has been floating around for many years…)

Rural Suburban Urban

If you stand naked on the front porch and the neighbors can’t see you… it’s rural.
If you stand naked on the front porch and the neighbors call the cops on you… it’s suburban.
If you stand naked on the front porch and the neighbors ignore you… it’s urban.

There are other variations, of course, that are not suitable for this newsletter ;>

Covid-19 and Appraisers FREE Newsletter(Opens in a new browser tab)

Fannie Update on Covid alternative appraisals

By Ann O'Rourke on July 3, 2020 / adjustments, Coronavirus, Fannie, liability, Mortgage applications, mortgage loan volume, real estate market, unusual home / Leave a comment

Tags: adjustments, Coronavirus, Fannie, mortgage lending, mortgage loan volume, real estate market

Fannie Update on Covid alternative appraisals. Excerpt: Through mid-May, about 15% of Uniform Collateral Data Portal® (UCDP®) appraisals completed after our announcement used the flexibilities, either desktop or exterior-only. As you know, circumstances vary widely across the country, and the uptake of the flexibilities reflects this. The highest percentages of appraisals using the flexibilities are around 40% in some northeastern states, while the lowest percentages are around 10% in some of the less impacted states…

We found that appraisers have used the flexibilities correctly about 90% of the time. Appraisers have done a great job identifying external obsolescence for desktops and exterior-only appraisals, as well as leveraging their local knowledge, maps, aerial photos, and other data sources. We’ve been pleasantly surprised to find that, although not required, about 35% of nontraditional reports include a sketch pulled from prior reports, assessors records, or other sources. Also, the supporting comments in the nontraditional reports have been even better on average than those in traditional reports.

Worth reading. 5 pages and well written. Also includes comments on “one mile rule” and flood zones. To read more, click here

My comments: There are very few of these done in the Bay Area. 10% sounds about right. However, now we are now in a major virus surge in some states – opened too soon and people in some areas did not do social distancing, hand washing and wear face coverings. Use of the alternative reports may increase in some states, and decrease in the northeast.

These appraisals are not easy to learn how to do, and are very different than doing full 1004 with interior inspections. In the June issue of the paid Appraisal Today I have lots of information on them, including useful references. See the ad below.

Click the link below for a church converted to a home, Value Difference Between Streets, Avenues & Boulevards…?, Millions of American Homes at Greater Flood Risk Than Government Estimates, New Study Says, random thoughts of an appraiser, mortgage origination stats.

Appraisal Neighborhood Analysis

By Ann O'Rourke on December 7, 2019 / AMCs, appraisal business, appraisal how to, AVMS, computers, marketing, Mortgage applications, mortgage loan volume, real estate market, Strange homes / Leave a comment

Tags: appraisal business, appraisal how to, appraisal management company, lenders, marketing, mortgage lending, neighborhood, real estate market, unusal homes

What is so Important About the Damn Neighborhood Analysis that the Reviewer Nicked me for it?

By Tim Andersen, MAI

Excerpt: Question: in a recent review of one of my appraisal reports, the reviewer said my neighborhood analysis was poor. I asked what that meant and she indicated I should familiarize myself with Fannie Mae’s requirements for a NEIGHBORHOOD ANALYSIS. She also indicated what I had in my report was just a recitation of facts, but (a) lacked any analysis of neighborhood trends and (b) therefore I did not analyze the neighborhood sufficiently to reconcile my conclusions of the neighborhood trends and its effect on both my highest and best use conclusion and my final value opinion. I came in just over the contract price. What does the reviewer want from me? I did what I always do in an appraisal! Help me!

For the answer, click here

My comment: Tim always has great answers for appraiser questions! He is a regular contributor to the paid Appraisal Today, with articles on USPAP 2020-2021, state board problems, etc.

What to Do When Your Appraisal Is Under Review(Opens in a new browser tab)

Covid-19 Residential Appraisers Tips on Staying Safe

To read more of this long blog post, click Read More Below!

Don’t pick appraisal comps the old way

By Ann O'Rourke on May 24, 2019 / appraisal business, hybrid appraisals, unusual home, unusual homes, va / Leave a comment

Tags: appraisal business, Hybrid appraisals, mortgage lending, mortgage loan volume, unusal homes

Are you violating USPAP every day?

If you pick comps the old way, you may be violating USPAP every day!

Excerpts: (In the past) Data was hard to get. I was taught it was only necessary to use only three or four comps. And only a few comps were available. I did learn the importance of bracketing from my trainers (it was nowhere in my appraiser education). I was diligent, and of course, I picked my necessary and available comps carefully. Don’t pick appraisal comps the old way.

Then things changed. No one noticed. MLS came on line. Income properties came online. Public records came online. All relevant sales became available. Instantly. Without thinking, I ignored the “as available” rule. But stuck to the ‘as necessary’ rule. And heck, everybody used just three comps. In fact, USPAP says I should do what my peers would do. And they all used just three or four.

So, what changed?

Today in most areas, all the sales are available. But are they necessary? Well no. All my peers use just three or four, so it is ok. But what if I want to do more than achieve credible results?

To read more, click here

My comment: I love George’s Most Excellent headlines plus his writings!! His blog posts are short, as they should be. But, sometimes we want to read more. The June issue of the paid Appraisal Today will have his 6-page article: “Old Versus New: Conflict or Opportunity?” about the past, current and future in appraisal analysis. Very interesting!!

Covid-19 Residential Appraisers Tips on Staying Safe

To read more of this long blog post, click Read More Below!!

https://blogs.alamode.com/blog/an-accidental-encounter-turns-into-a-lifelong-career-in-the-appraisal-industry

Women in Appraising

By Ann O'Rourke on April 11, 2019 / Appraisal Qualifications Board, Appraisal Standards Board, lender appraisals, marketing, Mortgage applications, new appraisers, trainees, USPAP / Leave a comment

Tags: Appraisal Qualifications Board, Appraisal Standards Board, mortgage lending, mortgage loan volume, new appraisers, USPAP

Women in Appraising

Karen Mann: An accidental encounter turns into a lifelong career in the appraisal industry

Excerpts: Karen Mann is a Certified General Appraiser in Discovery Bay, CA. In her 39-year tenure, Karen has made it her mission to help continue the evolution of the industry – serving on several national and local committees for both the Appraisal Institute and the American Society of Appraisers.

Karen’s success in the industry started with a fortuitous event that turned into a successful career and a lifelong friendship. Even today, she remains close to two of the mentors that helped her get started. Her leadership and activism in the industry have helped guide others just getting started, and her acceptance of technology has aided in her success.

“Becoming an appraiser has changed my world. I’ve now been in quite a few leadership roles in and outside the appraisal industry. And, I feel that I’ve had a very fortunate career. I’ve worked really hard, but for the whole 39 years (so far), it’s been an honor to be an appraiser.”

My comment: I have known Karen for over 30 years. She is a lot of fun also. I will never forget when Karen and I plus a couple of other women got on stage and dancing and doing karoke at a national Employee Relocation Conference (social event). Appraising interferes sometimes with cruising on her big power boat ;>

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Maggie Hambledon, ASB member since 2011

Maggie is president of Hambleton, Inc., a real property appraisal firm in Columbus, OH. She has been in practice for over 40 years, specializing in the valuation of residential properties, with an emphasis on litigation support.

She got started by Sheer luck. “I answered an ad to work as an assistant for an appraisal department in a corporation. The luck was I had two pioneer male appraiser mentors who believed in upward mobility and this was in 1968! I was able to learn from the time a potential assignment was logged in through the entire process and to travel to other states to participate in large multi-property appraisal assignments.”

https://www.appraisalbuzz.com/international-womens-month-part-3/

My comment: How did I get started? After 7 years I was bored working in labs, started when I graduated from college. In 1975 I saw an ad for “Engineering Aide” at the county’s assessor’s office. It said “work in the field” (verifying county records before switching to automated valuation). Previously I worked on the 1970 census in the field and really liked it. I had never heard of appraising and got an appraisal book at the library. Have been appraising ever since!

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

To read more of this long blog post, click Read More Below!!