Online Payday Loans Online Payday Loans

Appraiser News: Foreclosure Freeze Furor

October 12th, 2010 by Bill Collins Leave a reply »

Uncertainty and Confusion in The Housing Market

What began as admissions by several lending institutions that there was faulty paperwork in many foreclosure documents that needed correction has now led to a number of large banks halting foreclosure proceedings.  The Wall Street Journal reported on October 10th that J.P. Morgan Chase, Bank of America and Ally Financial had stopped said proceedings in the 23 states that require judicial approval and that Bank of America had stopped foreclosure actions in all 50 states.  Speculation was growing that the initial assumption that the banks could quickly find administrative solutions was inaccurate and that a more likely scenario was that the problems might take months to resolve.

Michael Hudson, writing in the Huffington Post on October 9th, discussed these recent occurrences along with providing some historical perspective.  A link to this interesting piece is found here:
Boiler Rooms and Foreclosure Mills: A Brief History of America’s Mortgage Industry

back to top

Appraiser News is always a FREE publication. Please support our sponsors by clicking here.

Appraiser Help is happy to announce it has renewed its partnership with McKissock 100% Education to provide generous discounts on Continuing Education courses for Appraisers. Go to Discounted McKissock Continuing Education to start saving today and to learn more!

A ‘Simple’ Solution? Institute a Moratorium on Foreclosures and Expedite Refinancing of Millions of Underwater Mortgages

In our last newsletter we discussed the idea put forth by Glen Hubbard (dean of Columbia Business School and Chairman of the Council of Economic Advisors under George W. Bush) and Chris Mayer (a senior vice dean of Columbia Business School) which proposed a “simple” solution to improve the housing market and “invigorate” the economy.

Their solution involves a program whereby Fannie Mae, Freddie Mac, the VA and the FHA would simplify and quicken the process for homeowners to refinance. They cited an example (see our last newsletter) as to how this would work and noted that the savings of approximately $50 billion would go to mostly middle class homeowners.  The authors concluded that:
“Lower mortgage payments would also allow many struggling families to stay in their homes and stave off foreclosure. This program would have the substantial added benefit of reducing the endless stream of fire sales of previously foreclosed houses. Stabilizing house prices reduces the incentive for other underwater homeowners to walk away from their homes, and gives all homeowners increased confidence in the economic value of their house."

Instead of the downward spiral that we have been trapped in and that many real estate analysts fear will continue ad infinitum, a moratorium or slowdown in foreclosures will help reduce the “shadow inventory” threatening to come into the marketplace creating further declines. These actions would put pressure on lenders to modify mortgages at the same time providing incentives to do so.

The New York Times essentially added their editorial support to the Hubbard/Mayer plan on October 9th and a link to the editorial is found here: Helping Homeowners to Refinance

Incidentally, this potentially could create a lot of business for appraisers.

Media support, however, is far from unanimous on the issue.  The Wall Street Journal in an editorial on October 9th stated that:
“The bigger damage here is to the housing market, which desperately needs to find a bottom by clearing excess inventory and working through foreclosures as rapidly as possible. The moratoriums further politicize the housing market and further delay a housing recovery.”

If it was only as simple and painless as the Wall Street Journal implies.  Perhaps it is not a situation of politicizing the housing market but more about their adopting a rigid ideological stance without analyzing the true consequences.

back to top

Appraiser News is always a FREE publication. Please support our sponsors by clicking here.

Appraiser Help is happy to announce it has renewed its partnership with McKissock 100% Education to provide generous discounts on Continuing Education courses for Appraisers. Go to Discounted McKissock Continuing Education to start saving today and to learn more!

Three Places Where Market Conditions are Improving

The apartment sector of the real estate market.  CNBC’s Diane Olick noted on October 6th that “If there can be an upside to the housing crash, the apartment sector is where you’ll find it.” She cited Reis data for the third quarter which was the best third quarter report in ten years and reported vacancy rates had declined to 7.2% from the previous quarter’s 7.8%.  A link to the CNBC report is found here: Apartment Sector Sees Record Improvements

The office market. The Wall Street Journal reported on October 5th that downward pressures on office rents were easing and there were signs that the market might be stabilizing.  The article did note that Reis reported that in the 79 metropolitan areas that they tracked, 1.9 million square feet of office space was vacated in the third quarter which increased the national office vacancy rate to 17.5%, the highest it has been since 1993.  On a positive note, the article stated that Reis economists now consider it unlikely that the vacancy rate will reach the 1992 high of 18.7%.

Internet businesses.  The New York Times reported on October 7th that the market for internet businesses was strong.  This is not a surprise as the internet reaches more people in more ways every day with new technology and equipment capabilities increasing markedly.  A link to this New York Times article is found here: The Search for an Internet Business Continues

A suggestion: Keep your appraisal practice healthy by making the necessary investments in software, technology and internet advertising. Don’t get left behind!

back to top

Appraiser News is always a FREE publication. Please support our sponsors by clicking here.

Not just for FHA Appraisers – Connect with over150 AMCs with updated information.

More Reader Comments Regarding Customary and Reasonable Fees

“I am concerned about how, or if, the "customary and reasonable" appraisal fees will be enforced with some of the larger AMC’s.  Since HVCC started my income per appraisal has decreased about 30% while the work to complete each appraisal has increased approximately 30%.  It is hard to make a living in this industry these days so it is hard to say no to assignments, regardless of the under-market fee they are willing to pay. 

 I do a lot of review work and have seen some lazy appraisals out there.  I can’t help but wonder how thorough the appraisal would have been if the appraiser was paid a full fee.  If I would lower my standards and just whip out an appraisal quickly, I probably wouldn’t be so strapped for cash and time trying to keep my head above water, but I take pride in my product…

I am afraid to ask for increased fees on difficult appraisals because each time I have done that, they say they have to get permission, then I never hear of the appraisal order again.  That is food off my table I am taking a chance on, so I accept the low fee.  It really puts appraisers in between a rock and hard place.  I realize if we would all just say no to the low fees it would work out in the end.  But, how long will that take?  Will I lose my house waiting for that correct fee appraisal order?

The letter TAVMA sent to Chairman Ben S. Bernanke is comical…

How do we get our "reasonable fee" when our "customary fee" as of late has been the AMC discounted fee?” Jennifer Rivard, Certified Residential Appraiser, Cary Appraisal, Cedar Springs, Michigan.

“Thank you for all you have done and continue to do in our industry.  I almost believed that everyone has forgotten the industry that used to be "appraisers". 

We will see what happens next.

It would be great if you urged your readers to write to the Federal Reserve board right now since they are crafting the new rules for us.”  Margo Henson, IFA, Certified Residential Appraiser, Market Appraisal, Inc., Seattle, Washington.

“I am a Certified Appraiser in Florida.

 I have seen a lot about reduced fees in the past several years, but nothing about the increased time it takes to complete an appraisal report.

 As I remember, in 2005, the nationwide average hours to complete an appraisal was 6.  My office was 5.5 hours.  Now it’s taking 8-12 hours per report, at the reduced fees…

In addition to all of that, we are competing with BPO’s, which are attractive to lenders as they are cheap and in this depressed-price environment are perceived as low risk.  However, some problems with BPO’s are:
a)  No appraisal training/continuing education or licensing required.
b)  May have a vested interest in setting a particular price but aren’t required to disclose.
c)  Does their E&O cover for appraisal?
d)  No requirements on how their appraisal is developed.
e)  Don’t have to comply with all the laws, rules, regulations (USPAP, etc.)…

We’re just "holding-on" trying to survive until the economy improves, if it ever does.

In the meantime, the nation is losing a lot of good and experienced appraisers and the cost of using AMC’s has increased cost to the borrower, eliminated appraiser profitability.”Michael H. Fitzpatrick, Real World Appraisal, Deland, Florida

back to top 

Appraiser News is always a FREE publication. Please support our sponsors by clicking here.

Not just for FHA Appraisers – Connect with over150 AMCs with updated information.

Rates and Dates

Freddie Mac reported that rates for 30-year fixed-rate mortgages declined to a record low of 4.27% for the week ending October 7th, down from the 4.32% of the prior week.

The Mortgage Bankers Association (MBA) in its most recent Weekly Mortgage Applications Survey for the week ending October 1st reported an increase to 4.38% from the previous week’s average of 4.25%.

Additional information from Freddie Mac can be found by going to: Primary Mortgage Market Survey – PMMS – Freddie Mac

Additional information from the Mortgage Bankers Association can be found by going to their site at: Research and Forecasts – Mortgage Bankers Association

CNBC reported on October 6th that these low rates were resulting in increasing mortgage applications and a link to this report is found here:
Mortgage Applications Rise as Rates Hit Record Lows

back to top

Appraiser News is always a FREE publication. Please support our sponsors by clicking here.

Appraiser Help is happy to announce it has renewed its partnership with McKissock 100% Education to provide generous discounts on Continuing Education courses for Appraisers. Go to Discounted McKissock Continuing Education to start saving today and to learn more!

Ask Angie

We want to congratulate our most recent winner, Sean M. Genovese, a Certified Residential Appraiser from New Orleans, Louisiana.  Sean was the first person who responded correctly that Anton Chekhov was the author of the quote: “Let us learn to appreciate there are times when the trees will be bare, and look forward to the time when we may pick the fruit.”

Today’s questions: Who said,

“Expose yourself to your deepest fear, after that fear has no power and the fear of freedom shrinks and vanishes. You are free.”

a) Napoleon Hill
b) Andrew Cuomo
c) Norman Vincent Peale
d) Jim Morrison
e) None of the above

And “For nowadays the world is lit by lightning.”

a) Bristol Palin
b) Benjamin Franklin
c) Tennessee Williams
d) Michael J. Kelly
e) None of the above

The first person to respond with the correct answer wins a choice of either:

One Free Trade Show Pass or $199 off a Full Conference Pass to Valuation 2010 or

One Free Regular Listing on AppraiserHelp.com

A Free Copy of the Directory of Appraisal Management Companies for FHA Appraisers

Angie’s Hall of Fame: Those who have been crowned winners more than once during the past two years and who have been retired from competition for the rest of 2010:
Suzanne Fahien
Pat Reass

back to top

Tell us what you think!

We invite your responses to any of the issues raised in this newsletter. Please e-mail us at: bill@appraiserhelp.com with your thoughts!

back to top

We really hope you find our newsletter to be informative!  If you have any input on future topics for discussion, please email me your questions and I will do my best to address them in the next issue.  If you want to look back at past issues you can see our archive at www.appraisernews.com

Regards,

Bill Collins, Appraiser Help Inc.

Appraiser Help Real Estate Appraiser Directory

Appraiser News Homepage

Discounted Appraiser Continuing Education

Business Appraiser Directory

Pictometry Real Estate Business Solutions

FHA Appraiser Directory

FHA Roster . com

Tax Grievance and Tax Appeal Appraiser Directory

twitter.com/appraiserhelp

Appraiser News on Facebook

FHA Appraisal Management Company Directory

 

AppraiserNews and the AppraiserNews Logo and all original content ©AppraiserHelp, Inc. 2009-2010
Advertisement

Comments are closed.