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Reform for Appraisers, or April Fools?

November 8th, 2010 by Bill Collins Leave a reply »

Implementation of "Customary and Reasonable" Fees for Appraisers Scheduled for April 1st, 2011

While other provisions of the Dodd-Frank Bill are to take effect immediately, payment of “customary and reasonable” fees to appraisers will reportedly not be implemented and enforced until April 1st, 2011. It is understandable if many appraisers view this as an “April Fool’s Day” prank and doubt whether this provision will actually become law.  Nothing has occurred, however, that would lead us to this conclusion and lenders and AMCs will face penalties of up to $10,000 per day for failure to comply. It has been suggested that the VA fee schedule may become the guide for setting appraisal fees but it is likely that the VA fee schedule will be just part of a fee schedule that will be based on a number of studies and sources with provisions for high value and unique properties. Appraisers who might be curious about the fee structure in their geographic area can contact the VA at VA Appraisal Fee Schedules and Timeliness Requirements.

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The Foreclosure Crisis is Not Going Away Soon

Along with other publications, on October 30th the New York Times reported on the ongoing efforts of the state attorneys general in pressing for investigations into their various concerns about the banking system’s improper and fraudulent actions related to foreclosure actions. This article, by Joe Nocera, makes the point that many see this as an opportunity not only to reform the foreclosure system but as a chance to force the banks to institute widespread loan modifications.  He compares the very different efforts made by federal agencies with the state attorneys general in both areas.  A link to this article is found here: The States Take on Foreclosures

In case any appraisers may have missed it, Andrew Cuomo will be leaving his position as New York State Attorney General: say hello to Governor-Elect Cuomo.  We encourage Governor-Elect Cuomo to use his new post to End BPOs (Broker Price Opinions) in New York State and encourage the nationwide movement to do so.  Do you think that he will listen to us this time?

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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!

An Election Day Lesson for Appraisers of All Political Persuasions

Lots of taxpayer angst.  When this anger is combined with financial pressure and awareness of declining real estate values, it will lead to an increase in property tax assessment grievances in many parts of the country.  While you’re waiting for April Fool’s Day and higher mortgage appraisal fees, why not learn the nuances of performing appraisals for tax grievance purposes in the municipalities where you appraise?

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Reader Comments On Our Last Issue

Regarding comments made by Lawrence Yun, Chief Economist for the National Association of Realtors (NAR) that included his remarks that “A housing recovery is taking place…”

“Every year when I have to send in my dues to the NAR, I cringe.  I only do so to be part of the MLS. It certainly isn’t because of it being a stellar organization. The NAR is an organization that has little credibility as to the direction of the real estate market… A prime example is their chief economist.  In 2008 Yun was spouting that the housing market had bottomed and we would start to see prices stabilize.  I wrote a letter to the REALTOR magazine and told them he was crazy.  Look what has happened since!   Now he continues to say that the market is starting to turn around because of September sales.  I swear this guy is the biggest joke of an economist, and I have to pay for his salary with my dues!

How can the housing market possibly recover when the supply exceeds the demand?  This is economics 101, and Yun is a prime example of someone that is living in lala land…Most people that are honest will say that over all the housing market will take about two to three more years to see real recovery.  And that needs to be qualified with a caveat which is economic recovery.

Please Mr. Yun start being honest with the American people instead of just being a propaganda machine for the NAR!” –Doug Quenzer, Certified Residential, Appraiser/Broker, Wisconsin

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New Words of Wisdom From Mr. Yun

On Friday, the NAR reported that their Pending Home Sales Index, which they describe as a “forward-looking indicator”, declined 1.8% based last month.  Amongst other comments, Mr. Yun noted that: “Existing-home sales have shown some improvement but the foreclosure moratorium is likely to cause some disruption and contribute to an uneven sales performance in the months ahead… Nonetheless, there appears to be a pent-up demand that eventually will be unleashed as banks resolve their issues with foreclosures and the labor market improves. However, tight credit and appraisals coming in below a negotiated price continue to constrain the market.”

Maybe somebody should explain to Mr. Yun the difference between leading and lagging economic indicators.  Or maybe appraisers just need to start drinking some of Mr. Yun’s cool aid…

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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!

Economics 102: Macrowikinomics: Rebooting Business and the World

In our last newsletter we discussed the new book Crisis Economics: A Crash Course in the Future of Finance by Nouriel Roubini and Stephen Mihm in which the authors discussed the falsely optimistic tendencies of many interested (and disinterested) parties towards the economic, housing and foreclosure crises that we are facing.  As we noted in the last newsletter, Roubini and Mihm wrote that:

“…Unfortunately, financial crises usually ebb and flow in their severity; they rarely hit once and then subside. They resemble hurricanes in that they gather strength, weaken for a while, and then gain even more destructive power than before. This reflects the fact that the vulnerabilities that build up in advance of a major crisis are pervasive and systemic.”

In their new book Macrowikinomics: Rebooting Business and the World, by Don Tapscott and Anthony D. Williams, the authors challenge other conventional wisdoms.  They make the point that our industrial economy and many of its institutions, from the print media to transportation systems to financial service institutions, no longer function properly and need “rebooting”.  The authors were featured in The Huffington Post on November 5th in which they were quoted as saying:

“…when it comes to fixing and restoring confidence in the financial services industry more is required than government intervention and new rules; it’s becoming clearer that what’s needed is a new modus operandi based on new principles like transparency, integrity and collaboration. Bankers can get going now to rebuild the industry on a new model. For example they could remove the value and dispose of the $trillion of toxic assets on their balance sheets by placing them in a commons and letting the world’s leading financial modelers determine their value…”

They went on to say that:
“Because of the Internet, small companies can have the same capabilities as large companies, without the same liabilities, like bureaucracy and legacy cultures, processes, people and systems. The world’s most dynamic innovators are using the Internet and new business models to transform industries ranging from manufacturing and transportation to fashion and retail.

So rather than simply debating the merits of fiscal stimulus, the task before us is to support more start-ups that lay the groundwork to get the country back to the high level of pre-recession job creation… So rather than simply tinkering, leaders in business need to face up to the new realities and get going on rebooting their industries.”

A link to the article by Tapscott and Williams is found here: Macrowikinomics: Rebooting the Economy

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Rates & Dates

Freddie Mac reported that rates for 30-year fixed-rate mortgages were essentially unchanged at 4.24% for the week ending November 4th, from the 4.23% rate reported on October 28th.

The Mortgage Bankers Association (MBA) in its most recent Weekly Mortgage Applications Survey for the week ending October 29th reported a slight increase to 4.28% 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

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Ask Angie

We want to congratulate our most recent winner, Clare Fleming, a Certified Residential Appraiser with CTF Appraisal in Perrinton, Michigan.  CTF Appraisal provides appraisal services in the Michigan counties of Gratiot, Midland, Saginaw, Bay, Montcalm, Ingham, Clinton and Eaton.  Clare was the first person who responded correctly that Oscar Wilde was the author of the quote “If you pretend to be good, the world takes you very seriously. If you pretend to be bad, it doesn’t. Such is the astounding stupidity of optimism” and that Aldous Huxley was the author of the quote “The charm of history and its enigmatic lesson consist in the fact that, from age to age, nothing changes and yet everything is completely different”.

Today’s questions: Who said,

"Life is what happens to you while you’re busy making other plans."

a) Joni Mitchell
b) Mark Twain
c) John Lennon
d) Christine O’Donnell
e) None of the above

And “No one likes to have less than they had before. That’s the nature of the human animal."

a) Mitch McConnell
b) Warren Buffett
c) Joni Mitchell
d) John Lennon
e) None of the above

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

One Free Regular Listing on AppraiserHelp.com

A Free Copy of the UPDATED Directory of Appraisal Management Companies for FHA Appraisers (Coming in Late November)

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

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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!

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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.

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