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Archive for February, 2011

Good News for Appraisers and the R.E. Market

February 14th, 2011

A Reader Comments on Recent Issues of Appraiser News

“I enjoy the Appraiser News, but it seems the glass is always half empty with your articles. Along with the doom and gloom, of which anyone can report, how about some positive? The old saying ‘you talk about something long enough, people start to believe it.’ (So) how about talking up some good news, it is out there and maybe you could be part of the catalyst that starts the move to more good than bad. Everyone that reads your articles would appreciate it and I think your credibility would increase…be an innovator, start the cheerleading. I am not saying fabricate the news, but do be tight with the good stuff. Thanks.”  –Vernon L. Garrett III, Certified Residential Appraiser, Hampton Roads, Virginia.   

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National Association of Realtors Reports Increase in "Housing Affordability Index" in 2010

As posted on their website (realtor.org), the NAR statistics show an increase in their Composite index to 185.3 at the end of 2010, an increase from the 178.1 reported at the end of 2009.  A link to this Index is found here:
National Association of Realtors Housing Affordability Index

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Some See an Impending Recovery in the New-Home Market This Year

In a Bloomberg report on February 8th, Kathleen Howley noted that “The chief executive officers of six of the 10 largest U.S. homebuilders cited the potential of a sales comeback in the spring…” after record low sales last year.  A link to this report is found here:  New-Home Recovery Seen as Post-Super Bowl Selling Season Starts

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Memo Obtained by Reauters Indicates Strong Support for Dodd-Frank Bill

On February 7th Kevin Drawbaugh, writing for Reuters, reported that a memo obtained by Reuters from the Senate Banking Committee panel stated that the Senate Panel will be working to insure that "…the letter and the spirit of the law are being implemented by the regulatory agencies…" The Reuters article noted that the Republicans would be facing an “uphill push” in their attempts to roll back and weaken reforms in last year’s Dodd-Frank law.  A link to this report is found here:
US Senate Memo Shows Fight Awaits Dodd-Frank Foes

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The Ultimate Valentine’s Day Gift: One of America’s Ten Most Romantic Homes

CNBC posted a slideshow prior to Valentine’s Day of “America’s Most Romantic Homes 2011” as listed by TopTenRealEstateDeals.com, a real estate listing website, and a link to this is found here: America’s Most Romantic Homes 2011

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Now Some Half-Empty News

On February 9th, CNBC reporter Diana Olick cited a Zillow study which indicated that the percentage of “underwater” homeowners (those mortgage holders with loan balances greater than the equity in their property) increased to 27% in the fourth quarter of 2010 from 23% in the previous quarter.  Ms. Olick noted that: “Adding to a slew of negative reports on home prices, Zillow found home values posted their largest quarter-over-quarter decline, 2.6 percent, since the beginning of 2009.”  In another report on that same day, Ms. Olick referred to the combination of rising mortgage rates and negative equity as a “toxic cocktail for housing” and a link to both CNBC reports is found here:
Negative Home Equity Surges, Weighing on Housing Recovery

Negative Equity and Rising Rates: Toxic Cocktail for Housing

The following day, February 10th, another report by Diana Olick cited data from RealtyTrac which indicated that foreclosures rose 12% in January from the previous month.  She noted that: “Ongoing foreclosures are a major headwind for a market that is already struggling with a glut of unsold houses.”  CNBC posted a slideshow from RealtyTrac on that day of the 10 states with the highest foreclosure rates and a link to this is found here: States with the Highest Foreclosure Rates

The Huffington Post posted a new report by Clear Capital yesterday which projected nationwide a price decline of 3.7% for the coming year. A link to this report is found here: Worst Housing Markets for 2011: Clear Capital Markets

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Obama Proposes "Winding Down" of Fannie and Freddie-What Does This Mean for Appraisers?

No easy answers here: this story will be unfolding over time as Democrats and Republicans alike seek to make political gains by “beating up” these two wards of the government.  The question posed by many, however, is whether the punishment may be worse than the crime?

As homeownership rates decline and we move towards being a “nation of renters”, who are the winners (big banks? Wall Street?) and losers (homebuyers?) as the government begins to withdraw support from the housing market at this time of great weakness. While the story is just beginning, here are links to some early speculations by Reuters (Maria Aspan, Ben Berkowitz, Joe Rauch and Al Yoon) on February 11th and Bloomberg (Lorraine Woellert and Clea Benson) the following day:
Factbox: Winners and Losers in the Obama Housing Plan

US Mortgage Finance Overhaul May Create New Winners, Losers

Nick Timiraos, writing in the Wall Street Journal this weekend, also speculated on what might occur in an article entitled “Views of Life after Fannie, Freddie.”  He quoted Daniel Mudd, the former chief executive of Fannie Mae as saying that “The cost of mortgages is probably going to go up, and homeownership is probably going to go down.”  Mr. Timiraos notes that “…some economists have noted that the mistakes in the U.S. private sector were far greater than the mistakes made by Fannie and Freddie.” Mr. Timiraos concludes his article by noting the reminder of Michael Barr, a former assistant Treasury secretary who said the report should help remind policy makers that the government has played a vital role for many decades in the mortgage market and that:
“People seem to think there’s a nostalgic world that we’ve never had.”

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The Message For Appraisers: Privatize

As we have suggested on (too) many occasions, uncertainties related to the future of the mortgage market and the mortgage appraisal business make it mandatory for appraisers to diversify their appraisal practices into areas outside of the mortgage appraisal arena.  Marketing to the many sources of private appraisal business (i.e. property owners, attorneys, accountants) is fundamental to insuring the continued success of your appraisal practice.

One last reminder: The season for tax grievance and appeals is beginning in many parts of the country and there are lots of opportunities for preparing appraisals for property owners challenging the increasing number of over-assessed properties as market values have declined.

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Rates & Dates

Freddie Mac reported that rates for 30-year fixed-rate mortgages jumped to 5.05% for the week ending February 10th from the 4.81% rate reported on February 3rd.

The Mortgage Bankers Association (MBA) in its most recent Weekly Mortgage Applications Survey for the week ending February 4th also reported a sharp increase in its average to 5.13% from the previous week’s rate of 4.81%. 

In a press release dated February 9th, the MBA reported that mortgage applications were down 5.5% on a seasonally adjusted basis for the week ending February 4th.  Refinance applications constituted 66.6% of mortgage activity in this most recent weekly report.

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, William Debs, a Certified Residential Appraiser with Coastline Appraisals in Hyannis, Massachusetts. Coastline covers Barnstable County (Cape Cod) in Massachusetts.  William was the first to accurately report that Malcom Forbes was the author of the quote “The biggest mistake people make in life is not trying to make a living at doing what they enjoy most” along with knowing that Mickey Rooney authored the quote “You always pass failure on the way to success” and Woody Allen is known for saying that “It’s not that I’m afraid to die. I just don’t want to be there when it happens.”

Today’s questions:

1. The saying "It’s all good" is attributed to or found in:

a) Bob Dylan
b) Romans 8:28, The Bible
c) MC Hammer
d) All of the above
e) None of the above

2. Who said: "He has all the virtues I dislike and none of the vices I admire"

a) Hugh Hefner
b) George Bush
c) Sir Winston Churchill
d) Mark Twain
e) None of the above

3. Who said: "We are all a little weird and life’s a little weird, and when we find someone whose weirdness is compatible with ours, we join up with them and fall in mutual weirdness and call it love."

a) Woody Allen
b) Jerry Seinfeld
c) Sigmund Freud
d) Erma Bombeck
e) None of the above

4: Who said: "Just because something doesn’t do what you planned it to do doesn’t mean it’s useless."

a) Steve Jobs
b) Thomas Edison
c) Henry Ford
d) George Taylor, M.D.
e) None of the above

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

One Free Regular Listing on AppraiserHelp.com

A Free Copy of the UPDATED Directory of Appraisal Management Companies (Available Now to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)

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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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