Online Payday Loans Online Payday Loans

Archive for March, 2011

Countdown to Appraiser Fool’s Day

March 29th, 2011

Housingwire.com Interviews Corelogic VP on Customary and Reasonable Fees

  • Shadow Inventory Estimated at $450 Billion with Absorption to Take Many Years
  • As the Real Estate Market Crumbles, What is Congress up to?
  • Mortgage Mess Not Likely to be Resolved Quickly
  • Moody’s Reports Declines in Commercial Real Estate Prices and Describes “Bifurcated” Market
  • Local Governments Raise Property Taxes to Record Highs as They Struggle to Balance Budgets
  • Reader’s Comments on the State of the Appraisal Profession
  • Rates & Dates
  • Ask Angie
  • Tell us what you think!
  • Closing Remarks
  • Housingwire.com Interviews Corelogic VP on Customary and Reasonable Fees

    On March 23rd, Jacob Gaffney of HousingWire.com interviewed Mr. Feldman about the implementation of “customary and reasonable” appraiser fees on April 1st as per the Dodd-Frank act and the Interim Final Rule.  Mr. Feldman made the following comments as to the two ways that appraisal management companies (AMCs) “will be presumed to be in compliance” with the new rules:

    “Presumption one requires that the amount of compensation is reasonably related to recent rates for appraisal services performed in the geographic market of the property. Fees paid by AMCs are specifically included in this approach. Moreover, necessary fee adjustments are to be made for type of property, scope of work and fee-appraiser qualifications, etc. In addition, there can be no anti-competitive action in violation of federal law such as price-fixing or restricting others from entering the market. This is an explicit requirement of Dodd-Frank designed to prevent collusion or market dominance among AMCs to depress appraiser fees.

    Presumption two relies on objective independent, third-party information, including fee schedules, studies and surveys. This approach excludes AMC fees.

    By April 1, lenders and AMC’s must decide which method or compliant combination/hybrid they will use in determining customary and reasonable fees for fee appraisers.”

    David Feldman responded to Mr. Gaffney’s question as to “How are your clients going to determine customary and reasonable?” with this answer:
    “Most clients appear to be selecting presumption one and working in partnership with AMCs to support reasonableness of the fees”.

    Mr. Feldman went on to discuss a “percentage approach,” citing an example whereby “…an AMC pays an appraiser a percent of the client fee – say 65%, for example”…He expanded on these comments in the HousingWire.com interview and made the following comment that is particularly alarming to appraisers looking ahead with hope to April 1st:
    “For lenders choosing presumption one and relying on AMC data and analysis, it is possible that there will be a minimal increase of cost to borrowers since AMC fees, assuming no anti-competitive activity, are currently the customary and reasonable fees.”

    A link to the entire HousingWire.com interview is found here: Corelogic VP speaks on upcoming changes to appraisal fees

    back to top

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

    Superior E&O insurance from the Landy Insurance Agency- click here to apply and receive your policy in about two hours!

    Shadow Inventory Estimated at $450 Billion with Absorption to Take Many Years

    HousingWire.com’s Jon Prior reported two days later on Standard & Poor’s estimate that the “shadow inventory” (those loans that were 90+ days delinquent, in foreclosure or taken into REO) was approaching the half trillion dollar point with lengthy time periods for absorption to occur in many markets.  A link to this report is found here: S&P Puts Shadow Inventory Principal Balance at $450 Billion

    CNBC’s Diana Olick summarized the mass of negative housing data on March 23rd in a report titled “Why Housing is Going Through a Double Dip” and a link to the entire report is found here:

    Why Housing is Going Through a Double Dip

    A second CNBC report (“For Real Estate, a Giant Clearance Sale”) on March 25th expanded on the myriad concerns and a link to this is found here:

    For Real Estate, a Giant Spring Clearance Sale

    One final CNBC report by Diana Olick on March 21st noted the disconnect between the housing and financial markets and a link to this report is found here: Market Scoffs at Pitiful Home Sales

    The National Association of Realtors (NAR) released their estimate of pending home sales yesterday which indicated that while pending sales rose 2.1% in February from the prior month, the figure was down 8.2% from the same month last year.  Lawrence Yun, chief economist for the NAR (and ever the optimist) is quoted as saying that “We may not see notable gains in existing-home sales in the near term, but they’re expected to rise 5 to 10 percent this year with the economic recovery, job creation and excellent affordability conditions providing confidence to buyers who’ve been on the sidelines.”. A link to the NAR release and a video interview with Mr. Yun is found here: February Pending Home Sales Rise

    back to top

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

    Limited Time Only: Pay Last Year’s Price for This Year’s AMC Directory! Over 150 AMCs listed with fully updated contact information for only $39.99

    As the Real Estate Market Crumbles, What is Congress up to?

    Amazingly, not only are there no serious proposals to provide assistance but House Republicans are calling for withdrawal of government support and the  accelerated privatization of Fannie Mae and Freddie Mac, actions that will increase the cost of home ownership and contribute to the downward spiral.

    On March 11th, Bonnie Wilt-Hild, staff writer for the National Association of Mortgage Underwriters (NAMU) discussed the “vital public purpose” of the two GSE’s and concluded that not only is privatization unfeasible but would “…be disastrous, particularly to the already underserved segments of the population.”

    A link to the entire article by Ms. Wilt-Hild is found here: Privatizing FNMA and FHLMC

    back to top

    Mortgage Mess Not Likely to be Resolved Quickly

    A proposed settlement of the case brought by the State Attorneys General documenting improper loan practices is not likely to reach an early resolution due to the complexities of the charges and the divergent interests of the parties.  Writing in the Huffington Post on March 13th, Robert Kuttner reviewed the matter and a link to this report is found here: The Continuing Mortgage Mess

    back to top

    Moody’s Reports Declines in Commercial Real Estate Prices and Describes “Bifurcated” Market

    In a March 22nd press release, Moody’s Investor Service reported that their index of U.S. commercial real estate prices declined by 1.2% in January.  They described the U.S. commercial market as “bifurcated” with an improving market with larger properties in major cities and an elevated level of distressed transfers in most other markets.  A link to this press release is found here:

    Moodys: US Commercial Real Estate Prices Slip 1.2% in January

    back to top

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

    Limited Time Only: Pay Last Year’s Price for This Year’s AMC Directory! Over 150 AMCs listed with fully updated contact information for only $39.99

    Local Governments Raise Property Taxes to Record Highs as They Struggle to Balance Budgets

    On March 22nd, Bloomberg Businessweek reported on the increasing percentage of household income going to the payment of property taxes, citing one study that 3.5% of income in 2009 went to property taxes, an increase from 2.9% in 2005.  As a percentage of overall property value, property taxes rose at a substantially higher rate due to the substantial decline in property values during this period.  New Jersey residents reportedly pay the highest residential property taxes with an average of $7,576 last year, up 78.7% from 1999.  A link to the Bloomberg Businessweek report is found here:

    Property Taxes Reach the Breaking Point

    As we have suggested on many occasions, residential and commercial appraisers in many parts of the country are missing out on substantial appraisal business if they are not investigating the market for tax grievance and tax appeal appraisals in the municipalities that they cover.

    back to top

    Reader’s Comments on the State of the Appraisal Profession

    Everett Clark, a California appraiser, responded to Florida appraiser Joe Johnson’s comments in the last newsletter:

    “Mr. Johnson, the certified appraiser featured in your article regarding customary and reasonable fees, is definitely not alone. The problem is a simple one: we don’t seem to have an organization to which we can belong, that will stand up for the independent fee appraiser.

    Appraisers are generally singular people, often concerned that other appraisers may be “taking a client.” The entities we are fighting, the banks and AMCs, are united. They have lobbyists in D.C. pushing their agenda on a regular basis. Who is there to lobby for the fee appraiser? With only one side telling their view of the issues, we have no chance to change things for the better for the appraiser.

    …Why can’t more people get behind an association such as NAIFA (National Association of Independent Fee Appraisers), and push for some lobbying on our part for a change? It doesn’t have to be NAIFA, it can be any organization already established and with a base membership, but it’s something we need to do… the power of the collective voice…of like minded people bound together and fighting for what they believe is much better than many singular voices intermittently questioning the system.

    Just a few thoughts to let Joe know he’s not alone out there.”

    Steve Hassoldt, a California appraiser, noted that:

    “I just finished reading the March 15th newsletter and believe that Joe Johnson is right on with his thoughts. With over 25 years of appraising under my belt, I’d like to see how the data mongers are figuring the value of a house that happens to have a guest unit… Or how it will determine the view adjustment… We have every kind of view available in Los Angeles County, and they all differ in value, even on the same street! A blind computer is only as good as the data input (GIGO… Garbage in garbage out)… Many neighborhoods have their own specifics, yet not all the houses in the same area have the same amenities (you have a good view from one house but no view for the house across the street, etc)…”

    back to top

    Rates & Dates

    Freddie Mac reported that rates for 30-year fixed-rate mortgages increased to 4.81% for the week ending March 24th, up from the 4.76% rate reported on March 17th.  In this most recent report, Freddie Mac noted that: “The housing market recovery experienced a setback during the start of this year. Existing home sales fell 9.6 percent from January to February and were down 2.8 percent from February 2010. Sales of new homes declined for the second consecutive month in February to record lows dating back to 1963.”

    The MBA in its most recent Weekly Mortgage Applications Survey for the week ending March 18th reported that rates were essentially unchanged with an average rate of 4.80% up from 4.79% at the end of the previous week.

    On March 15th, the MBA reported that FHA Commissioner David H. Stevens, whose last day as head of the FHA is scheduled to be March 31st, will become President and CEO of the MBA on June 1st.

    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

    back to top

    Ask Angie

    We want to congratulate our most recent winner: Dudley Tyson, a Certified Residential Appraiser with Maine Realty Consultants in Cape Porpoise, Maine. Dudley has been an appraiser for 28 years and covers York County in southwest Maine. Dudley was the first to accurately answer that George Orwell said “Sometimes the first duty of intelligent men is the restatement of the obvious,” Ralph Waldo Emerson was he author of the quote “If I have lost confidence in myself, I have the universe against me,” and that Albert Einstein coined the phrase “It’s not that I’m so smart, it’s just that I stay with problems longer.”

    Today’s questions:

    1. Who said: “There is always an easy solution to every problem-neat, plausible and wrong”

    a) H.L. Mencken

    b) Sarah Palin

    c) Paul Krugman

    d) Bristol Palin

    e) None of the above

    2. Who said: “In the business world, the rearview mirror is always clearer than the windshield.”

    a) Aiko Toyoda

    b) Warren Buffett

    c) Henry Ford

    d) Craig Newmark

    e) None of the above

    3. Who said: “Let no one ever come to you without leaving better and happier.”

    a) Zig Ziglar

    b) Mata Hari

    c) Mother Teresa

    d) Oprah Winfrey

    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 12/10 UPDATED Directory of Appraisal Management Companies (Available Now to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)

    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

    Business Appraiser Directory

    Landy E&O Insurance Agency

    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. 2009-2011