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Archive for April, 2011

Appraisers Spring Into Action

April 25th, 2011

Sometimes the Best Defense is a Good Offense

As we reported in our last newsletter, there was a lot of anger in the appraiser community at what was perceived to be a blatant violation of the statutory language of the Dodd-Frank Act related to customary & reasonable appraisal fees with Presumption 1 of the Federal Reserve’s Interim Final Rule. 

The Appraisal Institute’s online newsletter on April 20th reported on comments made by the Fed’s staff at an April 10 meeting of the Association of Appraiser Regulatory Officials (AARO) in which it was noted that “Some banks and appraisal management companies may be misinterpreting Presumption 1…”  The Appraisal Institute newsletter went on to say:

“Further, officials suggested that use of blanket schedules for fees within states may not rise to the requirements to satisfy both “customary” and “reasonable” as defined by Presumption 1. Separately, the officials also reiterated the provision of the Interim Final Rule that states that just because an AMC requires an appraiser to sign a document indicating that the fee that they are paid for an assignment is customary and reasonable does not necessarily satisfy the AMC’s responsibility to ensure that an appraiser is actually paid a customary and reasonable fee.” 

Additional information about the Appraisal Institute and the Association of Appraiser Regulatory Officials can be found by clicking on the following links:

Appraisal Institute Homepage

Association of Appraiser Regulatory Officials

As AppraiserNews.com first reported in our April 12th newsletter, the Appraiser Subcommittee’s Claire Brooks told us on April 11th that there are two websites which appraisers can use to find the federal regulator for a creditor if an appraiser is concerned about a creditor’s compliance with the Truth in Lending Act (TILA), including the creditor or the creditor’s agent paying an appraiser a customary and responsible fee.  Links to these sites are found here:
Federal Reserve System National Information Center (NIC)
FDIC Bank Find.

Richard Maloy, chair of the Appraisal Institute’s Government Relations Committee, indicated that they were actively working to ensure that Congress’ intent in the Dodd-Frank Act is carried out.  Other national appraisal organizations along with regional and local groups are also active in this effort and appraisers are urged to work with groups they are affiliated with to bring about a satisfactory outcome.

Needless to say, AppraiserNews.com has heard from many appraisers regarding what they view as violations of Dodd-Frank and the various ways they are handling the situation.  While some are taking aggressive actions to remedy “injustices,” others are more quietly speaking with bank and AMC representatives in order to negotiate higher appraisal fees out of concerns that they become “blacklisted.”

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Appraisers May Be Springing Into Action, But What About the Spring Housing Market?

S. Mitra Kalita and Dawn Wotapka, writing for The Wall Street Journal on April 21st, discussed the National Association of Realtors (NAR) report on sales of previously owned homes for March that was released by the NAR on April 20th.  In the article, they noted that while sales increased 3.7% in March from February, the figure was still below that of January and December.  The Journal article also reported that prices continued to fall, down 6% from a year earlier, and that distressed sales made up 40% of all sales in March, the highest figure in two years.  The tight lending market was reflected in the fact that 35% of all transactions involved all-cash buyers, the highest figure since such record-keeping began in 2008. 

Also in the Journal, on April 20th Ms. Wotapka and Jeffrey Sparshott reported that while new home building rose slightly in March, new construction “…remains near historically low levels heading into the crucial spring selling season.”  The article noted that the March construction figures were down 13.4% from last year and were the 10th lowest since the Commerce Department began keeping records in 1959.  On the same day, the New York Times published an Associated Press report which indicated that the Commerce Department figures for apartment and condominium construction rose at almost twice the rate for single family dwellings.  Various published reports also suggested that some of the larger builders may be following smaller builders in buying and renovating foreclosed properties rather than constructing new homes. 

On April 20th, the New York Times and CBS News released a poll which showed the deep pessimism that Americans have about the economy.  Also writing for the New York Times on April 22nd, David Streitfield discussed the concerns of prospective homebuyers about wanting to “…preserve their capital rather than risk it in real estate.”  He noted the feelings expressed by Bill McBride of the financial blog Calculated Risk who said that we might be seeing the moment when people are decisively turning against home ownership and quoted Mr. McBride as saying that “I’m starting to feel the hate.” President Obama also expressed his concerns on April 21st, saying that the housing market was “…probably the biggest drag on the economy.”

Kathleen M. Howley writing for Bloomberg on April 20th discussed this lack of confidence in homeownership that Americans were feeling and a link to this report is found here:
Americans Shun Most Affordable Homes in Generation as Owning Loses Appeal

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Why Should We Pay Attention to All of This? NAR Says No Worries

In his remarks accompanying the NAR March report, Lawrence Yun, the chief economist for the NAR stated that “…we’re clearly on a recovery path.” Grab your glass of Kool Aid and click on the following link to read and hear what Mr. Yun had to say on April 20th:

Existing-Home Sales Rise in March – National Association of Realtors

Speaking of Mr. Yun, wasn’t he supposed to be hard at work correcting the substantial errors in the NAR’s over-stated housing reports for the past several years? I guess it is just more fun to drink the Kool Aid and put out the same old spin, figuring that nobody will remember his “Oops” moment.

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Is Congress Driving Housing Market Further Into Trouble?

The New York Times/CBS poll also showed that 75% of the public disapproved of the job that Congress was doing.  No help for the troubled real estate market is forthcoming from this Congress, which appears likely to continue support of measures that will result in a withdrawal of government support for the real estate market along with a tightening of lending requirements and a likely increase in mortgage interest rates.

Writing in the Huffington Post on April 21st, Ted Kaufman reported that even Alan Greenspan was getting into the action, joining Congressional Republicans and Wall Street bankers in their efforts to weaken or kill Dodd-Frank regulations.  A link to this article is found here:

Greenspan Is Back to Lead the Charge Against Responsible Regulation

On April 13th, Amy Hoak writing for MarketWatch summarized several housing reports in an article titled “Home for sale this spring? Your outlook is bleak” and a link to this report is found here:

Home For Sale This Spring? Your Outlook is Bleak

While we continue to be critical of the NAR for ill-conceived, positively spun “talking points” that only reduce their credibility with the public, they have been proactive in calling attention to the Congressional proposals to end mortgage interest deductions, an act that would severely damage the housing market and bring further hardship to middle income and hard-working Americans.

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Happy and Healthy Places

We would like to thank CNBC and Gallup-Healthways for this slideshow of “America’s Happiest Cities” (#1: Boulder, Colorado).
America’s Happiest Cities

More thanks to CNBC and Lending Tree for this slideshow of the ten states with the healthiest real estate markets: States With The Healthiest Housing Markets

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Rates & Dates

Both Freddie Mac and the Mortgage Bankers Association (MBA) reported declines in interest rates in their most recent reports.

Freddie Mac reported that rates for 30-year fixed-rate mortgages decreased to 4.80% for the week ending April 21st from the 4.91% rate reported on April 14th. 

The MBA in its most recent Weekly Mortgage Applications Survey for the week ending April 15th also reported a drop in its average to 4.83% from the previous week’s rate of 4.98%.   

The MBA also reported a 5.3% increase in mortgage applications during this most recent week which they attributed partially to the scheduled increase in FHA insurance premiums and the motivations of borrowers to close on loans before these additional costs went into effect.

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: Larry Kelly, a Certified Residential Appraiser with Larry Kelly Appraisal Service of Fairfield, Connecticut. Larry was the first to accurately answer that Henry David Thoreau said “Success usually comes to those who are too busy to be looking for it,” Vince Lombardy preached that “Confidence is contagious. So is lack of confidence” and that Carlos Castaneda was the author of the quote “We either make ourselves miserable, or we make ourselves strong.  The amount of work is the same.” 

Today’s questions:

1. Who said: "The rising hills, the slopes, of statistics lie before us. The steep climb of everything, going up, up, as we all go down…"

a) Paul Ryan
b) Timothy Geithner
c) Lawrence Yun
d) Gary Snyder
e) None of the above

2. Who said: "Drive thy business, let not that drive thee."

a) Henry Ford
b) Sergey Brin
c) Benjamin Franklin
d) Chris Valerio
e) None of the above

3. Who said: "I hate quotations. Tell me what you know."

a) Michael Bloomberg
b) Ralph Waldo Emerson
c) Donald Trump
d) Meg Whitman
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!)

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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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