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Bold Move by Unnamed AMC; AppraiserLoft Fined

July 16th, 2012 by Bill Collins Leave a reply »

Recent CoreLogic Reports

Last Thursday, CoreLogic released their findings as to the number of residential properties with mortgages that were “underwater” with negative equity, or loans greater than the home was worth.  They found that at the end of the first quarter of this year 23.7% (11.4 million) of all residential properties with a mortgage were “underwater”.  This represented a decline from the 25.2% (12.1 million) with negative equity at the end of the fourth quarter of 2011.  CoreLogic also reported that an additional 2.3 million homeowners with mortgages had less than 5% equity.  A link to the CoreLogic report with a number of graphs, charts and statewide breakdowns is found here:
CoreLogic Reports Negative Equity Decreases in First Quarter of 2012

Last week CoreLogic also released their “Commercial Market Monitor” for July.  CoreLogic estimates that more than $407 billion in commercial mortgages will be maturing and need to be either sold or refinanced in 2012.  Charts depicting regional and property class breakdowns are found in this report, a link to which is found here: July 2012 Commercial Market Monitor, National Edition

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Appraisers Approaching License Renewal: McKissock’s 7 Hour 2012-2013 USPAP Online Course is Now Available in Most States

McKissock Education, the official provider of the Appraisal Foundation’s online 2012-2013 USPAP courses, is now available in most states. Last year, the Appraisal Foundation and McKissock announced their partnership and the online course is now available in most states. See if courses are available in your area and save up to 20% on course fees by going to our Online McKissock Portal.


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Other Recent Real Estate Reports

The Homeownership Preservation Foundation (HPF), a nonprofit organization which seeks to assist troubled homeowners understand mortgage issues and avoid foreclosure, reported a 70% surge in calls for counseling from homeowners that were current on their mortgage payments.  In a press release last Thursday Colleen Hernandez, CEO of HPF said that: “We are seriously concerned about the rise in homeowners who were classified as low risk when they took out their mortgages and, as a result of a combination of circumstances – job loss, healthcare crises, and various recession-related issues – have seen their economic situations severely deteriorate.  This could result in the proverbial ‘second shoe to drop’ for the housing crisis, especially considering the limited options available to homeowners who are struggling but not yet delinquent.” 

Ms. Hernandez went on to say that “This foreclosure crisis is far from over.  As lenders are learning to comply with new servicing standards set in place by the National Mortgage Settlement and the Consumer Financial Protection Bureau (CFPB), make no mistake that notices of default are once again landing in mailboxes across the country at a pretty rapid clip.”

On July 10th, Clear Capital released their July Home Data Index with a comment by Dr. Alex Villacorta, Director of Research and Analytics, that “June home price trends provided further evidence that housing has turned the corner…”

A link to the Clear Capital press release and July report, which includes regional breakdowns, is found here: Clear Capital Market Report

Writing in the New York Times on Sunday, Gretchen Morgenson discussed how some recent positive housing reports (i.e. increasing new home construction, increase in existing and pending home sales) suggestive of a healthier housing market which could be undermined by large increases in home equity lines of credit (HELOCs).  Ms. Morgenson cites the report earlier this month by the Office of the Comptroller of the Currency which stated that 60% of  HELOCs would start requiring interest and principal payments between 2014 and 2017.  The article notes that while only $11 billion in HELOCs requires principal and interest payments this year, the numbers jump to: $29 billion in 2014; $53 billion in 2015; $73 billion in 2017; and $111 billion for 2018 and beyond.

The Times article cites a study by Amherst Securities, utilizing Federal Reserve data, which shows that the four largest banks held 295.1 billion in residential revolving lines of credit during the first quarter of this year: Bank of America ($101.4 billion); Wells Fargo ($93.3 billion); JPMorgan Chase ($84.4 billion); and CitiGroup ($15.9 billion).  Refinancing these loans is also a big problem due to the substantial decline since these loans were made in the value of the properties securing them.

A housing optimist: On Friday, Warren Buffet spoke with Bloomberg’s Betty Liu and discussed his bet on a housing market recovery.  Buffett’s Berkshire Hathaway is reportedly the largest shareholder in Wells Fargo, currently the largest U.S. lender, and has added to their investment.

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Navigate the Minefield of AMCs With the Assistance of Appraiser Help’s Newly Released March 2012 Comprehensive, Up-to-Date Directory of AMCs and National Appraisal Companies

To help appraisers evaluate which AMCs are right for them, we have compiled this directory of over 200 AMCs and National Appraisal Companies, listing complete, up-to-date contact information and other details for each listing.

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One (Unnamed) Appraiser’s Thoughts on an Appraisal Request From an (Unnamed) AMC

“Wanted to let you and other appraisers know of the appraisal order I received from (unnamed) AMC. The ‘broad-casted’ appraisal offers a fee of $225. Terrible fee, but what is even worse is the agreement you must abide by if you accept this below living wage assignment. I have copied and pasted their statements saying that because this mortgage is not regulated by Section 129E of the Truth in Lending Act (TILA), they are under no obligation to pay any common or customary fee.  In other words, this AMC will pay the lowest fee whenever they can get away with it!  My question to my fellow appraisers is: Why would you even consider taking an assignment from a company like this when they state upfront, that they really have no interest in your services unless they can steal every penny that belongs to you?  They go on to state that they are ‘establishing’ their own customary & reasonable fee based on appraisers previous acceptance of these minimum wage assignments. The following is, word for word, the email I received from (unnamed) AMC:

‘Customary and Reasonable (C&R) Fees
Section 129E of the Truth in Lending Act (TILA); 
Unless an assignment has been designated as a Purchase or Refinance assignment above, it is not a "covered transaction" and therefore does not require that a customary and reasonable fee be paid pursuant to TILA requirements.   

(Unnamed) AMC’s standard policy is to pay a fee that we deem to be customary and reasonable regardless of whether the assignment technically qualifies as a covered transaction under TILA. The appraisal fee has been calculated in a manner intended to establish a customary and reasonable fee for this assignment.  Please note, however, that certain assignments may be found to be complex or to require an increased scope of work due to unique property- or assignment-specific characteristics. Please direct any questions on our fee process to DoddFrankfeedback@(unnamed AMC) .com.’

No appraiser should take any assignments from a company like this, no matter what they offer.”  

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AppraiserLoft Fined

Lily Leung, real estate and business reporter for U-T San Diego, reported on Friday that the owners of formerly San Diego based AppraiserLoft were fined $855,000 that day by Arizona’s appraisal board which also revoked the firms license in that state.  The matter reportedly involved failing to pay Arizona appraisers 171 times.  Officials at AppraiserLoft at one time claimed to have more than 20,000 appraisers in their nationwide appraisal management company at one time, Ms. Leung notes.  A link to the entire article is found here: San Diego Appraisal Firm Fined $855,000

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Rates & Dates

Mortgage interest rates again reached historic lows in the weekly reports issued by Freddie Mac and the Mortgage Bankers Association (MBA).

On July 12th, Freddie Mac reported that 30-year fixed-rate mortgages declined from 3.62% to 3.56%, a new historic low.  They also noted that last year at this time the 30-year rate was at 4.51%. 

The MBA in its most recent Weekly Mortgage Applications Survey released July 11th for the week ending July 6th, reported that 30-year rates with conforming loan balances ($417,500 or less) declined from 3.86% to 3.79%.  The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) dropped from 4.08% to 4.05% and the average rates for FHA backed mortgages fell to 3.63% from 3.69%.  All of these rates are the lowest in the history of this survey.

In their press release of July 11th, the MBA reported a drop of 2.1% in mortgage applications, after an adjustment was made for the July 4th holiday.  Refinance applications represented 77% of all applications.

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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AppraiserNews is a FREE publication, supported by advertising and sales of products designed to help appraisers build their practices. Please consider supporting us today by seeing what we have to offer.

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Ask Angie

No contest this week; Angie is on Vacation (as are many appraisers.)

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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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