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Who Needs Appraisers?

November 5th, 2014 by Bill Collins Leave a reply »

What is a House Worth? Just Ask Joe the Barber

Quicken Loans recently announced that they were establishing two new proprietary indexes: the Quicken Loans Home Value Index (HVI) and their Home Price Perception Index (HPPI).  While their Home Value Index joins a growing number of such indexes compiled by both private firms and government agencies and breaks little new ground, this Home Price Perception Index seeks to measure “the difference between appraisers’ home value opinions and the opinions of homeowners and homebuyers across the country”.

The obvious question is, in what way could this possibly be useful?  The first reaction of appraisers used to dealing with the fanciful value estimates of homeowners is to roll their eyes when hearing of this “Perception Index”.  The Quicken Loans press release announcing these new indexes goes on to say: “Quicken Loans records refinancing homeowners’ estimate of the value of their home at time of application as well as the agreed upon purchase price of homebuyers and home sellers. The company then compiles and compares these home value estimates to the actual appraised values of the properties that are received a short time later in the mortgage process. The gap between these two values is presented in the HPPI.

Quicken Loans Chief Economist Bob Walters notes in the press release that: “When you pair the HVI and HPPI, you get a glimpse into the housing market that has never been available before. You see the relationship that actual and perceived value play in the mortgage and housing industries, and how the human psyche influences the decisions consumers make when valuing their home. This information is extremely valuable to those looking to refinance, buy or sell a home, as well as many professional analysts and reporters who follow the U.S. housing markets.”

Mr. Walters states that the HPPI clearly shows that “…consumers tend to overestimate the value of their home in economic downturns and, conversely, undervalue their homes and understate home price appreciation when markets rebound.”

The HPPI for September 2014 found that the estimated home values according to homeowners were 1.62% below appraiser estimates.  In August 2014, the HPPI showed that homeowners undervalued their properties by 1.82% while in September 2013, homeowners overvalued their properties by 0.2%.

Just wondering how the homeowners came up with their numbers, did they consult Zillow or hire an appraiser?  Also, just wondering how long it will be for Facebook to create an algorithm involving asking “Friends” to weigh in on what another’s house is worth…Just wondering…

A link to the Quicken Loans press release and the findings of their index is found here:Perception vs. Reality: Quicken Loans Announces Two Revolutionary Monthly Indexes

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Recent Real Estate Reports

On Friday, the National Association of Home Builders (NAHB) forecast an improving market for 2015.  The NAHB projected that total housing starts will be up by 6.6% to 991,000 units.  They based their forecast on improving economic conditions, low interest rates and growing household formations.

In their news release, the NAHB notes the expectation of Moody’s chief economist Joe Zandi that mortgage interest rates will rise to their “equilibrium” of 6% by 2017.  Mr. Zandi is quoted as saying that “The housing market will be fine because of better employment, higher wages and solid economic growth, which will trump the effect of higher mortgage rates”. 

Mr. Zandi does not comment on the impact of 6% interest rates on mortgage appraisal volume.  We think it’s fair to say that residential appraisers dependent on said business view this with alarm; the mortgage appraisal business will likely be anything other than “fine” if and when we see 6% interest rates.

On October 28th, the Mortgage Bankers Association’s Quarterly Survey of Commercial/Multifamily Originations for the 3rd Quarter of 2014 reported that originations were up 18% from the 2nd Quarter and 16% from the 3rd Quarter last year. 

Year to date mortgage originations were up about 5% this year over last year.  Relative to the pace in 2013, multifamily properties showed a 4% increase in dollar volume, industrial properties a 29% rise, office properties increased by 6% and hotel properties moved up by 27%.  Health care real estate loans declined by 27% and retail properties fell by 6%. 

Last week, CoreLogic released their October MarketPulse report.  Key findings included:

~Distressed home sales made up just 11% of transactions in August, their lowest level since December of 2007.
~Completed foreclosures were down 22.2% from August 2013 to August 2014.
~Home prices were up 6.4% from August 2013 to August 2014.

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

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

Angie Celebrates

Angie is still feeling good and has increased the number of winners in her contest for the second consecutive week.  Check out her five new winners below and enter today’s contest.  Btw: she is waiving the prohibition against Googling the answers this week, another early holiday present for busy appraisers!

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Dealing with AMCs: 5 Tips for Appraisers on How Not to Lose Their Temper with Stupid AMC Requests

We thank Jacqueline Whitmore for her recent posting with these 5 tips for avoiding losing one’s temper in dealing with a stressful work situation.  She may not have been directly addressing the relations between appraisers and appraisal management companies but these 5 tips certainly apply:

1-. “Take a step back…losing your temper…will intensify the situation and add to the list of consequences…Ask yourself’ ‘Is this something I’ll still be angry about a year from now?’.  If not, let it go and move on.”

2-. “Be the voice of reason….take a deep breath and remain calm…”

3-. “Think carefully before you speak…Watch what you say, how you say it…”

4-. “Don’t take it personally…Because of the emotion tied to your business, you may take negative feedback…as a personal attack…You never know what kind of personal stressors someone may be dealing with…Try to practice patience and understanding…”

5-. “Walk away…If you find a situation pushes you to your breaking point, step away until you can return with a clear mind…A break from the office and physical activity will help you relax…When you return to the problem, your fresh perspective will help you find the best solution.”

No original insights here but some good reminders for busy appraisers.

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Habits of Successful People vs. Unsuccessful People

An interesting infographic from can be viewed here: Habits of Unsuccessful People vs. Successful People

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Some Random Tweets To Make You Smile

1) Monday, why are you here again? Leave me alone.  Don’t you have a hobby?

2) Never underestimate my ability to melt cheese on stuff.

3) You have better odds of seeing Bigfoot than an accurate Zillow estimate.

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Appraiser Help’s 2014 Directory of AMCs and National Appraisal Companies is Now Available!

To help appraisers evaluate how AMCs will work for their appraisal practices, we have compiled this expanded directory of AMCs and National Appraisal Companies, listing complete, contact information and other details for each listing.

If you’re looking to maintain or expand your mortgage appraisal practice, our Directory of Appraisal Management and National Appraisal Companies is a great place to start. Order it today for $69.99 and download it immediately!

Please visit our website now to make your purchase securely or contact us at (877) 434-2825 for more information on this comprehensive directory!

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Rates & Dates

Freddie Mac, the Mortgage Brokers Association (MBA) and HSH Market Trends all reported increasing mortgage interest rates in their most recent surveys. 

In their survey on October 30th, Freddie Mac reported that 30-year fixed-rate mortgages moved up to 3.98% from 3.92% the previous week. They also noted that last year at this time the 30-year rate was 4.10%.

Frank Nothaft, vice president and chief economist of Freddie Mac was quoted in the release as saying that:

"Mortgage rates grew across the board this week, rebounding from the lowest rates of the year. New home sales grew at an annual rate of 467,000 sales in September, the fastest rate observed during the recovery. Meanwhile, the National S&P Case-Shiller House Price Index grew at a seasonally adjusted annual rate of 0.4 percent in August."

The Mortgage Bankers Association (MBA) reported on October 29th (for the week ending October 24th) that 30-year rates with conforming loan balances ($417,500 or less) rose to 4.13% from 4.10%.  The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) moved up to 4.13% from 4.03% while rates for FHA backed mortgages also increased, from 3.81% to 3.84%. 

Mortgage applications fell by 6.6% from the previous week with the share of refinance applications as a percentage of all applications remaining at 65%. 

On October 31st, HSH Market Trends reported that 30-year mortgage rates rose to 4.09% from 4.04% the previous week.  Rates for FHA-backed mortgages also increased, from 3.74% to 3.78%.

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

Additional information from HSH can be found by going to: HSH.Com

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Appraiser Help has Released its 2014 Directory of AMC’s and National Appraisal Companies. Click the link above to learn more and to download your copy today!

Ask Angie

Angie would first like to congratulate her most recent winners: Wendy Ryan of Nobles Appraisal Express in Ohio; Texas appraiser Shannon Slater of DW Slater Co.; J.R. Cabai of Capital Appraisal Services in Florida; Michael Shank of Michael Shank Appraisal Services in Washington; and Florida appraiser S. Phil Houston Jr. Nobes Appraisal Express covers the central Ohio counties of Delaware, Fairfield, Franklin, Knox, Licking, Morrow, Pickaway and Union along with five counties in Kentucky; DW Slater covers the north Texas counties of Denton, Collin, Grayson and Cooke; Capital Appraisal Services covers the southwest Florida counties of Charlotte, Collier, Hendry, Glades and Lee; Michael Shank covers coastal Oregon and the Portland area as well as Clark and Cowlitz Counties in Washington; and S. Phil Houston covers Okaloosa County in the Florida panhandle.

They were the first to answer correctly that Groucho Marx was the answer to all three of Angie’s questions in the last newsletter: “One morning I shot an elephant in my pajamas.  How he got into my pajamas I’ll never know”;A child of five would understand this.  Send someone to fetch a child of five”; and “Humor is reason gone mad”.

Today’s Questions:

1. Who said: “Apparently, a democracy is a place where numerous elections are held at great cost without issues and with interchangeable candidates.”

a) Gore Vidal
b) George W. Bush
c) George H. W. Bush
d) Jeb Bush
e) None of the above

2. Who said: "If you do not change direction, you may end up where you are heading.”

a) Aristotle
b) Lao Tzu
c) Plato
d) Groucho Marx
e) None of the above

3. Who said: “Wherever you go, go with all your heart.”

a) Buddha
b) Jesus
c) Confucious
d) Krishna 
e) None of the above

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

One Free Regular Listing on

A Free Copy of the 2014 Directory of Appraisal Management Companies (Available to Members of and 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: 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


Bill Collins, Appraiser Help Inc.

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