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Archive for the ‘Appraiser News’ category

Open Letter to Donald Trump & Dr. Ben Carson

November 29th, 2016

Dear Mr. Trump & Dr. Carson:

America’s 80,000+ licensed and certified real estate appraisers are collectively holding their breath right now, concerned over their own future and the future of the housing market.

We’ll get right to the point and say it in under 140 characters (yay Twitter!): Appraisers have a central and irreplaceable role in facilitating proper risk management in mortgage lending. The hearing on November 16th by the Subcommittee on Housing and Insurance did not adequately bring out this point.  In fact, the “Key Takeaways from the Hearing” in the news release afterward ominously stated (emphasis is ours):

“The current appraisal regulatory regime is stuck in a 1980s model and does not reflect the advancements of a 21st century marketplace.

The appraisal regulatory structure should take advantage of advancements in alternative home valuation methods.

The Dodd-Frank Act’s impact on the appraisal industry has not enhanced the system for appraisers, consumers or stakeholders.

The decline in the number of professional appraisers is reflective of burdensome qualifications and a changing marketplace”.

Unquestionably, there are many problems with the current system which lead to a declining number of qualified, professional appraisers willing to work for longer hours at reduced fees as appraisal management companies (AMCs) skim a high percentage of the fee allocated for appraisals, a fee oftentimes disproportionate to the relative importance of the role they play. We will not delve into the role of AMCs in our comments today; please feel free to read past issues of AppraiserNews.com on our website (or just call any appraiser!).  What is important to emphasize right now is that so called “alternative home valuation methods (AVMs)” are unreliable and dangerous by themselves: their role is to assist in information gathering and analysis by professional, licensed and certified appraisers.

In her testimony at the House hearing, Joan Trice of Clearbox noted that: “The events of the presidential election offer a cautionary tale. Big data failed. Models failed”.  While there may be many changes during the next four years, the presence of professional, independent, licensed or certified appraisers helps to provide a “backstop” for those changes that might be ill conceived.

Brief History of HUD & the FHA

The following is a short summary for the benefit of Mr. Carson, if he chooses to accept the position of Secretary of HUD, since he has spent his life outside of government and may lack familiarity with the agency.

~The National Housing Act of 1934 was enacted during the Great Depression to help make housing and mortgages more affordable and to stop the wave of foreclosures.  It created the Federal Housing Authority (FHA).

~The Department of Housing and Urban Development (HUD) is created as a Cabinet-level agency in 1965.  The FHA becomes part of HUD.

~In 1979, Moon Landrieu becomes HUD Secretary; inflation hits 19%, seriously affecting homebuying and mortgage lending.  I guess you could say that interest rates really hit the moon (sorry about that, couldn’t resist).

~In 1989, former NFL quarterback Jack Kemp is appointed HUD Secretary by the first President Bush.  The Financial Institutions’ Reform, Recovery, and Enforcement Act (FIRREA) is passed to bail out failing thrift institutions.

~1990’s: various initiatives are taken to encourage homeownership and provide assistance to renters.  Andrew Cuomo becomes first HUD Secretary from within the department.

~Homeownership rate reaches 67.7% in 2000, the highest in history.

~Shaun Donovan appointed HUD Secretary in 2009 followed by Julian Castro in 2014.

~After the financial crisis, the percentage of FHA loans relative to all loans rose substantially until credit conditions normalized.  FHA loans currently account for approximately 12% of all loans (see below).

Granted, this is a very short summary.  Once we are convinced that HUD is not on the “kill” list of government agencies, perhaps we’ll have more to say. In the meantime, feel free to speak with the current management (but please don’t call Andrew Cuomo!).

Recent Real Estate Reports

Earlier today, the S&P/Case-Shiller U.S. National Home Price Index for September reported highs on a national level not seen since the peak of the housing bubble.  The index rose 5.5% year over year and by 1% from the previous month. Metropolitan areas in western states once again reported the greatest increases.

​​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.

RedStone Advanced Analytics from Bradford Technologies


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!Random online posting: ”What happens if the Universe is not infinite and there is an actual edge…


Rates & Dates

Freddie Mac and the Mortgage Brokers Association (MBA) again reported upward movement in mortgage interest rates last week.

In their survey on November 23rd, Freddie Mac reported that 30-year fixed-rate mortgages rose to 4.03% from 3.94% the previous week. They also noted that one year ago the 30-year rate was at 3.95%.

The MBA reported on November 23rd (for the week ending November 18th) that 30-year rates with conforming loan balances ($417,000 or less) jumped from 3.95% to 4.16%.   The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) also moved up, from 3.89% to 4.04% and rates for FHA backed mortgages increased from 3.73% to 3.90%.

Mortgage applications rose by 5.5% from the previous period.  Refinance applications as a percentage of all applications fell from 61.9% to 58.2%. The FHA share of applications fell from 12.2% to 11.7% and the VA share declined from 12.6% to 12.5%.

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

Ask Angie

Angie would first like to acknowledge the winners of her last contest: Virginia appraiser Tom Martin and California appraiser Robert Butler.  They were the first to answer correctly that Jon Stewart was the author of the quote “I celebrated Thanksgiving in an old-fashioned way. I invited everyone in my neighborhood to my house, we had an enormous feast, and then I killed them and took their land”; and Phyllis Diller is responsible for “My cooking is so bad my kids thought Thanksgiving was to commemorate Pearl Harbor.”

Today’s questions:

1) Who said: “One morning I shot an elephant in my pajamas.  How he got into my pajamas I’ll never know.”

a) Groucho Marx
b) Hillary Clinton
c) Harpo Marx
d) Jon Stewart
e) None of the above

2) Who said: A child of five would understand this.  Send someone to fetch a child of five.”

a) Groucho Marx
b) Donald Trump
c) Harpo Marx
d) Jon Stewart
e) None of the above

3) Who said: “Humor is reason gone mad”

a) Groucho Marx
b) David Bunton
c) Harpo Marx
d) Jon Stewart
e) None of the above

The first to respond with the correct answers wins:

One Free Regular Listing on AppraiserHelp.com

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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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