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Archive for the ‘Appraiser News’ category

Appraisal Risk Scores & “Collateral Undertaker”

January 26th, 2015

Fannie Mae’s "Collateral Underwriter" Is Now Open For Business

As this newsletter is completed Monday p.m. at the start of the 2015 blizzard, “Collateral Underwriter” (CU) has taken effect.  Here is a summary of some of the key points that appraisers need to know about Fannie Mae’s newly implemented “proprietary appraisal risk assessment application” which is intended to “support proactive management of appraisal quality”.

~The Uniform Appraisal Dataset (UAD) has collected data from over 12 million appraisals and 20 million transactions since 2011.  Uniform Collateral Data Portal (UCDP) users, including lenders and appraisal management companies, who submit appraisals to Fannie Mae will have access to the various CU goodies such as risk scores, flags and messages.

~CU provides a risk score of from 1.0 to 5.0 with the so-called riskier appraisals receiving the higher grade and those deemed safer lower grades.  Fannie Mae calculates that 97% of submitted appraisals can be so scored with geocoding limitations precluding 3%.

~CU will look at comparable sales used by appraisers and offer alternative choices.  It will also utilize census blocks to analyze market conditions and review specific fields in an appraisal (i.e. condition rating) for consistency from one appraisal to the next.

~CU analyzes appraisals submitted in UAD format on Fannie Mae forms 1004 (Uniform Residential Appraisal Report) and 1073 (Individual Condominium Unit Appraisal Report).  Other forms such as the 2055 (Exterior Only Inspection Residential Appraisal Report) and the 1025 (Small Residential Income Property Appraisal Report) are excluded.

~At this time, CU applies to Fannie Mae only not to Freddie Mac or FHA.  It does not, of course, apply to private appraisal assignments nor to commercial appraisals.  

“Explain, explain, explain”.  Appraisal 101 teaches appraisers the importance of explaining their findings to the report readers in order to avoid misunderstanding.  It would appears as though one of the unintended consequences of CU will be to increase the scope of work as appraisers try to anticipate the various “flags” that might be raised in a particular appraisal and address them proactively.  While this may sound like a positive point to non-appraisers, experienced appraisers might find it difficult to justify taking the time to “explain away” non-selected comps, for instance.  Will this lead to a rejection of mortgage appraisal work by experienced appraisers, leaving those less experienced appraisers performing a larger share?  It is also anticipated that appraisals of more unique properties will by their very nature end up with riskier scores than those “cookie cutter” type appraisals, all else being equal, making these assignments even less attractive to many appraisers (particularly when offered by AMCs that don’t acknowledge-or offer reasonable compensation-with appraisal assignments requiring greater time and/or expertise).

On January 21st, FNC’s Steve Costello writing in the AppraisalPort Daily stated that “The first thing to understand is that there is no need to panic. There are lots of rumors floating around that CU will be the end of appraising as we know it. In reality, if you haven’t already been getting a lot of returns for corrections, you probably won’t notice much difference when this change takes place”.

This has been a common refrain whenever changes designed to improve appraisal quality (and add-often unnecessarily- to the scope of work) are implemented: that good appraisers won’t notice any difference.  The only problem with this logic, however, is that good appraisers may be bolting for greener pastures.

Will the last appraiser to leave please turn out the lights?

A link to Fannie Mae’s “Collateral Underwriter (CU) FAQs” is found here: Fannie Mae Collateral Underwriter FAQs

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AppraisalPort Poll Suggests Some Satisfaction With Appraisal Fees

Last week AppraisalPort released the results of their poll which first asked “What percentage of your clients offer what you would consider to be customary and reasonable fees for most assignments?” 1/3 of the 5,464 respondents answered greater than 80% with another 1/4 answering 60% to 79%. 

The second question asked “What price range best fits your opinion of a “Customary and Reasonable fee for a non-complex SFR interior inspection appraisal reported on a UAD compliant 1004?” Lots of answers here, 7,938 to be exact, with 39% of respondents answering $400-$449 and 29% satisfied with $350-$399.
While the number of respondents is impressive, AppraiserNews is not certain as to how representative they might be of the overall appraisal population.  It also appears as though the manner in which the question was posed may have skewed the results somewhat.

A link to the AppraisalPort poll findings is found here: AppraisalPort Weekly Poll Analysis – January 2015

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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!


Suffolk County, NY Is Hiring Temporary Review Appraisers

Suffolk County has entered into a Local Project Partnership Agreement with the State of New York in connection with the reconstruction of portions of the Fire Island Barrier Beach and Dune Network.  The County will be working with New York State and the Army Corps of Engineers to repair damage along the shoreline created by Superstorm Sandy and to stabilize the area to prevent future damage.  The Suffolk County Department of Economic Development and Planning is seeking to hire Review Appraisers and land management specialists ASAP to assist with the implementation of the real estate aspect of this project.  Interested parties can receive further info by emailing Bill@AppraiserHelp.com.

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Some Random Tweets To Make You Smile

1) My goal for 2015 is to accomplish the goals of 2014 which I should’ve done in 2013 because I promised them in 2012 and planned in 2011.

2) Thanks for the invite to your housewarming party but I’d rather not be forced to robotically say ‘wow’ every time you show me a new room.

3) Do what makes you happy, and be with who makes you smile.

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Just Released! Appraiser Help’s 2015 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 over 275 AMCs and National Appraisal Companies, listing complete, contact information and other details for each company.

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 $79.99 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 were somewhat at odds with their reported trends in mortgage interest rates last week. 

In their survey on January 22nd, Freddie Mac reported that 30-year fixed-rate mortgages declined from 3.66% to 3.63%, the lowest rate since May 23, 2013.  They also noted that last year at this time the 30-year rate was 4.39%.

Two days earlier, Freddie Mac released their “January 2015 U.S. Economic and Housing Market Outlook” in which they projected that interest rates would remain around 4% during the first half of this year before increasing during the last two quarters.  Several previous projections were upwardly revised including the refinance share of mortgage applications (up by 9%) and 2015 home price appreciation (up from 3.0% to 3.5%).

The Mortgage Bankers Association (MBA) reported on January 21st (for the week ending January 16th) that 30-year rates with conforming loan balances ($417,500 or less) dropped to 3.80% from 3.89%.  The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) fell from 3.88% to 3.86% while rates for FHA backed mortgages also moved downward, from 3.71% to 3.66%. 

Mortgage applications jumped by 14.2% from the previous week with the share of refinance applications as a percentage of all applications increasing to 74% from 71%.  This is the highest percentage that refinance applications have been since May 2013.

FHA mortgage applications constituted 8.0% of all applications (up from 7.5% last week) while VA applications comprised 9.4% of applications (down from 9.7%).

On January 23rd, HSH.com Market Trends reported that 30-year mortgage rates rose to 3.81% from 3.80% the previous week.  Rates for FHA-backed mortgages also increased, from 3.55% to 3.62%.

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 2015 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 the winners of her last contest: Colorado appraiser Don Mitchell of Mitchell Real Estate Appraisal and California appraiser Joanne Cesena of Cesena Appraisal Services.  Don covers the northern Colorado counties of Weld and Larimer while Joanne covers San Diego County in southern California.  They were the first to answer correctly that the quote “If liberty means anything at all, it means the right to tell people what they do not want to hear” is attributed to George Orwell and “If freedom of speech is taken away, then dumb and silent we may be led, like sheep to the slaughter” is attributed to George Washington.

Today’s Questions:

1. Who said: “Colorado, Colorado
When the world leaves you shivering
And the blizzard blows,
When the snow flies and the night falls
there’s a light in the window and a place called home
At the end of the storm.”

a) Judy Collins
b) John Denver
c) Joni Mitchell
d) Taylor Swift  
e) None of the above

2. Who said: “Neither snow, nor rain, nor heat, nor gloom of night stays these couriers from the swift completion of their appointed rounds.”

a) U.S. Postal Service
b) Newman
c) Clear Capital, on their appraiser panel
d) All of the above
e) None of the above

3. Who said: “A lot of people like snow. I find it to be an unnecessary freezing of water.”

a) Carl Reiner
b) Jerry Seinfeld
c) Joey Bishop
d) April Ludgate
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 AppraiserHelp.com

A Free Copy of the 2015 Directory of Appraisal Management Companies (Available 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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