Real Estate Appraiser News: Appraisal Industry Information

NEWLY RELEASED 2012 Directory of AMCs and National Appraisal Companies!

Tell Chase to Stop Intimidating, Threatening and Bullying Appraisers

AppraiserNews and the AppraiserNews Logo and all original content ©AppraiserHelp, Inc. 2009-2012

Spring Sales Already Sprung? More Appraiser Hunger Games

Sean Collins — Tue, 24 Apr 2012 02:03:07 +0000

Has the Spring Selling Season Already Passed?
Appraisers Approaching License Renewal: McKissock’s 7 Hour 2012-2013 USPAP Online Course is Now Available in Most States
Recent Real Estate Reports and the Question of Whether Some Housing Markets May Not Recover for Years
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
More Appraiser "Hunger Games-" Spoiler Alert!
Change.org Petition "Tell Chase to Stop Intimidating, Threatening and Bullying Appraisers"
New Rockstar in Social Media: Pinterest
Boycotting Property Tax Assessments; in Ireland
A Transparent…Church
Some Thoughts Regarding Helping Those Less Fortunate and Assisting Causes That You Believe In
Stupid AMC Tricks
Rates & Dates
Ask Angie
Tell us what you think!
Closing Remarks

Has the Spring Selling Season Already Passed?

A frightening thought for home sellers, underwater homeowners and real estate agents: Is it possible that the Spring Selling Season has come and gone?

The record-breaking, mild winter which increased traffic at open houses in many parts of the country may have been little more than a “blip” on the real estate radar screen rather than a “kick-start” to a recovery in the housing market. Tight lending conditions, immobile homeowners (underwater and lacking flexibility in pricing their homes) and the nervousness of prospective purchasers may be “freezing” the real estate market at a time when it historically “thaws”. It is possible that the only “thaw” we will see this year might be in the foreclosure pipeline with an increasing number of foreclosed properties coming to market.

On April 9th, Jessica Lautz, Survey Research Manager for the National Association of Realtors (NAR) released a report which indicated that the typical home seller has owned their home for nine years, up from a low of six years in 2007. Given the lack of Congressional support for substantive measures to help the housing market, it is likely that (excluding those who lose their homes) the number of years homeowners stay in place will continue to increase as many become “frozen” in place. A link to the NAR report “Tenure in Home” is found here: Tenure in Home

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

Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

Recent Real Estate Reports and the Question of Whether Some Housing Markets May Not Recover for Years

RealtyTrac reported last week that short sales surged 33% in January in comparison with the year before. CNNMoney’s Les Christie discussed this on April 19th and quoted RealtyTrac VP Daren Blomquist as saying that "[W]e believe 2012 could be a record year for short sales". A link to Mr. Christie’s report is found here: Short Sales Expected to Flood the Market

Earlier this month, CoreLogic released their February Home Price Index which showed a decline of 2.0% year to year and 0.8% month to month and the Case-Shiller report due out later this morning is expected to show an even greater year to year decline. Last week, the National Association of Realtors reported a 2.6% drop in existing home sales from last month while at the same time reporting a 2.5% increase in price from March of last year.

Interesting link: the Bipartisan Policy Center Housing Commission weekly highlighting of housing news. The Commission’s stated mission is “…to reform the nation’s housing policy by crafting a package of realistic and actionable policy recommendations that consider the near-term and address the long-term challenges in the sector.” While it is our opinion that little will be done during this political year, it is interesting to see what the Commission is viewing regarding housing and a link to their most recent report is found here:
Bipartisan Policy Center Housing Commission

On April 5th, Yale Professor and economist Robert Shiller was interviewed by Motley Fool’s Brian Richards regarding his projections for housing prices. In the interview, he states that on his website “you can find I have my index of home prices back to 1890, and it looks like this recent boom and bust is unique. It hasn’t happened at such magnitude on a national scale before”. Mr. Shiller provides the example of the previously most famous real estate boom, the Florida real estate land boom which peaked in 1926, which wasn’t followed by another such event for approximately 80 years. He also cites the example of Los Angeles where approximately 90 years passed between great “booms”.

Some recent reports have suggested that in certain areas (for example, many suburbs) price increases may not increase significantly for decades. Wouldn’t it be a nice change if decision makers seriously addressed the consequences of their inactions on the housing market and the lives of millions of Americans?

A link to the video interview with Robert Shiller is found here: Where To for Home Prices? Robert Shiller Weighs In

On April 18th ProPublica released a report “10 Questions-And Answers-To Help You Understand the Foreclosure Crisis” in which they summarize how the crisis happened, where we are now and what may happen in the future. A link to this informative report is found here: 10 Questions – And Answers – To Help You Understand the Foreclosure Crisis

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

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

If you’re looking to expand your appraisal practice, our Directory of Appraisal Management and National Appraisal Companies is a great place to start.

Download the directory today — at only $49.99, it will pay for itself with your first appraisal order.

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

More Appraiser "Hunger Games-" Spoiler Alert!

Here it is: Katniss Everdeen survives-but what about appraisers? Will they be "fighting it out" for an ever-decreasing number of mortgage appraisals?

Hint: Work smarter (like Katniss,) not harder (alas, also like Katniss). Also: Work to end BPOs (Broker Price Opinions) and support appraiser organizations in their efforts to regulate Appraiser Management Companies (AMCs) in your state.

Change.org Petition "Tell Chase to Stop Intimidating, Threatening and Bullying Appraisers"

Are you tired of being pushed around by the big banks? Here is a link to a petition created by Arizona appraiser John Dingeman which addresses a number of issues including “…scrubbing each one of these appraisals…” (in foreclosure actions) “…in an attempt to place blame on a loan gone bad…”

Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

New Rockstar in Social Media: Pinterest

Pinterest, a social networking site with a “virtual pinboard” interface, has quickly become one of the most popular social networking sites on the Internet. For those readers not familiar with Pinterest, the site allows users to collect photos and link to products they like, in the process creating their own pinboards and following the pinboards of others. In case you’re interested in checking it out or signing up (by invitation only), here is a link to the AppraiserNews two day old Pinterest site: Appraiser News on Pinterest

Boycotting Property Tax Assessments; in Ireland

Writing in the New York Times earlier this month, Douglas Dalby discussed the acknowledgment of Ireland’s government that more than half of that country’s 1.6 million homeowners failed to pay a new property tax due by March 31st. This tax was introduced by the government on January 1st and was the first installment of a comprehensive property tax assessment scheduled to begin next year. It will be interesting to see how the Irish eventually deal with this new form of taxation, one that U.S. property owners have increasingly grieved as property tax burdens have risen dramatically in many American communities.

A Transparent…Church

Great pictures of this “See-through Church” thanks to Architecture Lab, a link to which is found here: See-through Church, Limburg/Belgium by Gijs Van Vaerenbergh

Some Thoughts Regarding Helping Those Less Fortunate and Assisting Causes That You Believe In

In our last newsletter, Florida appraiser Victor Harrison described his efforts helping his church in providing free appraisal services for many years.
While these are not easy times for many appraisers, we think that it is important to acknowledge the efforts of many appraisers in providing free or discounted appraisal services for organizations and individuals in need of help. It is not easy for an over-worked appraiser to take on pro-bono assignments when they are having difficult times themselves.

Stupid AMC Tricks

A Florida appraiser who requested anonymity, fearing a loss of business, wrote the following:

“I appreciated the article “Appraiser Hunger Games”-it’s so true. I received an offer (“be the first to click accept, and you get the assignment!”) for a 5 unit building. I called them and told them that a Certified Residential Appraiser could not accept this assignment (not to mention no one should due to their ridiculously low fee and turn time!). Imagine my surprise when they told me that a Certified Residential Appraiser had already accepted the assignment-at their offered fee and turn-around time. I again stated that they needed a Certified General Appraiser to do this one, and they hung up on me. I often wonder what happened to that appraisal! I hope the AMC had to eat their fee to the Residential Appraiser!”

New York appraiser Deborah Urianek, the self-professed “Queen of Stupid Addendum Requests” gave us her favorite from last week:

“Sale #3 is undergoing renovations as per the picture provided by the appraiser- should the report be made subject to?”

Regarding the “41-handle kitchen” discussed in previous newsletters, California appraiser Steve Hassoldt asked:
“I can’t believe that you left us hanging! I’d love to know that answer as well…”

Rates & Dates

Mortgage interest rates remained at low levels in the most recent weekly reports issued by Freddie Mac and the Mortgage Bankers Association (MBA).

On April 19th, Freddie Mac reported that 30-year fixed-rate mortgages rose slightly to 3.90% from 3.88% during the previous week. They also noted that last year at this time the 30-year rate was at 4.80%.

The MBA in its most recent Weekly Mortgage Applications Survey released April 18th for the week ending April 13th, reported that 30-year rates with conforming loan balances ($417,500 or less) declined to 4.05% from 4.10% during the previous week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) dropped to 4.36% from 4.43%. At the same time, the average rates for FHA backed mortgages fell to 3.83% from 3.87%.

In their press release of April 18th, the MBA also reported an increase of 6.9% in mortgage applications during this most recent survey. Refinance applications rose to 75.2% from the previous week’s 70.5%.

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

We want to congratulate our most recent winner: Billie Waits, a Certified Residential Appraiser with AABICO, Inc. in Crandall, Texas. AABICO provides appraisal services in northeast Texas. Billie was the first to accurately report that the answers to the last contest questions were: “If you’re going through hell, keep going” (Winston Churchill); “I know God won’t give me anything I can’t handle. I just wish he didn’t trust me so much” (Mother Teresa); and “You always pass failure on the way to success” (Mickey Rooney).

Today’s questions:

1. Who Said: “Where ones treasure is there also is his heart."

a) The Dalai Lama
b) John the Baptist
c) Jesus Christ
d) John Wesley
e) None of the above

2. Who said: “Men who succeed keep open minds and are afraid of nothing."

a) Anita Hill
b) Faith Hill
c) Napoleon Hill
d) Hill Billy
e) None of the above

3. Who said: “Despite a lack of natural ability, I did have the one element necessary to all early creativity: naivete, that fabulous quality that keeps you from knowing just how unsuited you are for what you are about to do."

a) Jon Stewart
b) Martha Stewart
c) Steve Martin
d) Alexis Stewart
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 NEWLY RELEASED 2012 Directory of AMCs and National Appraisal Companies!

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!

Regards,

Bill Collins, Appraiser Help Inc.

NEWLY RELEASED 2012 Directory of AMCs and National Appraisal Companies!

Sales of New Houses in U.S. Fall for Second Month: Economy

AppraiserNews and the AppraiserNews Logo and all original content ©AppraiserHelp, Inc. 2009-2012

Appraiser Hunger Games, AppraiserLoft Update

Sean Collins — Tue, 27 Mar 2012 03:49:08 +0000

Appraiser Hunger Games
Appraisers Approaching License Renewal: McKissock’s 7 Hour 2012-2013 USPAP Online Course is Now Available in Most States
AppraiserLoft Update
Available Now! Appraiser Help Releases March 2012 Comprehensive Up-To-Date Directory of AMCs and National Appraisal Companies
Recent (Mostly Disappointing) Real Estate Reports
Downsizing in a Big Way
Letters From Our Readers
Stupid AMC Tricks
Rates & Dates
Ask Angie
Tell us what you think!
Closing Remarks

Appraiser Hunger Games

This weekend’s release of the movie The Hunger Games, an adaptation of Suzanne Collins (no relation) novel, got us thinking about the various “games” that appraisers have had to deal with in recent years involving Appraisal Management Companies (AMCs).

Many appraisers have chosen not to work with AMCs, some limit their work with AMCs and some have quit the appraisal profession outright. Manohla Dargis noted in a New York Times review on Friday that Ms. Collins’s novel involves the attempts by “…a teenage survivalist in a postapocalyptic…” world to beat the 1 in 24 odds in a cruel competition; does this not remind appraisers of their dealings with AMCs?

Example: the broadcasting of an appraisal order to dozens of appraisers at a ridiculously low fee, with the first appraiser to click “Accept” awarded the job. On several occasions, I have received such solicitations from AMCs with fees in the $200 to $275 range. One AMC on several occasions has broadcast solicitations for appraisals of highly complex properties (i.e. a “mansion” on ten acres on Long Island’s “Gold Coast”) and continued to send out solicitations after they were informed of the nature of the property by this appraiser. In more than one case, a week or two passed with this AMC continuing to broadcast the assignment, occasionally offering an extra $25 or $50 when the assignment request went unaccepted.

One time, a representative of the AMC said that they had “no way” of knowing that a property was complex, which took me less than one minute to determine through public records and MLS data. This, by the way, occurred a week after I informed them about the complexity of the property and involved an AMC that prides itself (with good reason) on a detailed home data report which they release every month.

A good friend of mine who is leaving the appraisal profession next week after three decades, told me of his recent experience contacting a different AMC to explain that the complex nature of another assignment made the offered fee unreasonable. A representative of the AMC explained that another appraiser had already accepted the assignment, which had been sent out just minutes earlier.

Do the lending institutions (or federal agencies, hello Fannie and Freddie) working with these AMCs have any idea about how their appraisal orders are being handled? The fact that the “hungriest” or most desperate-for-work appraiser is accepting these assignments quite likely has a direct correlation with lower appraisal quality, particularly since from the moment the appraiser accepts the assignment he/she is on a 48-72 hour clock to complete the assignment. Maybe lenders should put AMCs on a 48-72 hour clock to assign an appraisal to a competent appraiser at a “customary and reasonable fee”?

Admission: I do have several AMCs with whom I work that are professional, fair and a pleasure to deal with. I also know that many appraisers throughout the country work extensively with AMCs and have done so in a satisfactory manner for a long time.

However, one last thought on the matter: Maybe the enactment of AMC regulations in all 50 states will eventually change the playing field and in the future we will be writing about AMC Hunger Games!

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

Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

AppraiserLoft Update

On Friday, Lily Leung, the excellent real estate and business reporter for the San Diego Union-Tribune discussed the new business involvement of former AppraiserLoft CEO Aman Makkar. Ms. Leung notes that Mr. Makkar will be involved with an internet start-up known as Carzy, which allows consumers to search for new or used cars.

What goes around comes around: During the “go-go” years prior to the collapse of the real estate market, many used car salesmen became mortgage brokers overnight. Will we now be seeing former AMC executives/employees going back into the used car business?

A link to Ms. Leung’s report follows, please note some of the ridiculous comments after the article that seek to discredit Ms. Leung’s report, truly unbelievable (friends of Mr. Makkar, possibly?).
CEO of Defunct Appraisal Firm Now Adviser to Downtown San Diego Start-Up

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

Available Now! Appraiser Help Releases March 2012 Comprehensive Up-To-Date Directory of AMCs and National Appraisal Companies

If you’re looking to expand your appraisal practice, our Directory of Appraisal Management and National Appraisal Companies is a great place to start.

Download the directory today — at only $49.99, it will pay for itself with your first appraisal order! New York appraiser Deborah Urianek of Orion Appraisals had this to say about the directory:

“As an appraiser who has worked with AMCs for many years, your Directory of Appraisal Management and National Appraisal Companies is amazingly complete and comprehensive. I thoroughly endorse it for appraisers looking to navigate the “minefield” of AMCs!”

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

Recent (Mostly Disappointing) Real Estate Reports

On Friday, CoreLogic released a report on the “shadow” inventory of homes for January which indicated that there was an approximate six month supply, a total of 1.6 million units. The report noted that “for every two homes available for sale, there is one in the ‘shadow’”. Mark Fleming, the chief economist for CoreLogic, stated that: "Almost half of the shadow inventory is not yet in the foreclosure process. Shadow inventory also remains concentrated in states impacted by sharp price declines and states with long foreclosure timelines."

A link to this report which includes several graphical illustrations is found here: Corelogic Reports Shadow Inventory as of January 2012 Remains Flat

That same day, the Commerce Department reported that sales of new homes declined by 1.6% in February, the second consecutive monthly decline. This followed earlier reports by the National Association of Homebuilder’s (which indicated a leveling off of homebuilder confidence after a period of higher expectations) and by the National Association of Realtors (NAR) that sales of existing homes dropped by 0.9% in February. The NAR report also noted that the rate of contract cancellations in February was at 31%, down from 33% in January and up from 9% one year ago. Links to reports discussing this by CNBC’s Diana Olick and Bloomberg’s Timothy R. Homan are found here:
Housing Hype: Recovery Turns to Relapse

ProPublica’s Jesse Eisinger and NPR’s Chris Arnold closed out the week’s news with a discussion of principal reduction and how studies show it would not only keep hundreds of thousands of families in their homes but would save Fannie and Freddie money. They quote Mark Zandi, chief economist of Moody’s Analytics, as saying that “Principal reduction works…“It saves taxpayers money and makes homeowners less likely to default”. They cite Mr. Zandi’s estimate that “principal modification could benefit 300,000 to 500,000 homeowners” with mortgages backed by Fannie or Freddie which would make a significant difference in both helping the economy and the housing market.

A link to this report is found here:
Fannie and Freddie: Slashing Mortgages is Good Business

Downsizing in a Big Way

CNNMoney released a video showing an 84 square foot (plus loft area) “eco” house in Olympia, Washington, cost to build reportedly $10,000 (we did not confirm this with Marshall & Swift). A link to this short video is found here:
Get Cozy in this 84 Square Foot Cabin

Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

Letters From Our Readers

A Florida appraiser offered his thoughts:
“Thank you so much for the enlightening letters, I read them as soon as they come out. And also thanks for all of the helpful links that you have attached to your letter as well. I would like to mention something about your last letter in the article regarding ‘Church Foreclosures’.

In that article (you) stated ‘All denominations have reportedly been impacted but the largest number involve small to medium sized houses of worship.’

If you do some research you will find that there is a ‘denomination’ that has not been impacted, and that would be the Jehovah’s Witness faith. The reason is, is that if they even need to use funding they use it from within the organization. Other reasons for this is that they have less over head since they have no paid clergy class, and maintenance for their houses of worship known as "Kingdom Halls" are completed by ones in the organization that have skills in that field…This keeps the cost to a minimum. And in many cases their Kingdom Halls are erected, for the most part in one weekend, or the next. The reason that emphasis is placed on erecting their Kingdom Halls is such a short time is that all Dedicated, Baptized, Jehovah’s Witness are ministers as well that volunteer their time and assets to their preaching work…

I know this because I am a Jehovah’s Witness, and my second job is a Real Estate Appraiser…I have completed appraisal assignments for the local congregation for land and so forth that they are contemplating on purchasing for parking, building their Kingdom Halls, etc, and I have never charged for my services. I also have been involved on many of their Kingdom Hall building projects and too, have donated an untold number of hours to new construction projects, remodels, disaster repair work, etc, so I know very well how the expenses are handled on these projects…”

Stupid AMC Tricks

Texas appraiser Lori Walker had this question about Pennsylvania appraiser Janet Heller’s submission in the last newsletter:

“Okay, now I feel stupid! What is a 41-handle kitchen? Was this an underwriter’s mis-read? What was the appraiser trying to describe, or was this question completely out of the blue?”

Rates & Dates

Mortgage interest rates mostly rose sharply in the most recent weekly reports issued by Freddie Mac and the Mortgage Bankers Association (MBA).

On March 22nd, Freddie Mac reported that 30-year fixed-rate mortgages jumped to 4.08% from 3.92% during the previous week, the first time since last October 27 in which the rate was over 4.0%. They also noted that last year at this time the 30-year rate was at 4.81%.

The MBA in its most recent Weekly Mortgage Applications Survey released March 21st for the week ending March 16th, reported that 30-year rates with conforming loan balances ($417,500 or less) rose to 4.19% from 4.06% during the previous week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.49% from 4.39%. At the same time, the average rates for FHA backed mortgages increased to 3.93% from 3.82%.

In their press release of March 21st, the MBA also reported a decrease of 7.4% in mortgage applications during this most recent survey. Refinance applications declined to 73.4% which they noted was the lowest since last July. Jay Brinkmann, the MBA’s Senior Vice President of Research and Education is quoted in the press release as saying that “With rate/term refinances falling as we go forward, HARP will be a bigger percentage of refinances but will be more concentrated in certain states”.

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

We want to congratulate our most recent winner: Tonya J. Pippin, office manager (and appraiser in training) with Pippin Appraisal Services in NW Florida. Pippin Appraisal Services has provided commercial and residential appraisal services for several decades in the rural area of Washington, Holmes, Jackson, Bay and Walton Counties. Tonya was the second winner from northern Florida this month and was the first to accurately report that the answers to the last contest questions were: “Life is short, art long, opportunity fleeting, experience treacherous, judgment difficult” (Hippocrates); “Beware the Ides of March” (Shakespeare); and “St. Patrick’s Day is an enchanted time – a day to begin transforming winter’s dreams into summer’s magic” (Adrienne Cook).

Today’s questions:

1. Who Said: “If you’re going through hell, keep going."

a) Winston Churchill
b) Mother Teresa
c) Alexis Stewart
d) Saint John Bosco
e) None of the above

2. Who said: “I know God won’t give me anything I can’t handle. I just wish he didn’t trust me so much."

a) Mother Teresa
b) Winston Churchill
c) Jimmy Carter
d) Desmond Tutu
e) None of the above

3. Who said: “You always pass failure on the way to success."

a) Mickey Rooney
b) David Carr
c) Steve Jobs
d) Richard Nixon
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 NEWLY RELEASED 2012 Directory of AMCs and National Appraisal Companies!

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!

Regards,

Bill Collins, Appraiser Help Inc.

NEWLY RELEASED 2012 Directory of AMCs and National Appraisal Companies!

Housing Settlement Details Filed in Court

AppraiserNews and the AppraiserNews Logo and all original content ©AppraiserHelp, Inc. 2009-2012

Foreclosing on God’s House

Sean Collins — Tue, 13 Mar 2012 06:11:59 +0000

Record Number of Church Properties in Foreclosure
Special Announcement: Appraiser Help Releases Comprehensive, Up-To-Date Directory of AMCs and National Appraisal Companies
Department of Justice Files Details of Mortgage Settlement Agreement in Federal Court Yesterday
Appraisers Approaching License Renewal: McKissock’s 7 Hour 2012-2013 USPAP Online Course is Now Available in Most States
The Appraisal Profession by the Numbers
Recent Real Estate Reports
Correction From Last Newsletter
Stupid AMC Tricks
Rates & Dates
Ask Angie
Tell us what you think!
Closing Remarks

Record Number of Church Properties in Foreclosure

On March 9th, Reuter’s Tim Reid discussed a report by CoStar in which they reported that since 2010, 270 churches have been sold after loan defaults, 90% of which came after a lender initiated foreclosure. Mr. Reid noted that this “…surge in church foreclosures represents a new wave of distressed property seizures…with many banks no longer willing to grant struggling religious organizations forbearance”. The Reuter’s article went on to cite CoStar’s finding that 138 churches were sold by banks in 2011, a record for a single year. Mr. Reid noted that there were just 24 such sales in 2008 and “only a handful in the decade before” and that there is “no sign that these religious foreclosures are abating”.

All denominations have reportedly been impacted but the largest number involve small to medium sized houses of worship. Not surprisingly, a disproportionate number are found in the states hardest hit by the foreclosure crisis: California, Georgia, Florida and Michigan. The article noted that many of the mortgages were commercial type loans set to mature after five years with the full balance immediately due. Many of these loans were made at the market peak in 2005 or 2006 and would have been routinely refinanced in previous times; now, however, the combination of how deeply underwater these properties were along with balance sheet pressure from regulators resulted in a situation all too familiar to millions of single family homeowners. Mr. Reid noted that many of the loans involved renovating or enlarging church facilities oftentimes with major lenders or institutions such as the Evangelical Christian Credit Union which he notes “…was particularly aggressive in lending to religious institutions”.

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

Special Announcement: Appraiser Help Releases Comprehensive Up-To-Date Directory of AMCs and National Appraisal Companies

While most appraisers have had some unpleasant experiences with appraisal management companies, it is clear that consideration must be given as to what role AMCs will play in their overall appraisal practice.

If you’re looking to expand your appraisal practice, our Directory of Appraisal Management and National Appraisal Companies is a great place to start.

Download the directory today — at only $49.99, it will pay for itself with your first appraisal order!

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

Department of Justice Files Details of Mortgage Settlement Agreement in Federal Court Yesterday

Yesterday, the federal government and state attorneys general filed in U.S. District Court in the District of Columbia proposed consent judgments with the five big mortgage servicers “…to resolve violations of state and federal law”. The Justice Department news release noted that this $25 billion settlement involving mortgage loan servicing and foreclosure abuses was “…the largest federal-state civil settlement ever obtained”. The news release stated that $20 billion would be provided by the servicers to homeowners in various forms of financial relief and $5 billion would be paid to the federal government and state governments. Links to the Justice Department announcement and a report by CNNMoney’s Jennifer Liberto are found here:
Department of Justice News

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

Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

The Appraisal Profession by the Numbers

How many appraisers are licensed in the United States?

The last time we checked, the Appraisal Subcommittee reported that there were 105,009 appraisers with 36% of them Certified General Appraisers, 51% Certified Residential Appraisers and 13% Licensed Appraisers. The following link will take you to the most recent report, including state by state breakdowns: Active Appraiser Credentials – ASC – Appraisal Subcommittee

What can we expect in the future? According to AppraisalPort, many are considering leaving the field, a link to their most recent survey is found here: AppraisalPort Survey Results

How many states have enacted AMC (Appraisal Management Company) legislation?

Reports indicate that approximately 30 states have enacted legislation with similar legislation pending in eight others. Appraisers who would like more information as to legislation in their states can go to AMCRegulations.com for more information, a link to which is found here: Michigan AMC Regulation

How do appraisers view the business environment for themselves this year?

According to a sample of almost 6,000 appraisers taken by AppraisalPort in January, a majority felt that 2012 would be similar to last year or somewhat worse, as indicated in their graphical depiction: AppraisalPort Poll Results

Recent Real Estate Reports

On March 7th, CoreLogic released their January Home Price Index which showed a decline for the sixth consecutive month. Nationally, prices declined 1.0% from the previous month and 3.1% from one year ago. A link to this report which includes regional breakdowns is found here: CoreLogic January Home Price Index Shows Sixth Consecutive Monthly Decline

One day earlier, Clear Capital released their Home Data Index which also showed year to year declines (-2.0%) with quarterly prices essentially unchanged (-0.6%). A link to this report is found here: Clear Capital Market Report

On March 7th, CNBC’s Diana Olick discussed the CoreLogic report along with Lender Processing Service’s foreclosure report and a link to this is found here: Parsing Home Prices Proves Precarious – CNBC

On that same day, Bloomberg’s Oshrat Carmiel discussed how the recovery of the commercial market was being led by apartment properties and cited recent studies by Real Capital Analytics, Reis Inc. and the Mortgage Bankers Association. A link to this report is found here: Recovery of Commercial Property Fueled By Apartments: Mortgages

HUD Secretary Shaun Donovan was interviewed by HuffPost Business last week and offered help/hope to underwater homeowners with his remarks. While hedging on predictions as to when the housing market would improve, he suggested that those with underwater mortgages not wait for that day but attempt to refinance now and, if their mortgage is with one of the big five banks involved in the foreclosure settlement, apply for a principal reduction. A link to this article is found here: Shaun Donovan, Housing Secretary, To Underwater Americans: There’s Help For You

One final report of interest: On March 10th, CNBC’s Mark Koba discussed the possibility that Baby Boomers might “flood the market” with houses in the coming years at the same time the younger generations might not be interested in buying. A link to this is found here: More Boomers Selling H omes, but Who Will Buy Them? – CNBC

Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

Correction From Last Newsletter

California appraiser John Thermos and Hal A. Coon, MAI, Appraisal Review Specialist for the FDIC in Texas both noted our error in the last newsletter in which we said that a “even a broken clock is correct once per day”. Unless we are using a 24 hour clock, a broken clock is correct twice per day (which is once or twice more per day than some “economists” we know).

Stupid AMC Tricks

Just one this week, we don’t want to overdo it:

Pennsylvania appraiser Janet M. Heller received this request:
“Please explain what a 41 handle kitchen is”

Rates & Dates

Mortgage interest rates mostly declined and remained close to historically low levels in the most recent weekly reports issued by Freddie Mac and the Mortgage Bankers Association (MBA).

On March 8th, Freddie Mac reported that 30-year fixed-rate mortgages declined to 3.88% from 3.90% during the previous week. They also noted that last year at this time the 30-year rate was at 4.88%. The 15-year fixed rate, which they call a “popular choice among refinance borrowers” reached a historically low rate of 3.13%.

The MBA in its most recent Weekly Mortgage Applications Survey released March 7th for the week ending March 2nd, reported that 30-year rates with conforming loan balances ($417,500 or less) dropped to 4.06% from 4.07% during the previous week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.33% from 4.34%. At the same time, the average rates for FHA backed mortgages increased to 3.87% from 3.86%.

In their press release of March 7th, the MBA also reported a decrease of 1.2% in mortgage applications during this most recent survey. Refinance applications declined to 77.0% which they noted was the lowest since last December. In a separate press release that day, the MBA noted that commercial and multi-family mortgage delinquency rates declined during the last quarter of 2011.

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

We want to congratulate our most recent winner: Cristal Bell, Appraisal Manager with Premier Appraisal in Tallahassee, Florida. Premier Appraisal covers Leon County and other portions of northern Florida. Cristal was the first to accurately report that the answers to the last contest questions were: “You have to be unique, and different, and shine in your own way ” (Lady Gaga); “The cure for boredom is curiosity. There is no cure for curiosity ” (Dorothy Parker); and “When you can’t create you can work ” (Henry Miller).

Today’s questions:

1. Who Said: “Life is short, art long, opportunity fleeting, experience treacherous, judgment difficult."

a) Plato
b) Aristotle
c) Hippocrates
d) Ben Flajnik
e) None of the above

2. Who said: “Beware the Ides of March."

a) George Clooney
b) Marisa Tomei
c) Shakespeare
d) Al Gore
e) None of the above

3. Who said: “St. Patrick’s Day is an enchanted time – a day to begin transforming winter’s dreams into summer’s magic."

a) George Bernard Shaw
b) C.S. Lewis
c) Adrienne Cook
d) Oscar Wilde
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 NEWLY RELEASED 2012 Directory of AMCs and National Appraisal Companies!

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!

Regards,

Bill Collins, Appraiser Help Inc.

NEWLY RELEASED 2012 Directory of AMCs and National Appraisal Companies!

Berkshire Hathaway’s 2011 Shareholder Letter (Opens a .PDF File)

AppraiserNews and the AppraiserNews Logo and all original content ©AppraiserHelp, Inc. 2009-2012

“I Was Dead Wrong on Housing”

Sean Collins — Tue, 28 Feb 2012 05:50:47 +0000

Warren Buffett Admits That Last Years Housing Forecast Was “Dead Wrong”
Special Announcement: Appraiser Help Releases Comprehensive, Up-To-Date Directory of AMCs and National Appraisal Companies
The Season for Property Tax Assessment Grievances and Appeals is Starting in Many Parts of the Country
McKissock 2012-2013 USPAP Online Course Now Available in Approx. 40 States and DC
Assorted Views on Foreclosure Settlement and Housing Fixes
Stupid AMC Tricks
Rates & Dates
Ask Angie
Tell us what you think!
Closing Remarks

Warren Buffett Admits That Last Years Housing Forecast Was “Dead Wrong”

In his annual letter to shareholders of Berkshire Hathaway, Warren Buffett admitted that last year’s call for a housing recovery in 2011 missed the mark. In this letter, Mr. Buffett now says that “Housing will come back-you can be sure of it” but only indicates that it will happen “over time”. He goes on to say that: “Every day we are creating more households than housing units. People may postpone hitching up during uncertain times, but eventually hormones take over.”

Okay, admit it, you thought the headline “I was dead wrong on housing” was an admission by Lawrence Yun, chief economist for the National Association of Realtors NAR). Much has been made of their two most recent news releases yesterday and last Wednesday optimistically titled “Existing-Home Sales Rise Again in January, Inventory Down” and “January Pending Home Sales Rise, Market on Uptrend”. Both reports cite small gains in sales but (buried within the reports) include references that the gains are from “downwardly revised” numbers in December.

Even a broken clock is correct once every day. Hopefully the cheerful forecast by Mr. Yun eventually proves to be correct sometime soon.

Links to Warren Buffett’s letter and the NAR releases are found here:

January Pending Home Sales Rise, Market on Uptrend

NAR Collaborates with U.S. Treasury on Short Sale “Help for Homeowners”

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.

Special Announcement: Appraiser Help Releases Comprehensive Up-To-Date Directory of AMCs and National Appraisal Companies

If you’re looking to expand your appraisal practice, our Directory of Appraisal Management and National Appraisal Companies is a great place to start.

Download the directory today — at only $49.99, it will pay for itself with your first appraisal order!

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

The Season for Property Tax Assessment Grievances and Appeals is Starting in Many Parts of the Country

Appraisers who perform appraisals for tax grievances say that the season has begun in many areas and a number of published reports back that up. In a report titled “How can I bring down my property taxes?” on Friday, CNNMoney’s Judy Feldman discussed the situation in New York and neglected to discuss the important role appraisers can play. It is surprising that many in the media are as ignorant as many homeowners in regard to the support that an appraisal by a certified appraiser can give to a tax grievance. Appraisers can do something about this, let your local media know that many departments of assessment appreciate an objective, well supported opinion of value by a certified appraiser rather than an assortment of ill conceived “comps” prepared by a homeowner or realtor. A link to the CNNMoney report is found here:

CNNMoney – How Can I Bring Down my Property Taxes?

McKissock 2012-2013 USPAP Online Course Now Available in Approx. 40 States and DC

McKissock Education, the official provider of the Appraisal Foundation’s online 2012-2013 USPAP courses, is now available in most states. Earlier this year, the Appraisal Foundation and McKissock announced their partnership and the online course is now available to most appraisers who are interested in completing this before the end of 2011. See if courses are available in your area and save up to 20% on course fees by going to our Online McKissock Portal.

Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

Assorted Views on Foreclosure Settlement and Housing Fixes

Since the recent announcement of the foreclosure settlement involving the five big banks and regulatory authorities, along with Obama Administration initiatives, much has been written about what will occur with some saying that the “devil is in the details”. Similar to the differences in agreement with how the Dodd-Frank Act would be implemented, a number of published reports offered various perspectives on what would now happen.

On February 20th, David Dayen in Firedoglake.com and February 14th Cora Currier in Propublica offered critiques of these matters, followed by the New York Times Nelson Schwartz on February 21st. Links to these three reports are found here:

The “Robo-Signed” Foreclosure Fraud Settlement

Obama Housing Plans vs. Reality – ProPublica

Some Doubt a Settlement Will End Mortgage Ills

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Stupid AMC Tricks

Sorry that we can’t publish all of them but here are a few that we received this week:

Florida Appraiser Anthony Powell wrote: “Thanks for the many interesting and informative articles that you publish. One topic that I haven’t seen discussed is the ongoing misuse and abuse of the Geographic Competence’ requirement by certain clients and AMC’s. Due to security issues with my mail, I updated all my website profiles to direct future checks to a P.O.Box close to my home.

There was an immediate and unmistakable drop in orders. I talked to several Clients/AMC’s that I’ve known for years. The responses were amazing to me. For example, S___ AMC said “We go by your (mailing) address”.

Another Florida appraiser, who prefers to remain anonymous, wrote: “How about this one. I recently did an appraisal on proposed construction. After turning in the report the AMC emailed me to go back out to the property and take interior photographs. My reply. Is there something about the work proposed that confuses you?”

One additional “special instruction” from an AMC was sent to us by “J” (I guess he/she prefers anonymity too): “Show Client/Lender Name as “this company is one of the top 5 lenders”

Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

Rates & Dates

Mortgage interest rates moved up in the most recent weekly reports issued by Freddie Mac and the Mortgage Bankers Association (MBA).

On February 23rd, Freddie Mac reported that 30-year fixed-rate mortgages rose to 3.95% from the historically low 3.87% of the prior two weeks. They also noted that last year at this time the rate was at 4.95%.

The MBA in its most recent Weekly Mortgage Applications Survey released February 22nd for the week ending February 17th, reported that 30 year rates with conforming loan balances ($417,500 or less) rose to 4.09% from 4.08% during the previous week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.32% from 4.30%. At the same time, the average rates for FHA backed mortgages remained at 3.87%.

In their press release of February 22nd, the MBA also reported a decrease of 4.5% in mortgage applications during this most recent survey. Refinance applications increased to 80.1% from the prior week’s 81.1%.

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

We want to congratulate our most recent winner: James J. Woodring, a Certified Residential Appraiser with Real Value Appraisals in Beltsville, Maryland. Real Value Appraisals covers Washington D.C. along with several suburban Maryland counties and Jim has been an appraiser here for 32 years. He was the first to accurately report that the answers to the last contest questions were: “The Eskimos had fifty-two names for snow because it was important to them: there ought to be as many for love” (Margaret Atwood); “There are two kinds of people I don’t trust: people who don’t drink and people who collect stickers” (Chelsea Handler); and “If you die in an elevator, be sure to push the Up button” (Sam Levenson).

Today’s questions:

1. Who Said: “You have to be unique, and different, and shine in your own way.”

a) Lady Gaga

b) Madonna

c) Adele

d) Taylor Swift

e) None of the above

2. Who said: “The cure for boredom is curiosity. There is no cure for curiosity.”

a) Rick Santorum

b) Dorothy Parker

c) Newt Gingrich

d) Felix the Cat

e) None of the above

3. Who said: “When you can’t create you can work.”

a) Woody Allen

b) Henry Ford

c) Henry Miller

d) Benjamin Franklin

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 NEWLY RELEASED 2012 Directory of AMCs and National Appraisal Companies!

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!

Regards,

Bill Collins, Appraiser Help Inc.

NEWLY RELEASED 2012 Directory of AMCs and National Appraisal Companies!

Banks May Finally Improve Foreclosure Practices

AppraiserNews and the AppraiserNews Logo and all original content ©AppraiserHelp, Inc. 2009-2012

Loving the Mortgage Settlement? Or Not?

Sean Collins — Tue, 14 Feb 2012 03:02:22 +0000

"The Deal Is Done, But Hold The Applause"
McKissock 2012-2013 USPAP Online Course Now Available in Approx. 40 States and DC
Response to the Mortgage Settlement From Others
Other Real Estate Market Reports
Commercial Reports
Stupid AMC Tricks
What Does All Of This Mean For Appraisers?
Rates & Dates
Ask Angie
Tell us what you think!
Closing Remarks

"The Deal Is Done, But Hold The Applause"

In an article with the above title in Sunday’s New York Times, Gretchen Morgenson raises many questions about last week’s settlement by the five big banks with state and federal authorities. She notes how “the banks crowed that this settlement would help the economy and the reputation of the mortgage industry” but says that “skeptics abound”.

Ms. Morgenson cites Paul Diggle, property economist at Capital Economics, as saying that principal forgiveness in the amount of $17 billion “is a drop in the ocean given that close to 11 million borrowers are underwater on their loans to the tune of $700 billion in total”. Ms. Morgenson notes that this would encompass just 2.4% of the total negative equity facing borrowers nationally. The Times article also reports the comments of Yves Smith, founder of the Naked Capitalism web site that this in actuality a “stealth bailout” of the big banks.

Ms. Morgenson notes that Joseph A. Smith Jr., North Carolina’s banking commissioner, will oversee the settlement programs and enforce the mandated changes in loan-servicing practices. She questioned “what size of army he would be deploying to ensure that the banks fulfilled their promises” and concluded by saying:

“Additional details will emerge. But this kind of minutiae will determine whether the settlement succeeds. So many borrower programs have failed since the foreclosure crisis began. Another nonstarter will only add to the mistrust that many people harbor toward those large institutions, both public and private, that contributed so mightily to this mess”.

McKissock 2012-2013 USPAP Online Course Now Available in Approx. 40 States and DC

Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

Response to the Mortgage Settlement From Others

On February 10th, Bloomberg’s Hugh Son and Dawn Kopecki discussed the fact that the big banks will still face years of litigation and potentially billions of dollars in liabilities in regard to loan securitization, fair-lending violations and criminal-enforcement actions according to U.S. Attorney General Eric Holder. The article also quoted HUD Secretary Shaun Donovan as saying that “It wasn’t the servicing practices that created the bubble, nor caused its collapse. It was the origination and securitization of these horrendous products.”

Also on February 10th, CNN Money’s Tami Luhby discussed how “the nation is now one big step closer to a national mortgage servicing standard”. Ms. Luhby cited “experts” who felt that this agreement had “more teeth to it” than the action announced last April against the 14 mortgage servicers.

Writing in TheHill.com on February 9th, Amie Parnes and Vicki Needham quoted various Obama Administration officials including the President saying that the agreement will help more Americans “get back on their feet” and urged additional Congressional actions to build on this settlement.

CNBC’s Diana Olick on February 9th made the point that this was “all about lowering mortgage principal” and “restoring stability in the housing market”.

Also writing on February 9th, the New York Times’ Nelson D. Schwartz and Julie Creswell reviewed this settlement and its limitations.

Links to all five of these reports are found here:
Banks Not Off Hook With $25B Mortgage Deal

Obama Says $26 Billion Deal With Banks Will Help Millions of Homeowners

Robo-Deal Is All About Lowering Mortgage Principal

Mortgage Plan Gives Billions to Homeowners, but With Exceptions

Other Real Estate Market Reports

On February 9th, Zillow reported that home prices dropped 1.1% in the 4th Quarter and that 2011 finished with a decline of 4.7% nationally. According to their calculations, this leads to an overall decline of 24.2% since the market peak in 2007. Their analysts call 2012 a “transitional” year with predictions that home prices will drop less this year (-3.7%) with some markets hitting bottom and achieving stability.

On February 8th, CoreLogic reported that completed foreclosures declined 24% in 2011 and the number of loans in foreclosure inventory decreased 8.4% from December 2010 to December 2011. Mark Fleming, chief economist for CoreLogic noted that: “This is the first time in a year that REO sales have outpaced completed foreclosures, and part of the reason for the decrease in the foreclosure inventory.”

Links to these reports and to CoreLogic’s “Market Pulse” report the next day are found here:
Home Value Declines Pick Up in Fourth Quarter, New Zillow Home Value Forecast Shows Brighter Days to Come

CoreLogic Reports 830,000 Completed Foreclosures Nationally in 2011, a Decrease of 24 Percent from One Year Ago

Corelogic – The MarketPulse (Opens a .PDF File)

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Commercial Reports

On February 6th, HousingWire’s Kerri Panchuk cited the Mortgage Bankers Association (MBA) quarterly survey which showed significant increases in multifamily and commercial lending. Loans for industrial properties increased by 43% year to year while multifamily lending jumped 31% during the last three months of 2011. Loans for retail properties declined 8% but the overall sector grew by 13% in the 4th Quarter of 2011 in comparison with the 4th Quarter of 2010. Mortgage Professional Magazine reported on the same day that the MBA survey indicated that Wells Fargo was the top commercial servicer in 2011 at $437.7 billion, followed by PNC/Midland at $355.1 billion.

Yesterday, CBRE Group’s Robert McGrath announced the release of CBRE’s report “12 Trends for 2012”. Amongst the findings are that “cap rate compression will end” and that there will be an increased demand for warehouse facilities. A link to the press release is found here: CBRE Press Release – CBRE EA Report Identifies 12 Key Trends In Commercial Real Estate

Stupid AMC Tricks

We would like to thank Debbie Urianek, a Certified Residential Appraiser with Orion Appraisals in East Islip, New York for providing us with what she calls her “Top Stupid Addendum Requests”. Some of these are classics but still make us chuckle (unless we have to respond to them). Debbie insists that these are just the most stupid requests that she received last week-and she has been an appraiser for more than two decades! In no particular order, here they are:

“Please explain what N/A means”.

“Report indicates that cesspools are common for the area, that all sales have cesspools, that there is no affect on marketability and that public sewers are not available for connection in the market area- Please state whether the cesspools are located above ground or inground”.

“Report indicates that the oil tank is located inground and that tank location prohibits inspection. Please state whether the oil tank has evidence of leakage”.

“Report indicates that the subject has an additional kitchen in the basement. Report states that there is interior access between the basement and the first level. Report provides a photograph of the stairs from the basement to the first level with an open door which indicates that there is open access. Please indicate what the stairs are utilized for”.

“Report indicates that there is no fireplace. Yet, the review of the photographs indicate that there is a chimney. Please review your report and correct to read that a fireplace exists as there is a chimney”.

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What Does This All Mean For Appraisers?

It is likely that “stupid addendum requests” and other mind-numbing requests for additional data and support (i.e. form 1004MC) will be part of appraiser’s day-to-day existence for some time due to over-reaction by regulatory officials and a “CYA” (cover your a__) mentality. Hopefully fees will rise commensurate with the additional work demanded over time.

AppraiserNews.com is of the opinion that additional regulations of the big banks and AMCs are needed and that they are mostly in a position to deal with them. Individual appraisers and small appraiser firms, however, are greatly burdened by these additional requests for information that mostly do not result in more accurate appraisals and better loan underwriting.

We hope that any regulators reading this will take this into consideration in the future.

Rates & Dates

Mortgage interest rates remained at historically low levels in the most recent weekly report issued by Freddie Mac and rates dropped to historic lows in the the Mortgage Bankers Association (MBA) Weekly Application Survey.

On February 9th, Freddie Mac reported that 30-year fixed-rate mortgages stayed at 3.87%, the same rate as the prior week. They also noted that last year at this time the rate was at 5.05%.

The MBA in its most recent Weekly Mortgage Applications Survey released February 8th for the week ending February 3rd, reported that 30 year rates with conforming loan balances ($417,500 or less) declined to 4.05% from 4.09% during the previous week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.29% from 4.33%. At the same time, the average rates for FHA backed mortgages dropped to 3.89% from 3.96%. All three of these represent historic lows in the MBA survey.

In their press release of February 8th, the MBA also reported an increase of 7.5% in mortgage applications during this most recent survey. Refinance applications increased to 80.5% from the prior week’s 80.0%. The MBA also reported that investors made up 6.4% of applications for home purchases.

The following day after the mortgage settlement announcement, the MBA released a statement in which their President and CEO David H. Stevens said: "A final agreement can play an important role stabilizing and providing certainty and confidence to the housing and mortgage markets…it is now imperative that policymakers, lenders, servicers and other stakeholders work together on policies and initiatives that will allow us to get the housing market on the road to recovery. "

"I would caution, though, that, while a positive step, this will not be a panacea for all that ails housing. There are a number of other issues that we need to resolve…”

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

We want to congratulate our most recent winner: Virginia Appraiser Tom Martin. Tom is an appraiser in Petersburg and was the first to answer correctly that Dr. Seuss wrote “Be who you are and say what you feel, because those who mind don’t matter, and those who matter don’t mind”; Mark Twain said that “Whenever you find yourself on the side of the majority, it is time to pause and reflect”; and that Mahatma Gandhi spoke the words “I will not let anyone walk through my mind with their dirty feet.”

Today’s questions:

1. Who Said: "The Eskimos had fifty-two names for snow because it was important to them: there ought to be as many for love."

a) Sarah Palin
b) Ralph Waldo Emerson
c) Margaret Atwood
d) Cyrano de Bergerac
e) None of the above

2. Who said: "There are two kinds of people I don’t trust: people who don’t drink and people who collect stickers."

a) Lily Tomlin
b) Sarah Silverman
c) Chelsea Handler
d) Tina Fey
e) None of the above

3. Who said: "If you die in an elevator, be sure to push the Up button."

a) Woody Allen
b) George Carlin
c) Sam Levenson
d) Henry Youngman
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 Directory of Appraisal Management Companies (Available Now to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)

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!

Regards,

Bill Collins, Appraiser Help Inc.

Appraiser News is always a FREE publication. Please support our sponsors by clicking here.

AppraiserNews and the AppraiserNews Logo and all original content ©AppraiserHelp, Inc. 2009-2012

Spotlight on Fees, Fraud and Foreclosure

Sean Collins — Tue, 31 Jan 2012 03:14:26 +0000

The New Consumer Financial Protection Bureau (CFPB) Begins to Scrutinize Appraisal Fees
McKissock 2012-2013 USPAP Online Course Now Available in Approx. 40 States and DC
AppraisalPort Asks Appraisers the Question: Have You Noticed Any Recent Change in the Average Fee Paid by AMCs For Any Reason?
Pittsburgh Budgets $100,000 to Subsidize Appraisals in Property Tax Assessment Grievances and Appeals
Another Reminder: The Season for Tax Appeal and Tax Grievance Appraisals is Now Beginning in Many Parts of the Country
Breaking News: HUD Issues Report Just to Keep Name Out There
Obama Administration Proposes Changes to HAMP (Home Affordable Modification Program)
Expanded Probe Into Mortgage Meltdown
"Gretchen Morgenson on Corporate Clout in America"
Former AppraiserLoft Execs Now Used Car Salesmen?
Rates & Dates
Ask Angie
Tell us what you think!
Closing Remarks

The New Consumer Financial Protection Bureau (CFPB) Begins to Scrutinize Appraisal Fees

The CFPB is starting to take a closer look at appraisal fees and, as part of its mandate, bring increased clarity to buyers, sellers and those refinancing to the breakdown of some costs which are not fully disclosed at their mortgage closings.

Writing in the Washington Post on January 27th, Kenneth Harney notes that the standard HUD-1 settlement statement includes just one line for appraisal costs with no definition of how much was actually paid to the appraiser and what amount was paid to an appraisal management company (AMC). This may change as the CFPB is considering disclosures of the exact amounts paid to the appraiser and the AMC.

Mr. Harney notes that the AMC “may be wholly owned by or otherwise connected” to the lender. The article quotes Frank Gregoire, a past chairman of the Florida Real Estate Appraisal Board, as saying that:

“The borrower receives no benefit from the [appraisal management] ‘service. The lender is able to outsource a significant responsibility—the selection of an appraiser—to an affiliated subsidiary, and profit from that task by making the consumer and the appraiser pay for the privilege. [This] business arrangement is concealed from the consumer/borrower, and the charge is misrepresented as an ‘appraisal fee’ on the HUD-1. This is dishonest, deceitful and unfair.”

The CFPB has a statutory deadline to put forth an improved HUD-1 by July so we are hopeful that full disclosure of how the appraisal fee is disbursed (along with the relationships between lenders and AMCs, actual services provided by AMCs, etc.) will result in improved working conditions (and pay) for appraisers.

A link to the Washington Post report (which includes a defense of AMCs and the present system by Donald E. Kelly, executive director of the Real Estate Valuation Advocacy Association) is found here: Consumer Financial Protection Bureau Scrutinizes Appraisals and Other Realty Fees

McKissock 2012-2013 USPAP Online Course Now Available in Approx. 40 States and DC

Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

AppraisalPort Asks Appraisers the Question: Have You Noticed Any Recent Change in the Average Fee Paid by AMCs For Any Reason?

Appraisers interested in participating in this survey (and seeing the results of previous surveys) can do so by clicking on the following link: AppraisalPort

By the way, it will be interesting to check the ASC’s National Registry of Real Estate Appraisers during the next several days to see the number of appraisers who let their licenses expire last year. They reported yesterday (1/30/12) that 1,766 left the business. Appraisers are not removed until one month after their licenses lapse so we will be getting the full reports shortly. AppraiserNews.com will be reporting on this in our next newsletter but those of you who follow us on Twitter (Twitter.com/AppraiserNews and Twitter.com/AppraiserHelp) and LinkedIn will get the news as soon as it is reported.

Pittsburgh Budgets $100,000 to Subsidize Appraisals in Property Tax Assessment Grievances and Appeals

Interesting report by Bob Bauder in the Pittsburgh Tribune-Review last Friday in which he announced that the mayor’s office would be paying half the cost for private home appraisals for city residences grieving their new assessments. The article reported that Pittsburgh “will request proposals from state certified appraisers and negotiate a cost per property for the appraisals” and would then pay homeowners half the fee. Mr. Bauder’s article reported that Pittsburgh gave similar assistance when Allegheny County last re-assessed properties in 2002. Pittsburgh to Subsidize Appraisals in Assessment Appeals

On January 27th, Bankrate.com’s Marcie Geffner noted that: “Declining house values create great opportunities for homeowners to contest their property tax bills and potentially save big money.” She gave an example of a Colorado property owner’s successful tax grievance and a link to her entire report is found here: Real: Fight Property Tax Bill with These Tips

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Another Reminder: The Season for Tax Appeal and Tax Grievance Appraisals is Now Beginning in Many Parts of the Country

So, what are you waiting for? How many times do we have to tell you to allocate some time each day to building your private appraisal practice preparing appraisals for tax grievance and appeal, estate, divorce, bankruptcy, buy/sell, trust formation, etc.?

Breaking News: HUD Issues Report Just to Keep Name Out There

A link to this big story by The Onion is found here:
Department of Housing and Urban Development Issues Report Just to Keep Name Out There

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Obama Administration Proposes Changes to HAMP (Home Affordable Modification Program)

Apparently the Onion woke up HUD officials as evidenced by a January 27th press conference involving HUD Secretary Shaun Donovan, Assistant Treasury Secretary Tim Massad, and White House National Economic Council Director Gene Sperling. The Friday afternoon press conference included the announcement by Administration officials that they would be attempting to expand eligibility in order to increase the number of homeowners receiving help. HAMP was originally designed to reach up to four million struggling mortgage borrowers but most recent counts placed the number helped at less than one million. In a report that day, CNNMoney’s Les Christie quoted Gene Sperling as saying that this was an “all of the above strategy to help responsible homeowners lower their costs and stay in their homes”. Included in the revised HAMP program, which would begin in April, are incentives for principal reduction as part of mortgage modifications. It is noted that these changes are unrelated to a new refinancing program that Mr. Obama announced in his state of the Union speech, details of which are to be announced in several weeks. Links to the article by Mr. Christie and one by Bloomberg’s Lorraine Woellert are found here: Obama Administration Expands Foreclosure Prevention Program

Obama Expands Aid for Delinquent Homeowners

Expanded Probe Into Mortgage Meltdown

Late in the afternoon on Friday, HUD Secretary Donovan again made headlines with the announcement that he and U.S. Attorney General Eric Holder made regarding a new, more powerful probe into the events (and those responsible) for the financial crisis. CNNMoney’s Jennifer Liberto reported that day that this task force would be a coalition of those from previous groups along with more than 50 attorneys and investigators who would be assigned to it, according to Mr. Holder. Mr. Holder also announced that subpoenas were being issued to 11 financial firms involved in the buying and selling of mortgages. Ms. Liberto’s report noted the importance of efforts by New York State Attorney General Eric Schneiderman “who can take advantage of New York State laws that are tougher on Wall Street financial fraud than the federal government’s laws” according to Mr. Holder.

On Saturday, Firedoglake.com’s David Dayen reported on this “newly titled RMBS working group”. He noted Mr. Schneiderman’s comments on MSNBC in which he indicated that the IRS could be brought in “…because there are huge tax fraud implications to some of the stuff that went on.” Links to the CNNMoney report, Mr. Dayen’s report and the MSNBC video with Mr. Schneiderman are found here: Mortgage Probe Unveiled as Foreclosure Talks Loom

FireDogLake News Desk

"Gretchen Morgenson on Corporate Clout in America"

The above is the title of Bill Moyer’s January 20th video interview with Pulitzer Prize-winning New York Times reporter and columnist Gretchen Morgenson. This 18 minute interview in which Ms. Morgenson discusses how Fannie Mae taught Wall Street how to be the “quintessential crony capitalist” is well worth viewing. Ms. Morgenson discusses how many small banks that did not create the problem are being penalized and that we are only learning to understand the full extent of what went on during the financial crisis. On the one hand, Ms. Morgenson is optimistic because she feels that “Main Street gets it”; on the other hand, she makes the statement that: “It will happen again.” A link to Mr. Moyer’s video is found here: Gretchen Morgenson on Corporate Clout in Washington – BillMoyers.com

Regarding the new mortgage fraud task force, Ms. Morgenson noted in Sunday’s New York Times:
“Perhaps the new working group will right this imbalance. But its members don’t have a lot of time, with the election coming. Private litigants have drawn a pretty clear road map for the places that this new group might go. Its leaders should welcome the assistance, given that the clock is ticking”.
A link to the Times’ article is found here: It Has a Fancy Name, but Will It Get Tough?

Former AppraiserLoft Execs Now Used Car Salesmen?

Lily Leung, real estate and business reporter for the San Diego Union-Tribune, reported on January 12th that two former executives of the defunct appraisal management company AppraiserLoft had moved on to a new industry after leaving appraisers nationwide with millions of dollars in unpaid appraisal fees. Ms. Leung reported that barely three months after shutting down AppraiserLoft, two of their top executives (Aman Makkar and Scott Stokas) had resurfaced online with a new venture known as Clearlot.

We at AppraiserNews.com have no comment on this except to say that we anticipate that our readership may have some thoughts about this. Ms. Leung, by the way, told AppraiserNews.com that she continues to receive calls from appraisers asking for more information or assistance.

A link to Ms. Leung’s report is found here: CEO of Shuttered Appraisal Firm Now in Car Biz

Rates & Dates

Mortgage interest rates generally rose from historically low levels in the most recent weekly reports issued by Freddie Mac and the Mortgage Bankers Association (MBA).

On January 26th, Freddie Mac reported that 30-year fixed-rate mortgages increased to 3.98% from 3.88% during the prior week and they noted that last year at this time, the rate was at 4.80%.

The MBA in its most recent Weekly Mortgage Applications Survey released January 25th for the week ending January 20th, reported that 30 year rates with conforming loan balances ($417,500 or less) increased to 4.11% from 4.06% during the previous week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.39% from 4.40%. At the same time, the average rates for FHA backed mortgages increased to 3.97% from 3.91%.

In their press release of January 25th, the MBA also reported a decline of 5% in mortgage applications during this most recent survey. Refinance applications declined to 81.3% from 82.2% in this most recent survey.

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

We want to congratulate our most recent winner: Arizona Certified General Real Estate Appraiser Ronald Keeler. Ron is an appraiser in Tuscon (Pima County) and has been appraising for 34 years. He was the first to answer correctly that Oscar Wilde said “The best way to appreciate your job is to imagine yourself without one” and that Dale Carnegie was the author of both “Act enthusiastic and you will be enthusiastic” along with “Develop success from failures. Discouragement and failure are two of the surest stepping stones to success.”

Today’s questions:

1. Who Said: "Be who you are and say what you feel, because those who mind don’t matter, and those who matter don’t mind."

a) Dr. Seuss
b) Ron Paul
c) Mark Twain
d) Joe Biden
e) None of the above

2. Who said: "Whenever you find yourself on the side of the majority, it is time to pause and reflect."

a) Barack Obama
b) Mark Twain
c) John Adams
d) John Boehner
e) None of the above

3. Who said: "I will not let anyone walk through my mind with their dirty feet."

a) The Dalai Lama
b) Chogyam Trungpa Rinpoche
c) Mahatma Gandhi
d) Nostradamus
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 Directory of Appraisal Management Companies (Available Now to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)

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!

Regards,

Bill Collins, Appraiser Help Inc.

US Foreclosure Trends and Foreclosure Market Statistics – RealtyTrac

Will Aggressive Foreclosure Measures Push Prices Down Further?

Sean Collins — Tue, 17 Jan 2012 04:49:36 +0000

New Aggressiveness Seen by Banks in Dealing With Delinquent Mortgages
McKissock 2012-2013 USPAP Online Course Now Available in Approx. 40 States and DC
Year End Reports on State of Commercial Real Estate Market Are Beginning to Appear
Reader Comments About the State of the Appraisal Business
"The Rise of New Groupthink"
Former AppraiserLoft Execs Now Used Car Salesmen?
Asleep at the Wheel: Reports Released on the Federal Reserve’s Lack of Awareness of Problems in the Real Estate Market in 2006
Rates & Dates
Ask Angie
Tell us what you think!
Closing Remarks

New Aggressiveness Seen by Banks in Dealing With Mortgages

A number of published reports during the past week have suggested that banks may be moving more swiftly in dealing with seriously delinquent mortgages and that such actions might lead to further price declines in many markets. Writing in the Los Angeles Times on January 12th, E. Scott Reckard reported on the likelihood that California and other states might see an “enormous wave” of foreclosure actions in 2012 which could lead to further price declines. Mr. Reckard cited RealtyTrac’s report that foreclosures were down by approximately one million in 2011 at approximately 1.9 million from 2010’s 2.9 million. Brandon Moore, CEO of RealtyTrac, is quoted in the article as saying that: "There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets. We expect that trend to continue this year."

Mr. Reckard noted that Realty Trac reported the average foreclosure took 352 days last year in California (a “non-judicial” state) versus 806 days in Florida and 1,019 days in New York, states which require judicial review of these matters. Links to the Los Angeles Times report and to RealtyTrac’s December 2011 U.S. foreclosure map are found here: Foreclosures Expected to Rise, Pushing Home Prices Lower

On January 12th, CNNMoney’s Les Christie discussed the report that last year foreclosures fell to their lowest level since 2007 and noted that “While the declines seem like good news for the housing market, where a flood of foreclosed homes has depressed home prices, much of it is due to processing delays…”

Earlier last week, CNBC’s Diana Olick discussed some of the governmental and private measures to deal with foreclosures and a link to this is found here: Realty Check – Bulk Foreclosure Sales Could Cause Bigger Bank Write-Downs

Writing in the New York Times on January 8th, Gretchen Morgenson noted that:
“The authorities have fallen silent lately about a possible settlement over foreclosure abuses at big mortgage servicing companies…That’s probably not a terrible thing. After all, no deal is better than a bad deal. State and federal authorities jumped into these talks without conducting serious investigations into foreclosure shenanigans. Why strike a deal-one that would, say, shield banks from new litigation over toxic loans…without knowing what happened?”

Ronald D. Orol, writing for MarketWatch on January 9th, noted that the Home Affordable Modification Program had passed the 900,000 mark in loan modifications, far short of the Treasury Department’s original goals of from three to four million when the program was launched in 2009. He also noted that a larger program which included Fannie Mae and Freddie Mac was needed and that many advocated the need for substantial principal reduction which was “…likely on the way.” A link to Mr. Orol’s report is found here: Obama Loan Modification Program Moving Slowly

McKissock 2012-2013 USPAP Online Course Now Available in Approx. 40 States and DC

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Year End Reports on State of Commercial Real Estate Market Are Beginning to Appear

NAI Global has just released their “US Commercial Real Estate Market Year in Review” in which they state that the commercial market across the country is “continuing to struggle”. Some of the trends they note are a “flight to quality” in office markets as a result of lower rental rates and the continuing problem in the retail sector with large “big box vacancies”. They describe the industrial market as “bifurcated” with Class A properties in good locations having a strong demand while the demand is very weak for “outmoded Class B and C properties”. NAI Global cites the large increase in investment sales volume in 2011 according to Real Capital Analytics, resulting in cap rates which “continued to compress” in almost every market with “national average cap rates for all property types below 8%”. A link to the NAI Global report is found here: US Commercial Real Estate Market Year in Review

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Reader Comments About the State of the Appraisal Business

Jim Manning, California appraiser and author of “Public Trust Betrayed: The Truth Behind the Real Estate Appraisal Industry” recently wrote to us about a letter he received from California Congresswoman Jackie Speier in which she commended him for his work and offered some of her own thoughts. Here are excerpts from this letter: "I agree with many of your conclusions. For example, you indicate that existing laws created after the savings and loan debacle were not enforced. I agree, and the State of California and federal regulators bear much of the blame for creating this recent real estate bubble and bust.

In addition, you indicated that the creation of third parties to buy appraisal services has driven down fees by 50% after they were already flat for a decade. Clearly, it is difficult to keep a well-informed appraisal force in the field if
wages and working conditions deteriorate so significantly over a brief period of time. The reforms that we did in Congress in recent years resulted in the creation of appraisal management companies. I concur that this has had a bad impact on valuations as less experienced appraisers do more and more of the work…

In response to your book’s implicit message that we haven’t completed the job of cleaning up the financial system, I will think about the role of appraisers and determine if legislation or further inquiry would be helpful. I also strongly advise you to speak to your state legislators. The most immediate impact on appraisers and the real estate industry can be made by regulators enforcing existing laws… There are not enough federal "cops on the beat" for this type of day-to-day problem, except after the financial autopsy of Wachovia or Washington Mutual is ordered by a receiver. A state legislator, however, can hold a hearing and learn if these laws are being enforced, and take relatively quick action to overcome problems…”

Dudley Tyson of Maine Realty Consultants in Cape Porpoise Maine has this to say:
“I have just received the umpteenth request (requirement) for additional information in the appraisal report. It occurs to me that the fee I charge should somehow reflect the number of pages, not including boiler plates, contained within the report. A survey of how many pages in a “typical” URAR 1004 would be interesting. I used to come in at between 18-20 pages. Currently, that number is more like 30…

I feel we have been absorbing the additional cost of producing reports that are growing larger and larger. Perhaps a menu of basic reports and a page of side dishes with additional costs?

…I understand the need for the lender to feel secure in the market value of a property. However, this is a complete summary report, not a narrative. So why should I be paid 1995 fees for a report that is twice the volume of one from 1995?”

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"The Rise of New Groupthink"

This is the title of an article by Susan Cain in Sunday’s New York Times in which she states that “people are more creative when they enjoy privacy and freedom from interruption”. Here is a link to this article for appraisers to use when receiving an insane amount of insane requests for additional documentation in an appraisal report: The Rise of the New Groupthink

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Former AppraiserLoft Execs Now Used Car Salesmen?

We at AppraiserNews.com have no comment on this except to say that we anticipate that our readership may have some thoughts about this.

A link to Ms. Leung’s report is found here: CEO of Shuttered Appraisal Firm Now in Car Biz

Asleep at the Wheel: Reports Released on the Federal Reserve’s Lack of Awareness of Problems in the Real Estate Market in 2006

Writing in the New York Times on January 13th, Binyamin Appelbaum noted that Fed transcripts released the day before showed that officials “…gave little credence to the possibility that the faltering housing market would weigh on the broader economy…”. The transcripts quoted Timothy Geithner (then president of the Federal Reserve Bank of New York) in December 2006 as saying:

“We think the fundamentals of the expansion going forward still look good”

The Times’ report noted that Mr. Geithner suggested that former Fed chairman Alan Greenspan’s “greatness still was not fully appreciated, an opinion now held by a much smaller number of people”. A link to the Times’ report is found here:
Inside the Fed in 2006: A Coming Crisis, and Banter

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Rates & Dates

Mortgage interest rates remained at historically low levels in the most recent weekly reports issued by Freddie Mac and the Mortgage Bankers Association (MBA).

On January 12th, Freddie Mac reported that rates for all products in their survey reached historic lows. 30-year fixed-rate mortgages declined to 3.89% from 3.91% during the prior week and they noted that last year at this time, the rate was at 4.71%.

The MBA in its most recent Weekly Mortgage Applications Survey released January 11th for the week ending January 6th, reported that 30 year rates with conforming loan balances ($417,500 or less) declined to 4.11% from 4.07% during the previous week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.34% from 4.41%. At the same time, the average rates for FHA backed mortgages remained at 3.96%.

In their press release of January 11th, the MBA also reported an increase of 4.5% in mortgage applications during this most recent survey. Refinance applications declined to 80.8% from 81.9% in this most recent survey.

On January 5th, David H. Stevens, former head of the FHA and current President/CEO of the MBA released a statement on the Fed’s Housing Policy White Paper in which he said:

"The Fed’s white paper is a thoughtful document that raises a number of very interesting issues that policymakers ought to consider as they seek to solve the ongoing ills of the housing market. The Fed staff’s comments validate much of what we have been saying, as it relates to the balance between credit availability and consumer protection, as well as the role that Fannie Mae and Freddie Mac could play in stabilizing and revitalizing the mortgage market.

"FHFA is tasked with preserving the assets and minimizing the near-term losses of Fannie Mae and Freddie Mac. However, at the same time, Fannie and Freddie are the dominant players in the mortgage market and we agree with the Fed that, if allowed, could take steps that would benefit the markets by helping homeowners and making affordable credit more available for qualified borrowers. Among those could be initiatives that may increase short term losses, but have long-term benefits for the housing market.

"We continue to urge policymakers to join us in advancing initiatives that will appropriately balance credit availability for qualified borrowers with regulation and protections for consumers that will ensure that the excesses of the past are not allowed to happen again."

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

We want to congratulate our most recent winner: Arizona Certified Residential Appraiser John Fournier. John was the first to answer that Mark Twain said “New Year’s Day: Now is the accepted time to make your regular annual good resolutions. Next week you can begin paving hell with them as usual”; Benjamin Franklin advised “Be always at war with your vices, at peace with your neighbors, and let each new year find you a better man”; and Jay Leno joked that “New Year’s Eve, where auld acquaintance be forgot. Unless, of course, those tests come back positive.” Today’s questions:

Today’s questions:

1. Who Said: "The best way to appreciate your job is to imagine yourself without one."

a) Oscar Wilde
b) Mitt Romney
c) George Romney
d) Donald Trump
e) None of the above

2. Who said: "Act enthusiastic and you will be enthusiastic"

a) Dale Carnegie
b) Napoleon Hill
c) Tina Fey
d) Tracy Ofri
e) None of the above

3. Who said: "Develop success from failures. Discouragement and failure are two of the surest stepping stones to success."

a) Dale Carnegie
b) Napoleon Hill
c) Aman Makkar
d) Anne Finucane
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 Directory of Appraisal Management Companies (Available Now to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)

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!

Regards,

Bill Collins, Appraiser Help Inc.

Yale’s Shiller on U.S. Housing, Economy

Real Estate in 2012; Lipstick on a Pig

Sean Collins — Tue, 03 Jan 2012 15:19:14 +0000

Some Recent Real Estate Reports
McKissock 2012-2013 USPAP Online Course Now Available in Approx. 40 States and DC
Is The National Association of Realtors Still Double-Counting Sales?
"I Just Got Here, But I Know Trouble When I See It"
How Much Interconnectedness and Online Time is Too Much: Finding The Right Balance
New Year Reminder For Appraisers
Rates & Dates
Ask Angie
Tell us what you think!
Closing Remarks

Some Recent Real Estate Reports

The S&P/Case-Shiller Home Price Indices showed month to month declines in 19 of the 20 cities covered in the most recent monthly report released on December 27th. The 10 and 20 City Composites showed respective monthly declines of 1.1% and 1.2% month to month along with respective year to year declines of 3.0% and 3.4%. David M. Blitzer, Chairman of the Index Committee at S&P Indices, said that “There was weakness in the monthly statistics…” while noting “…the only good news is some improvement in the annual rates of change in home prices…”.

Mr. Blitzer concluded his commentary by saying that:
“Some of the other housing statistics posted relatively healthy figures for November, but it seems that most of the good news was confined to the multi-family sector. Existing home sales rose in November, but are still at a low annual rate of about 4.0 million. Single family housing starts also rose, but remain close to record lows and are still down about 1.5% versus October 2010.”
A link to the entire Case-Shiller report along with graphic illustrations is found here: The Fourth Quarter Starts with Broad-based Declines in Home Prices According to the S&P/Case-Shiller Home Price Index

Writing for CNNMoney on the day the Case-Shiller report was released, December 27th, Les Christie noted that this was the sixth consecutive month of declines reported by Case-Shiller. He quoted Pat Newport, a housing market analyst for HIS Global Insight as saying that "The numbers are pretty bad and will get even worse over the next two years." Mr. Newport attributed the past and prospective declines to tight lending standards and the glut of foreclosed properties selling at distressed prices.
Bloomberg’s Timothy R. Homan discussed the Case-Shiller findings and their reporter Matt Miller interviewed Robert Shiller that day. Mr. Shiller found some positives amidst the negative data and suggested that the historically low interest rates suggest it “…might be a good time to buy” for those who will be staying put for a number of years and can weather some additional market declines in the next several years. Links to both Bloomberg reports are found here:
U.S. Home Prices Fell More Than Forecast

Housingwire’s Kerri Panchuk reported on December 29th about a new Urban Institute study on foreclosure which quoted Leah Hendey, a research associate for the Urban Institute as saying that “The foreclosure inventory that is building up is going to take an incredibly long time for lenders to clear. At the current pace of foreclosure sales, we are looking at a process that could take decades to complete.”

International Business Times had an interesting report on December 22nd titled “10 Trends in U.S. Housing in 2011 and What to Look for in 2012” and a link to this is found here: 10 Trends in U.S. Housing in 2011 and What to Look for in 2012

McKissock 2012-2013 USPAP Online Course Now Available in Approx. 40 States and DC

Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

Is The National Association of Realtors Still Double-Counting Sales?

While the NAR’s press release of December 29th had an upbeat title “Pending Home Sales Rise in November, Highest in Year-and-a-Half” we are still concerned about the accuracy of their data. In the press release reporting a 7.3% increase in pending sales (a figure well publicized in the media) Lawrence Yun, the NAR’s chief economist is quoted as saying that “…contract failures have been running unusually high. Some of the increase in pending home sales appears to be from buyers recommitting after an initial contract ran into problems…”. In a video interview with Mr. Yun that day, he acknowledges that contract cancellations have been “ratcheting up” in recent months to approximately 30% from about 10% last year and that we may be seeing some “re-entering” in the pending sale numbers.

It is disappointing that the NAR may still be attempting to “put lipstick on a pig”. The net impact of disseminating faulty data and mindless cheerleading hurts not only the NAR and some of their positive projects (i.e. promoting the benefits of homeownership) but leads the public and policymakers into a false optimism whereby positive efforts to assist the real estate market are put aside. A link to the NAR press release and Mr. Yun’s video is found here: Pending Home Sales Rise Again in November, Highest in a Year and a Half

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"I Just Got Here, But I Know Trouble When I See It"

On New Year’s Day, New York Times published an article with the above headline in which six economists gave their thoughts on the many troubles facing us in 2012. Robert Shiller discussed “A Tax Credit to Fix A Housing Mess” in which he endorsed changes to the tax system proposed by Professor Richard Green of USC whereby there would be “…stronger, more targeted encouragement for homeownership by focusing on people who might be giving up the dream of buying any home at all”. Mr. Shiller begins by noting that:

“We used to talk a lot about helping homeowners in trouble. Instead, the bankers were bailed out — and now we hardly talk at all about aiding ordinary Americans. Yet the problems facing homeowners today are even bigger than they were in the dark days of the financial crisis”. He goes on to briefly discuss how this change in the tax code might work and concludes by saying:

“Homeownership fosters citizenship, builds stronger families and communities, encourages active participation in the economy and, ultimately, bolsters economic confidence. Professor Green’s proposal is an example of a change that wouldn’t smack of a bailout, but would help vulnerable people who are losing hope in the American Dream”.

A link to this report is found here: From 6 Economists, 6 ways to Face 2012

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How Much Interconnectedness and Online Time is Too Much: Finding The Right Balance

In an article in Sunday’s New York Times titled “The Joy of Quiet”, Pico Iyer notes the extent that people go to take a break from the incessant chatter and noise we face, in one instance describing a retreat with no internet or TV at a cost of $2,285 for one night. The author notes that:

“Has it really come to this? In barely one generation we’ve moved from exulting in the time-saving devices that have so expanded our lives to trying to get away from them — often in order to make more time. The more ways we have to connect, the more many of us seem desperate to unplug”.

Mr. Iyer notes that the average American now spends at least eight and a half hours per day in front of a screen with the number of hours spent online by adults doubling between 2005 and 2009. The author cites research which reports that the average office worker “…enjoys no more than three minutes at a time at his or her desk without interruption”. He notes that “…we’re rushing to meet so many deadlines that we hardly register that what we need most are lifelines” and states that “All the data in the world cannot teach us how to sift through data…”

My suggestion to appraisers the next time they are asked to provide additional data for no good reason by a client or AMC is to simply provide them the above comment.

A link to the Times’ article is found here: The Joy of Quiet

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New Year Reminder For Appraisers

So, what are you waiting for? How many times do we have to tell you to allocate some time each day to building your private appraisal practice?

Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

Rates & Dates

Mortgage interest rates remained low in the most recent weekly reports issued by Freddie Mac and the Mortgage Bankers Association (MBA).

On December 29th, Freddie Mac reported that rates for 30-year fixed-rate mortgages rose to 3.95% from 3.91% during the prior week. They noted in their report that last year at this time, the 30-year rate was at 4.86%.

The MBA in its most recent Weekly Mortgage Applications Survey released December 21st for the week ending December 16th, reported that 30 year rates with conforming loan balances ($417,500 or less) declined to 4.08% from 4.12% during the previous week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.44 percent from 4.47 percent. At the same time, the average rates for FHA backed mortgages declined to 3.93% from the prior week’s 3.94%. In all three instances, the MBA noted that the rates were now at the lowest point of the year.

In their press release of December 21st, the MBA also reported a decrease of 2.6% in mortgage applications during this most recent. Refinance applications rose to 80.7% of all applications in this most recent survey, the highest percentage reached this year. In the report, Michael Fratantoni (MBA’s Vice President of Research and Economics) noted that:
“Remarkably low rates are not enough, as many homeowners continue to hold back due to lack of equity in their properties, [credit problems] and a weak job market.”

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

We want to congratulate our most recent winner: Nevada Certified Residential Appraiser Michael L. Brunson who is with Brunson-Jiu LLC in Las Vegas, Nevada.Brunson-Jiu LLC provides a variety of valuation services including USPAP compliance reviews, real estate damage analytics and litigation consulting (some of which he performs on a nationwide basis). Mr. Brunson was the first to answer that Louis Brandeis said “Most of the things worth doing in the world were said to be impossible before they were done”, Vaclev Havel noted that “All important events in the world—whether admirable or monstrous—are always spearheaded in the realm of words” and Henry Youngman joked that “I once wanted to become an atheist, but I gave up – they have no holidays.” Today’s questions:

Today’s questions:

1. Who Said: "New Year’s Day: Now is the accepted time to make your regular annual good resolutions. Next week you can begin paving hell with them as usual."

a) Oscar Wilde
b) Benjamin Franklin
c) Mark Twain
d) Lindsay Lohan
e) None of the above

2. Who said: "Be always at war with your vices, at peace with your neighbors, and let each new year find you a better man."

a) William Booth
b) Benjamin Franklin
c) Mark Twain
d) Michelle Bachman
e) None of the above

3. Who said: "New Year’s Eve, where auld acquaintance be forgot. Unless, of course, those tests come back positive."

a) Jay Leno
b) Jon Stewart
c) Sarah Palin
d) Jerry Seinfeld
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 Directory of Appraisal Management Companies (Available Now to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)

Tell us what you think!

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Bill Collins, Appraiser Help Inc.

Foreclosures Fall, But Outlook Isn’t Bright

NAR Admits Significant Error in Sales Calculations for 5 Years

Sean Collins — Tue, 20 Dec 2011 05:14:17 +0000

National Association of Realtors Admits to Double Counting Some Home Sales Resulting in Overstated Sales Figures for Five Years
McKissock 2012-2013 USPAP Online Course Now Available in Approx. 40 States and DC
Some Recent Real Estate Reports
What Our Readers Have to Say About The Difficult State of the Appraisal Profession
End of Year Reminder For Appraisers
"Perils of Indemnity"
Rates & Dates
Ask Angie
Tell us what you think!
Closing Remarks

National Association of Realtors Admits to Double Counting Some Home Sales Resulting in Overstated Sales Figures for Five Years

In a statement to Reuters last week, NAR spokesman Walter Malony reportedly stated that: “All the sales and inventory data that has been reported since January 2007 is being downwardly revised. Sales were weaker than people thought”.

On December 14th, the NAR posted a video and “Q and A on Re-Benchmarking of Home Sales” in which they discussed the matter. The video and Q and A discussed the problem of “data drift” and how “…there could be double or triple counting of a single home sale transaction” due to a single property being listed and sold on several Multiple Listing Systems. The NAR addressed some of the ways in which they would change their methods of collecting and processing information. They also seemed to be saying that the errors were not that important because the “trend lines” were the same as before and that “Like weather, the only thing that truly matters for consumers are outlooks on data from their local market area.”

After what appears to be an attempt to downplay the significance of the errors, the Q and A noted that: “The national data is important for policymakers to measure the broad strength and weakness of the housing market as they impact the national economy.”

The over-statement of sales by the NAR was substantial and appears to have continued for approximately five years, supposedly ending in October of this year. AppraiserNews.com is of the opinion that this is no time for the NAR to try to gloss over the extent of the problem, their credibility is truly at stake. If their data is to remain “important for policymakers” they will have to seriously address their deficiencies and make their chief economist, Lawrence Yun, choose whether he really is an economist and not a cheerleader whose commentary is not credible. In their video of December 14th, Mr. Yun starts to drift away into lala land with comments about “hopefully banks will start lending” and remarks about increased sales in 2012 along with a modest increase in values. The Q and A states:
“NAR takes its role as a leading source for housing information very seriously, and toward that end, NAR research will announce results of a year-long re-benchmarking process for existing-home sales on Wednesday, December 21.”

We shall see. A link to the NAR video and Q and A is found here: National Association of Realtors, Existing Home Sales Methodology, Benchmarking FAQ

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Some Recent Real Estate Reports

On December 15th, CNNMoney’s Les Christie discussed RealtyTrac’s latest report and why a new wave of foreclosures may be about to bring in the new year. Links to Mr. Christie’s article and the RealtyTrac report are found here: Scheduled Foreclosure Auctions At 9-Month High as New Foreclosure Wave Builds

On December 16th, the SEC charged six former executives of Fannie Mae and Freddie Mac with securities fraud related to misrepresentations of their holdings of subprime or high risk mortgage loans. Links to the SEC press release and a report by CNNMoney’s Aaron Smith are found here: SEC Charges Former Fannie Mae and Freddie Mac Executives With Securities Fraud

SEC Charges Former Execs of Fannie, Freddie

While Fannie and Freddie ex-execs were getting kicked around, Mark Zandi in the Washington Post on December 15th had some nice words for the FHA including the following:
“It has become fashionable to rail against government intervention in the economy, and the FHA is a favorite example by those trying to show the government’s overreach. In reality, the FHA shows how government action during the Great Recession forestalled a much worse economic fate. If FHA lending had not expanded after private mortgage lending collapsed, the housing market would have cratered, taking the economy with it.” A link to the complete article is found here: FHA Role May Be Bloated, But We’d Be Much Worse Off Without It

On December 9th, Rusty Weston of Yahoo! Real Estate discussed their recent survey which found continued support for the American dream of homeownership, along with a newly “Green” component and a link to this report is found here: Yahoo! Study: American Dream Homes Turn Green

On December 15th, CNBC’s Diana Olick discussed the projected growth in “green” construction and retrofitting in commercial real estate, along with the increased value associated with such work. A link to Ms. Olick’s video is found here: Green Buildings Pay

According to HousingWire’s Kerri Panchuk, Standard & Poor’s Rating Services reported yesterday that the delinquency rate for collateral backing industrial commercial mortgage-backed securities had reached 12.05%, a 22 year high. The article did note that the report indicated that the industrial segment was the only property type which was currently at a historic high.

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What Our Readers Have to Say About The Difficult State of the Appraisal Profession

Jon Cappaert, who performs appraisals in both Wisconsin and Michigan writes that:
“I am 34 years old, and have been appraising since 2005. I am a Certified Residential Appraiser. I don’t mind the 1004MC or the new UAD, I can’t handle all the the client specific requirements that the AMC’s have and they all have different requirements. I don’t have time to read each of the AMC’s flyers every other day telling me what needs to be on the report. All they want to do is to try and make their appraisals look better than the rest. The only thing I can do is charge more for the extra work. I think other appraisers in my area are feeling the same way, because I am still getting more than enough work. Bottom line is that they need to pay for our extra work.”

Buffalo, New York appraiser Jerry Pirritano writes: “How does anyone expect a professional opinion of value instantly. Broadcasting assignments at reduced fees with unrealistic turn times yet requiring quality work doesn’t equate. How long does an attorney take, or realtors, title, surveyors…”

A New Jersey appraiser (who prefers to remain anonymous) writes: “As for the number of appraisers renewing their licenses, don’t be mislead if it appears that a large number are renewing. My son and I (both certified with > 20 years experience) are renewing this month but our appraisal work is effectively nonexistent. We’ve attempted to demand our C&R fees but this eliminated over 90% of our work. We’re moving on to new endeavors and plan to be part time appraisers only. I suppose this is our meager contribution to the industry… adding a few more assignments for those appraisers deciding to (or being force to) work for the C&R fees dictated by the AMCs.”

Atlanta, Georgia appraiser Clay Posey writes: “You can add my name to the appraiser retired list. I have been appraising in the Atlanta area since 1977. I just turned in my business license, my MLS account, my MLS lockbox key, all my data services, and put my tape measure out to pasture. I have had it. I did keep my license active because it takes so much to get one, just in case.

This profession was enjoyable until about 2009, when all these new regulations started up. I don’t need AMC’s or anything connected with them, and I hope all of you remaining appraisers can survive working with them. I calculated that my on my last appraisal, I earned around $90 a day, before expenses. After expenses, about $80. I turned 65 and am now turning over my work to you younger guys. Good luck to all of you.”

Colorado appraiser Ray Starks writes: “This has forced me out of the appraisal business after 16 years. So far we have identified over $100,000 in fees owed to Colorado Appraisers for work done thru the Loft between August and September. (Name withheld) Credit Union contracted with them in August even though they were told that the Loft had a poor reputation. They owe me $9000. We intend to go after the Lender/Client/end user! I have filed complaints with the California and Colorado Attorney Generals, the California and Colorado Department of Regulatory Agencies, and The BBB. So far the BBB and DORA have asked the credit union to respond… If we can band together and hold the lender ultimately liable it would set national precedence.”

Virginia appraiser Jeff Phillips writes: “I keep reading the industry news and all the nonsense that is out of control. At least out of the appraiser’s control. What I don’t see are solutions to this nonsense. I am considered a "young buck" in this profession. I have been appraising for 10 years and I am 37 years old. I have yet to see a solid or size-able voice for the appraisers. Why are we not or unable to take control of our industry? To me, this is the issue I do not understand. Why are we not united? The real estate agents are. They do not seem to have had their fees or industry devastated like ours. I admit I am not aware of their changes, however, I have not heard any of them complaining. Please advise or offer advice as to your opinion or the readers opinion of why this is. I appreciate your time. Keep up the good work.”

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End of Year Reminder For Appraisers

So, what are you waiting for? How many times do we have to tell you to allocate some time each day to building your private appraisal practice?

Limited Time Only: Pay Last Year’s Price for This Year’s AMC Directory! Over 150 AMCs listed with fully updated contact information for only $39.99

"Perils of Indemnity"

The above is the title of an article written by Charles R. Franklin of Belongia, Shapiro & Franklin, LLP which was provided to AppraiserNews.com by John Torvi of Herbert H. Landy Insurance Agency. The article further discusses some of the concerns which we discussed in the last newsletter regarding the indemnity clauses which appraisers are frequently being asked to sign. Mr. Franklin concludes his comments by saying that:

“The moral: know who you are dealing with. Do some due diligence. While there soon will be nor requirement to sign contracts with indemnity clauses, if you choose to do so, BEWARE! Make sure the clause is clear and that it actually reflects your intentions, and because of unintended consequences and possible unforeseen events, make sure you are appropriately and adequately protected.”

Please feel free to contact AppraiserNews.com if you would like to receive a reprint of this article in full

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Rates & Dates

Mortgage interest rates declined significantly in the most recent weekly reports issued by Freddie Mac and the Mortgage Bankers Association (MBA).

On December 15th, Freddie Mac reported that rates for 30-year fixed-rate mortgages dropped to 3.94% (matching a historic low) from 3.99% during the prior week. Frank Nothaft, vice president and chief economist for Freddie Mac. Mr. Nothaft reported that “Over the first nine months of 2011, households lost almost $400 billion in property values which contributed to a $1.4 trillion reduction in overall net worth. In addition, serious delinquency rates (90 or more days delinquent plus foreclosures) on mortgages increased slightly between June 30 and September 30th”.

The MBA in its most recent Weekly Mortgage Applications Survey for the week ending December 9th, reported that 30 year rates with conforming loan balances ($417,500 or less) declined to 4.12% from 4.18% during the previous week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.47 percent from 4.52 percent. At the same time, the average rates for FHA backed mortgages declined to 3.94% from the prior week’s 3.98%. In all three instances, the MBA noted that the rates were now at the lowest point of the year.

In their press release of December 14th, the MBA also reported an increase of 4.1% in mortgage applications during this most recent week with refinance activity up 9.3% and purchase mortgage applications down 11.8%. Refinance applications rose to 79.7% of all applications in this most recent survey.

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

We want to congratulate our most recent winner: New York State Certified Residential Appraiser Dhanraj Singh who is with Reliable Appraisal Service. Mr. Singh was the first to answer that Albert Einstein said “Any intelligent fool can make things bigger and more complex… It takes a touch of genius – and a lot of courage to move in the opposite direction”, Thomas Jefferson said “Do you want to know who you are? Don’t ask. Act! Action will delineate and define you” and Groucho Marx joked that “A child of five would understand this. Send someone to fetch a child of five.” Today’s questions:

Today’s questions:

1. Who Said: "Most of the things worth doing in the world were said to be impossible before they were done."

a) Louis Brandeis
b) Steve Jobs
c) Albert Einstein
d) Isaac Newton
e) None of the above

2. Who said: "All important events in the world–whether admirable or monstrous–are always spearheaded in the realm of words."

a) William Shakespeare
b) Vaclev Havel
c) Winston Churchill
d) Salman Rushdie
e) None of the above

3. Who said: "I once wanted to become an atheist, but I gave up – they have no holidays."

a) Groucho Marx
b) Woody Allen
c) Henry Youngman
d) Jerry Seinfeld
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 Directory of Appraisal Management Companies (Available Now to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)

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!

Regards,

Bill Collins, Appraiser Help Inc.