Real Estate Appraiser News: Appraisal Industry Information

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Better Days For Appraisers, Higher Fees Ahead

Sean Collins — Tue, 06 Jul 2010 03:50:18 +0000

TUESDAY, JULY 6TH, 2010

Dodd-Frank Wall Street Reform and Consumer Protection Act Passed in House, Moves On to Senate

As we reported in our Special Edition last week, after several years of reporting about difficult times for appraisers, many provisions in the Dodd-Frank bill promise to help bring positive changes to the appraisal profession.

Here is a link to the Dodd-Frank bill, all 2,319 pages worth. Dodd-Frank Wall Street Reform and Consumer Protection Act

For those of you who don’t wish to read the entire document, we will summarize some of these provisions as we did last week with our Special Edition as many appraisers may have missed it during the holiday week.

Higher Appraisal Fees!

Sec. 1472 APPRAISAL INDEPENDENCE REQUIREMENTS

“Customary and Reasonable Fee:

The bill, however, goes further than the FHA mandate in describing manners in which customary and reasonable fees are to be determined:

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HVCC to End!

Page 2216 in the bill has this to say about the HVCC:

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New Regulations for AMCs!

Page 2223 of the congressional bill contains the following language regarding Appraisal Management Companies:

‘‘SEC. 1124. APPRAISAL MANAGEMENT COMPANY MINIMUM
REQUIREMENTS.

(1) register with and be subject to supervision by a State appraiser certifying and licensing agency in each State in which such company operates;
(2) verify that only licensed or certified appraisers are used for federally related transactions;
(3) require that appraisals coordinated by an appraisal management company comply with the Uniform Standards of Professional Appraisal Practice; and
(4) require that appraisals are conducted independently and free from inappropriate influence and coercion pursuant to the appraisal independence
standards established under section 129E of theTruth in Lending Act.”

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Not just for FHA Appraisers – Connect with over150 AMCs with updated information.

Limitations on BPOs!

While this does not go far enough and excludes many current uses of BPOs, the congressional bill contains the following provision regarding Broker Price Opinions on page 2241:

‘‘SEC. 1126. BROKER PRICE OPINIONS.
(a) GENERAL PROHIBITION.—In conjunction with the purchase of a consumer’s principal dwelling, broker price opinions may not be used as the primary basis to
determine the value of a piece of property for the purpose of a loan origination of a residential mortgage loan secured by such piece of property.

The Bottom Line

First, the Senate needs to pass the measure and send it to the President for his signature.

Assuming that this takes place within the next couple of weeks, it appears likely that many of the appraiser friendly provisions will begin to take effect before the end of the year. Other parts of the bill, such as the AMC registration, will not be fully implemented for an extended time.

A Positive Report Regarding Commercial Real Estate Loans?

On June 30th, the New York Times discussed some signs of life in the dormant market for commercial real estate backed securities and a link to this article is found here: Commercial Mortgage-Backed Bonds Make a Comeback

Other News

Amidst talk of a double dip recession, CNBC.com and Zillow recently posted two reports regarding 1) areas where the real estate market has declined significantly after a period of improvement and 2) those U.S. cities with the most underwater mortgages. Links to these articles are found here:
America’s Double-Dip Real Estate Markets
US Cities With The Most Underwater Mortgages

The negative impact of high property taxes on home sales was discussed in the New York Times on June 27th and a link to this article is found here:
Property Taxes Inhibit Sales in West Orange

On July 2nd, approximately two weeks after the delisting of Fannie Mae and Freddie Mac, CNBC.com discussed some of the possible consequences if the two mortgage giants were disbanded. A link to this is found here: Who Would Finance Mortgages If Fannie, Freddie Disbanded?

CNBC.com also put out a special report titled “The Housing Fix”, a link to which follows: The Housing Fix

Rates & Dates

Freddie Mac reported that rates for 30-year fixed-rate mortgages had dropped to 4.58% for the week ending July 1st from 4.69% during the previous week.

The Mortgage Bankers Association (MBA) in its most recent Weekly Mortgage Applications Survey for the week ending June 25th also reported a decline in the average rate for 30-year fixed-rate mortgages to 4.67% from the previous week’s rate of 4.75%.

On July 1st, CNBC.com discussed the lack of mortgage loan activity even with mortgage rates at 50 year lows: Mortgage Rates Drop to Lowest Rate in 50 Years

Additional information from Freddie Mac can be found by going to: Freddie Mac – Primary Mortgage Market Survey PMMS

Additional information from the Mortgage Bankers Association can be found by going to their site at: Research and Forecasts – Mortgage Bankers Association

Ask Angie

First, we want to congratulate our most recent winner: Scott D. Hammond, a Certified Residential Appraiser with Hammond Appraisal Services, LLC, in Grand Junction, Colorado.

Today’s questions:

Question 1) Who said:
“I don’t see much of (my husband) anymore since he got so interested in sex.”

1. Mrs. Sigmund Freud
2. Mrs. Alfred Kinsey
3. Mrs. Albert Gore
4. Mrs. Tiger Woods
5. None of the above

Question 2) Who said:
“I think the free enterprise system is absolutely too important to be left to the voluntary action of the marketplace.”

1. Congressman Richard Kelly
2. John Maynard Keynes, economic thinker
3. Congressman Barney Frank
4. Paul Krugman, New York Times columnist
5. None of the above

The first person to respond with both correct answers wins a choice of either:

One Free Trade Show Pass or $199 off a Full Conference Pass to Valuation 2010 or

A Free Copy of the Directory of Appraisal Management Companies for FHA Appraisers

Angie’s Hall of Fame: Those who have been crowned winners more than once during the past two years and who have been retired from competition for the rest of 2010:
Suzanne Fahien
Pat Reass

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.

Business Appraiser Directory

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

Breaking News: HVCC ENDS, BPOs Weakened, Higher Appraisal Fees

Sean Collins — Mon, 28 Jun 2010 01:49:59 +0000

BREAKING NEWS FINALLY-Good News for Appraisers in Financial Reform Bill Agreed to by House-Senate Conference Committee

It appears as though we may have some good news to report to real estate appraisers who have suffered through so many days of bad news during the past several years. While we are attempting to verify the final language adopted in the version agreed to by the committee and sent back to Congress for ratification, we want to share some of the highlights.

Learn more about discounted McKissock Continuing Education Courses by clicking here.

Higher Appraisal Fees!

The congressional bill appears to take some of the language from the FHA (see FHA Mortgagee Letter 2009-28) regarding appraiser compensation and includes the following language:

“Customary and Reasonable Fee:

The bill, however, goes further than the FHA mandate in describing manners in which customary and reasonable fees are to be determined:

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

Narrative1 is a turn-key system for writing narrative real estate appraisal reports using Microsoft Word and Excel.

HVCC to End!

What does this mean exactly? Well, it does not mean that real estate and mortgage brokers can go back to playing “pick an appraiser who will hit the number”. The congressional bill contains numerous provisions mandating protection for appraisers to prevent pressure from mortgage lenders or their agents. We will have more to say about this in future newsletters.

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

Sketch & Photo Addenda, Subject/Comp Arrows, FHLMC/FNMA Forms & Addenda, Books, Printer & Copier Cartridges, Report Covers & Spirals….everything you need for a professional look!

New Regulations for AMCs!

The congressional bill contains the following language regarding Appraisal Management Companies:

‘‘SEC. 1124. APPRAISAL MANAGEMENT COMPANY MINIMUM

REQUIREMENTS.

(1) register with and be subject to supervision by a State appraiser certifying and licensing agency in each State in which such company operates;

(2) verify that only licensed or certified appraisers are used for federally related transactions;

(3) require that appraisals coordinated by an appraisal management company comply with the Uniform Standards of Professional Appraisal Practice; and

(4) require that appraisals are conducted independently and free from inappropriate influence and coercion pursuant to the appraisal independence

standards established under section 129E of theTruth in Lending Act.”

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

Not just for FHA Appraisers – Connect with over150 AMCs with updated information.

Limitations on BPOs!

While this does not go far enough and excludes many current uses of BPOs, the congressional bill appears to have following provision regarding Broker Price Opinions:

‘‘SEC. 1126. BROKER PRICE OPINIONS.

Letter Regarding BPOs.

The Bottom Line

First, we need to receive confirmation that the various provisions outlined above which impact appraisers have made it through the committee as indicated.

Second, both branches of Congress need to ratify this legislation and the President has to sign the measure.

Third, we need to have some patience while these measures are implemented and work with our various appraisal organizations to make sure that the good portions of this legislation are not weakened and that additional measures (i.e. ending all forms of BPOs and BOVs) are taken in the future.

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.

Business Appraisers Online Business Valuation Community

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Appraiser News: Fannie and Freddie Delisted, “Flopping,” Fraud & BPOs

Sean Collins — Tue, 22 Jun 2010 00:21:52 +0000

BusinessAppraisers.com Announces Launch

BusinessAppraisers.com announced Monday that they are officially accepting new listings from Business Appraisers and valuation experts for their new online directory, BusinessAppraisers.com. ”While there is a vibrant community of business appraisers and valuation experts in the U.S., we found that there was no comprehensive directory by which new clients could find them quickly and easily” said Bill Collins, one of the developers of the site.

The site serves a number of purposes for both business appraisers and their customers. For the business appraisers, it provides a professional and easy to use venue to connect with new clients, and create a comprehensive web presence complete with full contact information and even a place to publish articles and share them. For the prospective client, it provides valuable education tools to help acquaint them with the business valuation process, teaches them what to expect, and finally, helps them to find the right business appraiser for their needs.

Any business appraiser interested in learning more can visit www.businessappraisers.com to find out more information. Special introductory pricing is available until July 31, 2010

Learn more about discounted McKissock Continuing Education Courses by clicking here.

“Flopping,” Fraud & BPOs

On June 10th, Bloomberg.com published a hard-hitting report about “flopping” (which they described as a “…scheme” in which “…investors or home buyers hire brokers to assess a home for less than its market value and convince banks to accept a sale at that level. The buyer conceals from the lender that he has lined up a higher offer and then quickly resells the property for a profit…”.

Bloomberg quoted Ann Fulmer, vice president of Interthinx (a California company that sells mortgage fraud detection software) as saying that: “Investors often use real estate broker opinions, which may rely on drive-by inspections instead of full appraisals, to persuade lenders to sell at a low price”. Ms. Fulmer illustrated her point by suggesting an Internet search for “How to influence a broker price opinion”. The article suggested that this search yielded 74,800 results. When we made this search on Google, it yielded 54,600 results; however, when we made the search “How to influence a BPO” it yielded 188,000 results!

The Bloomberg.com article noted that the special inspector general for the Troubled Asset Relief Program (TARP), Neil Barofsky, reported to Congress that by allowing BPOs, taxpayers were exposed to $49 billion of government bailouts for housing. Bloomberg quoted Mr. Barofsky as saying that: “As constituted now, the program permits home valuation, the key vulnerability point for a flopping scheme, without a true appraisal…No program of this type and scale can be considered well designed without robust protection of taxpayer funds against the predation of criminals, particularly given the inconsistent treatment of home valuation.”

The Bloomberg.com article describes a Connecticut case in which two real estate agents pled guilty in a fraudulent scheme and the entire article can be viewed by clicking on the following link:

Banks Face Short-Sale Fraud as Home “Flopping” Spreads

Letter to State Appraiser Board Chairs

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Narrative1 is a turn-key system for writing narrative real estate appraisal reports using Microsoft Word and Excel.

Subprime Lending and the “Working Poor:” Many Financial Institutions are Profiting Nicely with “Payday Loans” and Similar Products

The Huffington Post “Named Names” and provided details on the growth of this industry, now estimated at $40 billion per year, in an article on June 16th. A link to this article can be found here: Naming Names: Every Bank and Business That Is a Subprime Lender

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

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Debt Settlement Firms Putting Debtors in Bigger Holes, Including Some Appraisers

Lots of attention has been given to some of the unsavory practices of many debt settlement firms and action is being taken by a number of consumer protection agencies and state attorneys-general. An article in the New York Times on June 18th discussed the case of Linda Robertson, a former appraiser licensed in Arizona, and how the collapse of her real estate appraisal practice led to a bankruptcy filing, with the “assistance” of a debt settlement firm. A link to this article can be found here: Peddling Relief, Firms Put Debtors in Deeper Hole

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

Not just for FHA Appraisers – Connect with over150 AMCs with updated information.

Continuing Concerns Regarding the Commercial Real Estate Market

In a commentary on Moody’s Economy.com on June 15th, Ed Friedman wrote about how the difficulties obtaining financing would delay recovery of the commercial real estate market. In the article he noted that:

-“Low prices, high vacancy rates, and rising delinquencies will curb lenders’ appetite for commercial real estate.

-Major sources of CRE investment face problems of their own, further limiting funding.

-A revival in commercial mortgage-backed securities is on hold until Washington reforms financial regulation.

Commercial real estate faces continued difficulty obtaining financing despite the U.S. economic recovery. On the demand side, borrowers are less able to show economic fundamentals that would be acceptable to lenders, and this situation will persist for a long time. On the supply side, sources of funding that were abundant over the past decade are now limited, and this too will not reverse in the near term. As a result, commercial real estate will lag the rest of the economy longer than it otherwise would have.

A tidal wave of corporate bankruptcies, takeovers, and simple corporate downsizings has led to a huge decline in office use. This has been particularly apparent in the financial industry, where two major investment banks vanished forever and two of the largest deposit-taking institutions were taken over, with many branch offices closed around the country. Additionally, mortgage lending companies large and small went out of business or were taken over. The financial industry was not alone, moreover, with consolidation occurring among airlines, business IT services, and other industries.”

Mr. Friedman noted that because of this, the declines in the commercial real estate market have been greater than those in the residential real estate market. This article can be viewed by clicking on the following link: Finance Will Delay Commercial Real Estate Recovery

Commercial Real Estate Brokerage Firms Struggling in Wake of Declines in Commercial Real Estate Market

On June 15th, the New York Times discussed the difficulties and challenges facing commercial real estate brokerage firms in what they called a “Post-Boom World”. In particular, they noted the problems facing Cushman and Wakefield, the world’s third largest commercial real estate brokerage. A link to this article is found here: Commercial Firms Fight Back in a Post-Boom World

Rates & Dates

Freddie Mac reported that rates for 30-year fixed-rate mortgages were at 4.75% for the week ending June 17th, essentially unchanged from 4.72% during the previous week.

The Mortgage Bankers Association (MBA) in its most recent Weekly Mortgage Applications Survey for the week ending June 11th reported that the average rate for 30-year fixed-rate mortgages was also basically unchanged at 4.81% after the previous week’s rate of 4.82% during the prior week.

The MBA, in their Mortgage Finance Commentary for June 2010, noted the fragility of the housing market saying that:

“Early data from MBA’s Weekly Application Survey continue to suggest a fairly sharp pullback in home sales following the expiration of the homebuyer tax credit. We expect that sales will revive, putting the housing market back on track for a long, slow uphill climb to a more normal pace of activity. In the meantime, the steady additions to supply from foreclosed properties, coupled with the minimal number of new units on the market, and the occasional bursts of listings from current owners, will be sufficient to keep downward pressure on home prices for the near term. Given a gloomier macroeconomic outlook, we expect that national home prices will now bottom towards the end of next year before seeing some stabilization in 2012. We also expect greater differentiation in markets, with the strongest markets showing increases in prices this year.

On a seasonally adjusted basis, purchase applications declined by 18.1 percent over the month. Refinance applications increased by 34.8 percent relative to the prior month.

We predict that mortgage originations will fall to $1.4 trillion in 2010 from an estimated $2.1 trillion in 2009. Purchase originations will fall slightly to $725 billion, as home prices continue to fall and the effect from the homebuyer tax credits wane. Refinance originations will fall to $717 billion in 2010 from $1.4 trillion in 2009, but we continue to mark up our refinance origination forecast given the sharp drop in mortgage rates.”

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

Fannie Mae & Freddie Mac Delisted From the New York Stock Exchange

The Federal Housing Finance Agency (FHFA), conservator for Fannie Mae and Freddie Mac, announced on June 16th that shares of the two companies would be delisted from the New York Stock Exchange. This move was not considered to be a surprise since shares of Fannie have been below $1 for 30 trading days and the NYSE requires companies to take action to boost their shares or delist. Bloomberg.com discussed this matter on June 16th and a link to that report is found here:

Fannie, Freddie Stock To Be Delisted from NYSE

Ask Angie

We want to congratulate our two most recent winners: Virginia Buchanan-Furr, a Certified Residential Appraiser with Ginny Furr Appraisal Service in Trinity Center, California, and Donna K. Jones, a Certified Residential Appraiser with Donna Jones Appraisals, Hickory Creek, Texas.

Today’s questions:

Question 1) Who said:

“A well-functioning market economy can make a huge contribution to the growth of incomes and living standards. In the absence of sensible regulations, the market can also yield a complete disaster. What we have to work for now is to seek an appropriate combination of activities of the market and of the state.”

1. Paul Krugman, New York Time columnist

2. Adam Smith

3. Amartya Sen, Nobel laureate in economics

4. Timothy Geitner, Treasury Secretary

5. None of the above

Question 2) Who said:

“I am, or I was, an expert in kissing on stage and on screen. How did I prepare for this? Well most of my preparation took place in my suburban high school, or rather behind my suburban high school, in New Jersey.”

Meryl Streep

Dick Cheney

Liz Cheney

Lindsay Lohan

Madonna

The first person to respond with both correct answers wins a choice of either:

One Free Trade Show Pass or $199 off a Full Conference Pass to Valuation 2010 or

A Free Copy of the Directory of Appraisal Management Companies for FHA Appraisers

Angie’s Hall of Fame: Those who have been crowned winners more than once during the past two years and who have been retired from competition for the rest of 2010:

Suzanne Fahien

Pat Reass

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.

BP and BPOs, the New Toxic Twins

Sean Collins — Mon, 07 Jun 2010 21:41:29 +0000

What Do BP and BPOs Have In Common?

Long-standing, cozy relationships between the oil industry and those charged with regulating it have become all too apparent with the tragic oil spill in the Gulf.

After the financial crisis, attention became focused on similar “all too friendly” relationships between regulators and some of the big players in the real estate and financial sectors. There are many areas that need reform and many different ideas on how to do so. However, there is one area where all appraisers and informed decision-makers can agree: BPOs (Broker Price Opinions of residential real estate) and BOVs (Broker Opinions of Value of commercial real estate) need to end before they contribute to another collapse of the real estate market and a new crisis.

Once again, we at Appraiser Help want to note our support for the positions taken by the four appraisal organizations which authored the March 8th and April 20th letters that we have previously discussed opposing the use of both BPOs and BOVs. Links to these two letters are here: Letter From Appraisal Organizations Regarding BPOs and BOVs.

Valuation 2010-say yes if you literally want the t-shirt! Luxor Las Vegas, NV – November 8-10 – www.valuation2010.com

US Financial Crisis Inquiry Questions Moody’s CEO and Warren Buffett

On June 2nd Bloomberg.com reported on the written testimony of Moody’s Corp. Chief Executive Raymond McDaniel, in which he stated that his company’s ratings during the past several years of CDOs (collateralized debt obligations) and residential mortgage securities were “…deeply disappointing.” The report went on to say that Mr. McDaniel described the housing market collapse and economic troubles “were of a magnitude that many of us would have once thought unimaginable…Moody’s is certainly not satisfied with the performance of these ratings.”

The Chairman of the Commission, Phil Angelides, was reported by Bloomberg.com to have said: “To be blunt, the picture is not pretty…Moody’s did very well. The investors who relied on Moody’s ratings did not do so well.”

Also on June 2nd, the New York Times reported on the testimony of Warren Buffett, CEO of Berkshire Hathaway which is the largest stockholder of Moody’s. Apparently seeking to distance himself from Moody’s, the “Oracle of Omaha” who was testifying before the Commission under subpoena after first declining to appear, essentially admitted that he does not know everything. “I’ve never been to Moody’s,” he said, adding that “I don’t even know where they’re located. I just know that their business model is extraordinary.”

In another televised interview, Mr. Buffett said that he would not recognize the head of Moody’s if he was standing next to him. The Times report also quoted Mr. Buffett as saying that: “The entire American public was caught up in the belief that housing prices could not fall dramatically…” and that Moody’s “made the wrong call” and admitted that he “…was wrong on it, too.” Wikipedia’s online dictionary describes an oracle as: “A person… considered to be a source of wise counsel or prophetic opinion.” Perhaps we need a new nickname for Mr. Buffett (maybe “Bubblehead”, considering his now regrettable comment just prior to the real estate collapse, which he referred to as a “Bubble-ette”).

Links to the Bloomberg.com report and the New York Times article are found here:

Questions for Moody’s and Buffett

Moody’s Chief Says CDO Ratings ‘Deeply Disappointing’

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Anointing a New Oracle: Robert Shiller

Maybe it’s time for Mr. Buffett to pass the baton to Yale University professor of economics and finance (and housing guru) Robert Shiller, who has consistently recognized underlying patterns and accurately predicted home price movements. Bloomberg.com most recently interviewed him on May 26th where he expressed some of his current concerns. This interview can be heard by clicking on the following link: Bloomberg News – Yale’s Shiller Interview on Home Prices

On June 1st, the New York Times reported on the increasing number of underwater homeowners who are taking advantage of drawn out foreclosure proceedings to otherwise stabilize their financial picture and a link to that article is found here: Owners Stop Paying Mortgages, and Stop Fretting

Appraisers save as much as 25% off of Continuing Education Courses – Come see what we offer today!

Big Banks Agree, Who Wants to Buyback This Stuff?

One additional Times article from June 4th described the banks lack of enthusiasm when approached by Fannie Mae and Freddie Mac to buyback loans considered to be predatory or fraudulently underwritten and a link to this article is found here: Banks Say No. Too Bad Taxpayers Can’t.

Some of the prevailing anti-bank sentiment was “comically” presented in the Huffington Post on June 4th, a link to which is found here: Financial Crisis Explained Through Comics

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

Not just for FHA Appraisers – Connect with over150 AMCs with updated information.

Numerous Concerns Regarding the Commercial Real Estate Market

On May 25th the New York Times discussed reports from several sources describing a so-called “shadow inventory” of commercial space that is empty due to layoffs and consolidations. This space, which is not currently offered for rent or recorded anywhere, will be “backfilled” if and when the economy and employment picks up resulting in a lack of leasing activity. A link to this article is found here: Empty Desks May Slow Upturn in Real Estate

On June 2nd, the Wall Street Journal discussed the looming problems with commercial mortgage backed securities. It noted their popularity at the height of the real estate market and reported that approximately $700 billion of these securities are outstanding which is an amount greater than securitized credit card debt, student loans and auto loans combined. The Journal noted that the delinquency rate with these loans increased to 8.4% in June, more than triple that of the previous year as reported by Trepp LLC, a provider of commercial real estate backed security information. The article also reported research by Fitch Ratings which project a loss rate of 10% for commercial securities issued in 2007 at the height of the commercial real estate boom. Howard Chin, a managing director of Guardian Life Insurance Co. of America which oversees a portfolio of commercial mortgage backed securities is quoted in the article as saying that “The worst is yet to come.”

Another Journal article stated that Moody’s Investors Service Inc. reported that commercial property values were down 42% from the market peak in October 2007 while other reports by Moody’s and Real Capital Analytics Inc. indicated that as of March 2010, industrial and office prices had declined 32% during the prior two years with retail space down 28%. The Journal article noted that: “…because banks remain wary of commercial real estate loans, landing financing to make such a purchase can be time consuming and tedious.”

The Wall Street Journal reported yesterday that GE Capital planned to reduce its commercial real estate by 50% because that business “…has proved a huge headache in the wake of the credit crisis.” No time frame was delineated for accomplishing this but the Journal reported that the market value of commercial buildings owned by GE Capital has fallen by nearly 40% since 2008.

Rates & Dates

The Wall Street Journal reported yesterday that mortgages insured by the FHA are “…falling into delinquency at a lower rate than they have in the past..In April, nearly 8.5% of loans backed by the agency were 90 days or more past due. While that was still higher than a year earlier, April marked the third consecutive month in which delinquencies, which peaked at 9.4% in January, declined.” This improved performance was attributed largely to a tightening of standards by lenders.

Freddie Mac reported that rates were essentially unchanged with 30-year fixed-rate mortgages at 4.79% for the week ending June 3rd, up from 4.78% during the previous week.

Additional information from Freddie Mac can be found by going to: Freddie Mac Primary Mortgage Market Survey PMMS

How Many Appraisers Are Left in The US?

The Appraisal Subcommittee currently reports that there are 114,192 certified or licensed appraisers in the United States with 33% of them Certified General Appraisers, 50% Certified Residential Appraisers and 17% Licensed Appraisers. While this number may appear higher than many appraisers would expect in consideration of the difficulties in the appraisal profession, it appears as though it contains many appraisers who no longer appraise full time but retain their license, possibly in the hope that industry conditions might improve. A state by state breakdown can be viewed by clicking on the following link: Active Appraisal Credentials – ASC – Appraisal Subcommittee

Ask Angie

We want to congratulate our two most recent winners: Timothy Faso, a Certified Residential Appraiser with Fort Neck Real Estate Appraisal in Seaford, New York.

Today’s questions:

Question 1) Who said:

“Our greatest glory is not in never falling, but in getting up every time we do.”

1. Confucius

2. Sonny Liston

3. Richard Nixon

4. Lindsay Lohan

5. None of the above

Question 2) Who said:

“One original thought is worth a thousand mindless quotings”

1. Plato

2. Bill Gates

3. Auguste Rodin

4. Diogenes of Sinope

5. None of the above

The first person to respond with both correct answers wins a choice of either:

One Free Trade Show Pass or $199 off a Full Conference Pass to Valuation 2010 or

A Free Copy of the Directory of Appraisal Management Companies for FHA Appraisers

Angie’s Hall of Fame: Those who have been crowned winners more than once during the past two years and who have been retired from competition for the rest of 2010:

Suzanne Fahien

Pat Reass

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.

AMC Love and Hate, Cuomo For Governor?

Sean Collins — Tue, 25 May 2010 08:45:20 +0000

Working With Some AMCs to Survive

Robert L. Martin was interviewed for this article. He is a Certified Residential Appraiser from Paso Robles, California, who practices solely in San Luis Obispo County.

Bob began his working career in 1977 immediately after graduating with a degree in real estate and property management. During the ensuing decades, he has worked for Bank of America in both lender and appraiser positions as well as working as an independent fee appraiser and as a real estate broker. Along the way, Bob worked to receive the SRA designation from the Appraisal Institute and established his own appraisal practice.

During the 1990’s, Bob had two appraisers working under him and built a healthy practice. Most of Bob’s business was mortgage related residential appraisal work and the business thrived for many years up through the middle portion of this past decade.

During the past year, however, all of this changed as several banks Bob worked with on a regular basis either failed or were acquired by other lending institutions and, in combination with the advent of the HVCC, appraisal orders dramatically declined along with the fees for assignments.

When I spoke with Bob recently, he was unsure of whether he was going to continue in the appraisal business and was considering a career switch to an agricultural business since he lives on a ranch in what is largely a rural area. He is currently working with several small community banks along with several AMCs but indicated that he’s “running a little bit scared” with revenues substantially down from previous years.

While the bottom line is always about money, Bob not only complained about being offered fees for appraisals that were far below the amount required to complete complex assignments properly but also felt insulted by the “babysitting” service performed by AMCs. He offered one example: an AMC called him and offered him $125 for an appraisal assignment for a property along the coast that had the potential to be a complex job with many hours needed to complete the research to perform the job properly. Of course, he declined the offer to appraise the property after which the AMC upped their offer to $180 before eventually agreeing to a fee of $350. Bob then explained to the AMC that his customary fee for an appraisal of a property similar to this within this beachfront community was from $475 to $500 and would not agree to anything less. Bob subsequently did not hear back from this management company.

Bob also spoke of other appraisers he knew who were considering options outside of the appraisal field and concluded our discussion by saying “Why do we need to run the most experienced appraisers out of the business?”

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Working with AMCs and Thriving

Debra Urianek is a Certified Residential Appraiser from East Islip, NY and is co-owner of Orion Appraisals and Management with her husband Bill. Debbie and Bill have an appraisal practice which includes rural and suburban portions of Long Island as well as urban areas in the outer boroughs of New York City.

Debbie has been practicing as an appraiser for more than twenty years and has been working with AMCs for most of her appraisal career. Approximately 90 to 95% of her appraisal assignments currently are from AMCs, as opposed to approximately 85% one year ago. Most of the AMCs that she deals with are larger firms, although she deals with a number of smaller AMCs too, and some of these working relationships go back almost to the beginning of her appraisal career. During this past year she reports little change in her price structure with the exception of across the board increases with the advent of Form 1004MC and one AMC which immediately increased fees for FHA appraisals by $100 on February 15th in response to the FHA’s Mortgagee Letter 2009-28 (which includes the mandate that “FHA-approved lenders have new responsibilities to ensure that FHA appraisers are ‘…compensated at a rate that is customary and reasonable for appraisal services in the market area…”)

Debbie has been a friend of mine for about 15 years and she is serious about providing quality appraisals and knows her market area well. She is not only one of the hardest working appraisers I have met but she is also honest and very direct in her communications. During the “sub-prime craziness” earlier in this decade I would not have wanted my Mom to hear Debbie’s response to a mortgage broker asking her to push values! Debbie does not tolerate attempts to influence her value opinions and reports to me that the AMCs that she has long-standing relationships with do not pressure her; I would expect that any new AMCs that tried to do so would have a rude awakening.

Debbie has a good support staff and attempts to maintain clear channels of communications with the AMCs that she deals with. Many appraisers new to working with AMCs understandably lose patience with uninformed, non-appraiser employees (“phone slaves” as they are sometimes derogatively called) but Debbie and her staff try to be proactive by efficiently processing orders and providing “statuses” in a timely manner to their clients.

Debbie mentioned one bad experience receiving payment from AMCs. Several years ago when Express Financial Service shut down, Orion Appraisal was owed more than $20,000 in appraisal fees. After a lengthy period of time and a number of court filings, she was able to recover approximately 1/3 of the money owed. Except for this one instance, Debbie reports that the AMCs she deals with adhere to their payment schedules with some paying every two weeks, some on 30 day cycles and others paying either immediately upon the appraisal clearing a review process. A link to an article about Express Financial Service and the problems appraisers had is found here:

Express Financial’s Shutdown Wallops Real Estate Contractors

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New Bills Passed to Regulate AMCs

The Appraisal Institute reported in their online newsletter on May 19th that four additional states have enacted laws to regulate AMCs. With the addition of these four states (Arizona, Vermont, Florida and Minnesota), fourteen states now have laws to regulate AMCs (the previous ten consisting of Arkansas, California, Indiana, Louisiana, Nevada, New Mexico, Oregon, Utah, Virginia and Washington).

Regarding these four most recent states to enact AMC bills, the Appraisal Institute article stated that:
“Under each of the new laws, AMCs operating in each state will be required to register with, and be overseen by, the state appraisal boards. AMCs operating in each state will be prohibited from influencing or attempting to influence the development, reporting, result or review of a real estate appraisal through coercion, extortion or collusion by withholding or threatening to withhold timely payment of future business from an appraiser”. The Appraisal Institute article notes that the Arizona law requires appraisers to be paid within 45 days of the date the appraisal is completed while the Vermont statute requires that AMC review appraisers have a licensing or certification status equal to, or greater than, that required to complete the appraisal assignment.

Additional information about the Appraisal Institute can be found by visiting their website at: www.AppraisalInstitute.org

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Freddie and Fannie to Implement Tweaked HVCC Provision

On May 19th, Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA), conservator of Fannie Mae and Freddie Mac, wrote to New York State Attorney General Andrew M. Cuomo regarding the HVCC’s provision that Fannie Mae and Freddie Mac (the “Enterprises”) were to establish and fund an entity to be called the Independent Valuation Protection Institute (IVPI). Noting that the HVCC was agreed to prior to the FHFA’s placement of the Enterprises into conservatorship, Mr. DeMarco stated that he has decided not to proceed with this portion of the agreement for reasons related to unnecessary expenditure of taxpayer funds.

In a press release dated May 20th, the FHFA described what would take the place of the functions of the never instituted IVPI:

“Fannie Mae and Freddie Mac will deploy a complaint process to address suspected code violations including a mechanism for providing pertinent information to state and federal regulatory and enforcement departments. The process will be put in place within the next few weeks.”

A link to Mr. DeMarco’s letter to Andrew Cuomo as well as the FHFA news release is found here: Fannie Mae, Freddie Mac to Deploy Appraisal Complaint Process

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Governor Cuomo? Last Chance for Action to End BPOs and BOVs

By now, most appraisers around the nation have heard about Andrew Cuomo’s May 22nd announcement that he was entering the race for New York State Governor. Many pollsters have him in a favorable position at this point but before entering the Governor’s mansion, we think that it is not asking too much for him to read our letter dating back to August 4, 2009 (go to www.EndBPOsNow.com to see) and take one final action as Attorney General to use the powers at his disposal to help end BPOs (Broker Price Opinions of residential real estate) and BOVs (Broker Opinions of Value of commercial real estate).

Letter to State Appraiser Board Chairs from Leading Appraisal Organizations

Concerns Over Property Tax Assessments and Real Estate Taxes in Philadelphia

The Philadelphia Inquirer, in an article on May 14th, discussed the problems in the assessment system in Philadelphia which led to budgetary shortfalls and an almost 10% increase in property taxes. A link to that article is here:

Council Approves Proposed Real Estate Tax Hike

As we reported in our last newsletter, opportunities abound in many areas of the country for appraisers performing appraisals for property assessment and tax grievances. We would like to repeat three points from the last newsletter:

1. Licensed and certified appraisers are logically the professionals who should be involved in providing the most accurate, unbiased market value estimates to homeowners and commercial property owners concerned about property tax assessments that are overblown.

2. In many areas, property owners and departments of assessment recognize the contribution provided by appraisals provided by licensed and certified appraisers. Why, however, is the number of grievances still such a tiny percentage of the overall number of over-assessed properties and why aren’t appraisals by licensed and certified appraisers used more frequently?

3. Final question: Why aren’t appraisers doing more to promote the importance of their services in property tax assessment matters for both residential and commercial real estate?

Rates & Dates

The Mortgage Bankers Association (MBA), in its most recent Weekly Mortgage Applications Survey for the week ending May 14th, reported that the average rate for 30-year fixed-rate mortgages dropped to 4.83% from the previous week’s rate of 4.96%. Freddie Mac reported a decline to 4.84% in their most recent report for the week ending May 20th, down from the 4.93% during the previous week.

While Bloomberg.com reported on May 19th that mortgage applications (particularly for purchases) fell overall even with these declining mortgage rates, the Wall Street Journal reported yesterday that anecdotal evidence from mortgage professionals suggested that refinance activity may have surged last week. They reported that the financial turmoil in Europe was the big factor contributing to low mortgage rates since “…international money seeking a safe haven is flowing into the U.S., pushing domestic mortgage rates to the lowest levels of the year…Conventional wisdom held that mortgage rates would rise as the Fed pulled back from propping up the market. Instead, many in the industry now say rates could drift as low as 4.5% this summer…instead of rising to 6% as some economists projected…”

New Thoughts on a Double Dip Recession

On May 14th in the New York Times, Yale University professor of economics and finance (and housing guru) Robert Shiller had some interesting and disquieting thoughts about the (long term) possibility of a double dip recession in an article titled “Fear of a Double Dip Could Cause One,” a link to which is found here: Feat of a Double Dip Could Cause One

Bloomberg.com reported yesterday that while home sales rose in April, inventories rose at a faster pace leading to concerns that property values may decline further. It is noted that the Case-Shiller report will be coming out later today. A link to the Bloomberg.com article is found here:

US Economy: Home Purchases, Inventories Increase

Additional information from the Mortgage Bankers Association can be found by going to their site at: MBA Research and Forecasts

Additional information from Freddie Mac can be found by going to: Weekly Primary Mortgage Market Survey PMMS – Freddie Mac

New Concerns in Commercial / Multi-Family Real Estate

Bloomberg.com reported yesterday that defaults in mortgages backed by apartment buildings jumped to a new high of 4.6% during the first quarter of 2010, approximately twice that of the year earlier level. They cited a report by Real Capital Analytics which stated that borrowers were failing in their payments in regard to mortgages approved near the peak of the market. The report also indicated that defaults rose during the first quarter for mortgages backed by office, retail, hotel and industrial real estate. It quoted Sam Chandan, Real Capital’s global chief economist as saying that:

“Apartment defaults are leading other commercial real estate. Banks tended to make more aggressively underwritten apartment loans earlier during this last cycle. Credit and pricing reached their peaks for office properties and other commercial assets later.”

A link to the entire Bloomberg.com article is found here: Defaults on Apartment-Building Loans Set Record for U.S. Banks

“The Girl Who Kicked the Hornet’s Nest” is Released Today

In a previous newsletter we discussed the late author Stieg Larsson’s book “The Girl with the Dragon Tattoo” and its coincidental publication in the United States during the same week in September 2008 that Lehman Brothers collapsed and the financial system was shaken. We noted an article by Frank Rich in the New York Times which stated that:

“What’s remarkable is that Larsson wrote all this in a book completed years before the meltdown of 2008 — and was referring only to Sweden. And yet the overlap with our recent history is profound — so much so that surely both his prescience and the universal resonance of his villains account for some of his novel’s marathon ride through the zeitgeist, its ability to touch the nerves of so many readers in America and throughout the West.

If anything, the animus driving “Dragon Tattoo” seems more timely every day.”

Well, she’s back! Book three in Larsson’s trilogy, “The Girl Who Kicked the Hornet’s Nest” is being released today. Fans of “The Girl” might be interested in a New York Times article from May 20th and a short biography of the author from May 22nd, links to which are found below:

The Afterlife of Stieg Larsson

The Life of Stieg Larsson

Ask Angie

We want to congratulate our two most recent winners: Benjamin B. Sadtler, a Certified Residential Appraiser with the Northern Appraisal Group in Richmond, Virginia and Holly M. Chaffee, a Certified Residential Appraiser from Las Vegas, Nevada.

Today’s questions:

Question 1) Who said:

“Beware of the man of one book”

1. Stieg Larsson

2. James Patterson

3. Plato

4. St. Thomas Aquinas

5. None of the above

Question 2) Who said:

“All I can say is, beware of geeks bearing formulas”

1. Warren Buffett

2. Bill O’Reilly

3. Albert Einstein

4. Rachel Madow

5. None of the above

The first person to respond with both correct answers wins a choice of either:

One Free Trade Show Pass or $199 off a Full Conference Pass to Valuation 2010 or

A Free Copy of the Directory of Appraisal Management Companies for FHA Appraisers

Angie’s Hall of Fame: Those who have been crowned winners more than once during the past two years and who have been retired from competition for the rest of 2010:

Suzanne Fahien

Pat Reass

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.

Fair Game – Ignoring the Elephant in the Bailout

Appraiser News: HVCC Anniversary, Appraisers Holding On

Sean Collins — Tue, 11 May 2010 00:08:08 +0000

TUESDAY, MAY 11TH, 2010

Fannie Mae & Freddie Mac Report Large First Quarter Losses

We know all about the Wall Street Journal’s concern for what they call the “toxic twins.” Most recently in their editorial on May 6th, they stated “from the 2008 meltdown through 2020, the toxic twins will cost taxpayers close to $380 billion, according to the Congressional Budget Office’s cautious estimate.” On May 7th, in a New York Times article titled “Ignoring the Elephant in the Bailout,” Gretchen Morgenson notes that Freddie Mac’s first quarter report, which reported a $6.7 billion loss, “…caused nary a ripple in the placid Washington scene…” She notes Freddie’s statement that its credit losses would likely continue throughout the year with the substantial number of underwater borrowers contributing largely to the loss. Ms. Morgenson quotes Dean Baker, co- director of the Center for Economic and Policy Research in Washington, as stating: “I don’t understand why people are not talking about it…” The article points out the conflicting roles by Fannie and Freddie which are charged with supporting the mortgage market by purchasing loans from banks while at the same time working to minimize credit losses. A link to the New York Times Article is found here:

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Stories of Foreclosure From Around the Country

Nevada & California, courtesy of the Huffington Post on May 3rd:

Harry and the Homeowners

Southern California, courtesy of CNNMoney.com on May 5th:

Drowning in Home Debt

Florida, amongst the more well-off, from CNNMoney.com on May 4th:

Foreclosure is Hitting Well-Off Families, Too

And here is one of the bearers of bad tidings in Illinois, from the New York Times May 7th:

As Homeowners’ Dreams Die, He’s the Undertaker

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Broker Price Opinions (BPOs) and Broker Opinions of Value (BOVs): The New Toxic Twins

We want to thank the many appraisers who have taken actions in one way or another to help publicize the dangers of BPOs and BOVs. Once again, we at Appraiser Help want to note our support for the positions taken by the four appraisal organizations which authored the March 8th and April 20th letters opposing the use of both BPOs and BOVs.

Please visit our website www.EndBPOsNow.com for additional information and for contact information if you would like to join the effort to End BPOs Now!

The entire April 20th letter from the four appraisal organizations regarding their concerns can be viewed by clicking on the following link:

Letter to State Appraiser Board Chairs

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Mixed Messages Regarding Commercial Real Estate and Multi-Family Housing

Various commercial lenders and other analysts have been issuing their first quarter reports with the overall message essentially being downbeat but maybe less so than several months earlier. On April 28th, an article by Mark Heschmeyer of CoStar Group titled “1Q Bank Results: Potential for CRE Armageddon Fading” included a number of comments from various market participants and a link to this article is here: 1Q Bank Results: Potential for Commercial Real Estate Armageddon Fading

Readers interested in learning more about CoStar can visit their site at www.CoStar.com

Moodys Investors Services at the same time reported that an improving economy was boosting apartment demand resulting in higher rents, greater occupancy rates and an improved outlook for owners of multi-family housing.

The New National Pastime; Grieving Property Tax Assessments

The New York Times on May 7th, in an article titled “Seeking Lower Property Taxes on a House of Sinking Value” discussed how grieving property taxes “…is becoming a national sport.” It provides illustrations from different areas, such as Lakewood, NJ, Westchester, NY and Cobb County, Georgia. In the latter instance, Phillip Hogsed, Cobb County’s director and chief appraiser in the assessor’s office, reportedly indicated that 16,200 homeowners filed notices that they wanted a review of their property taxes between January 1st and April 1st, up from last year’s figure of about 12,000 and the previous year’s averages of approximately 5,000. The article indicated that this was out of a total number of 250,000 real estate parcels in Cobb County.

The article quotes the owner of a property tax reduction company who works on a contingent basis as sayin that “I do my own appraisals. Some others might charge you for an appraisal, and that can run you hundreds of dollars.” It also quotes Peter Sepp, Executive Vice President of the National Taxpayers Union (NTU), as saying that the process of grieving taxes is so simple that homeowners shouldn’t pay anyone to do it.

Some thoughts:

Like the flat earth theorists and flat tax proponents (an idea espoused by the NTU), it is nonsensical to suggest that homeowners shouldn’t consider using professionals to review and assist them in the process of grieving tax assessments, a process which differs tremendously from one municipality to the next.

Licensed and certified appraisers are logically the professionals who should be involved in providing the most accurate, unbiased market value estimates to homeowners concerned about property tax assessments that are overblown.

In many areas, property owners and departments of assessment recognize the contribution provided by appraisals provided by licensed and certified appraisers. Why, however, is the number of grievances still such a tiny percentage of the overall number of over-assessed properties, and why aren’t appraisals by licensed and certified appraisers used more frequently?

Final question: Why aren’t appraisers doing more to promote the importance of their services in property tax assessment matters? By the way, this is generally full-fee work with turn times measured more in weeks than in days or hours.

A link to the New York Times article is found here: Seeking Lower Property Taxes on a House of Sinking Value

Rates & Dates

The Mortgage Bankers Association (MBA) in its most recent Weekly Mortgage Applications Survey for the week ending April 30th reported that the average rate for 30-year fixed-rate mortgages rose to 5.08% from the previous week’s rate of 5.02%. Freddie Mac reported a decline to 5.0% in their most recent report for the week ending May 6th, down from the 5.06% during the previous week.

Freddie Mac’s Chief Economist, Frank Nothaft, in his weekly commentary from May 6th noted that:
“Rates for both the 30-year and 15-year fixed-rate mortgages were the lowest in six weeks; initial rates on 5/1 hybrid ARMs hit an all-time low since they were added to the survey in the beginning of 2005.

The homebuyer tax credit helped support home sales in March, and anecdotal reports point to strong April sales as well. Pending existing home sales rose for the second consecutive month in March to the strongest pace since October 2009, just before the original deadline for the credit, based on figures published by the National Association of Realtors. Three of the four Census regions showed an uptick in sales, led by the South with a 12.7 percent gain, while sales in the Northeast fell 3.3 percent. To receive the federal tax credit, homebuyers had to sign contracts by April 30th…”

In an interview on CNBC on April 30th, Robert Shiller of Case-Shiller and Richard Smith of Realogy discussed the question of whether the housing rebound will continue showing signs of recovery. Essentially they had serious questions whether a recovery would continue, with the exception of the high end market which Mr. Smith said was strongly rebounding. This discussion between Mr. Shiller and Mr. Smith on CNBC can be viewed by clicking on the following link: Honing In On Housing

Additional information from the Mortgage Bankers Association can be found by going to their site at: Mortgage Bankers Association Research and Forecasts

Additional information from Freddie Mac can be found by going to: Freddie Mac Primary Mortgage Market Survey PMMS

Where Has All The Money Gone?

Also on April 30th, in an article in the New York Times, Uwe E. Reinhardt noted that on the previous Sunday’s Meet the Press, Senator Christopher Dodd stated that “We’ve lost almost $11trillion of household wealth in the last 17 or 18 months”. Mr. Reinhardt raised the obvious question of “Where did all this wealth go?”

He illustrates the assumptions made as to discount rates related to future cash flows in commercial real estate to show how sensitive value estimates are to even small changes in these assumptions and states:
“It is here that mood enters the picture.

If investors are exuberantly optimistic about the future growth of the economy and future rental rates, and if they believe there is little risk in such long-term investments, the risk premiums they demand tend to be low and real estate values correspondingly high. Completely irrational exuberance of the sort we have seen in recent years can easily lead to serious “underpricing of risk” and, thus, to real estate bubbles.

On the other hand, if investors are very pessimistic and worried about the risk inherent in such investments, their risk premiums rise and asset values fall. Irrational despondency can lead to overpricing risk and underpricing real estate.

Now, what is true for real estate also applies to other assets — home values, stock prices, bond prices and so on.

So let’s go back to the lost $11 trillion in wealth lamented by Senator Dodd. Where did it go? For the most part, I suspect, it just went up in smoke. It represents a loss of wealth that once exuberant folks imagined to have had and now imagine they no longer have.”

A link to this article is found here: Where All That Money Went

What Will $450,000 Buy in Boulder, Colorado, Tuscon, Arizona and Marlborough, Connecticut?

Fun slide show from the May 7th New York Times shows what is available in some of my favorite places: Properties for $450,000 – Slide Show – NYTimes.com

Ask Angie

We want to acknowledge the consistently poor performance of Mr. Gerard D. Snover in Angie’s contest. An example of this is his answer to Angie’s question on March 16th “Who said ‘You never know what is enough unless you know what is more than enough.’”
In this contest Mr. Snover, a Certified General Real Estate Appraiser from Babylon, New York, answered “Pamela Anderson.” Mr. Snover, one of the most intelligent and articulate appraisers in the United States who has practiced (it is rumored) for more than half a century, appears to be auditioning for his next career as a comedian (or maybe he could help assist in a rewrite of Fannie Mae Form 1004MC).

Today’s questions:

Question 1) Who said: “If I had asked people what they wanted, they would have said faster horses”

1. Secretariat

2. John P. Chrysler

3. Henry Ford

4. Jonathan Schwin

5. None of the above

Question 2) Who said:
“Without music, life would be a mistake”

1. Leonard Bernstein

2. Nietzsche

3. Jim Morrison

4. Johann Sebastian Bach

5. None of the above

The first person to respond with all three correct answers wins a choice of either:

One Free Trade Show Pass or $199 off a Full Conference Pass to Valuation 2010 or

A Highlighted Listing for one year on www.AppraiserHelp.com and either www.FHAAppraisers.com or www.TaxGrievanceAppraisers.com (including other Appraiser Help membership benefits, up to a $225 value)

Angie’s Hall of Fame: Those who have been crowned winners more than once during the past two years and who have been retired from competition for the rest of 2010:

Suzanne Fahien

Pat Reass

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.

Senior Executives at Goldman Had a Role in Mortgage Unit

Hope for Appraisers / What’s Worse than BPOs?

Sean Collins — Tue, 27 Apr 2010 07:16:11 +0000

Mortgage Fraud Suit Brought by SEC Against Goldman Sachs

On April 16th, the SEC filed a civil fraud suit against Goldman which alleged that the Wall Street giant misled investors in connection with their conflicting positions on hedge fund trades that profited if subprime loans defaulted and the housing market collapsed. The New York Times and the Huffington Post offered interesting analysis of this case on April 18th and links to these articles follow:

Goldman’s Blueprint for Dumping Toxic Assets: How These CDOs Were Designed to Fail

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Triple A or Triple X? The Inappropriate Relationship Between Credit Rating Agencies and Wall Street

In an article in the New York Times on April 23rd, the question was raised of how so many bad mortgage investments earned credit ratings that made them look so good. The article suggested that close collaboration between the regulators and the Wall Street firms was to blame and it stated that:

“In essence, banks started with the answers and worked backward, reverse-engineering top-flight ratings for investments that were, in some cases, riskier than ratings suggested…”

The entire article can be read by clicking on the following link:

Rating Agency Data Aided Wall Street in Deals

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Valuation 2010-say yes if you literally want the t-shirt!
Luxor Las Vegas, NV – November 8-10 www.valuation2010.com

What’s Worse Than a BPO for Residential Valuation? Maybe a BOV (Broker Opinion of Value) for Commercial Use

On April 20th, four appraisal organizations addressed a letter to State Appraiser Board Chairs & Lead Staff Contacts concerning Commercial Broker Opinions of Value (BOV). The four appraisal organizations (the Appraisal Institute, American Society of Appraisers, American Society of Farm Managers & Rural Appraisers and the National Association of Independent Fee Appraisers) stated that:
“Our purpose in writing is to bring to your attention the possibility that real estate agents and brokers in your state may be providing broker opinions of value (BOV) of commercial real estate without appropriate appraiser credentials. If true, such performance blatantly disregards numerous state statutes that require appraiser credentialing for opinions of value of real estate. We strongly urge you to take aggressive enforcement action against any provider of a BOV who does not hold an appropriate appraiser credential…we urge the state Appraiser Board to bring this issue to the attention of the board responsible for the licensing and regulation of real estate agents and brokers, so they may investigate and take appropriate enforcement action against any agent or broker who is performing a BOV for an unauthorized purpose.”

The entire April 20th letter from the four appraisal organizations can be viewed by clicking on the following link: Letter to State Appraiser Board Chairs Regarding Commercial Broker Opinions of Value

Some Good News For Appraisers From Washington

On April 20th, Neil Barofsky, the Special Inspector General for the Troubled Asset Relief Program went before the Senate Committee on Finance and called upon the Treasury Department to utilize appraisals for the Home Affordable Modification Program (HAMP) in an effort to prevent fraud. He stated that:

“To protect against fraud, Treasury should abandon its differing valuation standards across HAMP and adopt the Federal Housing Authority’s appraisal standard for all HAMP principal reduction and short sale programs.”

The entire testimony of Mr. Barofsky can be viewed by clicking on the following link:

Statement of Neil Barofsky Before the Senate Committee on Finance

On the same date, the Office of the Special Inspector General for TARP issued its quarterly report which included the following recommendations:

Treasury’s new initiatives…include:

“Requiring that servicers ‘consider’ principal write-downs at their option as part of the loan modification process when indicated by program guidelines, with increased incentives for successful principal write-downs.

A new program, to be backed by $14 billion in TARP funds and managed by both Treasury and the FHA that will enable seriously underwater borrowers to refinance their mortgages so that the total amount that they owe on their homes will not exceed 115% of the homes value”

Rates & Dates: Temporary Drop Bucking Most Long-Term Predictions

The Mortgage Bankers Association (MBA) in its most recent Weekly Mortgage Applications Survey for the week ending April 16th reported that the average rate for 30-year fixed-rate mortgages dropped to 5.04% which represents the second week of declining rates after reaching 5.31% two weeks ago. Freddie Mac also reported a decline to 5.07% in their most recent surveys for the weeks ending April 22nd and April 15th after reaching 5.21% on April 8th.

The Mortgage Bankers Association News Link reported figures from the National Association of Realtors which indicated that existing home sales rose in March at the same time that there was a reduction in overall housing prices. It reported that existing home sales increased by 6.8% in March which reversed the prior three consecutive months of declining numbers.

The report indicated that while the supply of housing was down to 8.0 months from 8.5 months, the total unsold housing inventory increased by 1.5% to 3.58 million existing homes available for sale, the highest level since September of 2009.

Another NAR survey reported that first-time buyers purchased 44 percent of homes in March, up from 42 percent in February, with investors accounting for 19% of transactions in March and repeat buyers the balance. All cash transactions remained high at 27%.

The MBA report went on to indicate that: “The Federal Housing Finance Agency Purchase-Only House Price index fell by 0.2 percent on a seasonally adjusted basis in February, 3.4 percent lower than a year ago. This was the third consecutive monthly decline in the series. The previously reported 0.6 percent decrease in January was unrevised. The index is currently 13.3 percent below its April 2007 peak and is at its lowest level since October 2004… We expect that prices will continue to decline on a year over year basis for the rest of the year, but at a decreasing rate. The Q4 to Q4 change at the end of 2010 is estimated to be a gain of 0.2 percent.”

In a joint press release on April 16th, the Census Bureau and HUD reported that new housing starts rose 1.6% in March, a jump that some attributed to the federal government’s tax credit incentives to homebuyers which is scheduled to end at the end of this week, along with other factors such as bad weather in February in many parts of the country.

An analysis of this data by CNBC can be viewed by clicking on the following link: March Housing Starts

Additional information from the Mortgage Bankers Association can be found by going to their site at: Mortgage Bankers Association: Research and Forecasts

Additional information from Freddie Mac can be found by going to: Freddie Mac Weekly Primary Mortgage Market Survey

Readers interested in Freddie Mac’s April 2010 Economic Outlook can view it by clicking on the following link: History Repeats Itself… But, Which History?

To Rent or To Buy? Depends on Where You Live

An interesting study reported in the New York Times on April 20th weighs the costs and benefits of renting vs. owning in markets across the US. The article can be found here: In Sour Home Market, Buying Often Beats Renting

Will the FDIC Come Knocking on Your Door?

Residential and commercial appraisers interested in keeping informed on liability issues should check out the Appraiser Law Blog, which can be accessed at www.appraiserlawblog.com

The Reviews Are In For “The Big Short” and “The End of Wall Street”

Last newsletter we discussed Michael Lewis’ bestselling book “The Big Short: Inside the Doomsday Machine” which offers interesting and fresh perspectives on the various forces and interests that led to the financial meltdown along with characterizations of those who saw it coming and profited from that understanding. This book and another new book “The End of Wall Street” by Roger Lowenstein were reviewed by Newsweek columnist Daniel Gross in the New York Times on April 16th and a link to that column is here: Eve of Destruction

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.

Commercial Complete Software Solution

Valuation 2010 Las Vegas

I Saw the Crisis Coming. Why Didn’t the Fed?

Appraiser News – BPO Death March? Mortgage Rates Jump

Sean Collins — Mon, 12 Apr 2010 22:35:11 +0000

TUESDAY, APRIL 13TH, 2010

“I Saw the Crisis Coming, Why Didn’t the Fed?”

Michael Burry, one of the central figures in Michael Lewis’ blockbuster new book “The Big Short: Inside the Doomsday Machine” had some interesting comments in the New York Times about Alan Greenspan and others who have basically disclaimed responsibility for failing to see the real estate bubble and suggesting that nobody could have seen it coming. A link to Mr. Burry’s differing opinion is found here:

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Mortgage Rates: Up, Up and Away?

The Mortgage Bankers Association (MBA) in its most recent Weekly Mortgage Applications Survey for the week ending April 2nd reported that the average rate for 30-year fixed-rate mortgages jumped to 5.31%, up from 5.04% for the week ending March 26th. Freddie Mac also reported an increase in their most recent survey for the week ending April 8th with 30-year fixed-rate mortgage rates rising to 5.21% from the previous week rate of 5.08%.

Nelson Schwartz discussed this in the New York Times on April 10th and provided a frightening historical perspective:

“For young home buyers today considering 30-year mortgages with a rate of just over 5 percent, it might be hard to conceive of a time like October 1981, when mortgage rates peaked at 18.2 percent. That meant monthly payments of $1,523 then compared with $556 now for a $100,000 loan.

No one expects rates to return to anything resembling 1981 levels. Still, for much of Wall Street, the question is not whether rates will go up, but rather by how much.

Some firms, like Morgan Stanley, are predicting that rates could rise by a percentage point and a half by the end of the year. Others, like JPMorgan Chase are forecasting a more modest half-point jump.”

Also in The New York Times the following day, in an article titled “Don’t Bet The Farm on the Housing Recovery”, Robert J. Shiller wrote:

“MUCH hope has been pinned on the recovery in home prices that began about a year ago. A long-lasting housing recovery might provide a balm to households, mortgage lenders and the entire United States economy. But will the recovery be sustained?…

…If only it were that simple.

Home price booms and busts do end, sometimes quite suddenly, as was the case for the boom of 1995 to 2006 and the bust of 2006 to 2009. Today, we need to worry about strong headwinds, as the government begins to withdraw its support of a still-troubled lending industry and as foreclosures are dumping millions of homes onto the market.

Consider some leading indicators. The National Association of Home Builders index of traffic of prospective home buyers measures the number of people who are just starting to think about buying. In the past, it has predicted market turning points: the index peaked in June 2005, 10 months before the 2006 peak in home prices, and bottomed in November 2008, six months before the 2009 bottom in prices.

The index’s current signals are negative. After peaking again in September 2009, it has been falling steadily, suggesting that home prices may have reached another downward turning point.

But why? Unfortunately, it is hard to pinpoint causes for a change in demand for housing. The factors clearly include government economic policy, like interest-rate changes and tax credits. But these moves don’t line up neatly with major turning points in the market.

Sociological processes may be driving these changes…

…On March 31, the Federal Reserve ended its program of buying more than $1 trillion of mortgage-backed securities, and the homebuyer tax credit expires on April 30.

Recent polls show that economic forecasters are largely bullish about the housing market for the next year or two. But one wonders about the basis for such a positive forecast.

Momentum may be on the forecasts’ side. But until there is evidence that the fundamental thinking about housing has shifted in an optimistic direction, we cannot trust that momentum to continue.”

The entire article by Mr. Schwartz can be viewed by clicking on the following link:

Interest Rates Have Nowhere to Go but Up

Mr. Shiller’s article can be read by clicking on this link: Don’t Bet the Farm on the Housing Recovery

Additional information from the Mortgage Bankers Association can be found by going to their site at: Mortgage Bankers Association Research and Forecasts

Additional information from Freddie Mac can be found by going to: Freddie Mac Primary Mortgage Market Survey PMMS

Additional information about the National Association of Home Builders can be found by going to: National Association of Home Builders

Interesting Testimony Before the Financial Crisis Inquiry Commission

Last week, we saw some interesting testimonies before the Financial Crisis Inquiry Commission, which included past and present leaders of CitiGroup and Fannie Mae.

Charles O. Prince III, Citigroup’s former chairman and chief executive, was apologetic:
“I’m sorry the financial crisis has had such a devastating impact for our country. I’m sorry about the millions of people, average Americans, who lost their homes. And I’m sorry that our management teams, starting with me, like so many others could not see the unprecedented market collapse that lay before us.” Others, including Robert Rubin, the former Treasury Secretary and chairman of the executive committee of Citigroup’s board, while saying that “We all bear responsibility for not recognizing this, and I deeply regret that” basically denied culpability for their roles in the crisis.

Click here for a link to an April 8th article about this in the New York Times: Panel Criticizes Oversight of Citi by 2 Executives

Your Reactions to BPOs, and the Conflict Between the NAR and Appraisal Organizations

We received a large response to the article in our last newsletter titled ‘Conflict’ Breaks Out Between Appraisal Institute, NAR and Others over BPOs. Here are some of the e-mails that we received:

Bill, I am a broker/owner of a Century 21 real estate office. I am also a PA certified real estate appraiser. In Pennsylvania it is illegal for a real estate agent, broker to perform a BPO under the PA real estate commission. The PA Real Estate Commission has a special link on its web site to explain this to licensees. It is the only link on the web site, because it is such a problem.
I am a member of NAR, BUT DO NOT AGREE with Vicki Cox Golder, NAR president. She is being influenced by real estate agents who have everything to gain and are not impartial. Ms. Older should know the truth about who she speaks for and not assume that just because she is president of NAR she DOES not represent ALL of us! –Joe Schoetz, Schoetz Associates, Inc Appraisal Services, Willow Grove, Pennsylvania

Bill: I was reviewing the information on a sale from the MLS information yesterday. When looking at the broker’s description of the access to the property I totally lost it. The description read the property was accessed by a “Right Away”. After gathering my composure my first thought was the NAR feels all brokers are qualified to render a value by a BPO for loans? –Terry G. “Chuck” Beasley, Certified General Appraiser, North Carolina / Virginia

Hi Bill, Just wanted to add a comment to the need for an appraisal and not a BPO or for that matter a 2075.
Not only does an appraisal establish an opinion of value but this value is based on the description of the property which includes (unless it’s a drive by) a sketch that verifies the square footage… I can imagine that some of these homes being considered for loan reductions may have some errors from old listings or bad county records. It seems to me if the American people are going to bail people out we should at least establish the best available facts for evaluating the situation. Thanks –Renee Williams, Associated Appraisers, Inc, Kennewick, Washington

Bill: I am a Broker and Appraiser (98% appraiser) who can’t stand what BPO’s are doing to the business and how it is adversely affecting the home owners and buyers/sellers. It should be stopped. I have contacted local and state and national representatives. –Barry Noble, Certified residential Appraiser and independent Broker, Palm Springs, California

Bill: As a Broker and State Certified Appraiser, I would like to add that any Agent that does a BPO is doing it only for the intention of getting a possible listing. The BPO Agent would get about $25 and the other $25 goes to the office. For this amount, how much consideration and time do you think is put into it? Every Agent that I ever spoke to about this said it wasn’t worth the trouble and won’t do them unless they are guaranteed the listing. Of course it’s a conflict of interest. Why else would anyone in their right mind use their car, gas, camera and waste over a day for $25.00? COMMON SENSE, PEOPLE. Doing BPOs for appraisal purposes is not even legal in Pennsylvania. So what will the banks/management companies do about that? Agents are not even supposed to do BPOs; only the Brokers are allowed to but that doesn’t happen. BPOs are and always have been for listing purposes. IF you list a house, you want to sell it- how do you sell a REPO? Lower the price. –Joan Huhn, PA Licensed Real Estate Broker, PA State Certified Appraiser

Bill: You are absolutely correct! All appraisers I know in the state of Florida have to be members of NAR, their state, as well as their local Realtor organizations in order to have access to MLS! Appraisers are not adequately represented by these organizations, and this is why joining and becoming involved in local/state professional appraisal organizations is critical to the survival of our profession. –Kathy Ginkel, Certified Residential Appraiser, AFL Appraisals, Kissimmee, Florida

Bill: Andrew Cuomo has nothing to do with BPOs. You need to write to the GSE’s, the Secretary of the Treasury and leaders in Congress…
…One issue I have about BPOs is many appraisers have a real estate license such as myself. Yet, I am not allowed to compete with others on a level play field. The reason being is I cannot take off my appraiser’s hat. I must conform to USPAP. Therefore, any agent who performs a BPO should also be required to adhere to USPAP requirement to make the BPO market fair among all REALTORS® –Mack Strickland, Strickland Appraisal Services, Inc & Strickland Realty Co, Chester, Virginia

Our Thoughts on BPOs and Related Controversies

We have been very clear about our position towards BPOs and support the Appraisal Institute and the other appraisal organizations who authored the March 8th letter. Please visit our website www.EndBPOsNow.com for additional information and for contact information if you would like to join the effort to End BPOs Now!

Due to the importance of this issue, here is a link to the March 8th letter from the four appraisal organizations (the Appraisal Institute, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers and the National Association of Independent Fee Appraisers) to Treasury Secretary Timothy Geithner along with other public officials in financial leadership positions regarding their concern over the use of BPOs for “short sales”: Letter to Secretary Geithner

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Ask Angie

We want to congratulate the winner of the last contest, Cindy Butler, a Certified Residential Appraiser with Elite Real Estate Appraisals of Bel Air, Maryland. Cindy was the first person to provide the correct answer to Angie’s last contest: “No question is so difficult to answer as that to which the answer is obvious” (George Bernard Shaw).

Today’s questions:

Question 1: Who said: “What many critics of equity derivatives fail to realize is that the markets for these instruments have become so large not because of slick sales campaigns, but because they are providing economic value to their users.”

1. Michael Lewis

2. Leo Tolstoy

3. Alan Greenspan

4. Warren Buffett

5. Michael Burry

Question 2: Who said:
Derivatives are “Financial weapons of mass destruction”

1. Michael Lewis

2. Leo Tolstoy

3. Alan Greenspan

4. Warren Buffett

5. Michael Burry

Question 3: Who said:
“The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him.

1. Michael Lewis

2. Leo Tolstoy

3. Alan Greenspan

4. Warren Buffett

5. Michael Burry

The winner of this week’s contest chooses one of the following prizes:

The book “The Big Short” by Michael Lewis, or a free copy of the Directory of Appraisal Management Companies for FHA Appraisers

Angie’s Hall of Fame: Those who have been crowned winners more than once during the past two years and who have been retired from competition for the rest of 2010:

Suzanne Fahien

Pat Reass

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.

Commercial Complete Software Solution

A Bold U.S. Plan to Help Struggling Homeowners

Appraiser News – Will New Loan Modification Program Help Appraisers?

Sean Collins — Tue, 30 Mar 2010 07:21:40 +0000

Underwater, Unemployed or Late with Mortgage Payments: Help is on the Way?

The White House announced a series of initiatives on Friday that were designed to assist several distinct groups, including many of the 7 million households behind in their mortgages, those currently unemployed and those homeowners who, while gainfully employed, were among the 11 million “underwater” homeowners. The $50 billion estimated cost of these measures reportedly will come from funding previously allocated for housing programs in TARP (the Troubled Asset Relief Program). The New York Times discussed these new White House moves in an article on March 27th and a link to that article follows, along with a “Q & A” which also appeared in the publication.

Answers to Questions About New Mortgage Modification Program

The FHA is to play a prominent role in these modification efforts and HUD Secretary Shaun Donovan and FHA Commissioner David H. Stevens both issued press releases on Friday, links to which are here:

Housing Program Enhancements Offer Additional Options for Struggling Homeowners

From the Desk of David H. Stevens

Prior to the announcement by the White House on Friday, published reports were corroborating a fact known by appraisers, that loan volume was way down, as reported in this CNBC piece on March 19th:

Fannie/Freddie/FHA Loan Volume Falling Fast

“Conflict” Breaks Out Between Appraisal Institute, NAR and Others Over BPOs

On March 8th, four appraisal organizations (the Appraisal Institute, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers and the National Association of Independent Fee Appraisers) wrote to Treasury Secretary Timothy Geithner along with other public officials in financial leadership positions regarding their concern over the use of BPOs for “short sales”. The letter noted that:

“… we strongly believe continuing to allow “broker price opinions” (BPOs) in the property valuation component will not adequately protect the public interest (consumer, borrowers, etc.) or the interests of the various parties to the loan (lenders, loan servicers, etc.) and is likely to exacerbate mortgage fraud.

The letter went on to say that “generally speaking, real estate agents and brokers are not independent or properly trained valuation specialists. They have an inherent bias towards quick results and action which produces a fee for themselves irrespective of whether the lender/ services/ investor/ property owner/ borrower gets a fair return on the short sale.

We believe that such conflicts can and should be mitigated by implementing basic requirements reestablishing independence and competency in the valuation process. Specifically, any arrangements to encourage short sales must require competent appraisals prepared in accordance with the Uniform Standards of Professional Appraisal Practice. Such a requirement is a minimum safeguard to enhance the fiduciary responsibility of lenders, eliminate conflicts of interests, and ensure independence and objectivity in the short sale process.”

On March 12th, the NAR quickly made known their very different opinion on this matter in a letter addressed to Timothy Geithner and HUD Secretary Shaun Donovan, along with other public officials involved with this issue. The letter stated that:

“I am writing on behalf of the 1.2 million members of the National Association of REALTORS® (NAR) to support the Home Affordable Foreclosure Alternatives (HAFA) program and the use of broker price opinions (BPOs). NAR is concerned about misinformation that has been provided to the Treasury Department by the Appraisal Institute with regards to the use of BPOs and the real estate agents who provide this service.”

The NAR letter went on to defend the use of BPOs and the entire letter can be viewed by clicking on the following link: National Association of Realtors Letter

The entire letter composed by the appraisal organizations can be viewed by clicking on the following link: AI, ASA, ASFMRA, NAIFA Letter

Our Thoughts on BPOs and the Current Conflict

One additional note: Many appraisers are also real estate agents and members of the National Association of Realtors. Is it possible that this fact has somewhat muted the response of the Appraisal Institute and the three other appraisal organizations to the March 12th NAR letter? Maybe appraisers who are also members of the NAR who agree with our position regarding BPOs should let their appraisal organizations know that they fully support a stronger stand in the effort to end BPOs!

“The Girl With the Dragon Tattoo” and the Financial Crisis

An interesting Op-Ed piece by the Times’ Frank Rich on March 20th discusses the coincidental timing during the same week in September 2008 when Lehman Brothers collapsed and the Swedish novel “The Girl With the Dragon Tattoo” was published in the United States. The book, which had been written years earlier before the death of its author, Stieg Larsson, in 2004, decries influential financial journalists “who treat “mediocre financial whelps like rock stars” and who docilely “regurgitate the statements issued by C.E.O.’s and stock-market speculators.” He pleads for some “tough reporter” to “identify and expose as traitors” the financial players who have “systematically and perhaps deliberately” damaged their country’s economy “to satisfy the profit interests of their clients.” Mr. Rich goes on to say:
“What’s remarkable is that Larsson wrote all this in a book completed years before the meltdown of 2008 — and was referring only to Sweden. And yet the overlap with our recent history is profound — so much so that surely both his prescience and the universal resonance of his villains account for some of his novel’s marathon ride through the zeitgeist, its ability to touch the nerves of so many readers in America and throughout the West.

If anything, the animus driving “Dragon Tattoo” seems more timely every day.”

The book is a good escapist read for over-worked appraisers and the movie is now out!

While we can’t give you a link to the movie, here is a link to Frank Rich’s article: Obama, Lehman and “The Dragon Tattoo”

While we are on the subject…..

While “The Girl with the Dragon Tattoo” is ostensibly a work of fiction, the release of Michael Lewis’ book “The Big Short: Inside the Doomsday Machine” provides the results of the author’s investigation into the collapse of the subprime mortgage market. Mr. Rich’s article discusses the book briefly and the author has also been featured on 60 Minutes and in the Huffington Post which reported on March 15th:
“It may be tempting to think Wall Street is full of criminals who got off easy during the financial crisis.

But bestselling author Michael Lewis cautions against such an easy conclusion.

‘I think the story is much more interesting than that,’ he said during an interview on CBS’s 60 Minutes. ‘I think it’s a story of mass delusion.’

According to CBS, the result of his 18-month investigation attempts to explain, ‘how some of Wall Street’s finest minds managed to destroy $1.75 trillion of wealth in the subprime mortgage markets.’

A link to the Huffington Post article and the 60 Minutes piece is here: Michael Lewis: Wall Street Collapse A Story Of Mass Delusion

Double Dip, Anyone?

Meredith Whitney, CEO of the Meredith Whitney Advisory Group, discusses her concerns regarding a retreat in the housing market in this CNBC.com video from March 16th.

Housing Market Sure to Double-Dip

Commercial Real Estate Following the Residential Market Down the Same Slippery Slope?

Many commercial analysts have been reporting troubled conditions in most commercial property classes throughout the nation. The New York Times in an article on March 17th provided an illustration of how this is occurring in one city, Phoenix, Arizona.

Phoenix Meets the Wrong End of the Boom Cycle

Rates & Dates

The Mortgage Bankers Association (MBA) in its most recent Weekly Mortgage Applications Survey for the week ending March 19th reported that the average rate for 30-year fixed-rate mortgages was at 5.01%, up from 4.91% for the week ending March 12th. Freddie Mac also reported an increase in their most recent survey for the week ending March 25th with 30-year fixed-rate mortgage rates rising to 4.99% from the previous week rate of 4.96%.

Additional information from the Mortgage Bankers Association can be found by going to their site at: Mortgage Bankers Association – Research and Forecasts

Additional information from Freddie Mac can be found by going to: Freddie Mac: Primary Mortgage Market Survey (PMMS)

Ask Angie

We want to congratulate the winner of the last contest: Leo Savoie, SRA and Certified General Appraiser with APEX Appraisers, Inc. of Birmingham, Michigan. Leo was the first person to provide the correct answers to Angie’s last contest: “You never know what is enough unless you know what is more than enough.” (William Blake) and “If the facts don’t fit the theory, change the facts.” (Albert Einstein)

Today’s question: Who said:

“No question is so difficult to answer

as that to which the answer is obvious.”

The choices are:

1. Lisbeth Salander

2. Carl Jung

3. George Bernard Shaw

4. Robert Louis Stevenson

5. None of the above

The winner of this week’s contest receives either a copy of the book “The Girl with the Dragon Tattoo” or a free copy of the Directory of Appraisal Management Companies for FHA Appraisers.

Angie’s Hall of Fame: Those who have been crowned winners more than once during the past two years and who have been retired from competition for the rest of 2010:

Suzanne Fahien

Pat Reass

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.