Author: Dave Towne

The problem is, when speed is demanded, proper analysis, verifications and reporting procedures are often compromised or not done by the appraiser just so an artificial timeline can be accommodated 10

Zoom, zoom, zoom is Good for Whom?

…we continue to ask for very quick turn times to outperform the competition… Appraisers, I received a message today from an appraiser who provided the email from an AMC (below). I have redacted the lender’s name (primarily to avoid getting my skin scorched), but it’s a big one in the US that you see in TV commercials, on radio, in print, and social media outlets. The email demonstrates the prevailing and long-running attitude among just about everyone connected to mortgage lending, whether they be AMC’s or direct placement lenders. It originates at the very top of these organizations. It’s a very...

Waiving Appraisals, Lowering Appraisal Standards, & Raising De Minimis... 13

Waiving Appraisals & Lowering Appraisal Standards

Freddie getting aggressive in waiving appraisals & promoting appraisal free mortgages… Appraisers, Yes, I have a ‘dog in the fight’ with this article, as I have been an Appraisal Institute member since 2003 (along with other association memberships since). But this article provides explanations about changes to the appraisal process I have not seen elsewhere. Excerpt from “Dodd-Frank rollback weakens appraisal standards“ They started to evaluate whether they wanted to raise that appraisal threshold level from $250,000 to some figure… They left it untouched at $250,000 for residential, but they have increased the commercial real estate appraisal threshold level just in the...

Determining What to Charge for Appraisal Fees - Hard & Soft Costs - Imagecredit Flickr - Chris Potter 16

Retainer or Not?

Last month I asked appraisers if you ask for a retainer when doing vacant land private assignments, which tend to be more difficult than private ‘home on dirt’ residential assignments. For those who do private assignments on GP forms (NOT the stinking GSE forms!), do any of you request a retainer from the prospective client before you start the research? I do a fair number of private assignments, with about half of those vacant land (unimproved) assignments. Those are more challenging than ‘home on dirt’ assignments. Lots of initial research and perhaps a site visit is necessary before committing to...

Secret Revealed: UAD & Appraisal Forms Redesign Coming NOT Soon 20

Secret Revealed… Coming NOT Soon

New initiative will focus on modernization of the current UAD dataset and residential appraisal forms… What I originally described as a ‘rumor’ several months ago has finally been fully exposed. FNMA and FrMAC are in the process of examining the current GSE appraisal forms, which encompass UAD and the MC Form, to ‘finally’ get the appraisal forms & functions into the 21st Century! But it won’t happen for at least 3 years (2021)… by then many current appraisers will be enjoying bon-bons and brewskies while on the golf course, or be on their long-planned world cruise, after chucking their clipboard...

Importance of Including Sales Price Trend Graph in Appraisal Reports 2

Importance of Graphing Sales

Scatter graph can help you “visualize” the trend of sale prices over a time period… Appraisers, I’ve been including ‘comparable’ price trend graphs in my reports (using Excel) since 2008. The graphs are based on a chart of MLS sales in the subject’s neighborhood, and can be from 1 to 5 years prior to the report Effective Date – based on housing density and number of sales. (I work in urban, suburban and rural areas.) A Scatter Graph can help you “visualize” the trend of sale prices over a time period. It can also show questionable outlier sales that you...

Procrastinators Rejoice! Tax Deadline Gets Pushed Back 5

Procrastinators Rejoice!

In case you have not heard, the IRS tax filing deadline for 2017 taxes is on April 17 this year, per this info from the IRS: April 17 Filing Deadline The filing deadline to submit 2017 tax returns is Tuesday, April 17, 2018, rather than the traditional April 15 date. In 2018, April 15 falls on a Sunday, and this would usually move the filing deadline to the following Monday – April 16. However, Emancipation Day – a legal holiday in the District of Columbia – will be observed on that Monday, which pushes the nation’s filing deadline to Tuesday,...

Lender Contributions FNMA Policy Adding Fuel to the Confusion... 6

Concession Reporting Confusion

…how are these "lender contributions" identified… Appraisers are ‘required’ to report comparable sales or financing concessions that benefit a borrower in the GSE form appraisal report, on the second line in the comparison grid (as a negative adjustment). Secondly, for subject properties, appraisers are ‘required’ to report any concession benefiting the borrower on page 1 of the report form. Subject concession amount is NOT entered on the Comparable grid. Well now, FNMA has issued a modification to their Selling Guide (which takes effect as of 4/03/18) – SEL–2018-03 – (I have added type face enhancements): Lender Contributions With this update we are...

Getting Rid of the Human Appraiser & Putting Appraisers out of Business 14

Are ‘No Appraisal’ First Mortgages the Future?

A human appraiser usually goes to a home… Appraisers, The article, linked here, purports to say that future mortgage loans will be done without using the services of a “boots on the ground” appraiser… "the human appraiser". Why??… because speed and low cost are paramount when people want to finance their largest investment in their life. From the article: “The appraisal process, which typically is not automated, remains a problem. A human appraiser usually goes to a home, takes pictures, makes sure there’s nothing terribly wrong with the structure. It takes seven to ten days to turn around, van den Brand...

Appraisal Thresholds Raised $500K. How Long Before Its Raised for SFR? 12

Appraisal Thresholds Bordello

Anyone wants to place a wager on how long before appraisal thresholds are raised for SFR? Retirement, with a part-time job working as a bouncer at a bordello in the Nevada desert is beginning to look appealing. Activity there is similar to what appraisers are experiencing these days. From the article: “The FDIC board of directors today (Mar. 20, 2018) approved a final rule to raise the appraisal thresholds for commercial real estate transactions from $250,000 to $500,000…” While the individual 1-4 unit investment properties are being kept at $250,000, would anyone like to place a wager on how long...

Rural Areas Appraisal Waiver Threatening Appraisers & Bad for America! 30

Another Threat Looming

Senate Bill raising de minimus value to $400,000 will also waive appraisals in certain situations in rural areas Folks, while the TriStar Bank appraisal waiver issue is important for appraisers, there is another insidious threat looming: Senate Bill 2155 passed the Senate this week, and is now in the hands of the House of Representatives. That bill, if fully ratified as it stands, and is signed by the President, will undercut the need for appraisals in two ways: the current de minimus value of $250,000 is raised to $400,000, which means lenders can use non-appraiser evaluations to establish property value for...

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