Tagged: Fannie Mae

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Mortgage Takings: The Next Appraisal Frontier or Liability?

According to the Appraisal Institute’s recently published 2013 Real Estate Appraisal Outlook, U.S. appraisers anticipate that litigation valuation/forensic appraisals will be one of the top five areas of growth in the next one to two years in both commercial and residential appraisal.  Indeed, approximately 33% of surveyed commercial appraisers anticipate more demand from law firms and lawyers in the near future, with 24% of those surveyed expecting an increase in valuation consultation and studies in support of litigation.  The appraisers’ prediction may be spot on the money as at least one U.S. municipality has begun to implement a plan to...

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How to Identify a Bubble or Bust Housing Market

Bubble or bust? The nation’s home prices continue to climb, with some cities posting double-digit annual growth rates during 2012–13. While the continued economic recovery seems to trend in a positive direction, consumers, appraisers and other market participants should be on high alert for red flags that could signal the possibility of another housing bubble in the near future. How can appraisers tell if the current housing market is “bubble” or “bust”? Here is some guidance from the Appraisal Institute’s “Guide Note 12: Analyzing Market Trends.” Appraisers should be able to spot the symptoms of a changing market. Appraisers and...

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Fannie Mae and Freddie Mac UAD Update

Fannie Mae and Freddie Mac have released the specifics on phase two of the Uniform Appraisal Dataset (UAD) updates. The second phase will go into effect in early 2014, with warning edits for the following data fields converting to fatal UAD edits: Quality of Construction Rating (subject and comparables) Location Rating (subject and comparables) View Rating (subject and comparables) Condition Rating (subject and comparables)

Extinction of the Appraisal Industry - Image courtesy of Nujalee / FreeDigitalPhotos.net 23

The Imminent Extinction of the Appraisal Industry?

Late yesterday afternoon a bill was introduced in the House of Representatives that would alter the mortgage process and ultimately the way millions of Americans receive a mortgage. HR 1108 would eliminate the need for an appraiser to appraise a home prior to the funds being disbursed to the

Real Estate Appraisers Warned us About the Crisis but We didn't Listen 2

Real Estate Appraisers Warned us About the Crisis but we Didn’t Listen

Federal actors could have responded to the appraisers’ warning and prevented the crisis On July 9, 2013 I participated in a radio interview with a lobbyist for the 100 largest financial firms.  The San Francisco radio program host asked me what question I would ask the lobbyist and I said that any discussion should begin with allowing him to state his view of what caused the crisis.  In the course of his explanation, he bemoaned the fact that there was no warning about the crisis. I found this ironic because I had just published that morning an article about how...

FNMA 2075 a ticking time bomb 1

2075 FNMA Form a Ticking Time Bomb?

Is Fannie Mae Form 2075 a ticking time bomb for Appraiser? Fannie Mae Form 2075 (aka the “Desktop Underwriter Property Inspection Report”) seems innocuous enough when you pick it up and look at it. After all, it’s only a single page with just one-half page of instructions. It allegedly applies only to low risk loans and the form has been around and in use for a long time. The instructions even clearly state it “is not an appraisal report”. The instructions go on to say this report may be used without an estimate of fair market value of the property...

Short sale and low appraised value 0

Short Sale & Low Appraisal Value?

What Happens When a Short Sale Property Gets Approved for More Than the Appraisal Value? Most of the time when a potential home buyer submits a contract on an Orlando short sale, that person is expecting to get a fantastic deal on a home. Many times this is exactly what ends up happening. The lender approves your offer and you get the deal of a lifetime! However, depending on what happens with the appraisal, everything can still fall apart on you, so don’t celebrate just yet. Appraisal values, when it comes to short sales, are a crucial part of the...

Fatal UAD edits 0

Fatal UAD Edits on Appraisals Coming Soon

Fatal UAD edits on Appraisals to Become Effective in June 2013 Effective June 2013, Fannie Mae and Freddie Mac (the GSEs) will convert several of the current Uniform Appraisal Dataset (UAD) compliance warning edits to fatal UAD edits in the Uniform Collateral Data Portal. Warning edits for the following data fields will convert to fatal UAD edits in June 2013: Appraisal effective date Subject contract price and comparable sale price Above grade Gross Living Area (GLA) (subject and comparables) Sale type (subject and comparables) Warning edits for the following data fields will convert to fatal UAD edits in phases that...

NAIHP Promotes New Appraisal Rules on Capitol Hill 4

NAIHP Promotes New Appraisal Rules on Capitol Hill

NAIHP acknowledges neither HVCC nor Appraiser Independence rules require the use of AMC’s. The conflict of interest rules contained in the “Interim Final Rule on Appraiser Independence,” were designed to establish a firewall between a loan production department ordering valuations of residential real estate and appraisers, who perform valuations. The Federal Reserve Board (FRB), who established the Interim Final Rule to replace the Home Valuation Code of Conduct (HVCC) in October of 2010, recognized it was not always practical to separate these functions in small financial institutions, which is why the FRB created two sets of firewall requirements: one for...

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