Tagged: housing market

Credit Worthiness Based on Magazine Subscriptions 3

Low Credit Score? Don’t Fret Over It

Got a low credit score and can’t get a loan? Don’t fret over it, just subscribe to a magazine. Sounds absurd doesn’t it? According to an article on MSN, banks are using other means to determine your credit worthiness. We all understand alternative credit, such as phone and power bills, but companies are now considering consumer data such as magazine subscriptions, the stores your shop at, what you purchase, what restaurants you eat at and how much you spend at them. Based on your consumer data a risk score on your ability to repay a loan is determined. For decades,...

Zillow in Crosshairs - Zillow Has the Most Flawed Business Models 8

Zillow in Crosshairs

Steve Eisman, the hedge-fund manager famous for betting against the US housing market in 2008 explains why he is shorting online real estate company Zillow. “I would say Zillow has one of the most flawed business models I’ve seen in a very, very long time,” he said during an interview on CNBC. “They had a good business which was their internet real estate platform. The growth in that has slowed dramatically so that now the growth is zero… The most problematic is what they call their, I believe, iHome business, an internet buying business where they actually go out and...

Many Appraisers Will Not Work for Appraisal Management Companies 6

Devastating Impact of a Blanket Waiver

Appraisal management companies do not understand the nuances of the appraisal profession, nor do they understand the challenges many rural properties bring. The Virginia Coalition of Appraiser Professionals has submitted an official comment to the ASC opposing the State wide appraisal waiver request in North Dakota. VaCAP has submitted a public comment expressing concerns over the much larger consequences in allowing such a request. A blanket waiver of appraisals up to $500,000 for a 5 year period will have a devastating impact on housing, not only in North Dakota, but across the country. We envision a snowball effect with other...

The Role of Formal Valuations in the Home-buying Process is Under Attack 9

The Network Speaks Out

VaCAP and 27 other State Appraisal Organizations reached out to the House Finance Services Committee concerning the upcoming Subcommittee meeting entitled “What’s Your Home Worth? A Review of the Appraisal Industry” on June 20th. The Network stresses the most qualified to testify on the appraisal profession is an appraiser. The letter also outlines some of the flaws, inconsistencies and realities of the effects of appraisal management companies and how the GSE’s current “appraisal modernization plan” is actually harmful to consumers, investors, lenders, the housing market and the economy as a whole. Fannie Mae’s own publications are being used as documentation. Hopefully the committee members ask the...

The Erosion of Bank Underwriting Standards. Let's Get Rid of Appraisers. 18

Let’s Get Rid of Appraisers. What Could Go Wrong?

Why would regulators fundamentally weaken bank underwriting standards? Appraisers Warned The World In The Late 1990s And No One Listened. It Is Now Time To Listen Again as History is About to Repeat Itself. There’s a proposal from the FDIC, Federal Reserve, and Treasury Department not to require appraisals for some mortgages under $400,000. The Trump Administration wants to disrupt the role of appraisers, but that’s not a good idea. This change can impact several groups in particular: 1) Consumers: Removing appraisers from transactions can mean a lot of loans get made that shouldn’t be made. Does that sound familiar? We...

Reform America's Broken Housing Finance System 12

Reform Our Broken Housing Finance System

Hensarling Lays Out Principles for Housing Finance Reform, Expresses Support for Bipartisan Approach “I stand ready to negotiate….with any other stakeholder that shares my belief that America deserves a sustainable housing finance system, and deserves one now.” WASHINGTON – House Financial Services Committee Chairman Jeb Hensarling (R-TX) today outlined reforms to fix America’s broken housing finance system. During a speech at a conference on the future of the U.S. housing market, Chairman Hensarling said he would work on a bipartisan basis to come up with a reform package provided it included certain key principles. He also pointed to a proposal authored...

Conservative Appraisers Blamed By Economist 5

So-Called Economist Slams Appraisers

Is the cost-benefit of conservative appraisers worth it? Appraisers, Mr. Adam Ozimek, who is described as a ‘senior economist’ at Moody’s Analytics (from a search I did) penned this gawd-awful piece: Appraisers May Be Holding Back the Housing Market, And That Might Be Okay. This piece appeared in Forbes.com on July 5 – the focus of which is to nearly blame ‘conservative’ appraisers for “holding back the market,” … but maybe it’s OK, he says. Where do they find these people, anyway? I love it when so-called authority figures start off with speculations, not backed with any facts, and fill the...

Lesson learned or Lessons Lost 12

Haven’t We Learned Our Lesson?

Lesson Learned or Lessons Lost? Many have heard me say that we should expect a large market correction around 2019-2020. Some agree, some think it will be sooner, and I am sure there are some that don’t think it will happen again because we learned our lesson. There are a ton of factors that drive it so it’s not an easy thing to predict. The good news is most agree that there will be one, we just don’t know when. We have not learned our lesson and the lesson will be repeated. I’ll share my 2 cents on this and...

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HVCC Impact on Appraisal

Impact of the Home Valuation Code of Conduct on Appraisal and Mortgage Outcomes During the housing crisis, it came to be recognized that inflated home mortgage appraisals were widespread during the subprime boom. The New York State Attorney General’s office investigated this issue with respect to one particular lender and Fannie Mae and Freddie Mac. The investigation resulted in an agreement between the Attorney General’s office, the government-sponsored enterprises (GSEs), and the Federal Housing Finance Agency (the GSEs’ federal regulator) in 2008, in which the GSEs agreed to adopt the Home Valuation Code of Conduct (HVCC). Using unique data sets...

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GSEs Still Finding Problems with Home Appraisals

Three years after the creation of a database seeking to standardize the home appraisal process, Fannie Mae and Freddie Mac continue to see major issues in numerous appraisals submitted by mortgage lenders, American Banker reported Sept. 12. Fannie Mae conducted a sampling of appraisals and determined that 17.6 percent contained contradictory information, typically pertaining to the condition or quality of the property, Robert Murphy, the GSE’s director of collateral and single-family risk policy, told a Phoenix conference of risk managers. He added that those two factors are the most important in determining a property’s value. Elevated appraisals contributed to the...

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