Nancy, the MC form is a waste of time in almost ALL areas! It was poorly conceived and poorly implemented, but it makes FNMA managers feel all warm and fuzzy so they keep it.

(1) Defined neighborhoods rarely fit or match local MLS reporting areas; or even tax book areas. Nor do they usually fit zip codes. (2) Rarely do they encompass competitive market areas. (3) Consideration of only comparable properties presents a sliver of information about an area. It does not indicate prevailing trends in the entire neighborhood or area – so at best the MC results are an out of context snapshot that are largely meaningless in terms of either market value, or marketability.

A good rural appraisers description of the competitive market area being “generally comprised of Townships 1, 2, 3 and the Village of XYZ  in the south county area” is more meaningful than saying the Spring Valley Lake Area is comprised of 200 seasonal and year round homes and trying to draw ‘market’ conclusions from such a small sample size where there just may not be enough activity to do so. Saying its bounded on the north by Robin Lane; South by Hwy 30 and east and west by lakes or whatever means nothing to an underwriter or investor or pretty much anyone else. People looking to buy there already know what the boundary is/are.

LTRA How does the passage of time have relevance to current risk in raising de minimis? In 1989 when the deminimus was first proposed it was scheduled to be set at $25,000…not $250,000. Just because HELOCS grew to be outrageously risky amounts, doesn’t mean the deminimus should continue to support that risk.

That brings up your other point. How does raising the threshold for which no appraisal at all is needed, result in MORE work for certified appraisers,rather than less?

lastly if the excuse of age is the sole criteria, then maybe the level at which a certified appraisal is needed should alsobe raised from $1,000,000 to $2,000,000? (JUST KIDDING ABA! Dont try to do it!

My friend, please rethink your position and advocacy.

FHA should not be involved in Reverse mortgages at all. It is the most dishonest lending process still legally allowed to take advantage of senior citizens. Speak with any ex reverse mortgage broker and ask them.

THEN speak to any tax accountant; and then a social security expert and ask them about the pitfalls. Your reverse mortgage can actually COST you monthly income instead of supplementing it!

Seniors BEWARE!  Appraisers ALSO beware. Cutting values on RMs in the review is common and usually unsupported. On the other side of the coin, owners that feel cheated in the process may seek to recover from those ‘dishonest appraisers’ that were  in cahoots with lender to (1) either over appraise or (2) under value…take your pick, Reason doesn’t matter…just the fact you had E&O does.

Borrowers: The February 2017 AVERAGE US Home sale price per US Census was $390,400. Just for kicks, lets  say you own it free and clear. Reverse mortgage gives you 50% of equity.Say $195,200. You are 62 years of age and haven’t pulled SS yet. Assume you live to be 82 (only 20 years; my own mother and father are 86 and 87), but lets say 82. $195,200/ 20 = $,9760 a year…only $813.33 a month.

20 years ago that wasn’t enough to live decently on in most locales. It certainly wont be 20 years into the future. (For those that have double that equity keep in mind that Social Security deducts or ‘taxes’ benefits $2:1 for every dollar above a certain threshold that you earn before a certain age.

For others, the manner in which you take your RM payment (lump sum or payments) can have tax consequences despite being a loan. Its been too long since i investigated this stuff. Talk to experts the tax and social security experts BEFORE you talk to the loan brokers.

Something from an fha reverse borrower today, they got in just in time before even higher mip’s hit, and the borrowing against thresh hold went down to 50%.  The difference between private lenders and gse originators remains obvious, the taxpayer backing relieves them of risk and the normal business requirement to recognize and allow market corrections.  This approach where regulation saves their businesses is the problem.  Let them take risk, let them fail if they don’t handle that correctly.  Let them compete independently, and they can sort out what works and what does not.  One of the themes I picked up on;  competition bad, we must maintain our dominant positions in the changing market landscapes. If they want to be relieved of any requirement, please let them. But only so long as they no longer participate in any government insurance or backing programs, and shoulder the risk all by themselves.

Agree. I’m more amazed at how even sophisticate multi million dollar (res. & C&I) property buyers are agreeing to eliminate appraisal contingencies from offers.

That’ll last til a few major lawsuits hit alleging buyers were defrauded on over priced property at agent urging.

True

When we speak of AMCs many of us think “Rels size, or old Landsafe; or even Coester VMS, but its much worse today. The super monopoly comprised of the First American /CL family and affiliates is the biggest threat to sound appraisal polices today.

That PACE PRO fraud-inducing document was prepared using ACI. I don’t think THAT one was done under Richard Heyn…though I could be wrong. Anyway, now that they own ACI and control Mercury and AppraisalPort who is to stop them or at least be able to make them comply with USPAP rather than circumvent it?

banks (and regulators), create a MASSIVE mess, and now “Community bankers said appraisals are becoming a concern…”?

LMAO!

that bed has been made, now they can lay in it. (and apparently begin to realize there might be a problem).

Connecticut bankers want less regulation and oversight. They want the $250k threshold (that never should have been above $25k to begin with) doubled. Its taxpayer guaranteed money and that doesn’t require nearly as much oversight? Just because prices go up does not mean risk doesn’t go up too.

Idaho thinks evaluations and appraisals “are not that much different from each other’.  When federal and state regulators completely abdicated their number one responsibility to protect the American Public by pretending ‘evaluations’ were somehow a legitimate valuation method separate from appraisals, this was an inevitable result.

My interpretation of their lament is that they can’t know what an appraisal is supposed to be if they don’t know or see the difference between an evaluation and appraisal. One is a credibly supported opinion of value; and one isn’t. Again, this is purely regulators fault for allowing this deception to be legitimized to circumvent USPAP while maintaining the illusion of meaningful oversight. Sooner or later we’ll all be discussing why/iff verbally reported comp checks should be allowed in lieu of appraisals. That would REALLY speed up the appraisal process! Not to mention, reduce the cost.

Kansas proves the need remedial classes on FIRREA requirements by their bankers. Having a threshold for certified vs non certified appraisers was never primarily because of the money involved (despite the perception and wording). It was ALWAYS about presumed complexity and risk. Just as the “R” part of C&R was never given serious attention; the ‘non complex appraisal’ requirement for completion by licensees versus certified appraisers was and still is rarely given any consideration. maybe they take the Wells Fargo approach that ‘Some waterfront property may be complex’. Apparently nothing else is.

Massachusetts. NC and South Dakota all express valid concerns. These ranged from SDs issues shared by most appraisers (thresholds and qualifications); to North Carolina banks extremely serious claim that they are under increasing competitive pressure by out of area banks that bring in out of area appraisers to over value property! I thought RELS was out of business?

IF bankers in NC have knowledge or a reasonable basis of belief that out of area appraisers are being brought in to over value property; then they should be turning those lenders, AMCs and appraisers in to their respective regulators. If they have real knowledge of such serious wrong doing and do not report it, then one has to wonder what their regulators are doing!

The IDFPR Board has posted some excellent information in the past but this particular piece leaves the intent of their post unclear. Is Illinois concerned about what other states bankers think? Do they believe I should be?

“Kansas bankers recommended increasing the dollar threshold requiring a certified appraisal. The current amount of $250,000, set in 1994, was said to be out-dated, as prices obviously have increased.”

It is out-dated and would give additional opportunity to certified residential appraiser to expand their business and get away from AMC work.