Newz: AMC Liability; Coronavirus;
Why I Love Appraising
February 21, 2020
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AMC Liability for Deficient Appraisals

By Peter Christensen

Excerpt: It’s now been a decade since the market relevance of appraisal management companies surged in connection with the procuring of appraisals for residential lending. Since then, interesting recurring legal issues have arisen relating to AMCs’ potential liability for the work of contractor appraisers: when and how may AMCs be liable for the deficient work of contractor appraisers? Can AMCs be sued for negligence? Can they be sued by borrowers? Here’s an overview of the answers to these questions.

To read more, click here

My comment: Of course, the Big Issue is whether AMCs are appraisal companies using independent contractors or "brokers" of appraisals by connecting lenders to appraisers. Somewhat similar to Uber's issue of whether they are a technology or a transportation company.

FYI, Christensen's law firm has both appraiser and AMC clients, so he sees both sides of the issues. 
U.S. Real Estate Market Shows Symptoms of Coronavirus Effect: What You Need to Know

Excerpt: The deadly outbreak of the coronavirus from China, which has sickened thousands around the world and terrified millions more, is taking a toll on global financial markets as well—and the effects are likely to extend to the U.S. luxury real estate market.

While there are only 11 confirmed cases of the virus on American soil, the U.S. housing market is already feeling the effects of what could soon be declared a pandemic. Mortgage interest rates have dipped, and the already sluggish luxury real estate market has depended in recent years on an injection of Chinese buyers.

To read more, click here

My comment: Good analysis of the real estate market effects. However, for a perspective, the typical flu in the U.S., 30,000 people die every year on average. A 33 year old friend of mine had the flu and ended up in the hospital for over a week with pneumonia. In some cities, Chinese restaurants are almost empty of customers because of coronavirus fears. The corona viruses are carried by bats, who don't get sick.. Scientists have identified hundreds of bat viruses. Other animals, such as pigs, come in contact with bat droppings or eat their dropped food. When humans eat the animals, they get infected.

For many years, I try to never touch door knobs or any other surfaces. I don't shake hands - use fist bumps or say I am not feeling well during flu season. I use hand sanitizers and wash my hands. When the owner meets me at the door for an appraisal and they don't look well or are coughing, I make them open all the doors, etc. for me.
Why appraisers love appraising

4 things I love about being a real estate appraiser
By Shannon Slater

Excerpt: 1. Interesting- When you are a real estate appraiser you get appraise a variety of properties. Yes we get to see some beautiful luxury homes as well as unusual homes. We have been in luxury homes with every kind of built in feature and we have been in vacant REO properties that have been trashed, some with messages scrawled on the wall or the most unusual items that have been left behind. Talk to any real estate appraiser and he or she will have interesting stories of interesting places or things they have seen in the course of inspecting properties.

To read more, click here

Why Do You Love Being an Appraiser?

Dana Jo Robichaux
“40 years of fun – never worked a day!”

Chris Hughes
“I love the variety. Every day is different. Every house is different – even if it’s only by a little bit (those walls are ecru and in the last house they were eggshell). Getting to talk to people, to see how they live, what they collect, where they have traveled to. I love the problem solving. What are the best comps for that one-of-a-kind house? It’s very satisfying when I can find comps to support the unsupportable. I love the freedom & flexibility to be able to set my own schedule. There have been times when that was really important, and I’ve been glad I had that freedom.”

Short comments by 11 appraisers.

To read more, click here

My comments: I have always loved appraising and will always be an appraiser! To me, each appraisal is a "puzzle": How to put together all the information and figure out the value. 

Also, I am easily bored and always looking for new challenges in my life. No two properties are the same. 

I seem to be very good at this, including when writing these newsletters. I do this in non-appraisal situations also. I was very, very lucky to "stumble upon" appraising where I get paid for my talent. 

Of course the business side is a nuisance ;> We all want to get an email for an appraisal request, get a check in advance or on inspection, and email the appraisal to the client. 
Free Valuation Legal Webinar: Engagement Agreements for Non-Lending Assignments 

By Peter Christensen

How to create a professional engagement agreement for non-lending appraisal assignments - just for California and Washington appraisers. Impress your clients, make sure you get paid, and protect yourself. Participants will receive access to sample engagement agreements drafted by Peter Christensen, specifically for California and Washington appraisers.

Registration is free and only requires your name and email. Following registration, you will also receive future email announcements from Valuation Legal - Christensen Law Firm about offerings such as this webinar. You can unsubscribe at any time. 

Feb 28, 2020 09:30 AM

To read more and to register, click here

My comment: Non-lender appraisals are very, very different than lender appraisals. I have been writing about non-lender appraisals since I started my paid newsletter in 1992 and doing non-lender appraisals since I started my appraisal business in 1986. See below.  I have used engagement agreements for over 30 years, especially on litigation, larger properties, etc.
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Burned out on AMCs? Thinking about
doing non-lender work? Or, doing it but looking for some ideas and tips?

I have been writing about this since 1992 and have always done non-lender work. Below are a few recent articles. The most popular for appraisers are estates and divorces. I have written about them a lot, including how to get business.
  • Communicating with non-lender clients: Very, very different than lenders!! Side by side comparison and analysis.
  • Should you do non-lender work? Pluses and minuses of both lender appraisals and each different type of non-lender appraisal.
  • Quick Start – how to get non-lender work ASAP

To read the articles, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.

If this article gave you one appraisal, it is worth the subscription price!! 

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If you are a paid subscriber and did not get the February 2020 issue, emailed Monday, February 3, 2020 please send an email to [email protected]  and we will send it to you!! Or, hit the reply button. Be sure to put in a comment requesting it.
Infestations That Nibble Away Home Value

Excerpts: While small insects are not likely to ever grow into monsters, they can create monstrous problems to a home.

That’s why in appraisal reports, the appraiser will disclose any evidence of infestation. In fact, in Fannie Mae forms, there is a box to check, if evidence of an infestation is observed.

The box is easy to miss. But it is an important box to be aware of. Just to be clear, if the box is checked, this does not mean that there is an infestation. It means that there is evidence of it, and a qualified professional should investigate the matter to see whether there is an infestation. Appraisers are not experts in the many kinds of possible infestation that might exist. We are only looking for indications of a possible problem.

What kinds of infestation is this little box referring to? Any kind of infestation that would have a negative impact on the market value or marketability of a home. That would include deadly animals, vermin and wood destroying insects.

What are some types of infestation that can have impact the market value and marketability of a home? Let’s talk about several of them

For lots more info plus fun videos, animated gifs, etc, click here

My comment: Wow!! I never thought much about this! Another reason why I love appraising!! The longer I appraise (45 years) the more I learn something new ;>
Fannie Mae and the Future: Recruiting New Appraisers

I nterview about Fannie's Appraiser Diversity Pipeline Initiative 
by Isaac Peck, WorkingRE

WRE: Many appraisers believe that Fannie Mae is proposing significant changes to the valuation industry (the move towards appraisal waivers and PDCs, for example) that will substantially decrease the utilization and demand for residential appraisal services. Yet Fannie’s move to help recruit new professionals into the residential appraisal field seems to contradict the idea that residential appraisal work is going to decrease substantially. Can you address this perceived contradiction?

Wilkinson: Appraisals are very important to Fannie Mae in managing our risk. We offer appraisal waivers on a small percentage of the loans we acquire—mostly refinances with loan-to-value ratios below 80 percent. But we continue to require appraisals for the majority of loans that we purchase.

So while the appraisal is critical for most mortgage loans delivered to Fannie Mae, it is a “long pole in the tent” in the origination process. There are periodic shortages of appraisers in some markets that can lead to long waits and high prices for appraisals. Lenders and their borrowers quickly become frustrated with delayed loan closings and added costs. With more than half of appraisers nearing retirement, new career entrants are critical.

To read more, click here

My comment: Who knows what will happen as the opportunities are very limited in residential appraising as AMCs will not allow trainees to sign. It is totally different in commercial appraising as there is no restriction on trainees. There are many new commercial appraisers in my area. 

I was the first female appraiser hired by the county assessor's office in 1975. There are more women now, even in commercial. However, the overwhelming majority are white men. Very, very few black appraisers.
Event Duration: March 18 2020 1:30 PM to 4:30 PM
Event Description: In person event (not a webinar session) This free, on-site training will provide an overview of the appraisal requirements outlined in FHA’s Single Family Housing Policy Handbook 4000.1. The training topics will include property inspection requirements, appraisal validity period, manufactured homes, water and septic, attic and crawl spaces inspection, and the FHA Appraiser Roster. Who Should Attend : This live session is free and open to all interested stakeholders. FHA appraisers, underwriters, and lender management personnel with all levels of experience will benefit from this course. You must register to attend. Due to space limitations, registration is on a first-come, first-served basis. Please be sure to include your full email address should we need to contact you.
Event Location: 26 Federal Plaza
Suite 3541
Room 36-108 (36th Floor)
New York, NY 10278-0068

Contact Info:
Beth Cahall

To register, click here
Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample issue go to or send an email to [email protected]  . Or call 800-839-0227, MTW 7AM to noon, Pacific time.
Mortgage applications decreased 6.4 percent from one week earlier,

WASHINGTON, D.C. (February 19, 2020) - Mortgage applications decreased 6.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending February 14, 2020. 

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week and was 165 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 10 percent higher than the same week one year ago. 

"Treasury yields moved slightly higher last week, despite uncertainty surrounding the economic impact from the spread of the coronavirus. The 30-year fixed mortgage increased five basis points to 3.77 percent as a result, causing refinance applications - driven by a 11 percent drop in applications for conventional refinances - to fall," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Even with an 8 percent decline, the refinance index was still at its third highest reading so far this year. Government refinance activity, which tends to lag movements in the conventional market, bucked the overall trend, as VA loan refinances jumped 23 percent." 

Added Kan, "Purchase applications fell 3 percent last week, as there continues to be some pullback after a strong January. Activity was still 10 percent higher than a year ago, but too few options - especially at the lower portion of the market - are slowing some would-be buyers."

The refinance share of mortgage activity decreased to 63.2 percent of total applications from 65.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4 percent of total applications.

The FHA share of total applications decreased to 9.5 percent from 9.7 percent the week prior. The VA share of total applications increased to 12.1 percent from 10.1 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.77 percent from 3.72 percent, with points remaining unchanged at 0.28 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week. 

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.79 percent from 3.75 percent, with points increasing to 0.19 from 0.17
(including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.86 percent from 3.84 percent, with points decreasing to 0.24 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.22 percent from 3.20 percent, with points decreasing to 0.26 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.23 percent from 3.21 percent, with points increasing to 0.21 from 0.13 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. 

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.
Ann O'Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
2033 Clement Ave. Suite 105, Alameda, CA 94501
Phone 510-865-8041
Email   [email protected]