Newz: Fannie Update. Blacklisting.
Spaceship Houses
March 26, 2021
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How to Fight Real Estate Agents' Appraiser Blacklisting
Excerpts: When a real estate agent “blacklists” an appraiser, the result is often that the agent’s lender/AMC contacts will stop using the appraiser completely (at the agent’s request), or occasionally, the lender will continue to use the appraiser but not assign the appraiser any of the transactions that that particular agent works on. In the case of the latter, sometimes the appraiser will be assigned an order only to have it canceled later that day once the real estate agent sees the appraiser on the order and calls the lender or mortgage broker to complain. I’ve talked to appraisers who have this happen several times a year with the same agent…
Having an order canceled and reassigned is sometimes the first and only indication to the appraiser that something fishy is going on, but some appraisers who abruptly stop receiving work from a client often don’t have to look far to figure out why. While “blacklisting” is sometimes more discreet, some appraisers actually have the real estate agent call them and tell them explicitly that they are going to actively prevent the appraiser from ever working on one of their transactions.
My comments: Lender blacklisting has been around for decades. I remember when the blacklists were shared among lenders. Some appraisers said it was good to be on the blacklist of the not-so-ethical lenders.
Savvy AMCs (and lenders) often just don't give the appraiser any more work. Putting an appraiser on a blacklist can be a big issue.
Good article with practical tips from Richard Hagar and the author.
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Is This Discrimination?
By Jamie Owen
Excerpts: Let me share a real-world situation with you. In times past, I would not have thought about being accused of discrimination in the following situation. And to be clear, I have not been accused of discrimination in the following situation, nor have I been accused of being so in the past. Nonetheless, because it is on the minds of so many, which is understandable, and something we all need to be sensitive to, I find myself thinking about discrimination when I am appraising homes in neighborhoods that might be considered to be under-served…
If an appraiser’s opinion of value is less than what is expected, and if there is support for a higher opinion of value, then, please give the appraiser the data that supports this! We want to get it right!
We develop our opinions on facts, not feelings. We do not drive markets with artificially inflated opinions of value. The appraiser’s work is not to change markets; it is to reflect them. Appraisers are not in the business of telling people what they want to hear. We are in the business of telling our clients what they need to hear. Namely, the truth! Doing otherwise would be, well, biased!
My comments: When I purchased my home in Alameda in 1995, built in 1946, there was a deed restriction (restrictive racial covenant): No Negroes or Chinese except as servants were allowed. I have seen them in many title reports here in the Bay Area. They are not legal but can still remain. In 1948 the United States Supreme Court ruled that racially restrictive covenants could not be enforced. Check the status in your state for removing the covenants.
I used to live in Chico, a Northern CA town that had a "sundown law." It was founded in 1887, with a teacher's college. When I moved there in 1975, residents told me about it. No black persons allowed after sundown. Arsonists burned Chico's Chinatown in February 1886. See if your town, and other towns, are on the list, Sundown Towns in the United States
Housing segregation is a "root" cause of the discrimination problem. I recently saw a news segment about Evanston, IL planning on giving reparations to Black homeowners based on their neighborhood during the period of segregation. As a country, we have never fully addressed the effects of slavery, failure of reconstruction after the Civil War, and Jim Crow laws. Appraisers cannot fix these systemic problems that started in 1619 with the first slaves brought to America.
To watch a 5 min 26-second video (be sure to watch the ending) on Evanston IL reparations click here
To see redlining maps, click here
For a podcast and transcript on the history of redlining, click here
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Fannie Updates
Forms Redesign Extended Into 2023-24
Summary: One online interactive form for all appraisals. UAD changes are coming, of course (not discussed in the announcement). Nothing new.
Per Dave Towne: "What once was a ‘three-year’ project to redesign and implement revised appraisal forms has morphed into one taking far longer. Actual implementation and use of ‘new forms’ are not scheduled to happen until (presumably) early in 2024 but could be extended even further.
By 2024, the currently used ‘forms’ will be 19 years old, and the current UAD overlay entering ‘teenage hood’ at 13."
To read the details and add your comment, click here
My comments: I have been following this since it first started. Finally, there is an updated "official" plan. The February 2021 issue of the monthly Appraisal Today newsletter had a long article on this topic and other Fannie topics. "FHFA wants input on waivers, hybrids, new form, and UAD changes, etc."
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Fannie's March 2121 Appraiser Newsletter
PDF newsletter topics:
- Is it time to take on an appraiser trainee?
- Appraiser Q&A: Positive time adjustments, yes or no?
- Lenders are responsible for appraisal review and AIR compliance
- What goes in lender/client fields when an AMC is involved?
- Selling Guide updates — manufactured homes
- The UAD redesign vision
- Clearing confusion on condition and quality ratings
My comment: Nothing new for appraisers. But, you can copy and paste from Fannie's newsletter to put in your replies to Stupid and Clueless AMC "Reviewer" Questions!
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New in the April issue of the paid Appraisal Today, available April 2
- Retirement: To Stay or Not to Stay. That is the question!!
- Highest and Best Use of the Cost Approach, by Scott Cullen
- Review: Residential Property Appraisal by Mark Ratterman. Buy This Book!!
- Appraiser Independence Rules (AIR), AMCs, and the Appraiser, by Julie Freiss, SRA
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Could the great refi boom finally be over?
Rates are now comfortably over 3%, and the refis are waning
Excerpt: A growing chorus of mortgage industry observers believe the final week of February might have been the last hurrah for sub-3% mortgage rates. And the proof is in the refi pudding.
With mortgage rates making their ascension, many late-to-the-game homeowners hopped on the chance to refinance their home loans and pushed refi volume to 68% of all closed loans in February, according to the latest originations report from ICE Mortgage Technology. That’s the highest refi volume the industry has seen in over a year, with conventional refi volume even hiking all the way up to 75% of closed loans.
Rates have been over 3.0% for much of the month of March and reached a benchmark rate of 3.32% for the 30-year mortgage on Friday. While a 3% rate is still hovering near historic lows, anywhere from an eighth to a quarter percent turn in mortgage rates, up or down, can cause a borrower to wait out the market.
My comment: Of course, no one really knows what will happen. Make Money while you Can!!! My monthly newsletter has lots of time-saving tips to get more done. Appraisers sell our time. Once time is gone, you cannot get it back!!
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This Oregon Home Isn’t a Spaceship — Although It Sure Looks Like One
Just for Fun
Excerpts: On the market for $269,000, the home on Lorane Highway in Eugene, OR, looks as if it just alighted from a far-off galaxy.
“It really gets a great reaction from people. It does look like a flying saucer that’s landed out in the woods,” says the listing agent, John Davis.
A company called Mortar Sprayer built the house (855 sq.ft.) in 2009, using nontraditional building techniques. Essentially, it involves taking a big balloon, filling it with water, and using a sprayer to coat it with a stuccolike concrete product.
To read more and see more fotos, click here
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Spaceship UFO House Albuquerque, New Mexico
Just for More Fun!
Excerpts: Also known as the Bug House, this terrestrial UFO is actually the residence and studio of architect Bart Prince…
In 1984, Prince completed this structural masterpiece to call his own. The open-air front deck has a tile-encrusted façade. At street level, metal stegosaurus sculptures guard the property. Other abstract and interpretative metal sculptures are on outer walls for neighbors and visitors to see. Around the back alley, guests can see the house’s rear ehere things get even more space-age with a stucco and wood fuselage dotted by portholes that evoke serious Gemini capsule vibes.
The design is more angular but equally architecturally fascinating.
To read more and see some very strange photos, click here
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It's Vaccination Day! - "For The First Time In Forever" Frozen Parody Video
The Funniest by Far!!
This video made me smile ;> I am FREE and sm starting to return to my pre-pandemic life!! I know exactly how it feels. I was fully vaccinated on March 5 and am waiting for more friends to be vaccinated so we can get together inside without masks!! Eating outside is tough when it is cold or rainy.
If you are fully vaccinated, you know what this is like. Well… maybe just singing and jumping in your mind :> If not vaccinated yet, this is what will be coming.
If nothing else, you won't have to worry about getting Covid and going to the hospital and maybe dying. Or, won't get Long Covid (aka becoming a Long Hauler) and be chronically sick for months, which can happen to anyone of any age or health status. Estimated 20-30% of those who get Covid get it. Many never went to the doctor and recovered quickly. The long Covid symptoms showed up later. Some that were infected last March still have significant problems.
Thanks to Jamie Owen at Cleveland Appraisal Blog for this great video!!
To watch the video, click here
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HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to www.mbaa.org
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Mortgage applications decreased 2.5 percent from one week earlier
WASHINGTON, D.C. (March 24, 2021) - Mortgage applications decreased 2.5 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending March 19, 2021.
The Market Composite Index, a measure of mortgage loan application volume, decreased 2.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week and was 13 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 26 percent higher than the same week one year ago.
"The 30-year fixed mortgage rate increased to 3.36 percent last week and has now risen 50 basis points since the beginning of the year, in turn shutting off refinance incentives for many borrowers. Refinance activity dropped to its slowest pace since September 2020, with declines in both conventional and government applications. Mortgage rates have moved higher in tandem with Treasury yields, as the outlook for the U.S. economy continues to improve amidst the faster vaccine rollout and states easing pandemic-related restrictions," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Purchase applications were strong over the week, driven both by households seeking more living space and younger households looking to enter homeownership. The purchase index increased for the fourth consecutive week and was up 26 percent from last year's pace. The average purchase loan balance increased again, both by quickening home-price growth and a rise in higher-balance conventional applications."
Added Kan, "Inadequate housing inventory continues to put upward pressure on home prices. As both home-price growth and mortgage rates continue this upward trend, we may see affordability challenges become more severe if new and existing supply does not significantly pick up."
The refinance share of mortgage activity decreased to 60.9 percent of total applications from 62.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.2 percent of total applications.
The FHA share of total applications remained unchanged from 11.7 percent the week prior. The VA share of total applications decreased to 9.8 percent from 10.3 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 ($548,250 or less) increased to 3.36 percent from 3.28 percent, with points increasing to 0.42 from 0.41 (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 $548,250) increased to 3.40 percent from 3.34 percent, with points increasing to 0.43 from 0.40 (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 3.35 percent from 3.25 percent, with points increasing to 0.41 from 0.38 (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 2.72 percent from 2.67 percent, with points increasing to 0.40 from 0.37 (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 decreased to 2.79 percent from 2.82 percent, with points increasing to 0.44 from 0.30 (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.
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Ann O'Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501
Phone 510-865-8041
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