NEWZ://Haunted places/Most frequent adjustments/Appreciation: Big Mac vs houses,
|
________________________________________________________________
Thanks to our sponsor!!
|
|
Mortgage Banker's Association predicts mortgage originations will decrease to $1.32 trillion in 2016 from $1.45 trillion in 2015, a 9% decline
The Mortgage Bankers Association announced today that it expects to see $905 billion in purchase mortgage originations during 2016, a ten percent increase from 2015. In contrast, MBA anticipates refinance originations will decrease by one-third, resulting in refinance mortgage originations of $415 billion. On net, mortgage originations will decrease to $1.32 trillion in 2016 from $1.45 trillion in 2015.
For 2017, MBA is forecasting purchase originations of $978 billion and refinance originations of $331 billion for a total of $1.31 trillion.
"We are projecting that home purchase originations will increase in 2016 as the US housing market continues on its path towards more typical levels of turnover based on steadily rising demand and improvements in the supply of homes for sale and under construction. Despite bumps in the road from energy and export sectors, the job market is near full employment, with other measures of employment under-utilization continuing to improve," said Michael Fratantoni, MBA's Chief Economist and Senior Vice President for Research and Industry Technology. "We are forecasting that strong household formation, improving wages and a more liquid housing market will drive home sales and purchase originations in the coming years.
"Our projection for overall economic growth is 2.3 percent in 2016 and 2017 and 2 percent over the longer term, which will be driven mainly by consumer spending as households continue to buy durable goods, such as cars and appliances. The housing sector will contribute more to the economy than it has in recent years. We are forecasting a 17 percent increase in single family starts in 2016 and a further increase of 15 percent in 2017. Weaker growth abroad will mean fewer US exports, which will be a drag on growth over the next couple of years. Recurring flights to quality, a demand for safe assets from investors abroad, will keep longer-term rates lower than the domestic growth environment would warrant.
"Coincident with a strengthening economy, we expect the Federal Reserve will begin to slowly raise short-term rates at the end of 2015. At some point after liftoff, the Fed will begin to allow their holdings of MBS and Treasury securities to run off, likely beginning in late 2016. Even with these actions, we expect that the 10-Year Treasury rate will stay below three percent through the end of 2016, and 30-year mortgage rates will stay below 5 percent.
"We forecast that monthly job growth will average 150,000 per month in 2016, down from about 200,000 per month in 2015, and that the unemployment rate will decrease to 4.8 percent by the end of 2016, returning to 5.0 percent in 2017 and 2018. The slight rebound will be driven by an increase in labor force participation rates to more typical levels.
"Refinance activity will continue to decline as there are few remaining households that can benefit from an interest rate reduction and because rates will gradually begin to rise from historic lows in the coming years. Home equity products may see an increase in demand as home prices continue to increase at a decelerating rate," Fratantoni said.
MBA upwardly revised its estimate of originations for 2014 to $1.26 trillion from $1.12 trillion, to reflect the most recent data reported in the 2014 Home Mortgage Disclosure Act (HMDA) data release.
This graph shows the ups and downs since 2000
My comment: As you can see above, mortgage lending is a boom and bust business. No one knows when mortgage rates will go up and business will fall. How are you preparing for the inevitable bust? I have lots of ideas in the paid Appraisal Today, including an upcoming article on the topic.
Here's a few tips: Raise your fees now to save as much money as you can. Turn down low fees so you can get higher fees and offer a faster turn time. Lenders' #1 priority has always been fast turn time so they can get more loans. AMCs compete on lender fees and cut appraiser fees so they can make more money. Lenders have never been very fee sensitive. Paying $50 more for an appraisal to close the deal and beat out their competition has always been a non-issue for them as they make lots of money on mortgage loans. Maybe lenders will figure out what is happening, dump AMCs and use a portal such as appraisalport to place orders. Or... have their own appraisal department that orders appraisals. What a concept... from the ancient past...
------------------------------
Appraisers say new FHA policy goes too far
Excerpt:
According to FHA's 2015 first-quarter market share report, the administration insured 16.5% of the purchase loans nationwide, and 5.7% of the refinancing market in 2014. That's more than 750,000 borrowers and $133 billion worth of mortgages.
Jonathan Braverman, of Baker, Braverman and Barbadoro PC, has been litigating real estate cases for 35 years. He said for most appraisers, complying with the new policy is "going to be extremely daunting." "I think appraisers are going to have to look at this and consider whether they can disclaim competency and liability in any of these specific areas," Braverman said. "I believe appraisers are going to have to rethink what they're willing to sign off on, how much they charge and what liability arises out of it."
Read more comments at:
My comments: nothing new for appraisers, but it lets others know about what is happening. I want to hear directly from AMCs and lenders who are having problems finding appraisers. Lots of comments posted by appraisers online who say lenders/AMCs are having difficulty placing appraisal orders. If they increase their fees, there may be more willing appraisers. But, it seems to me, that a $50 or $100 increase will not decrease your potential liability or the hassles of crawl spaces. What will happen when business slows down? I suspect that more appraisers will accept FHA orders.
FHA continues to say that their requirements have not changed much. Some appraisers also agree, mostly long time, well trained FHA appraisers. Other appraisers never learned the correct FHA requirements. FHA has known about this problem for quite a while.
--------------------------------
How Much Have Housing Prices Gone Up in 30 Years? Hint: Less Than a Big Mac
Editor's note: The highest is college undergrad tuition. Next is Big Mac. Also included is Radio Shack stock price, gasoline and cellphones.
Excerpts:
McDonald's Big Mac
Though the two all-beef patties, special sauce, cheese, lettuce, pickles, onions on a sesame seed bun tend to look far infinitely better in commercials than in reality, the signature sandwich of McDonald's has slid its way into American's hearts and arteries ever since it entered the national market in 1968.
Due to the climbing prices of beef and bread, the Big Mac also experienced a drastic price surge-from $1.60 to $4.62 in 30 years, according to The Economist's Big Mac index.
Cellphone: From brick to flip to smart
It's hard to believe the cellphone has been around for only 30 years: The first handheld mobile device was released by Motorola in 1984. Though it was by no means "mobile" by modern standards, as it weighed 28 ounces, its market price was a whopping $3,995.
In the passing decades, we've seen iconic models such as the Nokia 6160, BlackBerry 5810, and the iPhone. Cellphone models have become more portable, multifunctional, and cheaper. Nowadays, most new smartphones can be purchased for $199 or less if you sign a contract with a provider.
Watch the very interesting 45 second video summary plus get more info:
|
|
Quick Links
|
How to change your email address - go to the bottom of this email.
Looking for an old email newsletter? Click here to access the email archive!!
|
Residential Highest and Best Use: More than Just a "Check Box" - Reviewers and state boards want to see more explanation.
What do you need to include?
In the July 2014 issue of the paid Appraisal Today, available to paid subscribers
Below are some of the concepts covered in Denis Desaix's article
· What are the basic elements that need to be included in the report's H&BU summary?
· "Is 'checking the box' sufficient to meet my reporting requirements?" (for results communicated in an Appraisal Report format, the answer is "no"!)
· Legally permissible, physically possible, financially feasible, and maximally productive (exactly what is "maximally productive and how is it measured?"
· As-vacant and as-improved H&U analyses
· Can my as-vacant be different than my as-improved, and if so, what does that really mean?
· As-vacant options: Build now, build something else, don't build now and wait
· Is there excess land present?
· As-improved options: Remodel, renovate, bulldoze, or retain as is
· H&BU tells us who the likely buyer will be and what that buyer will do with the property
· H&BU tells us what are the best sales to use as comparables
Want to read more of Denis' advice on Highest and Best Use?
Sign up for $8.25 per month!
Read the past 18+ issues FREE!!
Cancel at any time. For any reason!!
=================================================================================
$8.25 per month, $24.75 per quarter, $89 per year (credit card only),
or $99 per year or $169 for two years (no credit card required)
Subscribers get, FREE: past 18+ months of newsletters plus 4 Special Reports!!
|
To purchase the paid Appraisal Today newsletter go to
|
If you are a paid subscriber and did not get the October 2015 issue, emailed October 1, please send an email to info@appraisaltoday.com requesting it and we will send it to you!! Or, hit the reply button and request it. Be sure to put in a comment requesting it ;>
|
What are the most frequent adjustments that appraisers make?
Excerpts:
Using a national sample of approximately 1.3 million appraisal reports between 2012 and 2015, new analysis from CoreLogic shows which home features are being adjusted the most frequently, as well as which are being adjusted for the most money, thereby having the greatest impact on appraisal values.
So what is being adjusted and how often? CoreLogic analysis reveals that some type of adjustment was made on 99.8 percent of appraisal reports reviewed. Figure 1 shows the various features adjusted on appraisal reports in relation to how often that adjustment was made, as well as the financial impact, or value influence, it had on the appraisal report.
Differences in Living Area was the most adjusted feature at 96.4 percent. Other features that were adjusted on 50 percent or more of appraisal reports were Room, Car Storage, Porch and Deck, Overall Condition and Site Area. It is significant to point out that the frequency of an adjustment is indirectly correlated to the financial impact, as four of the top five most adjusted features resulted in relatively low average dollar adjustments. For example, Room adjustments were very common at 70.4 percent but had minimal value influence, recording an appraisal adjustment of only $2,246 on average. Conversely, a Quality Rating adjustment had the highest value influence, with an average adjustment of $14,748, but accounted for only 18.7 percent of all adjustments.
Although the adjustment features that result in the highest value adjustment levels (Condition, Quality and Location) are harder to quantify, appraisers are professionals who can do this and adjust their reports appropriately to reflect the most precise appraisal for the home.
My comment: Interesting results. The actual dollar amounts don't mean much as they are aggregated from all over the country. But, the frequency of adjustments and their relative amounts are worth checking out. What I see is that too many adjustments are being made for items that don't affect value much and are hard to support. Savvy appraisers are not making adjustments for items such as porches and deck. Many are putting 0 in the grid to indicate that no adjustment is needed. Some appraisers only make adjustments for market conditions and GLA. Other differences, such as condition and location, are considered in the reconciliation. For example, if the subject has superior condition as compared to the comps, a value on the higher end of the range of adjusted comps is selected.
Fannie is focusing on adjustments in the new CU 3.0. They have been focusing on Q and C ratings. I will be writing about what all this means in the November, 2015 issue of the paid Appraisal Today.
Click here to see the adjustments graph and full article. Very interesting and worth checking out.
|
Not sure if you want to subscribe to the Paid Appraisal Today?
PAID APPRAISAL TODAY NEWSLETTER!!
|
What places have the most, and least, appraisers per population?
This article includes the letter read by Joan Trice at the recent AQB meeting. Nothing much new in the comment letter, but the table of the top 30 SMSAs includes the ratio of appraisers to the general population for the top 30 MSAs is interesting.
Excerpts:
While no doubt the intentions of the Appraisal Qualifications Board (AQB) were to tighten standards with the effect of elevating the quality of the work product, there appears to be no evidence that that has actually occurred. In fact, it would appear that a new set of problems has resulted. The Collateral Risk Network (CRN) produces two surveys each year - one of chief appraisers within the lending community and a second one of chief appraisers from AMCs. Both stakeholders report that Appraisal Quality is the single biggest concern they have.
How can we discuss the next generation without a discussion of this generation? Who would step up and mentor this next generation? Is there a shortage of appraisers or just a shortage of well-trained appraisers? What impact does the lack of enforcement of C&R have on the current population and the future generation of appraisers? Do we have the right educational offerings available? What role should the appraiser play in the future of housing finance? We all have more questions than answers. The only thing clear is that we are all operating on a dearth of information.
My comments
- The results are aggregated. It seems very strange to me that the Los Angeles SMSA, with so many tract homes, has fewer appraisers per population than my area, San Francisco/Oakland/Hayward SMSa with few tract homes and a much higher percentage of difficult to appraise homes.
- The data does not break down commercial vs. residential. Almost everyone I know that has quit appraising is residential The differences between residential and commercial appraising is becoming a wider and wider gap. Not to be trusted form fillers vs. professionals. It is very sad.
- What if fees were the same as they were in 2007, even with the restriction on trainees? What if there was no Extreme Scope Creep for AMC appraisals?
To see the table, read more of the letter, and read appraisers' comments:
----------------------------
Dart Appraisal adds its first Chief Appraiser
They never had one before???
-----------------------------
The 50 Scariest Haunted Houses in America
Excerpt:
You don't scare easily, huh? How about the homes that hosted some of the most gruesome murders imaginable? Maybe the dark basements where innocent children met horrible ends? Or the backwoods houses where multi-headed incubi raped whole families?
OK, so that last one may be a bit much, but you get the picture: the places where really messed up bad stuff went down, and where the echoes of those messed up things can still be heard today.
Still not scared? Well, check out our collection of the 50 Scariest Haunted Houses in America, but don't tell your parents it's our fault that Little Jimmy wants to sleep in their bed tonight.
50. Pittock Mansion - Portland, OR
A 22-room French chateau in the hills overlooking downtown Portland built in 1922, the Pittock Mansion was the site of only two deaths (original residents Georgiana [1918; age 72] and Henry Pittock [1919; age 84]) and one political scandal (Pittock was able to get a water line installed to the mansion at the city's expense, despite the property being outside city limits), but since being opened to the public in 1965, it's been host to a number of ghost sightings, including floating old ladies, boots walking without legs, portraits moving of their own accord, windows opening and shutting themselves, and, perhaps most improbably, a tree with a face in it. The Mansion was also where the 1982 slasher film Unhinged and Madonna's 1993 answer-to-Sharon-Stone's-Basic-Instinct clunker Body of Evidence were filmed.
1. House of Death - New York
Mark Twain stayed in this 19th century brownstone in Greenwich Village, but it's the 22 people who died within the home's walls who are said to haunt the house (okay, they say Twain makes an appearance now and again, too). Most recently, lawyer Joel Steinberg beat his illegally adopted 6-year-old daughter to death while in a crack cocaine-fueled rage in 1987 (as dramatized [twice] on Law & Order).
-----------------------------
Any haunted places in your town?
Google haunted places and haunted houses in your town.
I found several in my small town of 75,000 people!! Including an old insane asylum, a large World War II aircraft carrier now a museum(one of the most haunted places in America), the local school auditorium, etc.!! Overnight stays at the haunted aircraft carrier are very popular for groups of kids and for adult groups. Many report hearing strange sounds and seeing ghosts!!
Sometimes haunted houses sell for less or never sell, and sometimes they sell for a premium!!
----------------------------------------------
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 .
Note: I publish a graph of this data every month in my printed newsletter, Appraisal Today. For more information or get a FREE sample issue go to http://www.appraisaltoday.com/products.htm or send an email to mailto:info@appraisaltoday.com . Or call 800-839-0227, MTW 8AM to noon, Pacific time.
Mortgage applications increased 11.8 percent from one week earlier
WASHINGTON, D.C. (October 21, 2015) -, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending October 16, 2015. This week's results include an adjustment to account for the Columbus Day holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 11.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index increased 9 percent from the previous week. The seasonally adjusted Purchase Index increased 16 percent from one week earlier. The unadjusted Purchase Index increased 5 percent compared with the previous week and was 9 percent higher than the same week one year ago.
"On an adjusted basis, application volume increased last week, led by a sharp rebound in government volume. We expect that application volume will remain volatile over the next few weeks as the industry continues to implement TILA-RESPA integrated disclosures," said Mike Fratantoni, MBA's Chief Economist.
The refinance share of mortgage activity decreased to 59.5 percent of total applications from 61.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.9 percent of total applications.
The FHA share of total applications increased to 14.3 percent from 12.6 percent the week prior. The VA share of total applications increased to 12.7 percent from 11.5 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.95 percent, the lowest level since May 2015, from 3.99 percent, with points decreasing to 0.43 from 0.53 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.87 percent, the lowest level since April 2015, from 3.89 percent, with points decreasing to 0.29 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.78 percent, the lowest level since May 2015, from 3.82 percent, with points remaining unchanged at 0.39 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.20 percent, with points decreasing to 0.34 from 0.39 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs decreased to 2.94 percent, the lowest level since May 2015, from 3.00 percent, with points decreasing to 0.35 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate decreased 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.
|
|
|
|
|
|
|
|
|
|
|
|
