Appraisal Today 
 
NEWZ://The Big Short/Shift from Refis to HELOCS?/Cat Memes - 
January 7, 2016
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Black Knight Expects Transition from Refis to HELOCs
 
Excerpt:
Years into the refinance boom Black Knight Financial Services estimates there are still millions of homeowners who could qualify for and benefit from turning in their existing mortgages for a new model.  The company, in its current Mortgage Monitor says that group includes about 5.2 million homeowners and that 2.4 million of them could save $200 or more per month through refinancing.
 
The pool is shrinking however as interest rates rise and Black Knight estimates that a 50 basis point increase in rates would eliminate 2.1 million potential candidates from refinance eligibility, a 42 percent drop.  A full point increase would take out an additional 1 million borrowers.
 
There is still a lot of equity out there that homeowners could utilize if they wished.  That "tappable" equity is probably around $4.2 trillion and has increased by $600 billion in the last 12 months.
 
Check it out. Some interesting graphs.
 
My comment: I spoke with an appraiser last week who is making lots of money doing HELOC drivebys for a direct lender. Some appraisers don't like doing drivebys. It is a business decision.
Some lenders use AVMS and BPOs, but others use licensed appraisers.
 
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Real Estate Cat Memes (Humor)
 
You just gotta see them. Cannot describe!!
Topics: hoarders, foundations, agents not returning phone calls, etc.
 
My comment: for real estate agents, but some fit for appraisers also. Make them up yourself. We need some appraiser cat memes!!
 
 
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Appraisal volume bounces back, jumps 35%
Still slightly below average
 
Excerpt:
"For the first full week of 2016, the National Appraisal Volume Index bounced back with a 35% increase over last week," explained Kevin Golden, director of analytics with a la mode.
 
"This is a little shy of the average recovery for the first week of the year of 37.2%. With steady interest rates and solid employment reports, the housing market is continuing its stable progress," Golden added.
 

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The 8 states most at risk of a housing crisis
Oil and gas producing states rank high in riskiest states for consumers, lenders
 
Excerpt: The plummeting price of oil has some states at a much higher risk of a housing crisis, a new report from Arch MI found.
 
According to the private mortgage insurer's latest Housing & Mortgage Market Review, the average likelihood of home price declines across the country over the next two years remains low, at 6%, but some states are at a much higher risk of seeing price declines.
 
 
My comment: Are you in an oil-producing state or reviewing appraisals from those states? Check out the list in the article. Fortunately, now you won't lose clients because you report declining values!!
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My comments on The Big Short 
I watched The Big Short movie yesterday. I strongly advise seeing this movie. It is based on real events and makes the mortgage mess personal. It is based on a book with the same name. I was very lucky. I sold my big house in Alameda in April, 2008, just before the crash, for $1,000,000. It had declined about $100,000 but I had no idea the value would decline about 30% more. It is now well past the previous peak of $1,100,000. What is really sad is that prices declined about 80% in low income neighborhoods in a nearby city. They have not come back yet.
 
What were the problems? Greed and lack of regulations, of course. But, there had never been property value declines all over the country at the same time since the Depression. I had no idea it would happen. None of the Wall Street statisticians thought it would happen. Beware of using statistics to predict the future.
 
I was very aware of the scams such as accountants making up fake business tax returns. I was able to persuade a young friend not to buy a house using a variable rate loan. I told him that if prices declined he could not refi when the low rate ran out.
 
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'The Big Short,' the Great Depression and the Evolution of Crisis Narratives
 
Excerpt:
Are financial calamities the fault of bad behavior or bad economic systems?
 
"The Big Short," released across the country in movie theaters Christmas week, leaves little doubt. Based on Michael Lewis's bestseller by the same name, "The Big Short" tells the story of a handful of renegade traders who figured out that the subprime mortgage bubble would end in catastrophe, and bet against (i.e. "shorted") it. It's an entertaining story in which director Adam McKay interlaces profanity, financial tutorials and comedy with a clear assessment of blame: financiers behaved like criminals and got away with it. It's a message that will resonate with much of the public, and politicians.
 
 
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'The Big Short' Uses B of A, Wachovia as Punchlines
Excerpt:
If you lived through the 2007-08 financial crisis, at some point you may have felt like you had to laugh to keep from crying.
 
That's the approach director Adam McKay takes in his new movie, "The Big Short." It's his surprisingly comedic adaption of Michael Lewis' nonfiction book about the investors who bet against the housing market and made billions when everyone else was losing their shirts -- and homes.
 
And so who is the butt of all the jokes? Big banks, including Charlotte's Bank of America and the late Wachovia. Charlotte itself even gets a little jab.
 
 
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The Big Short's Michael Burry on disastrous Fed policies; failure of Dodd-Frank
 
Excerpt:
Michael Burry, one of the featured players in both the book and movie "The Big Short," is thought of as a "soothsayer" who saw the financial crisis coming before anyone else.
 
As part of the publicity tour for the movie version of The Big Short, Burry spoke with New York Magazine about his views on the run-up to the financial crisis, the aftermath of it, and where things stand now.
 
In Burry's view, the government's biggest post-crisis move, the Dodd-Frank Act, is a failure, and he worries that the current policies of the Federal Reserve are setting up the country's economy for another crisis.
 

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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 
 
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 www.appraisaltoday.com/products.htm  or send an email to [email protected] . Or call 800-839-0227, MTW 8AM to noon, Pacific time.

Mortgage applications increased 21.3 percent from one week earlier

WASHINGTON, D.C. (January 13, 2016) - Mortgage applications increased 21.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending January 8, 2016.  The previous week's results included an adjustment for the New Year's holiday.
 
The Market Composite Index, a measure of mortgage loan application volume, increased 21.3 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 76 percent compared with the previous week.  The Refinance Index increased 24 percent from the previous week.  The seasonally adjusted Purchase Index increased 18 percent from one week earlier. The unadjusted Purchase Index increased 74 percent compared with the previous week and was 19 percent higher than the same week one year ago.
 
"MBA's purchase mortgage application index reached its second highest level since May 2010 on a seasonally adjusted basis last week, second only to the week prior to the implementation of the Know Before You Owe rules," said Lynn Fisher, MBA's Vice President of Research and Economics.
 
"Bolstered by strong fourth quarter growth in jobs and continuing low rates, the results are similar to levels we saw in early December, suggesting that the purchase market's strong finish to 2015 may be continuing.  While refinances also increased on a holiday-adjusted basis, refinance activity was down 38 percent relative to a year ago when rates dove below 4 percent," Fisher continued.
 
The refinance share of mortgage activity increased to 55.8 percent of total applications from 55.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.1 percent of total applications.
 
The FHA share of total applications decreased to 14.4 percent from 14.6 percent the week prior. The VA share of total applications decreased to 12.2 percent from 12.9 percent the week prior. The USDA share of total applications increased to 0.8 percent from 0.6 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 4.12 percent from 4.20 percent, with points decreasing to 0.38 from  0.42 (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 4.02 percent from 4.09 percent, with points decreasing to 0.30 from 0.35 (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 3.90 percent from 3.95 percent, with points decreasing to 0.34 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 15-year fixed-rate mortgages decreased to 3.42 percent from 3.47 percent, with points increasing to 0.39 from 0.31 (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 3.14 percent from 3.19 percent, with points increasing to 0.42 from 0.32 (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.
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Ann O'Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
2033 Clement Ave. Suite 105
Alameda, CA 94501 Phone 510-865-8041
Fax 510-523-1138
Email   [email protected]