Newz .Increasing fees .Flawed FEMA maps .Loan apps way up
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How many appraisers are increasing their fees?
Poll: In the past year, have your standard fees for a typical non-complex assignment? www.appraisalport.com
Take this week's poll: What is your typical rush fee?
My comment: Good news that the majority of responses were for increased fees. But, less than $50 annual increase is low. If you work for AMCs, your fees will drop when business slows down, assuming you are not getting very low fees now. If you don't ask for higher fees now, or drop AMCs that insist on low fees, you are losing lots of money. I keep increasing my fees by $50 every 3-4 months and am still below other local appraisers' fees. Remember, there is little or no AMC "loyalty" to appraisers. They will not remember you when business slows down and you really need work.
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McMansion Hell in Roseville CA
Just for Fun!!
Excerpt: Nothing in this world is a better metaphor for what politicians and marketers like to call "The American Dream" than the Californian tract house. Imagine - you too, could have your own sloppily put together plot of land on a nice street lined with other sloppily put together plots of land.
But you, of course, want your sloppily put together plot of land to be different from the sloppily put together plots of land of your peers. Now, your houses may have been built at the same time with the same plan by the same builder, but damn are you not determined to find a way to stand out from the crowd.
Finally, after the nth hour of HGTV, it dawns on you: the windows.
My comment: check out other interesting stuff on this web site. I didn't even know there were any McMansions in Roseville!!
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Mortgage originations surge to highest level in three years
Excerpt:
The purchase market is booming, fueling the overall mortgage market and helping set the highest first-lien mortgage originations volume in a single quarter since the second quarter of 2013, the latest Black Knight Financial Services Mortgage Monitor Report found, based on data as of the end of July 2016.
In the second quarter of 2016, purchase loan originations increased 52% ($102 billion) from the first quarter, reaching the highest level in terms of both volume and dollar amount since 2007.
This in turn helped bring in first-lien mortgage originations in the second quarter to $518 billion.
My comments: RAISE YOUR FEES. DUMP CRUMMY AMCS. PRE-SCREEN CAREFULLY. DON'T TAKE APPRAISALS OF UNUSUAL PROPERTIES. My articles in the August issue of the paid Appraisal Today can really help evaluate AMCs:
- Who's on your approved client list and why?
- Client Rating Grid
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Quick Links
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Email newsletter FAQs - who-what-why,
not getting email newsletter, etc.
I have a web page that explains it all.
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New in the September 2016 issue of Appraisal Today
AMCs Tell All to Appraisers!!
About 40 residential appraisers listened to a rotating group of speakers over seven hours. The day started with staffers from two local AMCs discussing how orders are assigned and priced. Then their bosses went up and discussed the AMC business model in some depth. Some details mentioned:
* AMCs generally offer base prices to lenders (known as "TRID Pricing") so lenders know how much to charge their borrowers. This is key because TRID does not allow for the borrower to be charged more.
* Certain lenders have "bandwidths of clients," or clients that generally come from similar markets/neighborhoods/etc., implying that a single fee will make sense.
* Other lenders with non-conforming borrowers work with tiered pricing
To read the full article, plus the recent issue on how to evaluate AMCs and dump the bad AMCs,
subscribe to the paid Appraisal Today.
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Course Title: NEW
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FHA Appraisal Training - Minneapolis, MN
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Date/Time:
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Tuesday, September 20, 2016, 8:00 AM - 4:30 PM (Central)
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Event Location:
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920 Second Avenue South
Suite 1300
12th Floor Training Room
Minneapolis, MN 55402
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Jurisdictional Host:
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Denver Homeownership Center
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Registration Link:
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Description:
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This free, one-day training course will cover FHA appraisal requirements, including FHA appraisal protocols and updates to FHA appraisal policy. The course will also equip attendees with the knowledge to determine property eligibility. This is a refresher course and is ideal for seasoned FHA appraisers as well as appraisers new to the FHA Appraiser Roster. Although intended primarily for appraisers, other industry professionals, including underwriters, processors, etc., will benefit from attending.
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Special Instructions:
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Advance registration is required. Seats are limited and available on a first-come, first-served basis. For more information, contact Juan Sola at (800) 225-5342 or juan.c.sola@hud.gov |
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Course Title: NEW
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FHA Appraisal Training - Minneapolis, MN
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Date/Time:
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Wednesday, September 21, 2016, 8:00 AM - 4:30 PM (Central)
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Event Location:
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920 Second Avenue South
Suite 1300
12th Floor Training Room
Minneapolis, MN 55402
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Jurisdictional Host:
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Denver Homeownership Center
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Registration Link:
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Description:
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This free, one-day training course will cover FHA appraisal requirements, including FHA appraisal protocols and updates to FHA appraisal policy. The course will also equip attendees with the knowledge to determine property eligibility. This is a refresher course and is ideal for seasoned FHA appraisers as well as appraisers new to the FHA Appraiser Roster. Although intended primarily for appraisers, other industry professionals, including underwriters, processors, etc., will benefit from attending.
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Special Instructions:
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Advance registration is required. Seats are limited and available on a first-come, first-served basis. For more information, contact Juan Sola at (800) 225-5342 or juan.c.sola@hud.gov. |
The Dangerous Flaw in FEMA Flood Risk Maps
FEMA bases flood insurance rates on the way water behaved in the past. But the atmosphere is changing.
Excerpt: ... weather conditions are shifting dramatically. Climate change is heating up the atmosphere, feeding energy for storms that are more frequent and more severe. So-called 100-year events have been striking more often than they used to. The recent floods in Louisiana were caused by a 1,000-year rain event-precipitation that is supposed to have a .1-percent chance of occurring in any year.* The state had already seen several 500-year rain events since October 2015 (and that's to say nothing of poor Texas). If measuring risk based on past events was ever a good way to manage flood plains, it certainly isn't now. "It's analogous to taking a car onto the Interstate and using the rearview mirror as an indicator of what's ahead," says Rob Moore, a senior policy analyst with the water program at the Natural Resources Defense Council. "Climate change is a turn in the road."
My comments: very interesting article. Be sure to keep track of areas you work that may be affected by floods and/or have FEMA map changes.
Using the past to predict the future is what we all do. It human nature and hard to avoid. Many appraisers use the past, closed sales, to determine today's values, even though pendings, listings, expireds are good indicators of the current market. Remember the PhD statisticians who said there was no risk until the mortgage market collapsed in 2008 because it had never happened before on a national level since the Great Depression. They were looking at the past.
My small city, and other cities, on San Francisco Bay have been recently remapped by FEMA because of anticipated higher sea levels due to glaciers melting, which has already started. Lots of changes are coming. I recently watched Supervolcano on Netflix, a well done British docu-drama about Yellowstone National Park, which has the largest active volcano in the U.S. It was about the "worst case" scenario about what would happen if there was a massive eruption, but also discusses more minor eruptions.
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Still don't have a web site and domain name for your appraisal business?
I just spoke with an appraiser who had a web site, but the person who set it up went out of business. He knows nothing about web sites and wanted to find out how to have someone else do it.
His ISP is AT&T, a very large company. I went to their web site and looked at their web site hosting options. For $30 per month he can get 3 pages, which is what I recommend for a solo appraiser web site. Plus, domain name registration, a professional designer to set it up, lots of templates to choose from, 30 minutes a month site maintenance for any changes, 10 email addresses, etc,etc. Wow!! What a change since I set up my first web site myself in 1998...
Deciding what to put on your new web site is easy. Just look at some other appraiser web sites. They all have the same information.
Finding a domain name may be tough. Often xxx.com is gone, but you can use xxx.net.
I wrote an article in the April 2016 paid newsletter on this topic, with a lot of practical tips.
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The Rise and the Fall of the Mortgage Broker in Three Data Points
Excerpt: The rise and fall of the mortgage broker in the mid-2000's can be tied to one product: subprime mortgages. Wholesalers and investors were willing to pay more for these loans than for FHA and conforming mortgages and many loan officers came into the industry seeing subprime as a way to make a quick buck.
But to truly understand how brokers rose to prominence, it is helpful to look back to the broker channel's beginnings, when it emerged in the late 1980's after the thrift crisis. Here's a look at three data points that sum up the rise and fall of the mortgage broker
- 29% of market in 2004-2007, after a long stable period.
- By 2005, the peak year for subprime lending, six of the top 10 wholesale lenders were also among the top 10 in subprime originations
3.$586.3 Billion at the peak. Just two years later, the subprime bubble burst, with volume plummeting to $142 billion in 2007. In 2008, subprime lending totaled $15 billion. At the same time, broker employment fell, dipping below its 22% historical norm in 2011. But brokers have slowly been replenishing their ranks. In 2015, the annual average number of broker employees was at its highest point since 2001. This resurgence is because loan officers no longer fear new regulations that could stifle their channel of the industry, said Mat Ishbia, president and CEO of United Wholesale Mortgage.
My comment: Just a look back at mortgage brokers.
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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 https://www.mba.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 or send an email to info@appraisaltoday.com . Or call 800-839-0227, MTW 8AM to noon, Pacific time.
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