Appraisal Scoop

Sneak Peak - 1004MC 2009 Form - Fannie changes list/sale to sale/list ratio

Original Form - 2008 - Median List-to-Sale Price Ratio

 

New Form - 2009 - Median Sale Price as % of List Price & Dropped "Historical (4-6 & 7-12 month) Analysis for Listings

    

So exactly what did they change?

The first change was to gray out several areas on the form. These areas pertain to historic listing data, (prior 4 to 6 months and prior 7 to 12 months), and the overall trend rating boxes. Fannie Mae understands that this type of info may be difficult to acquire in some areas. However if you can get the data you must still include it on the form and check the appropriate trend rating box.

Fannie's new instructions on the form now state:

“It is recognized that not all data sources will be able provide data for the shaded areas below, if it is available, however, the appraiser must include the data in the analysis.”

Also, the form now requires median sales price as % of list price instead of the median list to sales price ratio.

  Click Here to Download the "Official" Fannie Mae 1004 MC

ASB Issues 3rd Exposure Draft on Revisions to USPAP

The ASB has just released its 3rd Exposure Draft on revisions to become effective with the 2010-2011 edition of USPAP. The comment deadline for the Exposure Draft is March 27, 2009.

Topics covered include:

• Definition of “Assignment"
• Definition of “Signature"
• Definition of “Jurisdictional Exception” and revisions to the JURISDICTIONAL EXCEPTION RULE 
• The ETHICS RULE
• The COMPETENCY RULE
• STANDARD 3, Appraisal Review, Development and Reporting

Click here to view a copy of the Exposure Draft. You can send your comments via email to [email protected] . Any questions on the Exposure Draft or the work of the ASB can be directed to Carrie Composto ([email protected] ).

NAMB HVCC Lawsuit - Keep Your Friends Close . . .and Your Enemies Closer!

Earlier this month, Scott Tennell, Vice President, Florida Mortgage Professionals Association sent me an email asking for the support of real estate appraisers in their lawsuit against the FHFA and HVCC. In part, Scott is asking appraisers to join their fight . . .

"I am writing to you today because I am a member of the NAMB (National Association of Mortgage Brokers) and the FLMPA (Florida Mortgage Professionals Association, the official Florida affiliate of NAMB).

Long story short, NAMB is currently preparing a lawsuit against FHFA, FNMA, FHLMC, and the New York attorney general regarding the HVCC. While the independent broker is vulnerable, so are many residential appraisers who built their businesses serving reputable independent firms. Through various conversations, we have learned that residential appraisers do not have a true national voice in Washington DC.

Realizing the HVCC is just as devastating to residential appraisers, NAMB is reaching out to those residential appraisers who want to protect their business and / or there professional fees. This lawsuit is going to cost six to seven figures. In addition to monetary support to defeat the HVCC, we are looking to grow the number of members in our organization so when we are in DC or Federal court in this case NAMB can say we represent XXXX members including appraisers."

Download NAMB_HVCC_Donation_Lawsuit_Appraisers

I agree that we have some common concerns with the HVCC. I also agree that the NAMB, individual appraisers, and the various appraisal organizations should join forces in their lobbying efforts.

However, NAMB officials (IMHO), in recent press releases and articles, have not been real flattering in their remarks about appraisers.  As I’ve read those remarks, I’ve thought . . . Why would they say those things when we COULD be allies??!   Take a look at the attached letter and let us know YOUR thoughts!

You know the old adage . . . “Keep your friends close . . .and your enemies closer!”  Appraisers and Mortgage Brokers have a tenuous business relationship. In this case, I think we should join forces, but the NAMB needs to show more respect for appraisers in their public remarks and policies!

Author: Brian J. Davis, RAA - Brian Davis & Associates - Brian has over 25 years of appraisal experience in Central, IL and hosts the Appraisal Scoop blog, WinTOTAL Users Group, and Appraiser's Water Cooler network.

Runt Rants - I'm Back

Well, well, well. I’ve awakened from a year long nap to find a changed world. Rip Van Runt. That’s me!

When I dozed off

• We seemed a lock to elect the first woman president of the USA 
• The HVCC was going to revolutionize the appraisal industry 
• The Snake Oil Salesman were still selling bottled pig slop as perfume 
• The debate was ongoing to let troubled financial institutions fail 
• WAMU was a healthy bank 
• The DOW was down to 10,000 and there was concern in the air

When I returned 

• We have a male President 
• We have our third female Secretary of State 
• We have Senator Biden as Vice President in charge of something called Stimulus 
• The Snake Oil Salesmen have gone underground  
• The US auto industry has become a ward of the state 
• The financial industry has become a ward of the state 
• WAMU disappeared, Wachovia disappeared 
• HVCC has been so watered down that the change will be hardly noticed 
• The DOW is nearing 6,000 
• The US and the world are in a recession 

Yep, the last year has been eventful, and I missed it all. I know how Mr. Van Winkle must have felt.

Appraisal Scoop has become a must read in the Real Estate Blogosphere, regularly in the top 15 of 500 sites, often in the top 10. That’s impressive, but not a surprise. Appraisal Scoop was created by the best appraiser/marketer I know. He had a history of creating environments for others to thrive in before. He’s done it again in Appraisal Scoop. For my Heartless Editor to allow me to participate again is truly a stroke of luck!

Our business, Acorn Appraisal Associates in Houston Texas has endured a rough year; two rough years in fact. No doubt yours has also. Profits have declined. Net Income was still positive, but not nearly the required, the targeted, return. Revenues have basically been flat.

September brought Hurricane Ike, the first to directly hit Houston in decades.  Our building's power was knocked out and was one of the last to be brought on line; three weeks it took!  We’ve been able to maintain our staff and minimize the income loss to them personally, but little profit for the company remained.

That happens in business. We’ve adapted. We’ve changed. We’ll change some more. I’ll try to address those changes, those experiences in the time to come.

That’s what the Heartless Editor charged me to do when he invited me here several years ago. I’ll try to confine myself to what I know, which is my business. Not yours, but mine. For each of us business owners are experts in our own business, and no one else’s.

I’m here to share my business experiences, the successes, the not so successes.  One appraisal business owner's view of the market, the changes, and how I view their affects on my business. Take from them anything that might help you in yours.

I’m glad to be back.

AUTHOR: Ken Verrett: The author is the owner of Acorn Appraisal Associates, a 24 year old firm offering a wide range of quality appraisal services to the Financial and Business Communities.

Humor: The Dailyshow - "CNBC Gives Financial Advice"

Jon Stewart of The Dailyshow takes a humorous look at the "Financial Crisis" by juxtaposing video clip predictions with actual results . . .sometimes only days later

Here are a few quotes:

After CNBC's Rick Santelli screams angerily that "those loser homeowners are going to get bailed out." Jon Steward says: "He believes in personal responsibility.  He believes in not rewarding the losers for missing all the warning signs.  I mean for gawd sakes, he works at CNBC!  They're the best of the best!".

 

Later . . . "If I'd only followed CNBC's advice, I'd have a million dollars today - - provided I started with a hundred million dollars." - Jon Stewart

 

The Daily Show With Jon StewartM - Th 11p / 10c

CNBC Gives Financial Advice

Daily Show Full Episodes
Important Things With Demetri Martin

Political Humor
Joke of the Day

Neighborhood Boundaries and Life Cycles

The knowledgeable real estate professional will understand the boundaries and influences that characterize a neighborhood and will be able to recognize the stage or cycle that a neighborhood is undergoing as well as its future prospects. This knowledge is fundamental to knowing how a property fits into its surroundings and the community and the likely desirability of an area to a given buyer.

Neighborhoods and Boundaries

A neighborhood is a geographically localized community within a larger city, town or suburb. Neighborhoods are often social communities with considerable face-to-face interaction among members, usually feature some sort of boundary lines to distinguish themselves from other areas, and neighborhoods typically exhibit distinctive types, sizes, ages or styles of homes.

Neighborhoods boundaries can be determined in a variety of ways. They can a set of physical geographic characteristics such as roads, rivers, etc., the geographic area served by a particular school or place of worship, or perhaps social bonds where people share similar interests. Availability of and access to employment opportunities might form a boundary. They sometimes are formed around distinctive ethnic or cultural communities where people share similar backgrounds or heritage. Some neighborhoods encompass a single subdivision or development, while others may encompass many. Some are very small in area and others are very large, and some may actually overlap.

Many neighborhoods have associations (voluntary or mandatory) that maintain and enforce regulations or facilities, provide information, or offer opportunities for neighbors to interact. The Austin, Texas area has a large number of neighborhoods and is known for the strong bonds and influence that neighborhood associations have in the community and the grassroots aspect of the political process.

Knowing the boundaries and characteristics of the neighborhood where a property is located is very important in the real estate business, and neighborhood analysis is a fundamental aspect of both sales and appraisal valuation. Visiting neighborhood association websites can be a great starting point to understanding boundaries and other basic characteristics that comprise a given neighborhood. A driving tour will reveal much about a neighborhood as will informal interviews with people who live there. The ideal candidate for knowing the ins and outs of a area is someone who lives there.

Neighborhood Life Cycles

Neighborhoods typically begin in a growth phase as construction begins and continues over time, creating new housing. Growth ends where there is no longer any land available. The neighborhood will usually enter a phase of stability which is characterized by a lack of growth or decline and a period of relatively stable ownership. With advancing age a neighborhood will gradually enter a phase of decline evidenced by deteriorating property conditions, increasing crime rates, etc. and is sometimes combined with a certain neglect of public facilities or infrastructure by local authorities.

Click here to continue reading . . .