Welcome to The National Appraisers Union. Connect and share with appraisers around the world! The NAU is back. The communication tools that we wrote about are now available. Our mission is to allow appraisers across the United States to gather and communicate in a way that has not been possible before. We have no prejudice regarding other appraisal organizations and as such we are going to include link support and a marketing platform for each and every real estate and or appraisal organization that wants to have a voice here.
]]>- Implementation of "Customary and Reasonable" Fees for Appraisers Scheduled for April 1st, 201
- The Foreclosure Crisis is Not Going Away Soon
- An Election Day Lesson for Appraisers of All Political Persuasions
- Reader Comments On Our Last Issue
- New Words of Wisdom From Mr. Yun
- Economics 102: Macrowikinomics: Rebooting Business and the World
- Rates & Dates
- Ask Angie
- Tell us what you think!
- Closing Remarks
Implementation of "Customary and Reasonable" Fees for Appraisers Scheduled for April 1st, 2011
While other provisions of the Dodd-Frank Bill are to take effect immediately, payment of “customary and reasonable” fees to appraisers will reportedly not be implemented and enforced until April 1st, 2011. It is understandable if many appraisers view this as an “April Fool’s Day” prank and doubt whether this provision will actually become law. Nothing has occurred, however, that would lead us to this conclusion and lenders and AMCs will face penalties of up to $10,000 per day for failure to comply. It has been suggested that the VA fee schedule may become the guide for setting appraisal fees but it is likely that the VA fee schedule will be just part of a fee schedule that will be based on a number of studies and sources with provisions for high value and unique properties. Appraisers who might be curious about the fee structure in their geographic area can contact the VA at VA Appraisal Fee Schedules and Timeliness Requirements.
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The Foreclosure Crisis is Not Going Away Soon
Along with other publications, on October 30th the New York Times reported on the ongoing efforts of the state attorneys general in pressing for investigations into their various concerns about the banking system’s improper and fraudulent actions related to foreclosure actions. This article, by Joe Nocera, makes the point that many see this as an opportunity not only to reform the foreclosure system but as a chance to force the banks to institute widespread loan modifications. He compares the very different efforts made by federal agencies with the state attorneys general in both areas. A link to this article is found here: The States Take on Foreclosures
In case any appraisers may have missed it, Andrew Cuomo will be leaving his position as New York State Attorney General: say hello to Governor-Elect Cuomo. We encourage Governor-Elect Cuomo to use his new post to End BPOs (Broker Price Opinions) in New York State and encourage the nationwide movement to do so. Do you think that he will listen to us this time?
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Appraiser Help is happy to announce it has renewed its partnership with McKissock 100% Education to provide generous discounts on Continuing Education courses for Appraisers. Go to Discounted McKissock Continuing Education to start saving today and to learn more!
An Election Day Lesson for Appraisers of All Political Persuasions
Lots of taxpayer angst. When this anger is combined with financial pressure and awareness of declining real estate values, it will lead to an increase in property tax assessment grievances in many parts of the country. While you’re waiting for April Fool’s Day and higher mortgage appraisal fees, why not learn the nuances of performing appraisals for tax grievance purposes in the municipalities where you appraise?
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Reader Comments On Our Last Issue
Regarding comments made by Lawrence Yun, Chief Economist for the National Association of Realtors (NAR) that included his remarks that “A housing recovery is taking place…”
“Every year when I have to send in my dues to the NAR, I cringe. I only do so to be part of the MLS. It certainly isn’t because of it being a stellar organization. The NAR is an organization that has little credibility as to the direction of the real estate market… A prime example is their chief economist. In 2008 Yun was spouting that the housing market had bottomed and we would start to see prices stabilize. I wrote a letter to the REALTOR magazine and told them he was crazy. Look what has happened since! Now he continues to say that the market is starting to turn around because of September sales. I swear this guy is the biggest joke of an economist, and I have to pay for his salary with my dues!
How can the housing market possibly recover when the supply exceeds the demand? This is economics 101, and Yun is a prime example of someone that is living in lala land…Most people that are honest will say that over all the housing market will take about two to three more years to see real recovery. And that needs to be qualified with a caveat which is economic recovery.
Please Mr. Yun start being honest with the American people instead of just being a propaganda machine for the NAR!” –Doug Quenzer, Certified Residential, Appraiser/Broker, Wisconsin
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New Words of Wisdom From Mr. Yun
On Friday, the NAR reported that their Pending Home Sales Index, which they describe as a “forward-looking indicator”, declined 1.8% based last month. Amongst other comments, Mr. Yun noted that: “Existing-home sales have shown some improvement but the foreclosure moratorium is likely to cause some disruption and contribute to an uneven sales performance in the months ahead… Nonetheless, there appears to be a pent-up demand that eventually will be unleashed as banks resolve their issues with foreclosures and the labor market improves. However, tight credit and appraisals coming in below a negotiated price continue to constrain the market.”
Maybe somebody should explain to Mr. Yun the difference between leading and lagging economic indicators. Or maybe appraisers just need to start drinking some of Mr. Yun’s cool aid…
Appraiser News is always a FREE publication. Please support our sponsors by clicking here.
Appraiser Help is happy to announce it has renewed its partnership with McKissock 100% Education to provide generous discounts on Continuing Education courses for Appraisers. Go to Discounted McKissock Continuing Education to start saving today and to learn more!
Economics 102: Macrowikinomics: Rebooting Business and the World
In our last newsletter we discussed the new book Crisis Economics: A Crash Course in the Future of Finance by Nouriel Roubini and Stephen Mihm in which the authors discussed the falsely optimistic tendencies of many interested (and disinterested) parties towards the economic, housing and foreclosure crises that we are facing. As we noted in the last newsletter, Roubini and Mihm wrote that:
“…Unfortunately, financial crises usually ebb and flow in their severity; they rarely hit once and then subside. They resemble hurricanes in that they gather strength, weaken for a while, and then gain even more destructive power than before. This reflects the fact that the vulnerabilities that build up in advance of a major crisis are pervasive and systemic.”
In their new book Macrowikinomics: Rebooting Business and the World, by Don Tapscott and Anthony D. Williams, the authors challenge other conventional wisdoms. They make the point that our industrial economy and many of its institutions, from the print media to transportation systems to financial service institutions, no longer function properly and need “rebooting”. The authors were featured in The Huffington Post on November 5th in which they were quoted as saying:
“…when it comes to fixing and restoring confidence in the financial services industry more is required than government intervention and new rules; it’s becoming clearer that what’s needed is a new modus operandi based on new principles like transparency, integrity and collaboration. Bankers can get going now to rebuild the industry on a new model. For example they could remove the value and dispose of the $trillion of toxic assets on their balance sheets by placing them in a commons and letting the world’s leading financial modelers determine their value…”
They went on to say that:
“Because of the Internet, small companies can have the same capabilities as large companies, without the same liabilities, like bureaucracy and legacy cultures, processes, people and systems. The world’s most dynamic innovators are using the Internet and new business models to transform industries ranging from manufacturing and transportation to fashion and retail.
So rather than simply debating the merits of fiscal stimulus, the task before us is to support more start-ups that lay the groundwork to get the country back to the high level of pre-recession job creation… So rather than simply tinkering, leaders in business need to face up to the new realities and get going on rebooting their industries.”
A link to the article by Tapscott and Williams is found here: Macrowikinomics: Rebooting the Economy
Rates & Dates
Freddie Mac reported that rates for 30-year fixed-rate mortgages were essentially unchanged at 4.24% for the week ending November 4th, from the 4.23% rate reported on October 28th.
The Mortgage Bankers Association (MBA) in its most recent Weekly Mortgage Applications Survey for the week ending October 29th reported a slight increase to 4.28% from the previous week’s average of 4.25%.
Additional information from Freddie Mac can be found by going to: Primary Mortgage Market Survey PMMS – Freddie Mac
Additional information from the Mortgage Bankers Association can be found by going to their site at: Research and Forecasts – Mortgage Bankers Association
Ask Angie
We want to congratulate our most recent winner, Clare Fleming, a Certified Residential Appraiser with CTF Appraisal in Perrinton, Michigan. CTF Appraisal provides appraisal services in the Michigan counties of Gratiot, Midland, Saginaw, Bay, Montcalm, Ingham, Clinton and Eaton. Clare was the first person who responded correctly that Oscar Wilde was the author of the quote “If you pretend to be good, the world takes you very seriously. If you pretend to be bad, it doesn’t. Such is the astounding stupidity of optimism” and that Aldous Huxley was the author of the quote “The charm of history and its enigmatic lesson consist in the fact that, from age to age, nothing changes and yet everything is completely different”.
Today’s questions: Who said,
"Life is what happens to you while you’re busy making other plans."
a) Joni Mitchell
b) Mark Twain
c) John Lennon
d) Christine O’Donnell
e) None of the above
And “No one likes to have less than they had before. That’s the nature of the human animal."
a) Mitch McConnell
b) Warren Buffett
c) Joni Mitchell
d) John Lennon
e) None of the above
The first person to respond with the correct answer wins a choice of either:
One Free Regular Listing on AppraiserHelp.com
A Free Copy of the UPDATED Directory of Appraisal Management Companies for FHA Appraisers (Coming in Late November)
Angie’s Hall of Fame: Those who have been crowned winners more than once during the past two years and who have been retired from competition for the rest of 2010:
Suzanne Fahien
Pat Reass
Tell us what you think!
We invite your responses to any of the issues raised in this newsletter. Please e-mail us at: bill@appraiserhelp.com with your thoughts!
We really hope you find our newsletter to be informative! If you have any input on future topics for discussion, please email me your questions and I will do my best to address them in the next issue. If you want to look back at past issues you can see our archive at www.appraisernews.com
Regards,
Bill Collins, Appraiser Help Inc.
Appraiser Help Real Estate Appraiser Directory
Discounted Appraiser Continuing Education
Pictometry Real Estate Business Solutions
Tax Grievance and Tax Appeal Appraiser Directory
FHA Appraisal Management Company Directory
Housingwire.com Interviews Corelogic VP on Customary and Reasonable Fees
On March 23rd, Jacob Gaffney of HousingWire.com interviewed Mr. Feldman about the implementation of “customary and reasonable” appraiser fees on April 1st as per the Dodd-Frank act and the Interim Final Rule. Mr. Feldman made the following comments as to the two ways that appraisal management companies (AMCs) “will be presumed to be in compliance” with the new rules:
“Presumption one requires that the amount of compensation is reasonably related to recent rates for appraisal services performed in the geographic market of the property. Fees paid by AMCs are specifically included in this approach. Moreover, necessary fee adjustments are to be made for type of property, scope of work and fee-appraiser qualifications, etc. In addition, there can be no anti-competitive action in violation of federal law such as price-fixing or restricting others from entering the market. This is an explicit requirement of Dodd-Frank designed to prevent collusion or market dominance among AMCs to depress appraiser fees.
Presumption two relies on objective independent, third-party information, including fee schedules, studies and surveys. This approach excludes AMC fees.
By April 1, lenders and AMC’s must decide which method or compliant combination/hybrid they will use in determining customary and reasonable fees for fee appraisers.”
David Feldman responded to Mr. Gaffney’s question as to “How are your clients going to determine customary and reasonable?” with this answer:
“Most clients appear to be selecting presumption one and working in partnership with AMCs to support reasonableness of the fees”.
Mr. Feldman went on to discuss a “percentage approach,” citing an example whereby “…an AMC pays an appraiser a percent of the client fee – say 65%, for example”…He expanded on these comments in the HousingWire.com interview and made the following comment that is particularly alarming to appraisers looking ahead with hope to April 1st:
“For lenders choosing presumption one and relying on AMC data and analysis, it is possible that there will be a minimal increase of cost to borrowers since AMC fees, assuming no anti-competitive activity, are currently the customary and reasonable fees.”
A link to the entire HousingWire.com interview is found here: Corelogic VP speaks on upcoming changes to appraisal fees
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Shadow Inventory Estimated at $450 Billion with Absorption to Take Many Years
HousingWire.com’s Jon Prior reported two days later on Standard & Poor’s estimate that the “shadow inventory” (those loans that were 90+ days delinquent, in foreclosure or taken into REO) was approaching the half trillion dollar point with lengthy time periods for absorption to occur in many markets. A link to this report is found here: S&P Puts Shadow Inventory Principal Balance at $450 Billion
CNBC’s Diana Olick summarized the mass of negative housing data on March 23rd in a report titled “Why Housing is Going Through a Double Dip” and a link to the entire report is found here:
Why Housing is Going Through a Double Dip
A second CNBC report (“For Real Estate, a Giant Clearance Sale”) on March 25th expanded on the myriad concerns and a link to this is found here:
For Real Estate, a Giant Spring Clearance Sale
One final CNBC report by Diana Olick on March 21st noted the disconnect between the housing and financial markets and a link to this report is found here: Market Scoffs at Pitiful Home Sales
The National Association of Realtors (NAR) released their estimate of pending home sales yesterday which indicated that while pending sales rose 2.1% in February from the prior month, the figure was down 8.2% from the same month last year. Lawrence Yun, chief economist for the NAR (and ever the optimist) is quoted as saying that “We may not see notable gains in existing-home sales in the near term, but they’re expected to rise 5 to 10 percent this year with the economic recovery, job creation and excellent affordability conditions providing confidence to buyers who’ve been on the sidelines.”. A link to the NAR release and a video interview with Mr. Yun is found here: February Pending Home Sales Rise
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As the Real Estate Market Crumbles, What is Congress up to?
Amazingly, not only are there no serious proposals to provide assistance but House Republicans are calling for withdrawal of government support and the accelerated privatization of Fannie Mae and Freddie Mac, actions that will increase the cost of home ownership and contribute to the downward spiral.
On March 11th, Bonnie Wilt-Hild, staff writer for the National Association of Mortgage Underwriters (NAMU) discussed the “vital public purpose” of the two GSE’s and concluded that not only is privatization unfeasible but would “…be disastrous, particularly to the already underserved segments of the population.”
A link to the entire article by Ms. Wilt-Hild is found here: Privatizing FNMA and FHLMC
Mortgage Mess Not Likely to be Resolved Quickly
A proposed settlement of the case brought by the State Attorneys General documenting improper loan practices is not likely to reach an early resolution due to the complexities of the charges and the divergent interests of the parties. Writing in the Huffington Post on March 13th, Robert Kuttner reviewed the matter and a link to this report is found here: The Continuing Mortgage Mess
Moody’s Reports Declines in Commercial Real Estate Prices and Describes “Bifurcated” Market
In a March 22nd press release, Moody’s Investor Service reported that their index of U.S. commercial real estate prices declined by 1.2% in January. They described the U.S. commercial market as “bifurcated” with an improving market with larger properties in major cities and an elevated level of distressed transfers in most other markets. A link to this press release is found here:
Moodys: US Commercial Real Estate Prices Slip 1.2% in January
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Local Governments Raise Property Taxes to Record Highs as They Struggle to Balance Budgets
On March 22nd, Bloomberg Businessweek reported on the increasing percentage of household income going to the payment of property taxes, citing one study that 3.5% of income in 2009 went to property taxes, an increase from 2.9% in 2005. As a percentage of overall property value, property taxes rose at a substantially higher rate due to the substantial decline in property values during this period. New Jersey residents reportedly pay the highest residential property taxes with an average of $7,576 last year, up 78.7% from 1999. A link to the Bloomberg Businessweek report is found here:
Property Taxes Reach the Breaking Point
As we have suggested on many occasions, residential and commercial appraisers in many parts of the country are missing out on substantial appraisal business if they are not investigating the market for tax grievance and tax appeal appraisals in the municipalities that they cover.
Reader’s Comments on the State of the Appraisal Profession
Everett Clark, a California appraiser, responded to Florida appraiser Joe Johnson’s comments in the last newsletter:
“Mr. Johnson, the certified appraiser featured in your article regarding customary and reasonable fees, is definitely not alone. The problem is a simple one: we don’t seem to have an organization to which we can belong, that will stand up for the independent fee appraiser.
Appraisers are generally singular people, often concerned that other appraisers may be ”taking a client.” The entities we are fighting, the banks and AMCs, are united. They have lobbyists in D.C. pushing their agenda on a regular basis. Who is there to lobby for the fee appraiser? With only one side telling their view of the issues, we have no chance to change things for the better for the appraiser.
…Why can’t more people get behind an association such as NAIFA (National Association of Independent Fee Appraisers), and push for some lobbying on our part for a change? It doesn’t have to be NAIFA, it can be any organization already established and with a base membership, but it’s something we need to do… the power of the collective voice…of like minded people bound together and fighting for what they believe is much better than many singular voices intermittently questioning the system.
Just a few thoughts to let Joe know he’s not alone out there.”
Steve Hassoldt, a California appraiser, noted that:
“I just finished reading the March 15th newsletter and believe that Joe Johnson is right on with his thoughts. With over 25 years of appraising under my belt, I’d like to see how the data mongers are figuring the value of a house that happens to have a guest unit… Or how it will determine the view adjustment… We have every kind of view available in Los Angeles County, and they all differ in value, even on the same street! A blind computer is only as good as the data input (GIGO… Garbage in garbage out)… Many neighborhoods have their own specifics, yet not all the houses in the same area have the same amenities (you have a good view from one house but no view for the house across the street, etc)…”
Rates & Dates
Freddie Mac reported that rates for 30-year fixed-rate mortgages increased to 4.81% for the week ending March 24th, up from the 4.76% rate reported on March 17th. In this most recent report, Freddie Mac noted that: “The housing market recovery experienced a setback during the start of this year. Existing home sales fell 9.6 percent from January to February and were down 2.8 percent from February 2010. Sales of new homes declined for the second consecutive month in February to record lows dating back to 1963.”
The MBA in its most recent Weekly Mortgage Applications Survey for the week ending March 18th reported that rates were essentially unchanged with an average rate of 4.80% up from 4.79% at the end of the previous week.
On March 15th, the MBA reported that FHA Commissioner David H. Stevens, whose last day as head of the FHA is scheduled to be March 31st, will become President and CEO of the MBA on June 1st.
Additional information from Freddie Mac can be found by going to: Primary Mortgage Market Survey PMMS – Freddie Mac
Additional information from the Mortgage Bankers Association can be found by going to their site at: Research and Forecasts – Mortgage Bankers Association
Ask Angie
We want to congratulate our most recent winner: Dudley Tyson, a Certified Residential Appraiser with Maine Realty Consultants in Cape Porpoise, Maine. Dudley has been an appraiser for 28 years and covers York County in southwest Maine. Dudley was the first to accurately answer that George Orwell said “Sometimes the first duty of intelligent men is the restatement of the obvious,” Ralph Waldo Emerson was he author of the quote “If I have lost confidence in myself, I have the universe against me,” and that Albert Einstein coined the phrase “It’s not that I’m so smart, it’s just that I stay with problems longer.”
Today’s questions:
1. Who said: “There is always an easy solution to every problem-neat, plausible and wrong”
a) H.L. Mencken
b) Sarah Palin
c) Paul Krugman
d) Bristol Palin
e) None of the above
2. Who said: “In the business world, the rearview mirror is always clearer than the windshield.”
a) Aiko Toyoda
b) Warren Buffett
c) Henry Ford
d) Craig Newmark
e) None of the above
3. Who said: “Let no one ever come to you without leaving better and happier.”
a) Zig Ziglar
b) Mata Hari
c) Mother Teresa
d) Oprah Winfrey
e) None of the above
The first person to respond with the correct answers wins a choice of either:
One Free Regular Listing on AppraiserHelp.com
A Free Copy of the 12/10 UPDATED Directory of Appraisal Management Companies (Available Now to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)
Tell us what you think!
We invite your responses to any of the issues raised in this newsletter. Please e-mail us at: bill@appraiserhelp.com with your thoughts!
We really hope you find our newsletter to be informative! If you have any input on future topics for discussion, please email me your questions and I will do my best to address them in the next issue. If you want to look back at past issues you can see our archive at www.appraisernews.com
Regards,
Bill Collins, Appraiser Help Inc.
Appraiser Help Real Estate Appraiser Directory
Tax Grievance and Tax Appeal Appraiser Directory
FHA Appraisal Management Company Directory
AppraiserNews and the AppraiserNews Logo and all original content ©AppraiserHelp, Inc. 2009-2011
]]> Following the recent Appraisal Scoop post from Pipeline Press titled Are YOU an “Ineligible Receiver”? CitiMortgage Monitors “Ineligible Appraisers” List I received the following email and have reprinted it below, with the Appraiser’s permission.
I thought his story was somewhat unique in that it was the first time that I’d heard of an appraiser being blacklisted for completing a market update of another appraiser’s appraisal. Take a look at this story and please share your thoughts!
“I am a certified residential appraiser and have been appraising for the last 12 years successfully. A year ago I received a letter from CitiMortgage saying I was being blacklisted by them for a market update (1004 D) I was asked to do for them by PCV Murcor although the appraisal was done by another appraiser.
I [completed] the 1004D as requested and found the market conditions still stable. CitiMortgage apparently had a problem with the underlying appraisal done by another appraiser and is blaming me, as the address of the property [format] in his appraisal is the same as in the letter they sent me.
I wrote a letter to Gary Schlittler, their VP in charge of appraisals, and he said they were modifying the “punishment” by putting my name on the monitor section of the list (requires a field review) with any appraisal submitted to them by me. This has hurt my business not only from the lack of CitiMortgage business but they have also shared the information with other AMC’s who will not place orders to me for their clients as their clients may be taking the loans to Citi.
I searched your site for a half hour, but I couldn’t locate any information or instructions on how to actually fight this arrogant practice. I had requested they send me the actual file on what was reviewed when they made their decision to blacklist me, but they are ignoring me. Do you have any articles or material that gives instructions or strategies on how to get your name removed from a blacklist? Thank you for any information you can provide.”
There has been a comment from the “Ineligible Receiver” post regarding a source for a potential class action lawsuit:
Here is a law firm taking on with Wells Fargo
When emailing, please reference “Wells Fargo/RELS Blacklisted Appraiser”
•Contact: Genessa Stout, Attorney at Law: genessa@hbsslaw.com
•Larry Kunzler, Investigator: larry@hbsslaw.com
The Appraisal Foundation and McKissock LP
Partner on Online Property Appraisal Courses
Online National USPAP Courses will be available through McKissock in October 2011
Washington, DC, March 9, 2011 — The Appraisal Foundation and McKissock LP, a leading developer of computer-based education, are pleased to announce their partnership in the development of the 2012-13 edition of the online versions of The Appraisal Foundation’s 15-Hour National Uniform Standards of Professional Appraisal Practice (USPAP) Course and the 7-Hour National USPAP Update Course. In addition, McKissock will partner with The Appraisal Foundation to offer an online version of the Instructor Recertification Course for individuals who are AQB Certified USPAP Instructors.
All state licensed or certified real property appraisers must take the
7-Hour National USPAP Update Course, or its equivalent, every two years as a part of their continuing education requirements. All real property appraisers are required to take the 15-Hour National USPAP Course, or its equivalent, as a part of their qualifying education to initially earn a state credential.
The online versions of The Appraisal Foundation’s courses will be offered through McKissock’s online learning system and will feature the 2012-13 edition of USPAP. As is the case with the classroom version of the National USPAP Courses, The Appraisal Foundation will not be offering the online courses to students directly; they will be made available to all education providers through McKissock. It is important to note that education providers may continue to develop their own online course(s) that must be reviewed and approved by the Appraiser Qualifications Board (AQB) for equivalency.
McKissock has recently invested in a new online course delivery platform and learning management system with enhanced functionality. For the 2012-13 National USPAP Courses, students will notice the following improvements: (1) video introductions of the course chapters providing an overview of the content; (2) less repetition in course content; (3) individual student assessments at the beginning and end of each course; and (4) hyperlinks directly to the specific section(s) of the USPAP document whenever it is referenced in the course materials.
“In recent years McKissock LP has dedicated significant resources to hire additional professionals and improve its course delivery system,” stated David S. Bunton, President of The Appraisal Foundation. “These improvements, coupled with their excellent outreach capability and the Foundation’s course development ability, will ensure that all appraisers will have access to quality online USPAP education,” he added.
“Our success as a company is deeply rooted in our superior ability to understand and satisfy the needs of our customers,” said Richard McKissock, Founder. “We are pleased to announce this new partnership with The Appraisal Foundation and eager to show the profession just how good an online USPAP experience can be.”
The National USPAP Courses were donated to The Appraisal Foundation by its Appraisal Sponsors several years ago, for two purposes:
- To ensure nationwide quality USPAP education
- To provide a financial resource to The Appraisal Foundation for future support of its operations.
The online 15-hour and 7-hour National USPAP Courses and Instructor Recertification Courses will be available through McKissock in October 2011.
About The Appraisal Foundation
The Appraisal Foundation, a Congressionally authorized non-profit organization established in 1987, is dedicated to the advancement of professional valuation. The Foundation accomplishes its mission through the work of its three independent Boards: the Appraisal Practices Board (APB), the Appraiser Qualifications Board (AQB), and the Appraisal Standards Board (ASB). More information on The Appraisal Foundation is available at www.appraisalfoundation.org.
About McKissock LP
In 1990, McKissock began offering continuing education classes and online courses to real estate appraisers. As word of our quality education spread, we added pre-licensing and upgrade courses for appraisal professionals. Today, we offer superior courses – most of them online, so our students can study at their own pace, and at their convenience.
With McKissock, professionals will enjoy a total education experience that continues to exceed their expectations. Whether they choose to fulfill their continuing education needs by attending an onsite class or by taking a course in the comfort of their home or office, they will find that we are committed to providing a quality of education that cannot be equaled elsewhere.
]]>The Dreaded "D" Word
On January 11th, CNBC.com staff writer Cindy Perman, upon reviewing the mountain of negative data stated that:
“In the past few years, we’ve all been careful to choose our words carefully, not calling it a recession until it fit the technical definition and avoiding any inappropriate use of the “D” word — Depression. Things were bad but the broader economy never reached Depression territory. The housing market, on the other hand, just crossed that threshold."
She noted a Zillow report that the 26% decline since June 2006 was worse than the 25.9% decline estimated during the Depression years between 1928 and 1933 with home values expected to continue their decline.
Ms. Perman also noted Zillow’s estimate that the value of the White House, 1600 Pennsylvania Avenue, Washington D.C. had dropped to $251.6 million from a peak of $331.5 million in June of 2006.
Considering its importance to our country, as a public service, AppraiserNews.com & AppraiserHelp.com would like to engage a qualified real estate appraiser to estimate the true value of the White House, rather than rely on Zillow. Please forward all appraisal fee quotes (along with turn time and appraiser qualifications) to Bill@AppraiserHelp.com.
By the way, let us know whether you will be providing a Cost Approach in your proposal for the White House appraisal.
Bloomberg.com reported on the pessimistic outlook of homebuilders on January 16th in the article Home Building, Sales Probably Languished as Market Lagged Behind Recovery
While construction of “McMansions” and “White Houses” may be slow, an interesting January 14th report in the Huffington Post included one dozen photos of “small eco houses” from the book (naturally called Small Eco Houses: Living Green in Style by Francesc Zamora Mola, Cristina Paredes Benitez and Alex Sanchez Vidiella) and a link to this interesting photo display is found here: 11 Small Eco Homes That Live Large
Reminiscent of the Great Depression, the New York Times reported on January 13th that an audit of the United States Department of Agriculture (USDA) found that many rural home loans were poorly underwritten and warned that a wave of defaults might be forthcoming. In response to Congressional mandates to increase lending to small-town home buyers, the Times reported that the value of federally backed home loans increased to $16.2 billion in 2009, up from just $3.7 billion two years earlier, and reached almost $16.8 billion last year. While acknowledging problems, a USDA official stated that “We’re very confident that the overall objective of the recovery act was met” and officials pointed out that the while the overall foreclosure rate had risen, it was still significantly lower rate than for loans insured by the FHA. A link to the New York Times article is found here:
Auditors See Rising Defaults in Rural Loans
In a January 14th interview with Bloomberg’s Betty Liu, Mortimer Zuckerman, (CEO of Boston Properties, chairman and editor in chief of U.S. News & World Reports and publisher of the New York Daily News) discussed his bearish sentiment on housing which included an additional 10% to 20% decline in residential housing values and the lack of apparent solutions. When questioned about possible improvements in the commercial sector, he noted signs of improvement in places like New York City which are not yet occurring in secondary markets. This sentiment was echoed by Sam Chandan of Real Capital Analytics in the New York Times on the same day in an article in which he discussed the biggest transaction of 2010: Google’s $1.6 billion acquisition last month of 111 Eighth Avenue in Manhattan, a price that he indicated worked out to $621 per square foot. Links to the Zuckerman video and Chandan article are found below:
Mort Zuckerman Interview on Economy
Sam Chandan 30 Minute Interview
CNBC real estate reporter Diane Olick commented on January 13th about the possible huge “foreclosure dump” that many foresee in the coming year and another CNBC reporter, Colleen Kane, posted an article about what to look for (“red flags”) in inspecting foreclosed homes. Links to both of these articles are found here:
Whitney Defends Muni Call, Sees "Indiscriminate Selling"
Real Estate Red Flags
Also on the foreclosure front, on January 13th MSN.com released a report by RealtyTrac which included a slideshow depicting the ten states with the highest foreclosure rates. A link to this slideshow is found here:
States With the Highest Foreclosure Rates
While a flood of year-end statistics were being released and prepared for release, deriving meaningful future projections from this data was complicated by the uncertainties regarding the processing of foreclosures due to court decisions such as the Massachusetts Supreme Judicial Court ruling against the handling of home loans by Wells Fargo and U.S. Bancorp (the fourth and fifth largest U.S. banks). Susan Wachter, a real estate finance professor at the University of Pennsylvania, was quoted in the Wall Street Journal on January 9th as stating that this was a “landmark decision” with national implications due to the fact that Massachusetts loans were found in many securities.
David Streitfeld writing in The New York Times on January 8th reported that the federal and state investigations into bank’s foreclosure practices were slowing the foreclosure pace, especially in some of the most affected areas in the nation. He stated that:
“If the slowdown continued through this month and into the spring, it could be a boost for the economy. Reducing foreclosures in a meaningful way would act to stabilize the housing market, real estate experts say, letting the administration patch up one of the economy’s most persistently troubled sectors. Fewer foreclosures means that buyers pay more for the ones that do come to market, which strengthens overall home prices and builds consumer confidence in housing."
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Better Days Ahead for Appraisers? Inc. Magazine Projects Real Estate Appraisal as One of the "6 Top Performing Industries for 2011"
If you don’t believe us, here is a link to the Inc. report which projects revenue growth of 8.8% for real estate appraisers in 2011 and includes the industry (along with environmental consulting and e-commerce) as one of the top six industries for the New Year. 6 Top Performing Industries for 2011
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Forecasting the Future: "Flip That House" as a Leading Indicator
An interesting report by the Huffington Post’s Ryan Grim on January 14th discussed a December 13, 2005 meeting of the Federal Reserve Open Market Committee in which the housing market was a major concern. While much data suggesting a cloudy future was presented, Roger Ferguson, a Fed governor, is quoted in the article as saying that: "It is hard to say that the housing market is anything but robust".
Economist David Stockton, at this same meeting, noted that a variety of negative housing indicators suggested that “…we are at the front edge of some cooling…” in this market. In order to further illustrate his point, Mr. Stockton said (to a laughing room):
"I offer one more piece of evidence that I think almost surely suggests that the end is near in this sector. While channel-surfing the other night…I came across a new television series on the Discovery Channel entitled ‘Flip That House.’ As far as I could tell, the gist of the show was that with some spackling, a few strategically placed azaleas and access to a bank, you too could tap into the great real-estate wealth machine. It was enough to put even the most ardent believer in market efficiency into existential crisis."
Mr. Grim notes that the Federal Reserve Board “…home of many of the most ardent believers in market efficiency, did not go through an existential crisis, however, and did little to slow down surging prices or warn consumers that ‘the end is near.’ Instead, many consumers continued to purchase homes under the mistaken impression that housing prices would continue to rise."
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Rates & Dates
Freddie Mac reported that rates for 30-year fixed-rate mortgages declined slightly to 4.71% for the week ending January 13th from the 4.77% rate reported on January 6th.
The Mortgage Bankers Association (MBA) in its most recent Weekly Mortgage Applications Survey for the week ending January 7th reported an average rate of 4.78% (no survey was made by the MBA for the prior week as their offices were closed).
In a press release dated January 12th, the MBA reported that mortgage applications were up slightly (2.2%) on a seasonally adjusted basis for the week ending January 7th but the four week moving average seasonally adjusted Market Index was still down by 5.3%. Refinance applications rose to 72.1% of mortgage activity in this most recent weekly report.
Additional information from Freddie Mac can be found by going to: Primary Mortgage Market Survey PMMS – Freddie Mac
Additional information from the Mortgage Bankers Association can be found by going to their site at: Research and Forecasts – Mortgage Bankers Association
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Ask Angie
First, we want to congratulate our most recent winner, Larry Kelly, a Certified Residential Appraiser with Larry Kelly Appraisal Service, LLC in Fairfield, Connecticut. Larry knew that Mark Twain was the author of the quote “Now is the accepted time to make your regular annual good resolutions. Next week you can begin paving hell with them as usual,” that Henry Moore was the author of the quote “I think in terms of the day’s resolutions, not the years” and that Jay Leno had said that “Now there are more overweight people in America than average-weight people. So overweight people are now average…which means, you have met your New Year’s resolution.”
Today’s questions:
1) Who said, "The only function of economic forecasting is to make astrology look respectable."
a) Ezra Solomon, as quoted in Psychology Today (March 1984); also attributed to John Kenneth Galbraith in U.S. News & World Report in March of 1988
b) Sarah Palin, in an interview with Katie Couric on the CBS Evening News, August 2008
c) Uri Geller and Alfred Einstein in a joint statement at Princeton University, January 1953
d) None of the above
2. Who said: "The conventional view serves to protect us from the painful job of thinking."
a) David Stockton
b) Sarah Palin
c) Albert Einstein
d) John Kenneth Galbraith
e) None of the above
The first person to respond with the correct answers wins a choice of either:
One Free Regular Listing on AppraiserHelp.com
A Free Copy of the UPDATED Directory of Appraisal Management Companies (Available Now to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)
Tell us what you think!
We invite your responses to any of the issues raised in this newsletter. Please e-mail us at: bill@appraiserhelp.com with your thoughts!
We really hope you find our newsletter to be informative! If you have any input on future topics for discussion, please email me your questions and I will do my best to address them in the next issue. If you want to look back at past issues you can see our archive at www.appraisernews.com
Regards,
Bill Collins, Appraiser Help Inc.
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