~AMCs are to use “only state-certified or licensed appraisers for federally related transactions”.
~An AMC must “ensure selection of a competent and independent appraiser”.
“Big data pundits have long been touting the technology as the Holy Grail companies need to more effectively manage their supply chains, understand their customers and control their resources. Yet, this year the hype began to wear off as companies struggled to derive value from their strategies, Lucker said.
The Mortgage Bankers Association News Link posted an article at the end of last year looking towards 2014 by Lisa Binkley of Platinum Data Solutions titled “Beware the Second Phase of UCDP”. Ms. Binkley wrote:
“For residential and commercial appraisers-there simply has been no process improvement in workflow or analysis in a decade or more. I eliminate from this statement the continuing fine-tuning of appraisal software, which is nothing more than figuring out how to fill out a form more efficiently. Filling out a form faster is NOT what this industry needs. What it needed simply stated-is more standardized data and the ability to analyze that data…
Appraisers are the local market experts. Data is ever more readily available. Tools are being developed and will continue to be exposed to the market over the next several years.
What should appraisers do? They should be open to the tools; they need to be open to new ways of thinking about values. They must step out of the form prison that they have been inhabiting for the last decade, and think about the value first-the form second”.
In my early days as a real estate appraiser, gathering data on comparable sales involved hours of scanning printed books of sale data (most without photos of the properties), viewing thousands of lines of data seeking to find a handful of transactions most comparable to the subject property. The stunning technological advances made during the past several decades have given appraisers the opportunity to spend more time on analysis than on data gathering. It is likely that future advances will be game-changing or “disruptive” as the techies like to say.
As Mr. Lucker noted earlier “…a human brain can sort out any inconsistencies in a way an algorithm can’t”. Appraisers will need to do a lot of “sorting” in the future. This sorting will not only involve the gigabytes of data encountered in the course of each new appraisal assignment but will require business decisions involving the proliferation of new technologies and platforms offered as a means to the end, a completed appraisal report.
A 1004 with three comparable sales has become a distant memory in the same way older appraisers remember Polaroid cameras. Making the right choices from the plethora of new technologies, platforms and data assemblers in the future will be difficult but critical to the future of an appraisal practice.
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Links to some of the aforementioned articles are found here:
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An Austin, Texas appraiser writes:
“So, let me see if I understand you, correctly. Work is going away and isn’t coming back. Lenders will voluntarily act in their own best interest and hire real appraisers………someday, even though nobody is going to make them do it. But in the meantime you’ll just have to survive on the rarest property types in existence. I know, because I saw it on a reality show while you were staying up until 3 am doing superfluous revision requests.
How about something a little less naïve: The ship is sinking. Get off while you still can”.
A Wellington, Florida appraiser writes:
“Your article on appraisers increasing their skills makes lots of sense. However, what isn’t addressed is that lenders etc. won’t pay more for appraisers with more experience and better quality reports. Since HVCC appraisers are no longer hired based on who is most qualified, most familiar with the area or who has specialized expertise. Appraisers are hired on a rotational basis with "cheapest and fastest" as the primary qualifications.
I am one of the leading experts on equestrian properties in the country. Over a period of 30 years I built a clientele of lenders because of my specialized knowledge. All that went away with the AMCs”.
A Pennsylvania appraiser writes:
“I ask you this: What is the point of remaining in appraising, if the orders come in with greater demands than ever, and the fees are so low you can’t pay your bills and earn a living? If we cannot get this AMC leech off our backs, we are never going to make money as appraisers; I don’t care how many reports per week we do…If we do not change this broken structure, there will not be a future worth having in the field of appraising. You can have all the bells & whistles and the-next-best-thing in software, apps and marketing that you want, but if you can’t earn more than a few hundred dollars an appraisal, you can’t possibly earn a decent living, so why remain or train an apprentice.
Forget about ‘learning to swim with the sharks’, as a former scuba diver I can tell you, you don’t swim with the sharks, you stay away from the sharks before you get devoured. Separating ourselves from the AMCs as soon as possible is the only way to a financially secure future in appraising and achieving at long last true ‘appraiser independence”.
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This will be a busy week starting with the Case-Shiller Home Index scheduled to be released later this morning, continuing with several other reports today (Commerce Department report on new-home sales, FHFA report on single-family home prices) and ending with the pending home sales report from the National Association of Realtors.
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Rates & Dates
Freddie Mac, the Mortgage Brokers Association (MBA) and HSH Market Trends reported mixed results regarding mortgage interest rates in their most recent surveys.
On March 20th, Freddie Mac reported that 30-year fixed-rate mortgages fell to 4.32% from 4.37%. They also noted that last year at this time the 30-year rate was at 3.54%.
Frank Nothaft (vice president and chief economist of Freddie Mac) noted that:
"Mortgage rates eased this week as housing starts declined 0.2 percent in February to a seasonally adjusted annual rate of 907,000, below consensus forecast. The rate on the 10-year treasury note rose following the Fed’s announcement Wednesday afternoon and, if this holds, interest rates may begin to trend higher going into next week."
The Mortgage Bankers Association (MBA) reported on March 19th (for the week ending March 14th) that 30-year rates with conforming loan balances ($417,500 or less) declined to 4.50% from 4.52% the previous week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) dropped to 4.39% from the previous week’s rate of 4.41%. Rates for FHA backed mortgages also fell, to 4.13% from 4.18% the previous week. Mortgage applications were down by 1.2% from the prior week’s figure. The share of refinance applications as a percentage of all applications dropped for the sixth straight week to 56.5%.
On March 21st, HSH Market Trends reported that 30-year mortgage rates rose to 4.44% from 4.39% the previous week. Rates for FHA-backed mortgages also increased, from 4.01% to 4.07%.
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
Additional information from HSH can be found by going to: HSH.Com
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We would first like to congratulate our most recent winner: Janet Duy of Fred A. Duy & Associates, Inc. of Oswego, Illinois (the second straight winner from the Prairie State). Fred A. Duy & Associates appraises property in the northeast Illinois counties of DuPage, Kane, Kendall and Will. Jan was the first to answer correctly that Benjamin Franklin was the author of the first two quotes ("By failing to prepare you are preparing to fail"; "It takes many good deeds to build a good reputation, and only one bad one to lose it") and Ralph Waldo Emerson wrote "I hate quotation. Tell me what you know."
Today’s Questions:
Today’s Questions:
1. Who said: “Act as if what you do makes a difference. It does."
a) Mother Teresa
b) Yoko Ono
c) William James
d) Bono
e) None of the above
b) Yoko Ono
c) William James
d) Bono
e) None of the above
2. Who said: "A writer is someone who has taught his mind to misbehave."
a) Norma Maier
b) Chelsea Handler
c) Oscar Wilde
d) E.L. James
e) None of the above
b) Chelsea Handler
c) Oscar Wilde
d) E.L. James
e) None of the above
3. Who said: "We are all born ignorant, but one must work hard to remain stupid."
a) Benjamin Franklin
b) Lindsay Lohan
c) Miley Cyrus
d) Sarah Palin
e) None of the above
b) Lindsay Lohan
c) Miley Cyrus
d) Sarah Palin
e) None of the above
The first person to respond with the correct answers wins a choice of one of the following:
One Free Regular Listing on AppraiserHelp.com
A Free Copy of the Newly Released 2014 Directory of Appraisal Management Companies (Available to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)
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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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