Real Estate Appraiser Tips » News Appraisers Need To Know

Dave Towne: Survey Results How Appraisers Report Site Size, FNMA Requirement Effective 9/1/2011

http://realestateappraisertips.info/ — Tue, 08 Feb 2011 11:46:36 +0000

http://www.realestateappraisertips.info/ – Dave Towne: Survey Results On How Appraisers Report Site Size, New FNMA Requirements on 9/1/2011

Appraisers……

Over the weekend, I asked for your input as to how you report Site Size in the Fannie Form grid. This graph represents the results of your responses through Monday night 2/7/11, from appraisers in many parts of the US:

I asked this question because effective 9/01/2011, Fannie/Freddie will require Site Size for any site less than ONE ACRE to be reported as Square Feet, NOT Acres (or portion) ….. and any site of 1 Acre or more to be reported as Acres! This is for any conventional loan sold to them, reported on the 1004 and 2055 Forms.

UNLESS appraisers around the nation climb on Fannie’s back and explain how crazy this will be, and ask (politely) that this new poor requirement be modified so that site sizes are reported in a consistent manner in the report.

EXAMPLE: Subject is in a small urban area, on a .82 Acre site. Three Comps are a mix of site sizes, less than an acre and more than an acre…say up to 1.5 acres….because that’s all the sales found that are even remotely comparable in terms of GLA/Age of the properties. (This is a REAL situation in my area.)

So your grid will look like this:

Subj. Comp 1 Comp 2 Comp 3

35719 sf 20038 sf 1.1 ac 1.5 ac

(.82 Acre) (.46 Acre)

[No commas can be used, and only ‘sf’ can indicate Sq. Ft.]

[Acre must be reported as ‘ac’ – with nothing following that]

Can you imagine the U/W’s head scratching! You’re going to have to include an entire paragraph to explain this requirement, and then explain how you arrived at the site size adjustments (which you should do anyway, but now you will have to explain how you converted to Ac or SF before making the site adjustment).

Most county assessor records in our area, and other parts of the US report Site Size in terms of Acres – or a decimal portion thereof. Therefore, you will have to convert that Acre number to a Square Foot number for the report, further slowing down report writing. (I developed a Conversion Table which I will give to any appraiser for FREE who wants it … just e-mail me.)

FURTHER EXPLANATION: “Both” is represented in nearly 15% of responses. Some Appraisers told me they use an entry like .82 Ac/35,719 sf in the grid. Other appraisers said they currently use Square Foot for any property less than an acre, and Acres for 1+ acres (I don’t understand why!). And some appraisers said they use SF for FHA reports, believing that SF is ‘required’ by HUD/FHA – in fact they accept either per the 4150.2 manual but expect consistency in the report …. and use Acres for conventional reports.

Those appraisers who explained “Both” also stated they NEVER mix Acres with Square Foot in reports as my example shows ……… as Fannie will require as of 9/1/2011!

MY PERSONAL BELIEF: All reports should use Acre (or decimal portion), regardless of site size. MLS listings are reported that way, assessor records are that way, property owners think and talk in terms of ACRES …. not “my property is 32,670 s/f.” It’s much easier to say “3/4 of an acre.” It’s also what a majority of appraisers are doing now – overwhelmingly.

Thanks for your responses!

Dave Towne, Towne Appraisals

Mount Vernon, WA

360-708-1196

and

Appraiser Education Service

Real Estate Appraisers: Valuation Expo 2010 Appraisal Buzz Web Commercial Released

http://realestateappraisertips.info/ — Sun, 30 May 2010 20:40:53 +0000

http://www.realestateappraisertips.info/ – Real Estate Appraiser Tips! Real Estate Appraisers: Valuation Expo 2010 Appraisal Buzz Web Commercial Released

http://www.valuationexpo.com/ – Appraisal Buzz Valuation Expo 2010 Web Commercial. This will be our eleventh Valuation Expo and we are returning to Las Vegas by popular demand. Mark your calendars for November 8 -10, 2010 at the Luxor Hotel, 3900 Las Vegas Blvd, South.

U.S. District Ct Chinese Drywall Ruling Sets Legal Standard At A Little Over $80 Square Foot

http://realestateappraisertips.info/ — Thu, 29 Apr 2010 10:47:51 +0000

http://www.realestateappraisertips.info/ - Real Estate Appraiser Tips! U.S. District Ct Chinese Drywall Ruling Sets Legal Standard At A Little Over $80 Square Foot.

The link to entire articel is here: http://www.wafb.com/global/story.asp?s=12394620. Snippets of the article are below.

“NEW ORLEANS, LA (WWL) – A Mandeville couple said it was “a huge sense of relief” after a judge ruled in their favor in a landmark Chinese drywall case.

Tuesday, U.S. District Court Judge Eldon Fallon ruled for Tatum and Charlene Hernandez in their suit against Knauf Plasterboard Tianjin, or KPT. Knauf is a German company that manufactured the toxic drywall in China, which has now contaminated the Hernandez’s home off Highway 59 between Mandeville and Abita Springs.

Judge Fallon awarded the Hernandez family $164,000 plus attorney’s costs, which continue to mount. That money is to cover the cost of ripping out the walls and replacing damaged wiring and appliances.

“Because of the Hernandez family,” attorney Russ Herman added, “we now know what you’re entitled to.”

The ruling set the legal standard at a little over $80 a square foot. Attorneys representing the Hernandez family said at a press conference Wednesday, they believe that number can be applied to others with Chinese drywall.

“We believe that this is a solid decision and could be and should be predictably and reliably applied to other properties,” attorney Steve Herman said.

The question now, when will the Hernandez family get the money they need to re-mediate their home? For now, they are living in the home with their two small children. “This drywall manufactured by KPT has stolen so much from us, and we’re just dealing with it the best that we can,” Tatum Hernandez said.“

Good News For Appraisers: March 2010 Existing Home Sales Beat Expectations

http://realestateappraisertips.info/ — Thu, 22 Apr 2010 13:47:47 +0000

http://www.realestateappraisertips.info/ – Real Estate Appraiser Tips! Good News For Appraisers: March 2010 Existing Home Sales Beat Expectations

The NAR is reporting good news for March 2010 existing home sales: Existing-Home Sales Rise on Home Buyer Tax Credit and Favorable Market Conditions

“Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 6.8 percent to a seasonally adjusted annual rate of 5.35 million units in March from 5.01 million in February, and are 16.1 percent above the 4.61 million-unit level in March 2009.”

Read the entire article at the link above.

Real Estate Appraisers This Is Scary: The single biggest appraiser liability threat – the FDIC

http://realestateappraisertips.info/ — Thu, 22 Apr 2010 01:53:55 +0000

http://www.realestateappraisertips.info/ - Real Estate Appraiser Tips! Appraisal Today: The single biggest appraiser liability threat – the FDIC

From Appraisal Today Email Newsletter and Appraiser Law Blog – The single biggest appraiser liability threat – the FDIC

Another great article by Peter Christensen of Liability Insurance Administrators.

Here’s a quote:

“The single biggest liability threat to both residential and commercial appraisers is the Federal Deposit Insurance Corporation. The FDIC held a conference last week in Chicago for law firms interested in representing the FDIC. What came out of that conference made me very anxious for appraisers, but it’s much more than just a threat to individual appraisers. What the FDIC is doing hampers the ability of the appraisal profession to deliver accurate valuations going forward. The reason is: if you’re an appraiser doing work for a lender (which may or may not be one of the 700+ troubled banks on the FDIC’s watch list), you know your risk of being sued by the FDIC for overvaluation in hindsight is eliminated by “coming in low” on the appraisal. That means more loans don’t get made.“

To read the full story click here

Home Appraisers: Appraiser Organizations Urge State Boards to Look at Broker Opinions of Value

http://realestateappraisertips.info/ — Thu, 22 Apr 2010 00:13:06 +0000

http://www.realestateappraisertips.info/ - Real Estate Appraiser Tips! Home Appraisers: Appraiser Organizations Urge State Boards to Look at Broker Opinions of Value

Valuation’s Appraiser News Online is reporting that Appraiser Organizations Urge State Boards to Look at Broker Opinions of Value (BPO’s). The full story is here and here’s a snippet:

“The nation’s leading organizations of professional appraisers recently told all 50 state appraiser boards that real estate agents and brokers may be providing broker opinions of value of commercial real estate without appropriate appraiser credentials. The organizations stated that the performance of BOVs by agents and brokers “blatantly disregards numerous state statutes that require appraiser credentialing for opinions of value of real estate” and urged the boards to “take aggressive enforcement action against any provider of a BOV who does not hold an appropriate appraiser credential.“

Home Appraisers: TARP Inspector General Calls for Appraisals in HAMP, Forced Writedowns

http://realestateappraisertips.info/ — Thu, 22 Apr 2010 00:02:09 +0000

http://www.realestateappraisertips.info/ – Real Estate Appraiser Tips! Home Appraisers: TARP Inspector General Calls for Appraisals in HAMP, Forced Writedowns

Today’s “Valuation’s Appraiser News Online” is reporting that TARP Inspector General Calls for Appraisals in HAMP, Forced Writedowns. The Full Story is located here and here’s the snippet below:

“Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (SIGTARP), called for the Department of Treasury to utilize appraisals for the Home Affordable Modification Program to protect against fraud. Barofksy’s comments came during April 20 testimony before the Senate Finance Committee, and are highlighted further in a quarterly report issued to Congress. Citing concerns that inferior methods of valuation could lead to fraud, Barofsky told lawmakers, “Treasury should abandon its differing valuation standards across HAMP and adopt the Federal Housing Authority`s appraisal standard for all HAMP principal reduction and short sale programs.”

Home Appraisers: FHA Volume Dives, But Why?

http://realestateappraisertips.info/ — Tue, 20 Apr 2010 13:06:03 +0000

http://www.realestateappraisertips.info/ – Real Estate Appraiser Tips! Home Appraisers: FHA Volume Dives, But Why?

FHA Mortgage Guide is reporting on a decline in FHA Volume and comtemplates Why!

“The FHA mortgage volume figures will be out shortly but if they follow what happened in February then there should be a lot of head scratching on the home front.

During February, says HUD, there were 165,239 FHA loan applications — that’s down 26.4 percent from 2009. It follows that if loan applications are down then we will shortly see loan endorsements also fall.

It could be that the February numbers came up short because the weather was lousy in much of the country. However, offsetting the issue of blizzards and floods there is the little matter of April 5th — that’s the day when upfront mortgage insurance premiums will rise for all new FHA mortgages from 1.75 percent to 2.25 percent.

Translated into dollars, if you have a $200,000 FHA loan the up-front MIP will increase by $1,000 after April 5th — a very good reason to get an application in now, before FHA loan guidelines change and costs go up.

Or, there could be something else at work here, something which impacts both the FHA and the real estate market in general.”

Read the rest of the article here!

Working RE Magazine: Take The New HVCC Appraiser Talkback Survey: One Year On

http://realestateappraisertips.info/ — Tue, 20 Apr 2010 12:33:51 +0000

http://www.realestateappraisertips.info/ – Real Estate Appraiser Tips! Working RE Magazine: Take The New HVCC Appraiser Talkback Survey: One Year On

From Working RE:

“Editor’s Note: After a year of turmoil since the Home Valuation Code of Conduct (HVCC) was implemented, we know at least one thing: that you are being heard and that your feedback does make a difference. Don’t give up now. You’ll find the new survey questions about life after HVCC below. It’s up to you to let regulators and lawmakers know what is working and what isn’t. Is the FHA mandate, that appraisers be paid “customary and reasonable fees,” working? Has appraisal quality improved? Should Appraiser Management Companies (AMCs) be regulated? Are you feeling less pressure today to “make a deal work”? Are appraisers hired based on low fees rather than competency? Click here to take the New HVCC Talkback Survey: One Year On.”

Real Estate Appraisers: Real Estate Investors Daily Says Housing Recovery Dependant on Inventory Reduction

http://realestateappraisertips.info/ — Tue, 20 Apr 2010 12:18:48 +0000

http://www.realestateappraisertips.info/ – Real Estate Appraiser Tips! Real Estate Investors Daily: Housing Recovery Dependant on Inventory Reduction!

Housing is stabilizing but excess inventory and shadow supply are hindering recovery according to the April 2010 Economic Outlook released today by Fannie Mae’s Economics and Mortgage Market Analysis Group.

Read the article here!