Why get an appraisal at all?
Just make the housing market all cash unless government approved.
Nothing like a soviet style housing model!!
Faugh. Lenders should pay the fricking appraisers. Then they would have some skin in the game- especially if the gummint loans had they good for the first 10% of losses.
Appraisals need to be a local but disinterested government process. Yup, the Dawg is saying we need more government. First we already do this as a routine method of establishing taxable value. Second, we have ample evidence that what we have now isn't working. Third, It has become laughably easy to appraise all but the outlying properties. This is very much like the travel agent business. 20/80 has gone to 80/20 and the infrastructure hasn't responded.
The appraiser shouldnt even know what the number is in the first place. How does it help them do a good job knowing what loan amount someone is trying to obtain? Maybe my brain is just misfiring today and I too tired to think this through.
And this bit about being paid only if the loan is made? Jeebus.
When we sold our house during the bubble era I got the distinct impression from our realtor that the appraisal wouldn't be a problem. A missed appraisal number meant no more business for the appraiser from my agent.
My house building was stalled due to a low appraisal, and thank Glod for that. It looks like several more years of declining prices, so I'm glad I wasn't able to move forward without rethinking the whole thing.
"Appraisers are in CYA mode, going 15% below current comps automatically. "
In a declining market why is it a surprise that they are factoring further losses into their appraisals? This is nothing new. It happens during every cycle. Go over comps on the way up and under on the way down.
"The Used House Salesmen and Mortgage Borkers are just upset that they have lost control of the appraisal process. "
Exactly. Cuomo did everyone a favor if you ask me.
Everyone, that is, who cares about an honest house financing process.
I believe for a time many lenders (including JPM Chase and Cwide) owned or were in a joint venture with their appraisal companies. Talk about a conflict of interest. The only reason WaMu had to pressure their appraisers is because they were independent. When you own the appraiser, no need for pressure, they obey naturally.
Cool. We lived in Waterford, then Novi before following other rats out of the state. I have 100+ relatives in the area (by marriage) and we'll probably be visiting in next month. I don't mind the summers, three months of bad sledding
"Maybe...because an appraiser's job is to determine the value of a house NOW??
It's the lender that's suppose to give the mortgage haircut. Not the appraiser. "
If appraisers determine the value of a house NOW, how do prices every move up or down? In my old development as prices were moving up houses were always appraised at the last similar house sold plus 10%.
If houses are valued based on comparable sales only then explain how prices move up? There are MANY factors that go into the value of a house NOW.
During the melt down I remember the mortgage brokers trying to blame the appraisers for going too high and increasing the values of the loans. Now the NRA wants to blame them for going to low and stalling the recovery.
Most appraisals I saw were from independent guys. But I do know that the mortgage people would tell them what they needed the numbers to come in at. That was suposed to be a big no no here.
In Az the seller pays for the appraisal up front. Or at least that is the way it used to be several years ago.
Just ahead of the pig, but worth repeating- my take on how little profit there was in low interest balance transfers and convenience checks:
You know the gaming of the credit card companies by the smarter class was incredible too. Consider the implicit losses of a $10,000 1.9% till you pay it off with a 2% minimum payment- the first months bill looks like this:
Now in a year you would have paid off $2144.55
leaving a balance of $ 7854.45 and generating $179.50 in interest.
Now, you drop your payment back down to the that minimum payment of $157.09 and extend your payments again.
Jeez, yet another year of crappy profits ensues!!
A grand total of $ 140.99 in interest earned on that balance!!!
WTF!!! You get to hit reset again every month essentaily with a 2% minimum.
I ulitmately calculate to make a grand total of 10% profit for the bank it would take about 9 years, and then the balance would finally be paid off!!
I figured this was going to end six or seven years ago- but nooooo they kept doing it!!!
Now, that is how you make a tail of business that is death to your profits when they default having had your money for years at trifling rates.
This model was beyond stupid, yet pursued with great vigor.
Buyers should be celebrating that appraisals are coming in at the right value.
Sellers should be celebrating that they have buyers period.
'Tards simply are who they are - the greatest collection of adults with a 4th grade education ever assembled.
I'm in the mortgage biz and am very happy with HVCC. The problem in a nut shell is this: Appraiser checks this $500k priced home against recent comparables all closing at $450k. The description of the $500k home goes like this:
"Light and bright home located on a cheery street, close to schools. Large lot. Recently updated kitchen. Thousands in upgrades. Newer roof. Come show and sell!!!!.
All that for 3% commission due. That's some hard work there, Lou...The actual description should have been....
"Great home located on the view side of single loaded Cul-De-Sac street. Approx 10,000 SF lot. Blue Ribbon award winning Elementary within one mile of hope. Stainless Steel Viking appliances in kitchen. $31,000 in recent upgrades. Call for detailed list and itemized receipt. Roof replaced in 2005 with 10 year warranty. All offers must have pre-approved buyers with evidence of FICO scores"
Because these bums don't take the time to work for the seller or the buyer, the industry suffers.
That one would be marketed as "Charming pied-a-terre. Close proximity to SF Financial District. Get in on the ground-floor in a pre-gentrification neighborhood."
the zillow/cyberhomes gap came up again this morning - i posted a house which was under 700K on cyberhomes (obviously very close to true value) and over 1 mil on zillow. this was not an obscure location with low volume (aside from the miniscule volume in all CA high-end markets lately).
why does zillow cater to the sellers-in-denial crowd? is that their way of being realtor-friendly? mind-boggling.
Soylent Green Is People. Very true. I remember several times when in 2007 when I would give my realator info or stats or direction she would exclaim "Wow, you should have been a realator!!". I would almost bite my tongue off stopping my self from telling her how much she offended me by that comment.......Actually what I really wanted to say was "I think a monkey could be a realator".....
Culture Minister Farouk Hosni said on 23/6/2009 that a group of Egyptian archaeologists have unearthed a number of ushabtis - an ushabti is a funerary figurine placed in a tomb as a substitute for the deceased, should he/she be called upon to do manual labor in the afterlife - ... inside a hole near the Pyramid of Djoser in Saqqara.
Years ago (like when the dinosaurs roamed the Earth) I worked in retail banking while in College. Took a lot of loan and mortgage apps – I was always under the impression that the appraisal was supposed to protect the LENDER. It wasn’t meant to validate the purchase price for the buyer and the seller; it was meant to make sure that the price made sense (and prevented fraud and collusion between the buyer and seller). About6 years ago, when the Realtors and Mortgage Brokers got together, the appraisal became a rubber-stamp so that a loan could be made. But the objective of the appraisal was to validate the deal (in a small way, just like S&P / Moody’s did with the RBMS)
Sounds like all that is happening is a very small return to sanity in mortgage lending
The Farm Credit System
"Farm Credit institutions are chartered by the federal government and must operate within limits established by the Farm Credit Act. The Farm Credit System is regulated by an independent federal agency, the Farm Credit Administration, which has all of the enforcement, regulatory and oversight authority as other federal financial regulators. Farm Credit is a government-sponsored enterprise, or “GSE” – a privately owned set of institutions established by Congress to address the needs of a specific sector of the economy.
Farm Credit delivers the financial power of Wall Street to agriculture and rural America by issuing debt in the national and international money markets and using this capital to provide borrowers with access to reliable and competitive credit. The full financial strength of all of the Farm Credit banks stands behind the debt issued on behalf of the System. In addition, investors in Farm Credit debt are protected by the assets of the self-funded Farm Credit System Insurance Fund, which is administered by an independent agency of the federal government.
The Farm Credit System’s total loans equaled $158.063 billion at September 30, 2008, an increase of $15.157 billion since December 31, 2007. Approximately one third of the credit needs of U.S. agriculture are financed by the 99 Farm Credit associations and banks nationwide."
But it's for the good of the economy, don't put what the house is worth, put what your hopes and dreams of what it will be worth !
It's the audacity of hoping your house is worth $1000 per sqr.ft !
Just had an appraisal done about 4 weeks ago for a refinance here in Phoenix. It came in 35% less than our purchase price in 2001, 45% lower than what we expected.
As of today, Zillow still shows a price that is 2.3 times higher than what it appraised at (the appraisal was 67% lower than Zillow). Cyberhomes is equivilant to our 2001 purchase price.
Our Broker commented that Zillow is running about 5 months behind on comps. She had an agent pull current comps - looks like the appraisal was low by about 20%. Wasn't worth challenging, as it wouldn't get us where we needed. Missed out on the great re-fi rates a few weeks ago, but at least our existing mortgage is only at 5.5%.
For those wondering: we had to pay the $295 appraisal fee upfront on a credit card. The appraiser also seemed to be running scared - didn't want to answer any questions at all...
Great motto, but the beer around here is mediocre.
Heh.. fortunately in Sunny SD there is a true beacon of great beer Callahan's Pub & Brewery
Take your appraiser here, get a few in them and they'll mark to whatever value you want
Sir Laurence, why are the appraisals "faulty"? Is it because everyone knows real estate only goes up?
And, foreclosures and short sales ARE comps. Notice how they're the only things selling? It's because only at those price points are things affordable anymore.
The NAR is going all out to get rid of HVCC, here's their latest... Assholes.
TO: State Association Executive Officers
State Association Presidents
FROM: NAR Government Affairs
DATE: 19 June 2009
RE: Fly-In Head's Up
Please note this notice is going to all state executive officers and state presidents. We will be sending Fly-In details on Monday June 22, 2009 to the states who have Members of Congress and/or United States Senators on the House Financial Services Committee or Senate Banking Committee. (list of states at end of memo)
There is growing concern in the real estate industry over the implementation of the Home Valuation Code of Conduct (HVCC) and its effect on the use of appraisal management companies (AMCs) by lenders.
NAR is taking the following actions: (Target dates in bold)
1. NAR is scheduling meetings with the Director of Federal Housing Finance Agency, Jim Lockhart to raise concerns about implementation of the HVCC and problems with AMCs and ask for an immediate 18 month moratorium. Director Lockhart is the conservator over Fannie and Freddie who entered the consent order with the NY Attorney General. ( June 22, 23, 24, or 25th)
2. Government Affairs will conduct a fly in the week of June 22. Two members from each Association (State AE/State President or FPC as appropriate) to meet with members/staff of the House and Senate Banking/Financial Services Committee. The ask will be to cosponsor the bill (item 3) and to support an 18 month moratorium.
3. Our legislative team will work on getting a bill introduced in Congress asking for a 18 month moratorium. (week of June 22)
4. We will ask the Chair and Ranking Members of the House and Senate Banking [ Reps Frank and Bachus/ Senators Dodd and Shelby] Committees to write Director Lockhart asking him to grant a 18 month moratorium (week of June 22)
5. We will try and get an 18 month moratorium attached to an immediate pending appropriation bill or other similar fast track bill. (June)
6. Staff will talk to the American Bankers Association who heretofore is fine with the AMC system to see if we can negotiate support.(June 19)
NAR will engage a coalition of Appraisal Institute, MBA, Home Builders and other appropriate trade groups.
7. NAR Research is conducting a survey so we have concrete data information to bring to the regulators and the NY Attorney General’s office . The survey will also be run through the State Association. EHS will be released next week and the appraisal issue will be mentioned front and center in NAR's release. Survey release June 22
8. NAR is scheduling a meeting with NYS Attorney General Andrew Cuomo and representatives of NYSAR. (June 29. 30)
9. NAR will conduct a Call For Action if we do not get a moratorium in the next week to 10 days
NAR is aware of multiple petitions calling for an end to the HVCC. NAR is taking a more tempered and thoughtful approach of asking for a moratorium during this trouble housing economy.
States with Members of Congress and/or United States Senators on the House Financial Services Committee or Senate Banking Committee: AL, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, KS, KY, LA, MA, MI, MN, MO, MS, MT, NC, NE, NH, NJ, NY, OH, OK,OR
PA, RI, SC, SD, TN,TX, UT, VA, WI, WV
We will be sending Fly-In details on Monday June 22, 2009 to the states who have Members of Congress and/or United States Senators on the House Financial Services Committee or Senate Banking Committee. (list of states at end of memo)
BFD. Like the clowns at NAR didn't stop their PAC donations last year. Now they have no credibility AND no influence.
How long before they have no dues money to pay their bills?
A growing number of American homeowners are falling into financial limbo: They're badly behind on payments, but their banks have not yet foreclosed.
The backlog of seriously delinquent mortgages, which so far affects about 1 million borrowers, is a shadow over hopes for a rebound in the nation's housing markets. It masks the full extent of the foreclosure crisis and threatens to depress prices even further just as some parts of the country are hinting at recovery. For lenders, it could portend even more financial losses tied to the mortgage meltdown.
Jefferies becoming a primary dealer, then pre-announcing, interesting to say the least...this could be a bull play for years since they are hanging with the right people it seems...
Nike moves down, but Jazz Pharma, Jefferies surge - MarketWatch
Investment bank Jefferies Group said late Wednesday that it expects to report second-quarter net earnings of more than $50 million on net revenue greater than $500 million. Analysts polled by Thomson Reuters are currently looking for revenue of $341 million. The results are scheduled for release on July 21.
ZeroHedge's extract from BoA email's is priceless...they've got one from a Richmond Fed official calling Merrill "scary and ugly".
Also "BAC management told us they could not provide electronic versions of ML files, and one wonders how that is possible "; obviously a lie but could be used as evidence of incompetence...
The State of Ohio,Department of Commerce, Division of Real Estate and Professional Licensing will act on your Ohio Apraisal complaint regarding your appraiser.
1st They will do a shallow and hollow surface investigation of your complaint.
2nd They will cite the appraiser if they can find misconduct,just because there is misconduct does not mean that it will cited.
3rd They will make a deal with the appraiser regarding his or her misconduct.
4th. The punishment will be like getting an ice cream cone(sweet)
5th The appraiser who is guilty of misconduct must approve the punishment and the settlement.
6th You the recipient of the flawed appraisal regardless of the financial harm inflicted on you" better suck it up"
because the State of Ohio is adamant about the privacy of the appraiser and nothing you can do about
getting any facts or information.
7th Details of the settlement negotiations are secret. The reason for the settlements are always to" save Time and Money".
8th Thankfully the Ohio politicians and the government agencies really do not give a fat crap what happened to you or
the financial devastation that you have experienced.
From my point of view in Ohio , an appraisal in like playing appraisal roulette. If the State of Ohio has to get involved regarding
your appraisal problems you will know that what I just wrote is true cause been there suffered that.
Remember, Ohio was the original epic center for foreclosures. We are still in the top 10 and we are working hard to be number 1,again.
“… looks like the appraisal was low by about 20%. Wasn't worth challenging, as it wouldn't get us where we needed. Missed out on the great re-fi rates a few weeks ago, but at least our existing mortgage is only at 5.5%.
“For those wondering: we had to pay the $295 appraisal fee upfront on a credit card. The appraiser also seemed to be running scared - didn't want to answer any questions at all...”
HVCC is not working. A “middle man” has been inserted into the process that does nothing for their money but put the appraisal out to bid, and many established, professional appraisers will not participate. Both are problems. It now takes an extra 1 – 2 weeks to get an appraisal done that may be OK but may also be trash, and the cost has gone up, to $550 in one instance from $350 my “regular appraiser” used to charge. Again, the appraisal management company does nothing but add a step and cream off bucks, pushing the cost to the consumer UP.
One real world story … a Seattle condo we estimated was worth $325K was appraised at $240K with 5 comps. 2 of the comps were 2.5+ miles away and 2 more were listings, not sales. There was thus only ONE comp. We, my client (a retired investor) and myself (proud to have been an honest mortgage broker for 13+ years) provided 3 additional comps, very recent, truly comparable SALES, from $300K+ to $600K very close to the subject condo, but were ignored.
HVCC is gonna hammer the real estate market, driving prices down further and more quickly, but artificially, and killing sales. I’m not surprised NAR doesn’t like it. I certainly don’t. HVCC is not the solution. It’s a mess. Fraud was always fraud and prosecutable.
@NEMO - this is an awesome story, indeed! Hollywood might call it mortgage wars II - revenge of the appraisers...ok, that's lame, but I know two appraisers who were quite unhappy with the way things were working during the boom.
I Could about the problems in the Appraisal Biz in CA all day,from lack of enforcement (8 Investigators statewide) to Appraisal management companies and on to appraisal mills that "cover" multiple counties with 30 trainees per licensed appraiser.Oh, and do not forget BPO's at $50 a pop,I know a couple of brokers who feed themselves with these, 20 minutes each,on line.feh.
I am an appraiser and I will defend our profession. The honest appraisers were "Black Listed" years ago. Not for being bad appraisers but because WE ARE HONEST. The banks and lenders wanted appraisers who would "make the deal work". We are not coming in low today on purpose. It is the market....we only report. Our opinions are based on stats and data. The lenders wanted shitty appraisals and got them. The crooks made their money and are GONE. THE HVCC MANDATES lenders order through a 3rd party. When this 1st passed the lenders COULD NOT hold ownership interest in these Appraiser Management Companies. When it finally went through....THAT WAS STRUCK FROM THE AGREEMENT. The 3rd party management companies have in no uncertain terms told us the appraisers that if we want to work...the fee is $150-200. We used to make $300-500. Costs to appraisers for data and other essential items has RISEN...fees are cut in 1/2....and frankly...I could give a crap where your value comes in at. How hard will you work for 1/2 of your salary. It is a disgrace that your biggest asset will be evaluated by a guy making $8 bucks an hour. A honest and ethical appraiser can only do 1 House per day. We spend 20-30 minutes doing the inspection and HOURS compiling data and typing up the report. EVERY GOOD appraiser I know has had enough...What other profession has seen it's fees decrease on average for the past 2 DECADES?
Money Man,I agree with what you say.With the current requirements to become a Trainee in california,the poor compensation and the shit you have to put up with,no one in their right mind would take the job.I took and passed the exam in 2006 and was offered 2 jobs,one an UNPAID 2 year internship with a firm 40 miles away where I would learn the biz from an honest and competent appraiser,the other was with an appraisal mill that would pay me $100 a pop and wanted 3 a day...they got a lot of business from management companies because they had a quick turnaround and always hit the number...I will say that the Appraisal exam was tougher than the Broker's Exam by a goodly margin.That honest Appraiser is now out of the business,bad money drives out good.
Sorry to rant but the general public HAS NO IDEA how fu*ked up this has become. The bastard banksters have hijacked the appraisal profession....I won't even get into their ethics crisis and moral downfall. The honest appraiser was where the first shot was fired and it occurred years ago. What is a honest man to do....work hit the number and feed his family...or starve? I chose to starve but cannot fault a man for trying to take care of his family. I know for a FACT that NO appraiser ever got out of bed and asked how many bad appraisals can I do today? Sorry again but this is clearly a steam roller job on the profession. The appraiser is THE ONLY HUMAN interaction on the valuation process. Therefore, APPRAISERS are the ONLY ONES that can yell bankers are CROOKS!!!!!!!!!
Money Man, --If the banks WANTED good appraisals, they'd get them. And if they were lending thier own money they would. But once the banks managed to not have any skin in the game, they had no reason to WANT good appraisals. Instead the appraisal just became a way to lie on the LTV figure that they put on the loan before selling it.
Utah missed the big bubble unlike many areas and most appraisers were fairly conservative when prices did start to rise here. Now the HVCC is causing rampant incompetence. I wrote about a recent case of malfeasance. See this link for more:
The consumer does not win with the HVCC. My clients are now having to pay for several appraisals in order to get one that will work so they can buy the home they want.
This is just another example of unintended consequences and how government over corrects and makes things worse.
If Moody's, S&P, and Fitch were paid by security buyers instead of sellers, none of this would have happened to begin with.
This is my favorite story of the week.
Independent appraisals are crushing the housing market! You must outlaw independent appraisals!!
You read it all before commenting, eh Nemo?
In the case of the last appraisal I got, the appraiser asked for payment in advance.
The Used House Salesmen and Mortgage Borkers are just upset that they have lost control of the appraisal process.
Why get an appraisal at all?
Just make the housing market all cash unless government approved.
Nothing like a soviet style housing model!!
Faugh. Lenders should pay the fricking appraisers. Then they would have some skin in the game- especially if the gummint loans had they good for the first 10% of losses.
Problem solved, Next!
Someday this war's gonna end....
Appraisers are in CYA mode, going 15% below current comps automatically.
Should we go back and mark to fantasy?
Pigged!
From previous thread:
Mid-Michigan - Perhaps 10-15 percent of small retailers around here won't take checks any more. Too many bad ones written.
Appraisals need to be a local but disinterested government process. Yup, the Dawg is saying we need more government. First we already do this as a routine method of establishing taxable value. Second, we have ample evidence that what we have now isn't working. Third, It has become laughably easy to appraise all but the outlying properties. This is very much like the travel agent business. 20/80 has gone to 80/20 and the infrastructure hasn't responded.
The appraiser shouldnt even know what the number is in the first place. How does it help them do a good job knowing what loan amount someone is trying to obtain? Maybe my brain is just misfiring today and I too tired to think this through.
And this bit about being paid only if the loan is made? Jeebus.
Amazing how similar this problem is to the rating agency problem.
When we sold our house during the bubble era I got the distinct impression from our realtor that the appraisal wouldn't be a problem. A missed appraisal number meant no more business for the appraiser from my agent.
Arnoldbucks?
//Perhaps 10-15 percent of small retailers around here won't take checks any more. Too many bad ones written.//
My house building was stalled due to a low appraisal, and thank Glod for that. It looks like several more years of declining prices, so I'm glad I wasn't able to move forward without rethinking the whole thing.
Dawg, if only there was such a thing as a disinterested government process.
The local government has every incentive to jack up appraisals - property taxes.
mos maiorum (profile) wrote
Mid-Michigan - Perhaps 10-15 percent of small retailers around here won't take checks any more. Too many bad ones written.
About where mid-michigan are you from?
I spent 10 miserable winters in Detroit.
"Appraisers are in CYA mode, going 15% below current comps automatically. "
In a declining market why is it a surprise that they are factoring further losses into their appraisals? This is nothing new. It happens during every cycle. Go over comps on the way up and under on the way down.
Bond Girl --
Amazing how similar this problem is to the rating agency problem.
Was any problem in the entire crisis not caused by bad incentives?
The devil is always in the details..
//Was any problem in the entire crisis not caused by bad incentives?//
Nemo,
Nope. You are absolutely right.
//About where mid-michigan are you from?//
GM Triangle -
Lansing/Flint/Saginaw area
"The Used House Salesmen and Mortgage Borkers are just upset that they have lost control of the appraisal process. "
Exactly. Cuomo did everyone a favor if you ask me.
Everyone, that is, who cares about an honest house financing process.
I believe for a time many lenders (including JPM Chase and Cwide) owned or were in a joint venture with their appraisal companies. Talk about a conflict of interest. The only reason WaMu had to pressure their appraisers is because they were independent. When you own the appraiser, no need for pressure, they obey naturally.
Maybe...because an appraiser's job is to determine the value of a house NOW??
It's the lender that's suppose to give the mortgage haircut. Not the appraiser.
The HVCC is actually a well-thought-out-process.
Which is why the scumballs at the NAR and MBA hate it.
Cool. We lived in Waterford, then Novi before following other rats out of the state. I have 100+ relatives in the area (by marriage) and we'll probably be visiting in next month. I don't mind the summers, three months of bad sledding
"Maybe...because an appraiser's job is to determine the value of a house NOW??
It's the lender that's suppose to give the mortgage haircut. Not the appraiser. "
If appraisers determine the value of a house NOW, how do prices every move up or down? In my old development as prices were moving up houses were always appraised at the last similar house sold plus 10%.
If houses are valued based on comparable sales only then explain how prices move up? There are MANY factors that go into the value of a house NOW.
During the melt down I remember the mortgage brokers trying to blame the appraisers for going too high and increasing the values of the loans. Now the NRA wants to blame them for going to low and stalling the recovery.
Most appraisals I saw were from independent guys. But I do know that the mortgage people would tell them what they needed the numbers to come in at. That was suposed to be a big no no here.
In Az the seller pays for the appraisal up front. Or at least that is the way it used to be several years ago.
Just ahead of the pig, but worth repeating- my take on how little profit there was in low interest balance transfers and convenience checks:
You know the gaming of the credit card companies by the smarter class was incredible too. Consider the implicit losses of a $10,000 1.9% till you pay it off with a 2% minimum payment- the first months bill looks like this:
Payment Principal: $ 177.17 Interest: $ 16.58 Balance: $ 9822.83
Now in a year you would have paid off $2144.55
leaving a balance of $ 7854.45 and generating $179.50 in interest.
Now, you drop your payment back down to the that minimum payment of $157.09 and extend your payments again.
Jeez, yet another year of crappy profits ensues!!
A grand total of $ 140.99 in interest earned on that balance!!!
WTF!!! You get to hit reset again every month essentaily with a 2% minimum.
I ulitmately calculate to make a grand total of 10% profit for the bank it would take about 9 years, and then the balance would finally be paid off!!
I figured this was going to end six or seven years ago- but nooooo they kept doing it!!!
Now, that is how you make a tail of business that is death to your profits when they default having had your money for years at trifling rates.
This model was beyond stupid, yet pursued with great vigor.
The Heloc scam was the same deal.
Someday this war's gonna end....
" josap (profile) wrote on Wed, 6/24/2009 - 6:17 pm
.......Now the NRA wants to blame them for going to low and stalling the recovery. "
Recovery!?
BTW, I suspect you meant NAR...
Sniff.....makes me miss Tanta....sniff, sniff....
Off the immediate topic, but some of these relate to earlier threads and may be of some interest to folks
Parsing the Fed's Statement
New Home Sales Head South
Durable Goods Orders Rebounding
speaking of pigs, or are we?
The Political Pig Pile, Part I
Bond Girl,
+10^6
The real estate groups have been yelling recovery for months now. And as that is not happening = it must be someones fault.
Like so many they think if they say something loud enough, long enough people will believe it.
"And as that is not happening = it must be someones fault."
//
prolly a man
Well sure bobbi.
That works for me. LOL
So just how would you go about assessing this one?
re: Gov Sanford--why is it is always foreign affairs but domestic relations?
Buyers should be celebrating that appraisals are coming in at the right value.
Sellers should be celebrating that they have buyers period.
'Tards simply are who they are - the greatest collection of adults with a 4th grade education ever assembled.
I'm in the mortgage biz and am very happy with HVCC. The problem in a nut shell is this: Appraiser checks this $500k priced home against recent comparables all closing at $450k. The description of the $500k home goes like this:
"Light and bright home located on a cheery street, close to schools. Large lot. Recently updated kitchen. Thousands in upgrades. Newer roof. Come show and sell!!!!.
All that for 3% commission due. That's some hard work there, Lou...The actual description should have been....
"Great home located on the view side of single loaded Cul-De-Sac street. Approx 10,000 SF lot. Blue Ribbon award winning Elementary within one mile of hope. Stainless Steel Viking appliances in kitchen. $31,000 in recent upgrades. Call for detailed list and itemized receipt. Roof replaced in 2005 with 10 year warranty. All offers must have pre-approved buyers with evidence of FICO scores"
Because these bums don't take the time to work for the seller or the buyer, the industry suffers.
My .02c
Soylent Green Is People.
Think globally, act locally?
picosec,
That one would be marketed as "Charming pied-a-terre. Close proximity to SF Financial District. Get in on the ground-floor in a pre-gentrification neighborhood."
the zillow/cyberhomes gap came up again this morning - i posted a house which was under 700K on cyberhomes (obviously very close to true value) and over 1 mil on zillow. this was not an obscure location with low volume (aside from the miniscule volume in all CA high-end markets lately).
why does zillow cater to the sellers-in-denial crowd? is that their way of being realtor-friendly? mind-boggling.
poic - If I ever do business with you, remind me to count my fingers after we shake on it
picosec, hahaha
I suck at business.
My .02c
Soylent Green Is People. Very true. I remember several times when in 2007 when I would give my realator info or stats or direction she would exclaim "Wow, you should have been a realator!!". I would almost bite my tongue off stopping my self from telling her how much she offended me by that comment.......Actually what I really wanted to say was "I think a monkey could be a realator".....
Strict work rules precede UAW Dept
Wednesday, June 24, 2009
Archaeological discovery in Saqqara
Culture Minister Farouk Hosni said on 23/6/2009 that a group of Egyptian archaeologists have unearthed a number of ushabtis - an ushabti is a funerary figurine placed in a tomb as a substitute for the deceased, should he/she be called upon to do manual labor in the afterlife - ... inside a hole near the Pyramid of Djoser in Saqqara.
Years ago (like when the dinosaurs roamed the Earth) I worked in retail banking while in College. Took a lot of loan and mortgage apps – I was always under the impression that the appraisal was supposed to protect the LENDER. It wasn’t meant to validate the purchase price for the buyer and the seller; it was meant to make sure that the price made sense (and prevented fraud and collusion between the buyer and seller). About6 years ago, when the Realtors and Mortgage Brokers got together, the appraisal became a rubber-stamp so that a loan could be made. But the objective of the appraisal was to validate the deal (in a small way, just like S&P / Moody’s did with the RBMS)
Sounds like all that is happening is a very small return to sanity in mortgage lending
Too funny! where was the concern when appraisals came in way to high? NAR,YUN, NAHB? Prices still going down! get ready.
"Sounds like all that is happening is a very small return to sanity in mortgage lending "
How could any return to sanity in mortgage lending be regarded as a "small" thing?
think globally, drink locally
Hales Ale motto
Broward knows
OT: Here's a GSE you all may not been aware of:
The Farm Credit System
"Farm Credit institutions are chartered by the federal government and must operate within limits established by the Farm Credit Act. The Farm Credit System is regulated by an independent federal agency, the Farm Credit Administration, which has all of the enforcement, regulatory and oversight authority as other federal financial regulators. Farm Credit is a government-sponsored enterprise, or “GSE” – a privately owned set of institutions established by Congress to address the needs of a specific sector of the economy.
Farm Credit delivers the financial power of Wall Street to agriculture and rural America by issuing debt in the national and international money markets and using this capital to provide borrowers with access to reliable and competitive credit. The full financial strength of all of the Farm Credit banks stands behind the debt issued on behalf of the System. In addition, investors in Farm Credit debt are protected by the assets of the self-funded Farm Credit System Insurance Fund, which is administered by an independent agency of the federal government.
The Farm Credit System’s total loans equaled $158.063 billion at September 30, 2008, an increase of $15.157 billion since December 31, 2007. Approximately one third of the credit needs of U.S. agriculture are financed by the 99 Farm Credit associations and banks nationwide."
the financial power of Wall Street...har har
"think globally, drink locally"
Great motto, but the beer around here is mediocre.
This is good. When I first heard local reports of appraisals "not coming in," I knew things were headed in the right direction.
Be empathic folks, for those appraisers. All they want to do is be able to take a week off and hike the Argentinian Tail with adequate funds to do so.
Great motto, but the beer around here is mediocre.
Sounds like a business opportunity there..."microbrew"...
Should we go back and mark to fantasy?
But it's for the good of the economy, don't put what the house is worth, put what your hopes and dreams of what it will be worth !
It's the audacity of hoping your house is worth $1000 per sqr.ft !
Re: Cyberhomes vs. Zillow
Just had an appraisal done about 4 weeks ago for a refinance here in Phoenix. It came in 35% less than our purchase price in 2001, 45% lower than what we expected.
As of today, Zillow still shows a price that is 2.3 times higher than what it appraised at (the appraisal was 67% lower than Zillow). Cyberhomes is equivilant to our 2001 purchase price.
Our Broker commented that Zillow is running about 5 months behind on comps. She had an agent pull current comps - looks like the appraisal was low by about 20%. Wasn't worth challenging, as it wouldn't get us where we needed. Missed out on the great re-fi rates a few weeks ago, but at least our existing mortgage is only at 5.5%.
For those wondering: we had to pay the $295 appraisal fee upfront on a credit card. The appraiser also seemed to be running scared - didn't want to answer any questions at all...
"think globally, drink locally"
Great motto, but the beer around here is mediocre.
Heh.. fortunately in Sunny SD there is a true beacon of great beer Callahan's Pub & Brewery
Take your appraiser here, get a few in them and they'll mark to whatever value you want
We clearly need to get back to goldilocks appraisals to revive the goldilocks (fantasy) markets.
down here most folks are watching the College World Series
final game, LSU up on Texas 3 zip bottom of the first on ESPN
get a few in them and they'll mark to whatever value you want
Mark-to-Microbrew is a valuation model I support.
Sir Laurence, why are the appraisals "faulty"? Is it because everyone knows real estate only goes up?
And, foreclosures and short sales ARE comps. Notice how they're the only things selling? It's because only at those price points are things affordable anymore.
rumor has it the LSU fans done drunk em dry up in Omaha
"Mark-to-Microbrew is a valuation model I support. "
Mark-to-malt?
The NAR is going all out to get rid of HVCC, here's their latest... Assholes.
TO: State Association Executive Officers
State Association Presidents
FROM: NAR Government Affairs
DATE: 19 June 2009
RE: Fly-In Head's Up
Please note this notice is going to all state executive officers and state presidents. We will be sending Fly-In details on Monday June 22, 2009 to the states who have Members of Congress and/or United States Senators on the House Financial Services Committee or Senate Banking Committee. (list of states at end of memo)
There is growing concern in the real estate industry over the implementation of the Home Valuation Code of Conduct (HVCC) and its effect on the use of appraisal management companies (AMCs) by lenders.
NAR is taking the following actions: (Target dates in bold)
1. NAR is scheduling meetings with the Director of Federal Housing Finance Agency, Jim Lockhart to raise concerns about implementation of the HVCC and problems with AMCs and ask for an immediate 18 month moratorium. Director Lockhart is the conservator over Fannie and Freddie who entered the consent order with the NY Attorney General. ( June 22, 23, 24, or 25th)
2. Government Affairs will conduct a fly in the week of June 22. Two members from each Association (State AE/State President or FPC as appropriate) to meet with members/staff of the House and Senate Banking/Financial Services Committee. The ask will be to cosponsor the bill (item 3) and to support an 18 month moratorium.
3. Our legislative team will work on getting a bill introduced in Congress asking for a 18 month moratorium. (week of June 22)
4. We will ask the Chair and Ranking Members of the House and Senate Banking [ Reps Frank and Bachus/ Senators Dodd and Shelby] Committees to write Director Lockhart asking him to grant a 18 month moratorium (week of June 22)
5. We will try and get an 18 month moratorium attached to an immediate pending appropriation bill or other similar fast track bill. (June)
6. Staff will talk to the American Bankers Association who heretofore is fine with the AMC system to see if we can negotiate support.(June 19)
NAR will engage a coalition of Appraisal Institute, MBA, Home Builders and other appropriate trade groups.
7. NAR Research is conducting a survey so we have concrete data information to bring to the regulators and the NY Attorney General’s office . The survey will also be run through the State Association. EHS will be released next week and the appraisal issue will be mentioned front and center in NAR's release. Survey release June 22
8. NAR is scheduling a meeting with NYS Attorney General Andrew Cuomo and representatives of NYSAR. (June 29. 30)
9. NAR will conduct a Call For Action if we do not get a moratorium in the next week to 10 days
NAR is aware of multiple petitions calling for an end to the HVCC. NAR is taking a more tempered and thoughtful approach of asking for a moratorium during this trouble housing economy.
States with Members of Congress and/or United States Senators on the House Financial Services Committee or Senate Banking Committee: AL, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, KS, KY, LA, MA, MI, MN, MO, MS, MT, NC, NE, NH, NJ, NY, OH, OK,OR
PA, RI, SC, SD, TN,TX, UT, VA, WI, WV
Get your 125% LTV or HIGHER refi right here, ladies and gentlemen.
We will be sending Fly-In details on Monday June 22, 2009 to the states who have Members of Congress and/or United States Senators on the House Financial Services Committee or Senate Banking Committee. (list of states at end of memo)
BFD. Like the clowns at NAR didn't stop their PAC donations last year. Now they have no credibility AND no influence.
How long before they have no dues money to pay their bills?
wow... I killed the thread. Hope everyone is calling their reps to tell 'em what we think of the NAR.
It wasn't dead. It was just resting.
@ JP... lol
I come not to appraise Caesar's comps, but to bury him in low evaluations
A growing number of American homeowners are falling into financial limbo: They're badly behind on payments, but their banks have not yet foreclosed.
The backlog of seriously delinquent mortgages, which so far affects about 1 million borrowers, is a shadow over hopes for a rebound in the nation's housing markets. It masks the full extent of the foreclosure crisis and threatens to depress prices even further just as some parts of the country are hinting at recovery. For lenders, it could portend even more financial losses tied to the mortgage meltdown.
"It just means foreclosure rates are going to keep rising," said Patrick Newport, an economist for IHS Global Insight.
Homeowners stuck in foreclosure limbo - Washington Post- msnbc.com
re: appraisals--it's a whore's business, turn out the lights baby, I'll be what you want me to be
I'm seriously Delinquent, but it works for me.
So is a Juvenal Delinquent someone who is in arrears on a junior lien?
Jefferies becoming a primary dealer, then pre-announcing, interesting to say the least...this could be a bull play for years since they are hanging with the right people it seems...
Jefferies added to Fed's primary dealer ranks - MarketWatch
Nike moves down, but Jazz Pharma, Jefferies surge - MarketWatch
Investment bank Jefferies Group said late Wednesday that it expects to report second-quarter net earnings of more than $50 million on net revenue greater than $500 million. Analysts polled by Thomson Reuters are currently looking for revenue of $341 million. The results are scheduled for release on July 21.
Jefferies shares surged 8.1% to $22.11.
ZeroHedge's extract from BoA email's is priceless...they've got one from a Richmond Fed official calling Merrill "scary and ugly".
Also "BAC management told us they could not provide electronic versions of ML files, and one wonders how that is possible "; obviously a lie but could be used as evidence of incompetence...
The appraiser shouldn't know the number - period. It's been made easier with the HVCC. Case closed, next..........
All they want to do is be able to take a week off and hike the Argentinian Tail ...
barfly- for you
http://www.surfersvillage.com/gal/pictures/0226_MissReefArgentina2.jpg
bro, you made my day. Thx.
The State of Ohio,Department of Commerce, Division of Real Estate and Professional Licensing will act on your Ohio Apraisal complaint regarding your appraiser.
1st They will do a shallow and hollow surface investigation of your complaint.
2nd They will cite the appraiser if they can find misconduct,just because there is misconduct does not mean that it will cited.
3rd They will make a deal with the appraiser regarding his or her misconduct.
4th. The punishment will be like getting an ice cream cone(sweet)
5th The appraiser who is guilty of misconduct must approve the punishment and the settlement.
6th You the recipient of the flawed appraisal regardless of the financial harm inflicted on you" better suck it up"
because the State of Ohio is adamant about the privacy of the appraiser and nothing you can do about
getting any facts or information.
7th Details of the settlement negotiations are secret. The reason for the settlements are always to" save Time and Money".
8th Thankfully the Ohio politicians and the government agencies really do not give a fat crap what happened to you or
the financial devastation that you have experienced.
From my point of view in Ohio , an appraisal in like playing appraisal roulette. If the State of Ohio has to get involved regarding
your appraisal problems you will know that what I just wrote is true cause been there suffered that.
Remember, Ohio was the original epic center for foreclosures. We are still in the top 10 and we are working hard to be number 1,again.
Michael LittleBig
Splat:
“… looks like the appraisal was low by about 20%. Wasn't worth challenging, as it wouldn't get us where we needed. Missed out on the great re-fi rates a few weeks ago, but at least our existing mortgage is only at 5.5%.
“For those wondering: we had to pay the $295 appraisal fee upfront on a credit card. The appraiser also seemed to be running scared - didn't want to answer any questions at all...”
HVCC is not working. A “middle man” has been inserted into the process that does nothing for their money but put the appraisal out to bid, and many established, professional appraisers will not participate. Both are problems. It now takes an extra 1 – 2 weeks to get an appraisal done that may be OK but may also be trash, and the cost has gone up, to $550 in one instance from $350 my “regular appraiser” used to charge. Again, the appraisal management company does nothing but add a step and cream off bucks, pushing the cost to the consumer UP.
One real world story … a Seattle condo we estimated was worth $325K was appraised at $240K with 5 comps. 2 of the comps were 2.5+ miles away and 2 more were listings, not sales. There was thus only ONE comp. We, my client (a retired investor) and myself (proud to have been an honest mortgage broker for 13+ years) provided 3 additional comps, very recent, truly comparable SALES, from $300K+ to $600K very close to the subject condo, but were ignored.
HVCC is gonna hammer the real estate market, driving prices down further and more quickly, but artificially, and killing sales. I’m not surprised NAR doesn’t like it. I certainly don’t. HVCC is not the solution. It’s a mess. Fraud was always fraud and prosecutable.
@NEMO - this is an awesome story, indeed! Hollywood might call it mortgage wars II - revenge of the appraisers...ok, that's lame, but I know two appraisers who were quite unhappy with the way things were working during the boom.
I Could about the problems in the Appraisal Biz in CA all day,from lack of enforcement (8 Investigators statewide) to Appraisal management companies and on to appraisal mills that "cover" multiple counties with 30 trainees per licensed appraiser.Oh, and do not forget BPO's at $50 a pop,I know a couple of brokers who feed themselves with these, 20 minutes each,on line.feh.
I am an appraiser and I will defend our profession. The honest appraisers were "Black Listed" years ago. Not for being bad appraisers but because WE ARE HONEST. The banks and lenders wanted appraisers who would "make the deal work". We are not coming in low today on purpose. It is the market....we only report. Our opinions are based on stats and data. The lenders wanted shitty appraisals and got them. The crooks made their money and are GONE. THE HVCC MANDATES lenders order through a 3rd party. When this 1st passed the lenders COULD NOT hold ownership interest in these Appraiser Management Companies. When it finally went through....THAT WAS STRUCK FROM THE AGREEMENT. The 3rd party management companies have in no uncertain terms told us the appraisers that if we want to work...the fee is $150-200. We used to make $300-500. Costs to appraisers for data and other essential items has RISEN...fees are cut in 1/2....and frankly...I could give a crap where your value comes in at. How hard will you work for 1/2 of your salary. It is a disgrace that your biggest asset will be evaluated by a guy making $8 bucks an hour. A honest and ethical appraiser can only do 1 House per day. We spend 20-30 minutes doing the inspection and HOURS compiling data and typing up the report. EVERY GOOD appraiser I know has had enough...What other profession has seen it's fees decrease on average for the past 2 DECADES?
Money Man,I agree with what you say.With the current requirements to become a Trainee in california,the poor compensation and the shit you have to put up with,no one in their right mind would take the job.I took and passed the exam in 2006 and was offered 2 jobs,one an UNPAID 2 year internship with a firm 40 miles away where I would learn the biz from an honest and competent appraiser,the other was with an appraisal mill that would pay me $100 a pop and wanted 3 a day...they got a lot of business from management companies because they had a quick turnaround and always hit the number...I will say that the Appraisal exam was tougher than the Broker's Exam by a goodly margin.That honest Appraiser is now out of the business,bad money drives out good.
Sorry to rant but the general public HAS NO IDEA how fu*ked up this has become. The bastard banksters have hijacked the appraisal profession....I won't even get into their ethics crisis and moral downfall. The honest appraiser was where the first shot was fired and it occurred years ago. What is a honest man to do....work hit the number and feed his family...or starve? I chose to starve but cannot fault a man for trying to take care of his family. I know for a FACT that NO appraiser ever got out of bed and asked how many bad appraisals can I do today? Sorry again but this is clearly a steam roller job on the profession. The appraiser is THE ONLY HUMAN interaction on the valuation process. Therefore, APPRAISERS are the ONLY ONES that can yell bankers are CROOKS!!!!!!!!!
Or worse than that, Lawrence Yun.
Money Man, --If the banks WANTED good appraisals, they'd get them. And if they were lending thier own money they would. But once the banks managed to not have any skin in the game, they had no reason to WANT good appraisals. Instead the appraisal just became a way to lie on the LTV figure that they put on the loan before selling it.
That was my point.....
Utah missed the big bubble unlike many areas and most appraisers were fairly conservative when prices did start to rise here. Now the HVCC is causing rampant incompetence. I wrote about a recent case of malfeasance. See this link for more:
Ogden Insights: Conventional Lending: Gov't Siege Engines Attack
The consumer does not win with the HVCC. My clients are now having to pay for several appraisals in order to get one that will work so they can buy the home they want.
This is just another example of unintended consequences and how government over corrects and makes things worse.
If Moody's, S&P, and Fitch were paid by security buyers instead of sellers, none of this would have happened to begin with.