Posts Tagged ‘real estate market’

Appraisal came in low? You’re not alone…

Wednesday, June 24th, 2009

Back in the day of skyrocketing home sale prices between 2001 – 2006 the appraisal of a home you’re buyingappraiser1 (or selling) was of very little concern to buyers, Realtors, lenders etc because it almost seemed as though appraisers were asking the lenders “what do you need it to appraise for?” before doing the appraisal…no accusations here, but there was some funny business going on and it was one of many factors that encouraged the housing bubble to burst. Since then appraisers have completely reversed course and potentially to the detriment of the market.

We often mention appraisal issues here and even mentioned this particular appraisal issue back in June 2008; we’ve also wondered to ourselves if this will become such a problem that when the housing market begins to recover if appraisals will keep it down. Well, we’re not the only ones wondering or talking about it any longer, seems the media at large is catching on. An article today on Bloomberg.com specifically lays out the issues we’re seeing, specifically that appraisals are begining to kill more and more deals. What happens is the buyer agrees to pay say $350,000 for a home, the appraisal comes in at $325,000 and the lender then refuses to lend on the home –> dead deal.

After getting their hands slapped for inflated appraisals in years gone, appraisers have done a 180 now often being downright harsh on their appraisals in some cases causing everyone, the buyer, the seller, the Realtors and the lender to all be on the edge of their seat sweating waiting for the results of the appraisal to see if we really have a deal or not.

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Bruce Howard / Landover Mortgage Daily Market Commentary – May 4th 2009

Monday, May 4th, 2009

bruce1Before we launch into the plethora of investor updates, let’s take a look at the market. With the absence of any bond-market news, the focus continues to be on stocks. Asian stocks rallied last night back to levels last seen in October. To many, in spite of the poor earnings results by many companies, it would appear that investors don’t want to miss out on a rally, and seem to be putting cash to work in the stock market. From last week, the Michigan Consumer Sentiment Index rose for the second straight gain, from 57.3 in March. Today we have Construction Spending and Pending Home Sales. Tomorrow the ISM Services number, Thursday our old friend Jobless Claims, and then on Friday we can get fired up about all of the Unemployment data. Hourly Earnings are expected to be up .2%, Nonfarm Payrolls -663,000, and the Unemployment Rate expected around 8.5%. The results of the government’s stress tests for 19 large financial institutions will be released on Thursday. We also have the Treasury selling over $70 billion in securities Tuesday-Thursday, which is weighing on the bond market. 10-yr is at 3.14% and mortgage prices are a shade better than Friday afternoon.

 

Fannie Mae came out with the details on their new mortgage loan data requirements. ”Fannie Mae has issued Announcement 09-11: Mortgage Loan Data Requirements. To comply with Federal Housing Finance Agency (FHFA) requirements, Fannie Mae will now be requiring loan origination identifiers and appraiser data elements for mortgage loan applications dated on or after January 1, 2010. This Announcement provides detail on the following: The Secure and Fair Enforcement Mortgage Licensing Act (S.A.F.E. Act) requires all states to implement a system to license and register mortgage loan originators. The Nationwide Mortgage Licensing System and Registry (NMLS) has been developed to implement the S.A.F.E Act. The NMLS will issue unique identifiers for loan originators and loan origination companies. Updates to the 2000-Character Loan Delivery Files – To support the requirements referenced above, Fannie Mae has updated our 2000-Character File Format and 2000-Character File Format Field Definitions documents with fields for the loan originator’s unique identifier, loan company’s unique identifier, appraiser’s state license number, and supervisory appraiser’s state license number. Updates to the Uniform Residential Loan Application (Form 1003) – Form 1003 will be updated shortly to capture the identification for both the loan originator and the loan originator company. We are working with Freddie Mac on changes to this joint Fannie Mae / Freddie Mac form, and additional information will be forthcoming. Form 1003 already includes fields for the capture of the other required identifiers.”

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