All posts tagged Appraisals

Mortgages Get Denied Due To Low Ball Appraisals

by Justin Miller on April 10, 2012 in Appraised Values with No comments

 

 

 

 

 

 

 

I have mentioned this time and time again.  This is one of the many reasons that the interest rates and fees should not be what you are most concerned with.  It is obvious that you want to get a good deal and not be taken advantage of but there are other questions you should be asking when choosing your Mortgage Professional.

We at FEMBi use our own appraisers and rotate them so we are compliant with the appraisal standards.  We are not having the issues the article, “Low-Ball Appraisal: Mortgage Denied” is talking about.

You find the home of your dreams. You’re pre-approved for a mortgage. You’ve scheduled the closing. Then … the appraisal comes in too low and the deal blows up……..

Appraisal Process Is Flawed

by Justin Miller on March 4, 2012 in Appraised Values with No comments

 

 

 

 

 

 

 

 

This is one of the reasons I am always saying that a mortgage is much more than an interest rate.  Appraisals are a big problem and especially in Fort Lauderdale and South Florida.  You don’t want to overpay for a property but you don’t want the deal to fall apart because the property under appraises and this happens all of the time.

Luckily at FEMBi Mortgage, we are HVCC compliant and rotate our appraisers but the appraisers on our appraiser list are experienced and know the area they are appraising. With the banks and brokers they use the appraisal management companies which the big banks have an ownership interest in and you never know who you are going to get, their experience, and/or whether they know the area.

I recommend reading the article “Home Appraisal Process Flawed, Government Report Finds.”

A recent NAHB poll showed that one out of three builders surveyed lost signed sales contracts because of flawed appraisals. And a National Association of Realtors survey conducted last fall found 18% of Realtors reporting recent contract cancellations or delays as a result of a low appraisal……..

Appraisals & Distressed Sales

by Justin Miller on February 7, 2012 in Appraised Values with No comments

It’s quite often that a borrower reviews an appraisal that I send to them and they can’t understand why there are short sales and foreclosures included in it.  If there is a recent sales close (same neighborhood or within .5 miles) to the property and within the last 3 months it needs to be included.  A lot of times the appraiser will comment that it was a distressed sale and due to the condition little weight has been giving to it but it has to be included.

Here in Fort Lauderdale and all of South Florida we see this all of the time because there are so many distressed sales.  The article below, “Do Appraisers Use Distressed Sales As Comparables,” give very good examples to answer this question:

Last month, the Appraisal Instituteissued a paper on the subject. In the paper,  the Institute explained that:

“Foreclosures and short sales can provide important information for appraisers, who develop valuations based on market data and market forces.”

On whether an appraiser should use distressed properties as comparables, the Institute was very direct (all items in bold were shown as bold in the original paper):

“An appraiser should not ignore foreclosure sales and short sales if consideration of such sales is necessary to develop a credible value opinion.”

And they explained the possible differences between short sales and foreclosures:

“A short sale … might have involved atypical seller motivations and so might not be an ideal comp…

A sale of a bank-owned property might have involved typical motivations, so the fact that it was a foreclosed property would not render it ineligible as a comp.”

Fort Lauderdale Appraisals

by Justin Miller on August 13, 2011 in Appraised Values with No comments

If you think the most important part of your mortgage is your interest rate you better think again.  If the property doesn’t appraise it changes everything.  Appraisals are a big issue right now due to the change in the appraisal standards and the banks and brokers being required to use an Appraisal Management Company (AMC).

When your appraisal is ordered through an AMC you never know who the appraiser is going to be, if they know the area, how long they have been in the business, if they are conservative, etc, etc.  And the banks have ownership interests in the AMC.

You need to deal with a Mortgage Bank that picks their appraisers but has them rotated so that they are still compliant with the HVCC Appraisal Standards.  I will never work for a company that doesn’t do this that is how large of a role this plays.

Make sure to check out The Wall Street Journal article, “Judgment Call: Appraisals Weigh Down Housing Sales.”

Appraisal Management Companies Conflict of Interest

by Justin Miller on January 29, 2010 in Appraised Values with No comments

This was not written by me but by Rob Chrisman who is a director of Capital Markets.  I found it very interesting since we have all own that the big banks have interests in the appraisal companies just like Countrywide did with Landsafe which the owned.  

“How far can an appraisal management company go toward originating mortgages? We may find out shortly. It is well know that many large companies such as Wells and BofA have interests in AVM’s but recently a story has made the press about an appraisal company getting involved in mortgage banking. Is it a possible conflict of interest? Stay tuned.”

http://www.prweb.com/releases/appraisal_management/hvcc_compliance/prweb3494924.htm 

Appraisals Continue To Devalue Devalued Properties

by Justin Miller on December 30, 2009 in Appraised Values with No comments

This Q&A from MarketWatch talks about changing appraisal standards and using short sales and foreclosures as comparables.  This is a big issue and the title of this post is exactly what has been happening. 

I see this day in and day out since most of my business is in the Fort Lauderdale, Florida area and we have been hit so hard by the housing bubble.  Appraisers just aren’t able to give the adjustments that are deserved for the condition of the property.  It’s not because of the appraiser and you could even argue it’s not the banks doing but it is due to the secondary market.  I really don’t care who is to blame but they need to change it especially since if you are a normal seller, not a distressed sale, you won’t get what you should for your property. 

http://www.marketwatch.com/story/is-it-time-to-change-home-appraisal-practices-2009-12-30?siteid=rss&rss=1 

Appraisals Still Under Fire

by Justin Miller on August 18, 2009 in Appraised Values, Conventional Loans, FHA Loans, General News with No comments

This is something new that I haven’t seen.  “Squeezed by a drop in fees, some appraisers are compensating by driving long distances to handle more assignments. Their wanderings are raising questions about whether they know enough about the neighborhoods to accurately assess the value of homes—which has implications for both home buyers and owners.”

http://online.wsj.com/article/SB10001424052970203496804574348712795471006.html?mod=rss_Weekend_Journal

Some Help With The New Appraisal Guidelines

by Justin Miller on July 30, 2009 in Appraised Values, Conventional Loans, FHA Loans, General News, Refinance with No comments

The article below has 5 good things for you to follow when it comes to the appraised value of your home. 

http://money.cnn.com/2009/07/29/real_estate/home_appraisals.moneymag/index.htm?section=money_realestate 

More On The New Appraisal Code

by Justin Miller on July 23, 2009 in Appraised Values with No comments

Fannie Mae and Freddie Mac are trying to defend their new appraisal rule, HVCC, by saying that appraisers must have experience in those geographical areas.  What they leave out is how conservative they are all being, how the comparables don’t take into account the condition of the property like they should, the costs involved, etc. 

 

 “The two government-backed mortgage investors told mortgage lenders that appraisers must have experience in the geographic areas where they get assignments. Brokers have complained recently about what they see as a growing number of appraisers traveling outside the areas they know best, resulting in less-accurate appraisals.

Fannie and Freddie also said the code doesn’t bar appraisers from talking with real-estate agents.”

http://online.wsj.com/article/SB124830543450973871.html#mod=todays_us_page_one 

What Will My Home Be Worth In 10 Years?

by Justin Miller on June 26, 2009 in Appraised Values, General News with No comments

Great question and one that I don’t know the answer to but there is a website that will predict it for you. 

http://www.smartzip.com/ 

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