As you know if you've been reading this blog, I'm not a fan of the HVCC (Home Value Code of Conduct). It's killing values, deals and realationships that good brokers and good appraisers have built over many years.
Yes, I understand why the HVCC was created but it has done more damage than good. Please, find the time to go to this website and learn more. Anything you can do to help; by signing the petition and writing to your state and local officials.
http://hvccpetition.com/
How does this affect you? The best example is that if you want to go to Wells Fargo and order / pay for an appraisal, and then for ANY reason; whether it's because of rate, program or service, you decide to go to another lender, you'll have to order / pay for another new appraisal!!! This costs you time, money and you don't know what each appraiser is going to come in at. Many times the appraisers do not know the area and we as brokers are to have no contact before or during the appraisal process to help get the value you need.
Showing posts with label appraisals. Show all posts
Showing posts with label appraisals. Show all posts
Friday, March 5, 2010
Wednesday, July 1, 2009
The truth is coming out
Almost all the news today has been bad. Higher unemployment, lower sales and poor housing news. Basically all the stuff I've been talking about, the truth behind the headlines, is starting to poke it's head.
Next week will be an interesting one. The should be a few big sales of treasuries and depending on the demand we'll know where rates are going. I feel with this bad news out this week, people will buy up treasuries for safety which will bring the yields down and in turn hopefully the rates.
Again, I beg all of you to go to www.hvccpetition.com and sign this. What is going on with the appraisal process is going to kill this business and the value of your home.
Next week will be an interesting one. The should be a few big sales of treasuries and depending on the demand we'll know where rates are going. I feel with this bad news out this week, people will buy up treasuries for safety which will bring the yields down and in turn hopefully the rates.
Again, I beg all of you to go to www.hvccpetition.com and sign this. What is going on with the appraisal process is going to kill this business and the value of your home.
Tuesday, June 23, 2009
Appraisal issue
Here's proof that I'm not over reacting about this HVCC appraisal rule. This quote is strait from someone at NAR
As I always say, read the full article so here.
It's a lot of mix and mash info. If you take a step back, you'll realize that we're in for more troubles a head. The word from everyone that I speak to is that there is nothing good on the market. Most of the stuff that's priced correctly is all foreclosures or short sales, which doesn't leave a lot of quality to choose from when new buyers are looking. Most of the people who don't need to sell are taking their properties off the market or locking in at a price and not budging hoping that someone will come along and buy their house for the price they want. "You can hope in one hand and crap in the other, let's see what gets filled faster." - Ten points for who knows what movie that's from?
Yun said the appraisal problem is serious. “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,” he said. “In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.”
As I always say, read the full article so here.
It's a lot of mix and mash info. If you take a step back, you'll realize that we're in for more troubles a head. The word from everyone that I speak to is that there is nothing good on the market. Most of the stuff that's priced correctly is all foreclosures or short sales, which doesn't leave a lot of quality to choose from when new buyers are looking. Most of the people who don't need to sell are taking their properties off the market or locking in at a price and not budging hoping that someone will come along and buy their house for the price they want. "You can hope in one hand and crap in the other, let's see what gets filled faster." - Ten points for who knows what movie that's from?
Thursday, June 4, 2009
Random Thoughts
Random.
That seems to be the way I'd put this market. No one knows what's happening or really what's going on. I feel that there is a tremendous amount of sheep fallowing the blind leaders. Panic will drive a market up hundreds of points and the same blind fear of the unknown or belief in what others might be doing will drive the market into a tailspin.
I've been talking about a summer crash for weeks now. I felt that I was going just on a gut feeling but now there seems to be more and more people that are saying the same thing.
It's funny, because while rates have (and historically) been good, they where so low that there was a ton of pressure to get every one's loan done. All the lenders are backed up and many are even going past the RESPA 30 day requirement to have a decision. I could talk for hours on why and how this is affecting everything and one but maybe later. Back to my main point here, I was hoping that we'd get a small raise in the rates. "Give me a week or two with higher rates, just so we / I can get caught up." Well be careful for what you wish for. We got a spike in rates this week. Most people are trying to find a cliff to leap off of, but I've got to remind myself I asked for this. With my firm belief, and over the past few days this has happened, rates will come back down. Now is the time to get caught up.
Now is the time to get those apps in. Lenders truly are taking sometimes 60+ days to get some deals done. There are a lot of problems. For instance this new HVCC appraisal rule is HORRIBLE. I beg all that read this to write your congress, Senate and president to get rid of this rule or at least make it work within reality. I hope to put together an idea that can incorporate the "thought" behind this rule with some reality so that if this is what the law makers want, it can work. Back to my example, most every lender wants an appraisal to be submitted with a complete loan package. Well if they insist that the appraisal can't have comps past 90 days, but don't underwrite a file for 30 days, that's only really a 60 day window for comps. So often I'm finding that a lender will kick a loan out or charge the borrower with a review fee because the appraisal is old and the value has dropped or there are no current comps to support the file, so the lender would rather decline it than risk approving it and not being able to re-sell it on the secondary market. This is horrible for the borrowers and for us trying to work within the system and the long run for the lenders because they're not making as much money and passing up on helping lower people's payments and in turn stimulating the economy, which is what this is all about.
We've got so many problems right now. Even if and when we solve them, these answers will cause more issues that will need to be addressed. But if rates go up now, from mortgages to business loans, you'd might as well pack your bags because we're all going to be screwed.
It is late and I know I'm bouncing around here, but just be patient. As always read further than the first line of these financial articles. And call or write me if you have any questions.
That seems to be the way I'd put this market. No one knows what's happening or really what's going on. I feel that there is a tremendous amount of sheep fallowing the blind leaders. Panic will drive a market up hundreds of points and the same blind fear of the unknown or belief in what others might be doing will drive the market into a tailspin.
I've been talking about a summer crash for weeks now. I felt that I was going just on a gut feeling but now there seems to be more and more people that are saying the same thing.
It's funny, because while rates have (and historically) been good, they where so low that there was a ton of pressure to get every one's loan done. All the lenders are backed up and many are even going past the RESPA 30 day requirement to have a decision. I could talk for hours on why and how this is affecting everything and one but maybe later. Back to my main point here, I was hoping that we'd get a small raise in the rates. "Give me a week or two with higher rates, just so we / I can get caught up." Well be careful for what you wish for. We got a spike in rates this week. Most people are trying to find a cliff to leap off of, but I've got to remind myself I asked for this. With my firm belief, and over the past few days this has happened, rates will come back down. Now is the time to get caught up.
Now is the time to get those apps in. Lenders truly are taking sometimes 60+ days to get some deals done. There are a lot of problems. For instance this new HVCC appraisal rule is HORRIBLE. I beg all that read this to write your congress, Senate and president to get rid of this rule or at least make it work within reality. I hope to put together an idea that can incorporate the "thought" behind this rule with some reality so that if this is what the law makers want, it can work. Back to my example, most every lender wants an appraisal to be submitted with a complete loan package. Well if they insist that the appraisal can't have comps past 90 days, but don't underwrite a file for 30 days, that's only really a 60 day window for comps. So often I'm finding that a lender will kick a loan out or charge the borrower with a review fee because the appraisal is old and the value has dropped or there are no current comps to support the file, so the lender would rather decline it than risk approving it and not being able to re-sell it on the secondary market. This is horrible for the borrowers and for us trying to work within the system and the long run for the lenders because they're not making as much money and passing up on helping lower people's payments and in turn stimulating the economy, which is what this is all about.
We've got so many problems right now. Even if and when we solve them, these answers will cause more issues that will need to be addressed. But if rates go up now, from mortgages to business loans, you'd might as well pack your bags because we're all going to be screwed.
It is late and I know I'm bouncing around here, but just be patient. As always read further than the first line of these financial articles. And call or write me if you have any questions.
Tuesday, April 7, 2009
New Programs - UPDATE
I've been very busy trying to keep up with all the lenders and all their changes. They're starting to slowly but surely roll out the changes. I've got only one or two lenders that have pricing but almost all of them have been rolling out the guidelines. By next week I hope all the lenders will be set.
As I feared there are some hits that may take away the usefulness of the new programs but I still think that there is a lot of good that's going to come out of these programs.
Please make sure you contact your local congress person and senate person AND president to encourage them to get rid of this appraisal change that coming in May. It's going to be a disaster for you the consumer and for everyone involved in the loan process. Here is a link to find your representative http://www.usa.gov/Contact/Elected.shtml
Thanks.
As I feared there are some hits that may take away the usefulness of the new programs but I still think that there is a lot of good that's going to come out of these programs.
Please make sure you contact your local congress person and senate person AND president to encourage them to get rid of this appraisal change that coming in May. It's going to be a disaster for you the consumer and for everyone involved in the loan process. Here is a link to find your representative http://www.usa.gov/Contact/Elected.shtml
Thanks.
Friday, March 27, 2009
The Value of a good Appraiser
There are changes coming to the lending world regarding appraiser / broker relationships. Starting in May, there could be new rules that state that only the lender that receives a loan application may order the appraisal and the broker is to have no say or contact with the appraiser.
No one wants this. Not the Lenders, not the Brokers, not the Appraiser's and most importantly not the BORROWERS!! Essentially this will eliminate a fair market. The new rule would mean that if we submit your loan to Wells Fargo, they would order an appraisal and make you pay for it. If we then submitted the loan to MetLife, they would order an appraisal and make you pay for it. Just to shop the loan around and get the best rate, could cost a fortune in appraisal fees. This is unfair to the borrowers and hurts their right to get the best rate.
Also, if they don't allow us Brokers to talk to the appraisers, you are putting entire files at risk. How can we know what a property is going to appraise at? What if I think a property is worth 1 million dollars but the appraiser comes in at 900,000? That difference could change the loan, if not cancel it completely.
I understand there was a lot of fraud that went on in the past, but most of that was perpetrated by the LENDERS ordering the appraisals. Even in the easy days, a few years ago, when a Broker submitted a loan with an appraisal, it would get reviewed by the lender. But a lender who ordered an appraisal directly didn't get it reviewed. There are people sitting in jail right now that abused the lender / appraiser relationship to push values and get loans off of inflated values. So let's not pretend like it was just us Brokers who did all the damage and should never talk to the appraiser because of the possibility of fraud.
The relationship between me and my appraisers is very special and is meant to help our borrowers. I'm working on a deal right now that needs the appraiser and myself to work together and be on the same page. This is not just a value issue. I, as just the loan broker, rely on what the appraiser sees and their expertise in area / location and condition to know what the value of the home is. If this relationship is taken away, it won't be the Brokers or the Appraisers who suffer, it will be the Buyers and Borrowers. You'd be shocked to know the amount of bad appraisers there are out there. If you are unlucky enough to get one hired by the lender, you could be out money, a loan or a home. I've been doing this a long time and I've worked with a lot of appraisers. I only TRUST two of them. I'll use others and some are good and some aren't so good but my appraisers are great and we've been able to help many borrowers.
When you hear of any new rules that will limit the interaction between Brokers and Appraisers, please vote or speak against it. You're home and loan may be at risk. Regulation is fine and probably needed now more than ever. But don't cut off one of the most important aspects of the Real Estate and Mortgage business.
No one wants this. Not the Lenders, not the Brokers, not the Appraiser's and most importantly not the BORROWERS!! Essentially this will eliminate a fair market. The new rule would mean that if we submit your loan to Wells Fargo, they would order an appraisal and make you pay for it. If we then submitted the loan to MetLife, they would order an appraisal and make you pay for it. Just to shop the loan around and get the best rate, could cost a fortune in appraisal fees. This is unfair to the borrowers and hurts their right to get the best rate.
Also, if they don't allow us Brokers to talk to the appraisers, you are putting entire files at risk. How can we know what a property is going to appraise at? What if I think a property is worth 1 million dollars but the appraiser comes in at 900,000? That difference could change the loan, if not cancel it completely.
I understand there was a lot of fraud that went on in the past, but most of that was perpetrated by the LENDERS ordering the appraisals. Even in the easy days, a few years ago, when a Broker submitted a loan with an appraisal, it would get reviewed by the lender. But a lender who ordered an appraisal directly didn't get it reviewed. There are people sitting in jail right now that abused the lender / appraiser relationship to push values and get loans off of inflated values. So let's not pretend like it was just us Brokers who did all the damage and should never talk to the appraiser because of the possibility of fraud.
The relationship between me and my appraisers is very special and is meant to help our borrowers. I'm working on a deal right now that needs the appraiser and myself to work together and be on the same page. This is not just a value issue. I, as just the loan broker, rely on what the appraiser sees and their expertise in area / location and condition to know what the value of the home is. If this relationship is taken away, it won't be the Brokers or the Appraisers who suffer, it will be the Buyers and Borrowers. You'd be shocked to know the amount of bad appraisers there are out there. If you are unlucky enough to get one hired by the lender, you could be out money, a loan or a home. I've been doing this a long time and I've worked with a lot of appraisers. I only TRUST two of them. I'll use others and some are good and some aren't so good but my appraisers are great and we've been able to help many borrowers.
When you hear of any new rules that will limit the interaction between Brokers and Appraisers, please vote or speak against it. You're home and loan may be at risk. Regulation is fine and probably needed now more than ever. But don't cut off one of the most important aspects of the Real Estate and Mortgage business.
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