This time of year is special. Yes, there is commercialism but it is also a time full of good will. Even though you see the craziness of Black Friday shoppers, you will also see those giving of their time by serving at soup kitchens, homeless shelters, giving to food banks, giving gifts to children and those in nursing homes. I love this time of year when I can see good, kindness and peace in our world. There just seems to be a little extra good will in the air. It is also a good time for reflection and review. Here is a look at our year in review.
It has been an eventful year for Appraisers and those in Real Estate and Mortgage Lending. Here are a few things that we have experienced in 2015:
Collateral Underwriter: We began the year with the January Implementation of Collateral Underwriter. Appraisers went through an adjustment on all appraisals performed that are for mortgage lending geared toward Fannie Mae. Fannie Mae uses appraisal data and compares the data to other appraisals in the area. It is an analytical data tool. It has been an adjustment for appraisers and lenders. The implementation resulted in a change in how long it takes for appraisals to be completed as more and more items have to be explained. Many appraisers have added more regression analysis to their reports which is a statistical analysis of market data to determine adjustments.
Appraiser Shortage and Fees: there has been and continues to be much talk of an appraiser shortage. Since the Housing Crisis and recession in 2008 and there have been changes in our profession. The qualifications of an appraiser changed making it more difficult to obtain an appraiser's license as the requirements were increased. Along with it becoming harder to obtain a license, the fees and time it takes to perform an appraisal has increased. Appraisal Management Companies have become a prevalent and some of them are taking a very large percentage of the fees that lenders/borrowers pay. Lower fees make it difficult for an appraiser to be able to take on a trainee to become an appraiser. We will continue to see how this plays out in our profession.
FHA Changes: In September, FHA made changes with the new FHA 4000.1 Handbook. The changes resulted in additional requirements for appraisers with some of the biggest changes being a change in the word "should" to "must" in the guidelines. Some appraisers have stopped accepting FHA assignments due to increased liability. This has also resulted in higher fees for FHA assignments. There are things that real estate agents or homeowners can do before an FHA inspection.
TRID Implementation: In October the TILA-RESPA Integrated Disclosure rule was implemented. This has been a bigger adjustment for lenders and real estate agents but does impact appraisers as well. The appraisal fee has been included in the CFPB's zero tolerance section which means they cannot be increased unless there is a valid change in circumstance. It is important for appraisers to research a property before quoted or accepted a fee. However, sometimes additional issues and complexities can be discovered during the appraisal process which would necessitate a fee increase. Here is a helpful TRID form for real estate agents to provide lenders to help with the fee determination.
FED Rate Hike: The most recent event has been the historic Federal Reserve interest rate increase, the first rate increase since 2006. Here is a Many are wondering how this will impact the housing market. A rise in interest rates may or may not result in a rise in mortgage rates. Appraisers will watch and study their individual markets to see any impact, positive or negative. We will watch how the rate increases impacts the overall economy as we head into 2016.
2015 is quickly coming to a close and we are looking forward to what 2016 has in store for us. During this special time of the year, we wish you a special time with your family and friends. May we look for the good that is out there. May we take a little time to relax and enjoy this special time of year. If you are having special Christmas events you might enjoy 3 Hours of Christmas Music. If you are an appraiser then you will really enjoy Portland Appraisal Blogger Gary Kristenson's "12 Days of Appraisals"
Merry Christmas Happy New Year from the DW Slater Company!
Disclaimer: All information deemed reliable but not guaranteed. The information is meant entirely for educational purposes and casual reading only and is NOT intended for any other use. This information is NOT intended to support an opinion of value for your appraisal needs or any sort of value conclusion for a loan, litigation, tax appeal or other potential real estate or non-real estate purpose. If you’d like to obtain additional information or order an appraisal for your specific needs, please contact us at www.dwslaterco.com.