Property taxes to high?

Are your property taxes too high? If you think so, you’re standing with some pretty high rollers. Walt Disney Parks (Magic Kingdom, Epcot and Hollywood Studios), along with SeaWorld, Universal Orlando, and other commercial property owners have filed over 100 lawsuits against the Orange County Appraiser Rick Singh. But believing that their properties assessments are exceeding fair market value and proving it in the Orange Circuit Court will be two different things!

The county assessor (Singh) valued Epcot at $446 million, Magic Kingdom at $437 million and Hollywood Studios at $339 million. There are other lawsuits for quite a few hotels that are not just owned by Disney, but by other corporations.

Wow! What a hit!

In April one of the largest bank failures in years occurred. State regulators shut down First NBC Bank, New Orleans. The FDIC was appointed the receiver and they promptly sold a small part of the assets (about 1 billion) to Whitney Bank. The December total assets of NBC were 4.74 billion. Of course, no customers lost money, but the FDIC really took a hit to its Deposit Insurance Fund.

A combination of aggressive lending and bad timing led to their downfall. That’s where sound appraisals help protect the community bank.

This is the largest failure in years, and you have to go back to 2008-2009 to find a closure of this size. It can still happen though. But the banking industry has come out of the woods and grows healthier every year.

Home Valuation Code of Conduct – Wiki’s Opinion

What are your thoughts on Wikipedia, is it a valid reference or is it people’s perceptions? Now most of us know that Wikipedia is not considered a valid source for a research citation. But I always check there when writing on a topic just to see what the perception is ….valid or not. It is someone’s opinion. If you check the Home Valuation Code of Conduct (HVCC) under Wikipedia it explains briefly about the code and how it became effective in 2009. The funny part is the last part (which has been disputed – and not by me), it goes on to say that this had not been well accepted by most appraisers because it eliminated the constructive working relationship the appraiser’s had with a lender. The kicker is the opinion presented stated that appraisers when working for Appraisal Management Companies are generally only paid 50% of the fee.

If this is true….you NEED to quit working for that AMC!! The only shopping of an order that we consider acceptable is for a due date or a complex fee assignment. We have had lender’s request that we reassign based on extended due dates or a complex assignment which usually covers both due date and fee quotes.

Our policy is to have a standard fee for the appraiser unless we are researching a new area. Offer that fee, the appraiser then accepts or accepts with conditions (if they need a higher complex fee or an extended turn time). Our fees and the appraiser’s fees are also split out on the invoice provided to the lender. They never have to guess what the appraiser is being paid for their assignments. Some states require full disclosure of fees from AMC’s on invoices and some do not.

My thoughts and advice to lenders are to ask for a detailed invoice. My thoughts and advice to the appraisers, do not work for below normal fees! I have heard of fees being offered for a standard 1004 URAR for $ 225.00- $ 250.00 range ….that is unacceptable. Find a company that appreciates working with you, AND THAT PAYS FAIRLY. SAMCO appraisers are paid typically within a 2-week timeframe.

Several of our clients have come to us from an appraiser recommendation (how awesome is that!!!) or a lender recommendation (even better). I gotta say that I still like Wikipedia for a source of opinion. If nothing else it gives me something to think about.

 

Source: Home Valuation Code of Conduct https://en.wikipedia.org/wiki/Home_valuation_code_of_conduct

An AMC’s Thoughts on the Repeal of Dodd-Frank

An AMC’s thoughts on the repeal of Dodd-Frank……I recently read an article titled “An Appraiser’s Thoughts on the Repeal of Dodd-Frank” by Tom Horn, and I found it interesting that our thoughts lined up so well on some key points about what we would like to see remain and what we would like to see removed if Dodd-Frank is changed. 

Several key points that we are definitely in agreement on is the independent ordering of appraisals and appraisal independence. (Tom caught some flack over his opinion……but I agree). This is such a key point in preventing any value pressure…..it protects the lender and the appraiser from undue influence. After discussions with several Compliance Officers, this process has been a great tool for true appraiser independence. (This is a hotly debated topic by many appraisers….the comments in the article were interesting.)

Total disclosure of the appraisal fee and the appraisal management fee should have always been a key factor. SAMCO has always disclosed each fee in our invoice to lenders. They never have to wonder what the appraiser is truly being paid, because it is there in writing. I never realized that was a problem until last year and I was reading the blogs. Our platform is set up for full disclosure, and that has been a great tool for lenders. If we have a problem order…they know about it too.

AMC’s (at least SAMCO does) currently help with limited communication with the appraiser after the appraisal is completed. Currently, there is no regulation that stops the borrower from contacting the appraiser directly when a value has not met expectations. We intervene on behalf of the lender and the appraiser by offering a reconsideration of value process with set procedures.

This AMC looks forward to changes for the appraiser /trainee inspection requirements. We have worked with several talented trainees in the past, and we think this will benefit the appraisal profession.

No one knows what the future may bring in regulatory changes…..but I think that appraisers, lenders and AMC’s can form a great team. I will end with a conversation that I had yesterday with an appraiser, they had worked 20 years with a lender, already been through one AMC change with them, and SAMCO was the second. They said as an AMC …you guys are different. They liked working with us, and we really like to hear that. WE WANT TO BE DIFFERENT. We appreciate the feedback, the good and bad ….we are always striving to make improvements.

Everyone has their opinion of AMC's, and these are just my thoughts on the subject.

 

Source: https://www.appraisalbuzz.com/appraisers-thoughts-repeal-dodd-frank/

Just what does a Fed rate hike mean?

We’re all influenced by interest rates in some way. But what does it affect when the Fed changes its benchmark interest rate? In the past three months, the Fed has raised its rate twice, and it’s expected that there will be two additional rate increases in store still for this year. Consumer products like mortgage loans, credit cards, car loans, and savings accounts are all affected differently by Fed rate hikes. Here’s how.

Real Estate Mortgage Loans - These rates tend to follow the 10-year Treasury rate, which is influenced by many different factors. This is the reason that sometimes when the Fed rate goes up mortgage rates can go down! Unless the Fed indicates they will be raising their rate faster and higher than anticipated, mortgage rates will probably stay steady. Since November the 10-year Treasury has gone up, anticipating deregulation, increased infrastructure spending, and tax cuts. These would be expected to stimulate the economy and possibly increase inflation. There has been a minimal increase in mortgage rates since November, but that means that these increases were in anticipation of the above happening, not the actual. So watch Treasury rates to get a handle on what’s happening to Real Estate Mortgage Rates.

Credit Card Loans - Now this story is different! All types of variable interest loans (consumer lending and credit cards for example) are based on the cost of what the bank has to borrow money from the Fed or what’s called the bank’s prime rate. The rate change won’t be immediate but usually, follows within 60 days. This goes for credit card banking also.

Car Loans - Now car loans are consumer loans, right? They’re also relatively short term. So why doesn’t change in the Fed rate mean a change in car loan rates? The answer is simple, competition. That competition slows the change in rates up (not down!). They will go up eventually, just slower.

Savings Accounts -  Slow down time again! Better rates for savings, certificates of deposit, and money market accounts will go up with a Fed hike, but slowly. Be honest, if you were a bank wouldn’t you try to widen your margin a little? It’s tough to make money out there whoever you are; banks aren’t any different. That’s why these types of accounts generally don’t follow the Fed rate closely. There just isn’t competition for these savings rates like there are in lending.

Short and sweet, my opinion, but it’s pretty solid. Let me know what you think! 

Competency and Quality top list of recent survey

Two recent surveys of both AMC’s and Lenders reveal that both believe that appraiser competency and quality are the most pressing issues for our industry today. I know that a lot of appraisers would take offense at this, but it’s true. There are many great appraisers and good appraisers. But there are also a large number of appraisers that just do not want to enter into the 21st century and understand that the product they produce is completely read, from front to back. Todays’ appraisal must PROVE the value. The days of taking an appraiser’s word for it are gone. This means goodbye boilerplate and hello well-written explanations of reasoning and logic.

Part of this challenge lies in that most appraisers are independent and work with little to no oversight. This brings up one of the next pressing issues this survey revealed, improper mentoring and training. Many of the AMC’s, Chief Appraisers, and Lenders believed that this ranks close to the current short supply of appraisers as a concern.

Our industry has been gradually becoming more and more professional ever since 1981, but we still have some rough bumps in the road before we reach the top. Tell me what you think. 

THE DISAPEARING COMMUNITY BANK

More than 10,000 community banks have exited banking through failure, mergers, and acquisitions since 1984. In the mid to late 1980’s, there were roughly 15,000 community banks providing financial services to their local communities. Thirty years later there is only one-third as many community banks, many of which have total assets less than $100 million. These ag banks tend to be small with a limited number of employees, and banks acquiring ag banks tend to be about four times larger than the banks they acquire. The clear majority of acquisitions of ag banks were by other community ag banks through merger and acquisition.

To learn much more detailed analysis go to Farmer Mac’s ‘The Feed’ newsletter. https://www.farmermac.com/news-events/the-feed/       

New Home Sales highest since 2007

New home sales (single family) sales increased 12.2% in 2016 to 563,000 units, according to data released by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. A 5.8 month supply of homes (259,000 units) is currently in inventory. The median sales price of new houses sold was $322,500. The National Association of Home Builders reports high builder confidence for not just new housing in 2017, but in remodeling also. 

What’s that beep?

The other night at 3:00 in the morning my smoke detector/CO2 alarm started beeping. Why doesn’t this every happen during the day, that will always be one of life’s great mysteries, but what do you do then?

Well, if there is no smoke, it’s probably the CO2 part of your alarm being activated. The first thing to do is open all of your windows, then shut off all gas appliances. Check everyone in the home for nausea (CO2 poisoning). If anyone is sick (headache, nausea, confusion, drowsiness) then get to a neighbors and call 911. If no one is sick, then simply call the Fire Department for a CO2 check.

There are several good internet sites that have much more detailed information. I encourage you to not only mark down your battery replacement on a yearly calendar but to go to these sights and learn more details. 

Ellie Mae reports 50 days for loan closings and average FICO scores.

Ellie Mae reports 50 days for loan closings and average FICO scores. In the December Origination Insight Report, Ellie Mae provides data from a sampling of loans that flow through their Encompass mortgage management software in the Ellie Mae Network. Closing time for all loans increased slightly to 50 days. Refinances were 52 days and time to close a purchase increased to 48 days, both up one day from the previous month.

An interesting fact was that 71% of all closed loans had a FICO scores over 700 while 72% of all closed refis had FICO scores over 700. The average FICO score on all closed loans decreased to 726 in December. The average FHA purchase FICO score held steady at 686 and refis increased slightly to 655. Conventional refi FICO scores decreased to 739 in December, the fourth monthly decrease. Only one in four loans closed within 90 days (or at all)! Closing rates on refis were 69.6% and closing rates on purchases were 77% in December.

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About Us

In everything we do, we believe in open and honest relationships. In knowing our client, the community banker, the way they know their customers and community. 

The way we achieve that client relationship is by always being available, improving our client's service to their customer, providing regulatory compliance, and saving our client actual dollars. This is accomplished through working together as a team, being completely open and frank to our SAMCO teammates/clients, and by taking personal responsibility. 

 

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