Compliance Question?

Community banks often lend out of their typical marketing area due to the solid relationships developed with their customers. If a long time customer of the bank wants to purchase a vacation or second home in Wisconsin or in Florida they naturally come to their hometown banker.

But what happens when an appraisal fee of $450, which was disclosed on the initial loan estimate, is revised to $800. The appraiser discovered that the home was on a waterfront, and was much larger than the other homes, making it atypical for the area. Can the bank consider this a valid changed circumstance and re-disclose within three days and pass along the increase to the customer?

Defaults? Where did they go!!

Fannie Mae recently released information on historical default rates. An interesting trend popped up, current default rates are unbelievably low, at least compared to the years 2004 through 2008.

Prior to those years, the national Fannie default rate is still slightly below that trend. Some critics are saying that this proves our loan policies are too tight and need to be loosened. Are they crazy? Remember 2008?

Foreclosures are Trending Down!

Core Logic reported 34,000 foreclosures completed in July, nationally. This is down 29.1% from July a year ago, and down 6.8% from June, the month before. This is good news, but, there is a large ‘shadow’ inventory of bank owned properties just sitting empty. These need to be moved through the pipeline eventually and hopefully sooner rather than later. 

What is a ‘Mansion’ and where are they?

In the appraiser world, a mansion is generally defined as a home with at least five bedrooms and 15 rooms (and we’re not talking about two mobile homes hooked together!). You would think Miami, Chicago, or Los Angeles would all be at the top of the list, but we’d be wrong!

SmartAsset, a technology firm analyzed Census information and came up with the following list.

The top 10 mansions in metro areas

Providing Excellent Service

SAMCO doesn’t focus on beating competitors. We are just providing great service for our users, which has been our mission since day one. Part of the fun in building a consumer company that just works for community banks is to provide what the consumer bank wants and needs. If you keep providing stuff they like and love and stay focused on that, that’s the most important thing. 

Changing Fannie 'Requirements'?

Fannie recently announced in the Selling Guide Announcement SEL-2014-16 that the 15% net and 25% gross adjustment guidelines were eliminated. Fannie Mae also clarified their expectations for the appraiser to analyze the market for competitive properties and provide appropriate market based adjustments without regard to limits on the size of the adjustments.
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Eliminate ‘Additional Comparable’ Requests

Don't you hate it when you get a Request for Revision that says find another comparable? It  would be "nice" or possibly "convenient" for everyone looking over the appraisal report to just trust that you located the "best" comparable sales, but that isn’t your job, your job is to PROVE that the comparable sales chosen were the best available. So how do you do that?

 

Basic Appraisal Standards

15% - 25%, Site adjust’s., 12 Months
There are to be no comparable adjustments that exceed 15% net and 25% gross. This is an
absolute, and one of SAMCO’s more firm requirements. If an appraisal is submitted with
excessive net and gross adjustments, an additional comparable that meets guidelines will be
requested. You can bet on it! In addition, SAMCO will lower your quality ranking, affecting
future assignment opportunities. Are there times when there just isn’t any other way to write the
report? Absolutely! But those are few and far between. But utilizing Search Parameters &
Results as we suggest will clearly show the reader of your report what is available in the

Search Parameters and Results

SAMCO's appraisal requirements are fairly simple and straightforward. Our appraisal audits are completed by experienced appraisal professionals who understand that many real estate assignments are atypical and nonconforming with respect to Appraisal Standards and Fannie/Freddie approved forms.

Cram Downs and your Client

SAMCO's community bank clients, who are your clients as well, typically utilize Fannie/Freddie guidelines as their appraisal standards. Conforming to these appraisal standards may be stressful in the beginning, but it is extremely important that these guidelines and SAMCO's requirements are met with every appraisal report. Non-compliance may result in a lower quality rating with SAMCO and fewer assignments. I know you don't normally hear this stated so boldly, but there is an exceptionally good reason for this - our clients. You and I have a responsibility to provide the best product possible for the community bank. Have you heard of "cram downs"? This is when a Fannie/Freddie loan is forced back onto the community bank.

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About Us

SAMCO Appraisal Management Company is a nationwide appraisal management service for community banks. We provide regulatory compliance and save our clients actual dollars at the end of the day.

SAMCO is committed to earning your loyalty one appraisal at a time.

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