Bank

125. ENGAGED DIRECTLY BY THE HOMEOWNER Question: I was contacted by homeowners who want me to perform an appraisal of their home to be used for a loan at a federally regulated financial institution. What are my responsibilities in this potential assignment?

Response: It is an appraiser’s responsibility to disclose to the homeowners that a lender or its agent is required by Title XI of FIRREA to directly engage the services of an appraiser in a federally related transaction. If the homeowners still want to engage you, your disclosure allows you to accept the assignment. Additional information can be found in Advisory Opinion 25, Clarification of the Client in a Federally Related Transaction.

The USDA launched a streamlined version of its guaranteed loan program for smaller-scale farms. It’s called the EZ Guarantee Loan program, and it uses a simplified application process for loans up to $100,000. For more information, visit www.fsa.usda.gov/farmloans. 

All of us in the mortgage business know it hasn’t slowed down for the holidays yet, and there is a reason why! Sales of previously owned homes in October hit almost a 10-year high! This is throughout the nation also, with no region weighing in more than another. Different economists have different views of the why, but it’s generally thought that the tight housing market through the summer created pent-up demand this fall. Rates have recently gone up, so maybe there might be a slow down now for the balance of the holiday season. 

A REPORT BY Callahan and Associates recently stated that commercial real estate loans are 5.8 % of the total credit union lending. This past year commercial lending has increased by 17% with the nation's credit unions, something that the community bank should be concerned with.

One of the big mistakes in retirement is leaving the workforce too soon. It may sound great but you won’t be eligible for Medicare until 65, and insurance costs to get to that age are surprisingly high.

The Dept. of Labor Statistics reports that the average income per year for people 75 years and older is $37,000 and that half of that is taken for housing and health care. So saving enough for retirement is also crucial for success. When it comes to your home have it paid off before you retire, consider future upkeep and repair costs, and consider downsizing? Downsizing can deliver you a newer, easier to maintain (cost-effective) and contribute extra cash to your retirement fund.

CoreLogic recently released their national sales data for all residential homes (including distressed sales) for August 2016. Compared to a year ago, home values have increased 6.2%. The CoreLogic forecast estimates that prices in 2017 will increase at a minimum of 5% over the next year. There is a growing demand for single family residential both from home buyers and investors. In many markets now in the U.S. there is a growing affordability crisis.

Around 20 years ago a key performance measure was developed to help community banks. It’s called the efficiency ratio. The equation is simple, total non-interest expense divided by net interest income plus total non-interest income. Most banks which recognize the value of this concept and utilize it shoot for their efficiency ratio to be 50% or less. The three largest non-interest expense items are normally salary and employee benefits expense, premised expense and data processing expense. But there isn’t one magic pill or solution to making operational efficiency improvements. It requires a thorough review of all facets of a bank's operation. This is where SAMCO helps our client banks.

And I’m not talking about saving money purchases, but the old-fashioned savings account that community banks have always provided. According to a Gallup poll, more people than ever before say they prefer saving to spending! Gallup stated this is a huge change from the pre-2008 period. Over 65 % of the folks surveyed said they preferred saving to spending, even in the young 18 to 29 age group. This trend for saving started in the black days of the latest recession and has continued through today.  

A recent article in the Independent Bankers profitability issue pointed to outsourcing for a greater competitive advantage, especially asset-liability management. Cost efficiencies played a large part in their decision as well as greater expertise. To read more details go to https://independentbanker.org/2016/08/outsized-outsourcing/

The ICBA Independent Banker magazine recently reported that the top 24 banks in the U.S. hold $10.7 Trillion in total depository assets, while the remaining 6147 community banks hold $5.4 Trillion depository assets. So basically one-third of U.S. deposits are held by your local community bank. An important part of our country’s economic engine.