Home Prices Nationwide Increased 12 Percent

CoreLogic® Reports Home Prices Nationwide Increased 
12 Percent Year Over Year In January

 
 

Home Prices Rise by Just Under 
1 Percent Month Over Month in January

  
 

January Marks 23nd Consecutive Month of Year-Over-Year Home Price Gains

 
   

HOME PRICES INCREASED

‘Remember when’

Just a few years ago (before 2008) mortgage brokers were touting unreasonably quick closings.  The result was many community banks lost the opportunity to serve their clients, and their clients went to someone who really didn’t care about them.  No matter how quick some lenders could close (remember no doc loans?) the community bank still needed to have due diligence to protect all concerned. 

Mortgage Delinquencies Fall to Lowest Level in 5 Years

The single-family mortgage delinquency rate has been declining for eight straight quarters and it ended 2013 at the lowest level since 2008.

TransUnion reported Tuesday that the percentage of homeowners who are at least two months behind on their mortgage payments fell to 3.85% in the fourth quarter from 4.09% in the prior quarter and 5.08% a year earlier.

This marks the first time since 2008 that the percentage of loans that are 60 days or more past due dipped below 4%.

New Mortgage Rules make it tougher for some Lenders, but for Community Banks it’s ‘business as usual’.

On January 10 the Consumer Financial Protection Bureau (CFPB) set new rules intended to prevent the same risky lending practices that led to the housing crash.  Borrowers will have stricter standards for debt-to-income ratios, FICO credit scores, residual income analysis, and more reserves for those loans classified as “nonqualified”. It is likely that lenders will make fewer exceptions with the new rules.

The CFPB’s goal makes sense: restrict mortgages that borrowers can’t afford.  The standards are listed in the CFPB’s Ability-to-Repay and Qualified Mortgage Rule.  The Ability-to-Repay standard bans no-documentation loans and requires lenders to verify and document a borrower’s income, assets, savings and debt. 

No Surprise Here!

As busy as everyone in the mortgage business was this past year (not now though) it comes as no surprise what the reporting companies are announcing.  CoreLogic reported in their December report that the 12 month sum of completed foreclosures is at the lowest level since 2007, with the rate of serious delinquency at the lowest level since November 2008.  They also reported that foreclosure inventory was down 31% year ending December 2013.  RealtyTrac announced that the shrinking number of distressed properties in 2013 helped reduce foreclosure filings 26% year to year.  Both companies have many other great stats that will make everyone in the lending industry much happier.

Fannie issues Appraiser Blacklist!

This means if they have found an appraiser providing inferior work the lender is not to utilize these appraisers for Fannie loans.  Sounds OK, but they only have four appraisers on their list, for the entire United States!  It’s a small beginning, but it’s sure to grow as Fannie searches through its database for appraisers who have repeatedly provided inferior work. 

On a regular basis SAMCO reviews individual State Appraiser Board Disciplinary Actions.  We will now be doing this with Fannie also.  In the past some ‘bad apples’ have tainted our profession.  But with every passing year, the professionalism of our appraisal industry is growing.  It’s great to be part of it.  

Fannie issues Appraiser Blacklist!

This means if they have found an appraiser providing inferior work the lender is not to utilize these appraisers for Fannie loans.  Sounds OK, but they only have four appraisers on their list, for the entire United States!  It’s a small beginning, but it’s sure to grow as Fannie searches through its database for appraisers who have repeatedly provided inferior work. 

On a regular basis SAMCO reviews individual State Appraiser Board Disciplinary Actions.  We will now be doing this with Fannie also.  In the past some ‘bad apples’ have tainted our profession.  But with every passing year, the professionalism of our appraisal industry is growing.  It’s great to be part of it.  

Cold January, and Cold Shoulder for many appraisers!

It usually takes a few weeks after a loan application for the appraisal request to be sent to an appraiser.  That is one of the reasons that January is such a slow month for appraisal work, the results of bank customers being consumed with holiday distractions in November and December. 

So when an appraiser calls an Appraisal Management Company to ask for more business, the AMC doesn’t have anything for you!  The results are as cold as the temperature outside (and for the southern appraisers, it’s REALLY cold up north!!).  And then a good portion of the country has winter weather which also contributes to the slow down.  Add those two together alone, and it’s not good for the appraiser. 

Community Banking and Mortgage Lending

A few weeks ago there was a great article in the American Banker about Community Banks being forced to rethink their mortgage strategies.  It initially implied that many banks are leaving the consumer mortgage lending arena, but by the end of the article it was obvious that the community banker was staying in residential lending for their customers and community.  Not only that, but positioned correctly it could be a profitable part of the bank’s strategic planning.  There was a big BUT though, community banks need to improve their efficiency’s.  Most community banks efficiency ratios are in the mid to high 70’s, when the ratio should be in the mid 60’s. 

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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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