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Newz: Disasters - Working Together - Nonbank lender risk
September 13, 2018
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When a Disaster Strikes, Are You Prepared?
By Bruce Ford
Excerpt: In 2017, California experienced the most destructive wildfire season on record. There were over 9,000 fires that burned covering 1,381,405 acres. The fires destroyed anything in its path. Damaging more than 10,000 structures and resulting in over 40 causalities.
The author, Bruce J. Ford, Chief Appraiser of NorCal Quality Appraisals and California native... collaborated with other appraisers in the area to help those in need.
Read this article for lots more info:
My comment: Disasters can occur anywhere, any time. Fire, flood, hurricanes, etc. In my area, the 1989 earthquake and the 1991 Oakland firestorm were the most recent. I will never forget driving by all the remaining fireplaces trying to find the properties I had appraised to see which were gone. It was very, very sad. Now, I really worry about the failure to do much about the large amount of trees and brush that are a significant fire hazard in the Oakland/Berkeley hills and many other Bay Area cities.
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Mapping the boom in nonbank mortgage lending - and understanding the risks
Excerpts: In the decade since the financial crisis, nonbank mortgage companies, for example Quicken Loans, Inc., Freedom Mortgage Company, loanDepot.com, and Caliber Home Loans, Inc., just to name a few, have played a crucial role in maintaining access to mortgage credit. Nonbanks originated about half of all mortgages in 2016, up sharply from 20 percent in 2007.
But as we describe in a paper published by Brookings Papers on Economic Activity, this growth also poses some risks to borrowers, communities, and the U.S. government. In particular, nonbanks are dependent on short-term credit to finance their operations, and this credit can become more expensive, or dry up entirely, when financial market conditions tighten...
Click here for lots more info, including an infographic on where the loans have been made
https://www.brookings.edu/blog/up-front/2018/09/10/mapping-the-boom-in-nonbank-mortgage-lending-and-understanding-the-risks
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How CoStar became a $15B juggernaut
A deep dive into the CRE data giant's approach to competition
Excerpts: At the core of CoStar's business is a detailed database of commercial properties - size, tenants, photographs and rents. It has long seen itself as the Bloomberg of commercial real estate, and in recent years expanded into the residential space with the acquisitions of Apartments.com and ForRent.com.
For this story, The Real Deal interviewed dozens of CoStar's customers, competitors, former employees, lawyers and industry experts, some of whom spoke on condition of anonymity. An examination of CoStar's litigation history indicates that the company uses a playbook of aggressive lawsuits and public-relations warfare against its rivals. As will be seen, its tactics can push them to the brink of collapse or weaken them enough to make them soft targets for an acquisition.
My disclosure: I used Costar when I started my business in 1986 and for quite a while after that. I recently re-subscribed because they purchased Loopnet, the service I used. Over the years they have used various methods to keep data from being shared by appraisers.
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The problem of not listening in a slower market
By Ryan Lundquist
Excerpts: It's not easy to listen when the market is slowing. This is true for sellers taking in pricing advice, and it's also true for the average person reading national headlines...
This sounds like such a geeky point, but hang in here with me because it matters. Lots of times in real estate we end up comparing the current year with the previous year, and that's actually a good thing. But my sense is we're missing something if we pay too much attention to last year only and ignore prior years.
Read how Ryan analyzes his local market at:
My comment: I have been going on the weekly open house tour since 1990 for a free lunch, see the future comps and catch up on the latest market chat among real estate agents. Most of the segments for my market had been slowing down for about a year, although no one but me talked about it. Many listings have been priced just under $1,000,000. Why? To encourage more offers over list. This week I saw a house that was about $500,000 over priced. Floor plan problems, not appealing exterior, etc. An out of the area agent.
No one knows when a market will peak. But, we know when it crashes. What are you seeing in your market?
Don't use the recent strong market to predict the future.
Don't miss the market when it starts declining.
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What's the best type of non-lender work for you?
Expanded article coming in the October issue of the paid Appraisal Today
Excerpt from the April 2008 issue on this topic:
My articles discuss how they differ from lender work, the pluses and
minuses, and how to market your services. I have done all the non-lender work I
write about. Over time, I have figured out which ones I like the best.
Before spending a lot of time trying to get the business, I strongly recommend looking at all the options and see what appeals to you. They are all very different.
I go over the pluses and the minuses.
My preferred non-lender work has changed over time. I finally figured out that estate work was best for me - no hassles, no value pressure, and I always get paid. I don't mind listening to the stories about the person who died and/or about the "ungrateful relatives". I decided I did not like divorce work because it was too personal. Other appraisers like divorce work, but don't like estate work. Try
different non-lender work and see what is best for you.
To read my articles on non-lender appraisals, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
If these articles helped you get one non-lender appraisal, they are worth the subscription price!!
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If you are a paid subscriber and did not get the September 2018 issue, emailed Tuesday, September 4, 2018, please send an email to [email protected] and we will send it to you!! Or, hit the reply button. Be sure to put in a comment requesting it.
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Working Together in an Appraisal Business - Is it for you?
Excerpt: We are a husband and wife appraisal team. We are both real estate appraisers and have been working together now for 12 years. My husband has had his business for 30 years but I was formerly a school teacher. I joined him in 2006. I will admit that I wasn't sure at first if it would work but we have been going strong ever since. I have reached out to other appraisers who also are married and work together. They have shared some of their stories with me as well as tips and advice for working together. If you are considering working together as appraisers or other forms of business here are a few tips:
1. Keep work life and home life as separate as possible...
Click here for more advice:
My comment: my husband Zeke worked part time in my appraisal business for many years. He was not an appraiser but was great at collections. Once a mortgage broker owed us money. Zeke was a very big guy. He put on his black suit with a black shirt and tie and said he was here to collect what we were owed. He came back with all the cash...
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Where are the Nation's Older Homes?
It is worthwhile to examine the age of owner-occupied housing stock at a more local level, as it will help better understand the local housing supply and market. This article focuses on the median age of owner-occupied homes at metropolitan (metro) area level using data from the 2016 American Community Survey.
The aging housing stock is also associated with population decline. The top metro areas with the oldest owner-occupied housing stocks all experienced negative population growth from 2010 to 2016 with the exception of 1.2% growth in Springfield, MA. In contrast, metro areas with ewer owner-occupied housing stock all have enjoyed double-digit population growth from 2010 through 2016, well above the national average of 5.5%.
Click here to see the interesting inforgraphics:
My comment: Of course, my area on the infographics shows more older homes, because of the lack of land for building.
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Million-Dollar Home Sales Are Gaining in U.S. While the 99% Balk
Excerpt: Scarce supplies of U.S. homes for sale are propping up prices and pushing some buyers to the sidelines, leading to fewer transactions -- but not for those with big budgets.
Deals for the most expensive properties jumped to a record share of the U.S. total in the last two months, a National Association of Realtors report showed Wednesday. Existing single-family homes with a price tag of at least $1 million made up 3.7 percent of all transactions in July and 3.8 percent in June, the highest in data starting in 2013.
My Comments: The Bay Area median home price recently increased to $935,000. I am sooo glad I bought my current home in 1985 for $140,000. Today, it would be close to $1,000,000. I could not afford to buy it. Is a crash coming?? I keep close track on local trends. I have been though 3 local crashes since 1980. The most recent one after 2008 had declines of 20% to 80%, depending on the city. Higher priced cities and neighborhoods had lower price declines. My city was 30-40%, similar to previous declines. I keep telling buyers to wait for the next big decline. Of course, few want to buy then. Catch 22. I bought my previous home in 1995 for $375,000 after it had been on the market for almost two years with no offers in a bad market. 100% seller financing. I sold it in 2008, just before the big crash, for $1,000,000. It would be worth a lot more today.
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HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to www.mbaa.org
Mortgage applications decreased 1.8 percent from one week earlier
WASHINGTON, D.C. (September 12, 2018) - Mortgage applications decreased 1.8 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending September 7, 2018. This week's results include an adjustment for the Labor Day holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 13 percent compared with the previous week. The Refinance Index decreased six percent from the previous week to the lowest level since December 2000. The seasonally adjusted Purchase Index increased one percent from one week earlier. The unadjusted Purchase Index decreased 11 percent compared with the previous week and was four percent higher than the same week one year ago.
The refinance share of mortgage activity decreased to 37.8 percent of total applications from 38.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4 percent of total applications.
The FHA share of total applications increased to 10.4 percent from 10.2 percent the week prior. The VA share of total applications increased to 10.5 percent from 10.0 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.84 percent from 4.80 percent, with points increasing to 0.46 from 0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) increased to 4.72 percent from 4.67 percent, with points increasing to 0.47 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.84 percent from 4.79 percent, with points decreasing to 0.51 from 0.69 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 4.28 percent from 4.23 percent, with points increasing to 0.47 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs decreased to 4.07 percent from 4.09 percent, with points decreasing to 0.30 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.
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Ann O'Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
2033 Clement Ave. Suite 105
Alameda, CA 94501 Phone 510-865-8041
Fax 510-523-1138
Email
[email protected]
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