Appraiser News Online Headlines!

In Memoriam

James Sobiesczyk — Wed, 28 Jul 2010 00:00:00 GMT

The Appraisal Institute regrets the passing of the following Designated members who were reported to Appraiser News Online in July:

Freddie Mac: Fixed-rate Mortgages at Record Low

James Sobiesczyk — Wed, 28 Jul 2010 00:00:00 GMT

Interest rates on 30-year fixed-rate home loans fell to a record low for the fourth time in five weeks to 4.56 percent, down from 4.57 percent last week and 5.2 percent a year ago, as concerns about the economic recovery drove down Treasury bond yields, according to Freddie Mac's July 22 Weekly Primary Mortgage Market Survey .

Purchase Applications Up in Weekly MBA Survey

James Sobiesczyk — Wed, 28 Jul 2010 00:00:00 GMT

The purchase share of mortgage activity reached its highest level since the end of June as refinancing activity fell in the week ending July 23, according to the Mortgage Bankers Association’s weekly Mortgage Application Survey. The July 28 survey showed that the Market Composite Index, which measures mortgage loan application activity, fell 4.4 percent on a seasonally adjusted basis from the previous week and 4.2 percent on an unadjusted basis. The four-week moving average for the Market Index increased 1.6 percent on a seasonally adjusted basis.

Case-Shiller: May Home Prices Slightly Increase

James Sobiesczyk — Wed, 28 Jul 2010 00:00:00 GMT

Home prices in May improved in 15 of the 20 metropolitan statistical areas compared to the previous year, according to the latest Standard & Poor’s/Case-Shiller Home Price indices released July 27. The 10-city composite was up 5.4 percent from a year ago and the 20-city composite was up 4.6 percent.

Existing Home Sales Ease in June

James Sobiesczyk — Wed, 28 Jul 2010 00:00:00 GMT

Sales of existing homes fell 5.1 percent in June to a seasonally adjusted annual rate of 5.37 million units from May’s rate of 5.66 million units, according to a July 22 National Association of Realtors news release. The pace remains 9.8 percent above the June 2009 rate of 4.89 million units.

New Home Sales Up in June from Record Low

James Sobiesczyk — Wed, 28 Jul 2010 00:00:00 GMT

New home sales in June jumped 23.6 percent from the previous month’s record low pace, according to data released by the Commerce Department on July 26. June’s sales topped May’s downwardly revised rate of 267,000 units to a seasonally adjusted annual pace of 330,000, down 16.7 percent from a year ago. Despite the increase, June’s pace was the second-weakest month on record. By region, sales in the Northeast surged 46.4 percent in June from the previous month, the South gained 33.1 percent, the Midwest rose 20.5 percent, while the West fell 6.6 percent.

GM Buys AmericaCredit; Relation with Ally Financial Questioned

James Sobiesczyk — Wed, 28 Jul 2010 00:00:00 GMT

General Motors said that it will purchase AmeriCredit Corp. in an all-cash transaction valued at about $3.5 billion, according to a company news release dated July 22. The acquisition will give GM a new captive finance unit that will allow it more flexibility to offer lease and finance deals.

20 Percent of Americans Experienced Major Economic Loss

Heather Norgaard — Wed, 28 Jul 2010 00:00:00 GMT

One-fifth of Americans suffered a significant economic loss in 2009, the highest level in the past 25 years, the Economic Security Index found July 21. The Economic Security Index shows that economic insecurity has risen across all groups, not just among low-income families and those without much education, CNNMoney.com reported.

Bank Failures Up to 103 for Year

Heather Norgaard — Wed, 28 Jul 2010 00:00:00 GMT

State and federal regulators shut down seven community banks July 23, bringing the total of failed federally insured banks to 103 in 2010 and costing the deposit insurance fund $431 million, BNA Banking reported. Banks were closed in Florida, Georgia, South Carolina, Kansas, Minnesota, Nevada and Oregon. In the South, the Florida Office of Financial Regulation closed Sterling Bank in Lantana marking the 18th Florida bank to fail in 2010. The failure will cost the deposit insurance fund $45.5 million.

Low Loan Volume Equals Higher Profits for Lenders

Heather Norgaard — Wed, 28 Jul 2010 00:00:00 GMT

Historically low interest rates and reduced competition are increasing home lenders' profit margins, American Banker reported July 26. Although purchase loan applications hit a 14-year low in July, according to the Mortgage Bankers Association, lenders are making more money on each loan they originate.

AI in the News: AI President Praises Passage of Financial Reform Bill

James Sobiesczyk — Wed, 28 Jul 2010 00:00:00 GMT

Appraisal Institute President Leslie Sellers, MAI, SRA, was featured in various media outlets the week of July 19 in coverage concerning the sweeping financial reform legislation signed into law, including Real Estate Economy Watch, United Press International, Valuation Review and Inman News. In the articles, Sellers praised the new law, which includes the first modernization of real estate appraisal regulations in more than 20 years. “This bill will mean good news for consumers because they should see more reliable home appraisals,” Sellers told Valuation Review in a July 20 article.

John G. Walsh to Head OCC on Temporary Basis

Aaron Hultgren — Wed, 28 Jul 2010 00:00:00 GMT

John G. Walsh, currently chief of staff for the Office of the Comptroller of the Currency, has been picked by the Obama administration to head the OCC on a temporary basis following the planned departure of current OCC Chairman John Dugan, The Associated Press reported July 23.

Analyst: GSE Subpoenas Could Force $30 Billion in Buybacks

Aaron Hultgren — Wed, 28 Jul 2010 00:00:00 GMT

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, could force sellers to repurchase as much as $30 billion in mortgage-backed securities debt as a result of 64 subpoenas the federal agency issued July 12, according to a leading industry analyst.

Mortgage Brokers to Undergo Criminal Checks under New Rules

Aaron Hultgren — Wed, 28 Jul 2010 00:00:00 GMT

Mortgage brokers in all 50 states will be required to undergo criminal background and credit checks, as well as licensing exams, by Jan. 1, 2010. The new rules will assign brokers identification numbers to enable regulators and borrowers to track their lending histories, according to a July 21 Bloomberg story.

CMBS Showing Signs of Life

Aaron Hultgren — Wed, 28 Jul 2010 00:00:00 GMT

The struggling commercial mortgage-backed securities market has been given a shot of life with recent reports that major banks will be releasing two offerings of CMBS totaling $1.4 billion in the coming weeks, The Wall Street Journal reported July 21.

Gulf Coast Oil Crisis Spilling into CMBS

Aaron Hultgren — Wed, 28 Jul 2010 00:00:00 GMT

Commercial mortgage-backed securities exposed to the oil spill in the Gulf of Mexico "could cause longer-term effects that reverberate for months and perhaps years to come," an industry analyst with Standard & Poor's Ratings Services told MBA NewsLink on July 26.

Agencies’ Oil Spill Statement Offers Suggestions to Financial Institutions

Aaron Hultgren — Wed, 28 Jul 2010 00:00:00 GMT

A joint statement from six financial regulatory agencies issued July 14 lists four ways that financial institutions may consider assisting customers impacted by the Gulf Coast oil spill. The deepwater offshore spill is the largest in U.S. history and has wrecked havoc on the coastal residents of Alabama, Florida, Louisiana and Mississippi for months. “The regulators encourage financial institutions to work with their customers and consider measures to assist borrowers affected by this situation and its subsequent impact on local communities,” read the joint statement.

Appraisers Permitted to Value Florida Oil Spill-effected Properties

Heather Norgaard — Wed, 28 Jul 2010 00:00:00 GMT

Gov. Charlie Crist authorized property appraisers July 21 to calculate lost real estate values caused by the Gulf oil spill so that homeowners and businesses can make damage claims to BP, the Pensacola News Journal reported July 22. Property owners will still have to pay taxes, but the 26 Gulf counties under Crist’s previously declared state of emergency will be able to make damage claims to BP. Because appraisals are based on values as of Jan. 1, the governor said "an interim assessment will give homeowners the documentation they need to hold BP accountable," the News Journal reported.

White House Voices Support for Warren

Aaron Hultgren — Wed, 28 Jul 2010 00:00:00 GMT

Though not a direct endorsement, White House press secretary Robert Gibbs called Elizabeth Warren “very confirmable” when asked by reporters July 26 about her position as the leading candidate to run the new Consumer Financial Protection Agency. President Obama must select a nominee to head the newly created CFPA, an office that will be housed in the Federal Reserve after it was created by the passage of the financial regulatory reform bill earlier in July. Warren, who is currently serving as chair of a congressional panel overseeing the 2008 Wall Street bailout, is being touted by Democrats as the ideal candidate to lead the new office.

PACE Pilot Program Proposed

Aaron Hultgren — Wed, 28 Jul 2010 00:00:00 GMT

Lawmakers have come to the aide of controversial Property Assessed Clean Energy bond programs by allowing the Federal Housing Finance Agency to issue a pilot study to gather data on how the programs affect home loans – a move intended to evaluate a major FHFA concern, The Bond Buyer website reported July 23.

Deutsche Bank Closing its CRE Adviser Group, Report Says

Staff — Wed, 28 Jul 2010 00:00:00 GMT

Germany’s largest lender is dismantling a group that advises companies on commercial real estate transactions, Bloomberg reported July 28. According to Bloomberg’s unnamed sources, Deutsche Bank is pulling back from advising clients on real estate financing as it grapples with losses on transactions struck before the credit crisis.

Basel Committee Nears Completion of International Reforms

James Sobiesczyk — Wed, 28 Jul 2010 00:00:00 GMT

The Basel Committee on Banking Supervision said it is on track in the development of an international package of capital and liquidity reforms after softening some of its proposals while introducing new restriction, Bloomberg reported July 27. The committee is expected to announce the reforms at the November 2010 Group of 20 summit in Seoul, South Korea. At its July 14-15 meeting in Basel, Switzerland, the group of policymakers from 27 countries developed recommendations for a set of global banking rules designed to strengthen banking systems worldwide to avoid a repeat of the recent financial meltdown.

Fed Will Act if Economic Outlook Worsens

Aaron Hultgren — Wed, 28 Jul 2010 00:00:00 GMT

Federal Reserve Chairman Ben Bernanke told lawmakers July 21 that he is prepared to take further steps to support the economy should the nation’s economic outlook worsen. In presenting the Fed’s semiannual monetary policy report to Congress, Bernanke testified that his agency is “considering all options,” The New York Times reported. “We are ready, and we will act if the economy does not continue to improve, if we don’t see the kind of improvements in the labor market that we are hoping for and expecting,” Bernanke told members of the House Financial Services Committee.

Treasury Takes Heat as Foreclosure Prevention Program Stutters

Aaron Hultgren — Wed, 28 Jul 2010 00:00:00 GMT

The Treasury Department took criticism from Congressional overseers at a July 21 hearing over its failure to meet its goals of keeping struggling borrowers in their homes under the government’s foreclosure prevention program. Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, told members of the Senate Finance Committee that the Obama administration’s program to help homeowners avoid foreclosure has fallen far short of its goals, in part because the Treasury has failed to spell out what its objectives should be, according to a July 21 New York Times report.

FHA Board Slaps Mortgage Lenders for Non-Compliance

Staff — Wed, 28 Jul 2010 00:00:00 GMT

The Federal Housing Administration’s Mortgagee Review Board announced dozens of administrative actions against FHA-approved lenders on July 26 for failing to meet its requirements. The recent sanctions bring to nearly 1,500 the number of administrative actions taken against lenders this year. "Lenders should know by now that FHA will not tolerate fraudulent or predatory lending practices," FHA Commissioner David Stevens said in a news release. "Any FHA-approved lender that does business with us must follow our standards."

New AI Seminar: Advanced Spreadsheet Modeling

Heather Norgaard — Wed, 21 Jul 2010 00:00:00 GMT

The Appraisal Institute announced July 21 that its newest seminar, “Advanced Spreadsheet Modeling for Valuation Applications,”is scheduled topremiere in September.The seminar exposes participants to spreadsheet program tools that will strengthen their analyses, increase their productivity and help them meet the expectations of demanding clients. Participants will learn key spreadsheet program features; best practices in financial model development; complex highest and best use analysis; key inputs in maximum building-size calculations, land residual analysis and feasibility rent analysis; and how to maximize useful Excel features such as sorting, the outlining function and pivot tables.

Demand for Design Services Continues to Remain Low, AIA Says

James Sobiesczyk — Wed, 21 Jul 2010 00:00:00 GMT

June’s Architecture Billings Index inched up slightly to 46 from the previous month’s reading of 45.8, the American Institute of Architects reported July 21. The June ABI continues to reflect a decline in demand for design services. Scores lower than 50 represent declining conditions, while those greater than 50 indicate an industry-wide increase in billings. “The steep decline in nonresidential property values has slowed investment in new facilities,” AIA Chief Economist Kermit Baker, Ph.D., said.

RICS Joins The Appraisal Foundation as International Sponsor

Staff — Wed, 21 Jul 2010 00:00:00 GMT

The Appraisal Foundation announced July 19 that it has approved the Royal Institution of Chartered Surveyors as an international sponsor of the Foundation, effective immediately. In February 2010, The Appraisal Foundation Board of Trustees adopted criteria for international appraisal sponsorship that requires organizations to be not-for-profit or non-stock under the laws of its jurisdiction and includes adoption of the Uniform Standards of Professional Appraisal Practice or an equivalent document.

MBA Survey: Refinance Activity Picks Up as Fixed Rates Fall

James Sobiesczyk — Wed, 21 Jul 2010 00:00:00 GMT

The refinance share of mortgage activity reached its highest level since April 2009 in the week ending July 16 as homeowners took advantage of historically low mortgage rates, according to the Mortgage Bankers Association’s weekly Mortgage Application Survey. The July 21 survey showed that the Market Composite Index, which measures mortgage loan application activity, increased 7.6 percent on a seasonally adjusted basis from the previous week and 19.5 percent on an unadjusted basis. The four-week moving average for the Market Index increased 4.9 percent on a seasonally adjusted basis.

Randy Williams, MAI, SR/WA, Appointed IRWA President-Elect

Staff — Wed, 21 Jul 2010 00:00:00 GMT

The International Right of Way Association recently announced the appointment of Randy A. Williams, MAI, SR/WA, as international president-elect for the association. The announcement was made during IRWA’s 56th Annual International Education Conference held June 27-30 in Calgary, Alberta, Canada. A former president of the Appraisal Institute’s Austin Chapter, Williams has been an approved IRWA course facilitator since 1990 and has taught numerous IRWA appraisal courses, including partial acquisitions, easement valuation and income capitalization.

AI in the News: AI Members Comment on Fannie Mae Appraisal Updates

James Sobiesczyk — Wed, 21 Jul 2010 00:00:00 GMT

Gary Crabtree, SRA, and Frank Gregoire, Associate member, were featured July 18 in The Los Angeles Times, the nation’s fourth largest newspaper, concerning updates to Fannie Mae’s lending guidelines. Jim Blaydes, SRA, was featured July 16 in the Chicago Tribune, the nation’s ninth largest newspaper, on the same topic.

AI Media Coverage Potentially Seen 1.3 Billion Times

Staff — Wed, 21 Jul 2010 00:00:00 GMT

News stories including the Appraisal Institute and its members were potentially seen, heard or read more than 1.3 billion times during the first half of 2010, a July 19 internal AI report found. The Appraisal Institute and its members appeared in 1,288 stories that appeared in 638 media outlets. During the first six months of this year, the Appraisal Institute’s coverage resulted in a publicity value of more than $1 million, according to an AI vendor’s proprietary formula. All the figures represent massive growth over results from the second half of last year.

Goldman Fined $550M in Civil Fraud Charges

Heather Norgaard — Wed, 21 Jul 2010 00:00:00 GMT

Goldman Sachs & Co. has agreed to pay $550 million to settle civil fraud charges that it misled buyers of mortgage-related investments, The Associated Press reported July 15. The settlement requires Goldman to pay the Securities and Exchange Commission fines of $300 million. The remaining money will compensate those who lost money on their investments.

Recovery Rates Edge Up in RCA Second Quarter Survey

Staff — Wed, 21 Jul 2010 00:00:00 GMT

The average recovery rate for troubled commercial real estate mortgages, before costs and fees, increased from 63 percent in 2009 to 67 percent in 2010 year-to-date, according to a recent Real Capital Analytics report. In the second quarter, the average recovery rate was 68 percent.

Freddie Mac: 30-Year Mortgage Rates Remain at Record Lows

James Sobiesczyk — Wed, 21 Jul 2010 00:00:00 GMT

The 30-year fixed rate mortgage averaged 4.57 percent for the week ending July 15, unchanged from last week when it drop to a record low, according to Freddie Mac's July 15 Weekly Primary Mortgage Market Survey . Reuters reported that the rate averaged 5.14 percent a year ago.

June Housing Starts Dip, Permit Activity Increases

James Sobiesczyk — Wed, 21 Jul 2010 00:00:00 GMT

Overall housing starts dipped 5 percent in June from the previous month to 549,000 units, according to U.S. Commerce Department data released July 20. Single-family housing starts fell 0.7 percent to 454,000 units while multi-family starts plunged 21.5 percent to a seasonally adjusted annual rate of 95,000 units. By region, overall housing starts fell 11.3 percent in the Northeast, 6.9 percent in the Midwest, 2.4 percent in the South and 5.9 percent in the West.

Homebuilder Confidence Falls for Second Consecutive Month

James Sobiesczyk — Wed, 21 Jul 2010 00:00:00 GMT

Homebuilder confidence declined in July for the second consecutive month to its lowest level since April 2009, according to the National Association of Home Builders/Wells Fargo Housing Market Index released July 19. The index fell to 14, two points from the previous month, the NAHB reported.

FHA Inviting Comment on Risk Proposal

Aaron Hultgren — Wed, 21 Jul 2010 00:00:00 GMT

The Department of Housing and Urban Development has introduced policy changes intended to reduce the risk of loans insured by the Federal Housing Administration and is soliciting public comment through Aug. 15, according to HUD’s July15 notice in the Federal Register.

Fannie/Freddie Overseer Sued by California Attorney General

Aaron Hultgren — Wed, 21 Jul 2010 00:00:00 GMT

The regulatory agency responsible for overseeing mortgage giants Fannie Mae and Freddie Mac has been sued by the California Attorney General over its role in effectively shutting down a program that allows homeowners to finance solar panels and other energy-saving improvements through their property tax bills. The Federal Housing Finance Agency on July 6 said that the Property Assessed Clean Energy program, known as PACE, presented "unusual and difficult risk management challenges" for lenders, servicers and mortgage securities investors in a "fragile housing finance market," according to The Los Angeles Times.

Fed Reserve Board Nearing Full Slate of Governors

Aaron Hultgren — Wed, 21 Jul 2010 00:00:00 GMT

With President Obama’s three picks to fill vacant seats on the Federal Reserve Board of Governors meeting with lawmakers on July 15, the Fed is moving closer to its first full slate of governors in nearly four years. According to CNNMoney.com, Peter Diamond, a professor at the Massachusetts Institute of Technology; Sarah Bloom Raskin, the Maryland commissioner of financial regulation; and Janet Yellen (right), the president of the San Francisco Federal Reserve Bank, told Senators that they are ready to help the central bank with its vastly expanded duties to ensure financial stability and would use the lessons learned during the financial crisis to better handle their responsibilities.

FASB Proposes Fair Value Reporting Change for Investment Properties

James Sobiesczyk — Wed, 21 Jul 2010 00:00:00 GMT

The Financial Accounting Standards Board announced July 14 that it will develop a proposal requiring investment properties be entered at fair value in accounting ledgers, BNA Tax and Accounting reported. Although the proposal may only affect real estate investment properties, it also may affect other types of assets that have similar traits.

New Fannie Guidance Concerns Lenders

Aaron Hultgren — Wed, 21 Jul 2010 00:00:00 GMT

Under new Fannie Mae guidelines rolled out this summer, lenders are being encouraged to retrieve a borrower's latest credit report just before a loan closes. But according to a July 16 story in The Washington Post, lenders say the new policy is causing more confusion and slowdowns than necessary.

Foreclosure Filings Reach 1.65 Million in First Half of Year

James Sobiesczyk — Wed, 21 Jul 2010 00:00:00 GMT

Foreclosure activity is on track to rise to a new historic level by the end of 2010, according to a June 15 RealtyTrac news release. In the first half of the year, 1.65 million properties — or one in every 78 homes — received a foreclosure filing, down 5 percent from the previous six months but up 8 percent from the same period a year ago. In June, nearly 314,000 properties received a foreclosure filing, down 3 percent from the previous month and 7 percent from a year ago, according to RealtyTrac’s Midyear 2010 U.S. Foreclosure Market Report.

Fed Forecasts Economic Recovery Slowdown

James Sobiesczyk — Wed, 21 Jul 2010 00:00:00 GMT

In its latest economic forecast released July 14, the Fed predicted that economic growth will slow; high unemployment will persist; and deflation will cause businesses to cut-back on spending, according to a July 15 article on CNNMoney.com. Despite the Fed’s pessimism, however, the central bank declined to take any new policy actions, preferring to leave interest rates alone and not tinker with stimulus programs that could prove risky.

44 Percent of Americans Expect Economy to Improve, Survey Says

Heather Norgaard — Wed, 21 Jul 2010 00:00:00 GMT

According to a Certified Financial Planner Board of Standards Inc. survey, more Americans think the U.S. economy will improve rather than decline in the next six months, Bloomberg reported July 13. The survey found that 44 percent of respondents said the economy will get better compared with 28 percent who believe it will get worse.

Fannie Mae Aims to End Strategic Mortgage Defaults

Aaron Hultgren — Wed, 21 Jul 2010 00:00:00 GMT

Taking a stand against "strategic defaulters" – borrowers who default on a mortgage they can afford – Fannie Mae has announced a new policy set for this October in which strategic defaulters will be taken to court and disqualified for new Fannie-backed loans, according to a July 19 story in USA Today.

JPMorgan Chase Gets Tough on Short Sale Deficiencies

James Sobiesczyk — Wed, 21 Jul 2010 00:00:00 GMT

To recoup as much as possible on losses, JPMorgan Chase & Co. began notifying certain borrowers in a pre-approval letter that they will remain responsible for debt not covered in short sale transactions, according to a July 16 American Banker report. The new policy illustrates an additional obstacle to short sales, which the government and mortgage industry have been advocating as a less costly alternative to foreclosure.

Fed Governor Calls for Change in Mortgage Data Reporting

James Sobiesczyk — Wed, 21 Jul 2010 00:00:00 GMT

Federal Reserve Governor Elizabeth Duke has called for a reconsideration of the mortgagedata reporting formats used by federal regulators to determine policy, The Wall Street Journal reported. At a July 15 hearing in Atlanta on proposed revisions to the Home Mortgage Disclosure Act, Duke questioned current data collection efforts and their impact on understanding the state of the economy. "Data do not create the market, but they do help us understand what is happening in the market,” Duke said.

Administration Needs Appraisers’ Help, FHA’s Stevens Says at AI Summit

Staff — Wed, 21 Jul 2010 00:00:00 GMT

The Obama administration is doing what it takes to provide responsible homeowners with opportunities to prevent avoidable foreclosures, but it needs the appraisal profession’s help, said Federal Housing Administration Commissioner David Stevens. He was the opening speaker July 19 at the Appraisal Institute’s Washington Appraisal Summit in the nation’s capital. “I’m confident that the vast changes we have experienced in the housing market will result in a changed industry once we come through the crisis,” Stevens said.

Rep. Kanjorski Tells AI Summit “Hard Part of the Bill Occurs Now”

Staff — Wed, 21 Jul 2010 00:00:00 GMT

Greeted with a standing ovation for his work on behalf of appraisers, Rep. Paul Kanjorski, D-Pa., told about 200 Appraisal Institute Washington Appraisal Summit attendees that “the hard part of the (recently passed financial regulatory reform) bill occurs now.” Kanjorski played a key role in the inclusion of appraisal provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173), which President Obama signed into law July 21. The provisions include the first modernization of real estate appraisal regulations in more than 20 years.

Obama Signs Financial Regulatory Reform Bill

Aaron Hultgren — Wed, 21 Jul 2010 00:00:00 GMT

President Obama signed the historic financial regulatory reform bill into law July 21, ushering in a dramatic rewrite of the rules governing financial service providers and products and ending a nearly year-long struggle to enact meaningful reforms. "These reforms represent the strongest consumer financial protections in history," Obama said in his prepared remarks, released by the White House before the signing ceremony. "These protections will be enforced by a new consumer watchdog with just one job: looking out for people – not big banks, not lenders, not investment houses – in the financial system. Now, that's not just good for consumers; that's good for the economy."

New AI Webinar Recording Available: Financial Reform Legislation

Heather Norgaard — Wed, 14 Jul 2010 00:00:00 GMT

The recording for the Appraisal Institute webinar “Financial Reform Legislation: Appraisal and Real Estate Impacts,” conducted July 1, is now available to AI members at no cost. The cost for nonmembers is $75. This webinar recording provides the details of the Conference Report on H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act. This legislation, if enacted, would mark the first modernization of Title XI of the Financial Institutions Reform Recovery and Enforcement Act since 1989, addressing several issues of concern to the appraisal community.

The Appraisal Foundation Appoints Three New Trustees

Staff — Wed, 14 Jul 2010 00:00:00 GMT

The Appraisal Foundation announced July 12 the appointment of three new members to its Board of Trustees: Anthony (Tony) Aaron of Los Angeles, Thomas (Tom) V. Boyer of Coalville, Utah, and Elizabeth von Habsburg of New York City. They each will serve a three-year term beginning Jan. 1, 2011.

Appraisal Institute Submits USPAP Comments to ASB

Staff — Wed, 14 Jul 2010 00:00:00 GMT

The Appraisal Institute submitted comments July 13 to the Appraisal Standards Board regarding ASB’s Second Exposure Draft of proposed changes for the 2012-2013 Uniform Standards of Professional Appraisal Practice. Appraisal Institute members and others may submit comments on the Exposure Draft to the ASB before July 20.

Purchase Applications Lowest Since 1996, MBA Weekly Survey Shows

James Sobiesczyk — Wed, 14 Jul 2010 00:00:00 GMT

Mortgage application activity, including refinance and purchase applications, fell in the week ending July 9, according to the Mortgage Bankers Association’s weekly Mortgage Application Survey. Purchase application activity reached its lowest level since December 1996. The July 14 survey showed that the Market Composite Index, which measures mortgage loan application activity, fell 2.9 percent on a seasonally adjusted basis from the previous week and 12.6 percent on an unadjusted basis. The four-week moving average for the Market Index increased 1.5 percent on a seasonally adjusted basis.

Appraisal Institute’s Terry Dunkin Appointed to FIABCI Post

Staff — Wed, 14 Jul 2010 00:00:00 GMT

Terry Dunkin, MAI, SRPA, SRA, has been named to the board of The International Real Estate Federation (FIABCI) and as president of the organization’s Principal Members Committee. FIABCI World President Enrico Campagnoli of Italy made the announcement July 8. Currently chair of the Appraisal Institute’s International Relations Committee, Dunkin has been an appraiser for more than 30 years and an AI member since 1984. His service to the Appraisal Institute includes: national president (2007), International Committee (2008 to present), national Executive Committee (2004 to 2008), national Board of Directors (2000 to 2008) and president of the Maryland Chapter (1990).

CMBS Delinquencies Could Reach $90 Billion: Realpoint

James Sobiesczyk — Wed, 14 Jul 2010 00:00:00 GMT

Realpoint LLC’s Monthly Delinquency Report, released June 26, projected that delinquent unpaid balances in commercial mortgage-backed securities could climb to between $80 billion and $90 billion by the end of 2010 and that the delinquency percentage could grow to between 11 percent and 12 percent.

New CE Requirements Take Effect for Most AI Members

Staff — Wed, 14 Jul 2010 00:00:00 GMT

Following action taken by the Appraisal Institute Board of Directors, new continuing education requirements went into effect July 1 for Designated and Associate members. Designated members now have more options to fulfill continuing education requirements. CE credit for the seven-hour or 15-hour national Uniform Standards of Professional Appraisal Practice course will be granted up to three times per CE cycle.

Fannie and Freddie Delist from NYSE, Announce OTC Symbols

Aaron Hultgren — Wed, 14 Jul 2010 00:00:00 GMT

Shares of Fannie Mae's and Freddie Mac's common stocks began trading July 8 on the over-the-counter market, three weeks after the Federal Housing Finance Agency directed the government-sponsored enterprises to delist from the New York Stock Exchange, according to MortgageOrb.com.

Mortgage Delinquencies Up after Months of Improvement

James Sobiesczyk — Wed, 14 Jul 2010 00:00:00 GMT

After several months of improving conditions, the number of mortgage loans 90 days or more delinquent increased 2.3 percent in May from the previous month to 9.2 percent, according to a July 6 LPS Applied Analytics news release. The number of loans that were 30 days or 60 days delinquent also increased. Although the percentage of delinquent loans increased, overall delinquency and foreclosure rates continue to remain relatively stable at historically high levels, LPS said.

Macquarie Enters U.S. Commercial Mortgage Market

James Sobiesczyk — Wed, 14 Jul 2010 00:00:00 GMT

Australia’s largest investment bank, Macquarie Group LTD, announced that it is expanding its commercial mortgage presences in the U.S. by forming a credit trading division, Bloomberg.com reported July 8. The bank added a commercial mortgage finance and commercial mortgage-backed securities team to the credit trading division of its fixed income, currencies and commodities group. With more than $60 billion in loans bundled into bonds scheduled to mature in 2011, Macquarie said it is positioning itself to take part in restructuring and refinancing the debt as it comes due.

MBA Report: Commercial Real Estate Declines Easing

James Sobiesczyk — Wed, 14 Jul 2010 00:00:00 GMT

Declines in commercial real estate fundamentals eased in the first quarter of 2010 as the economy showed signs of improvements, according to the Mortgage Bankers Association’s recently released first quarter 2010 Commercial Real Estate/Multifamily Finance Quarterly Data Book.

Appraisal Institute Unveils Core Competency Model

Staff — Wed, 14 Jul 2010 00:00:00 GMT

The Appraisal Institute rolled out the Core Competency Model on July 14, seeking comments from members on an exposure draft. The AI Core Competency Project Team and the Admissions and Designation QualificationsCommittee have defined core competencies as education, professional experience and demonstration of knowledge.

AI in the News: AI Committee Chair Hails New Guidelines

James Sobiesczyk — Wed, 14 Jul 2010 00:00:00 GMT

Appraisal Institute Government Relations Committee Chair Richard Maloy, MAI, SRA, was featured in a Valuation Review article July 8 concerning updates to Fannie Mae’s appraisal process, which focus on appraiser geographic competence and knowledge requirements, the submission of interior photos when an conducting an interior inspection, communication under the Home Valuation Code of Conduct and the proper determination of comparable sales.

Yahoo, Zillow Announce Real Estate Ad Partnership

James Sobiesczyk — Wed, 14 Jul 2010 00:00:00 GMT

Yahoo and Zillow, the operators of the second and third most-trafficked home-sales websites, have agreed to a joint venture that would create an Internet real estate adverting network, according to a July 9 report in The Wall Street Journal. Under the partnership Zillow will oversee a network that will combine home listings and ads from local real estate brokers on Yahoo’s website as well as its own, the Journal reported. Spencer Rascoff, Zillow’s chief operating officer, told the Journal that the partnership “creates the opportunity for agents and brokers to reach one of the largest audiences of homebuyers online when they list a home or purchase an ad.”

FHA Makes Changes for Lenders, Underwriters

Aaron Hultgren — Wed, 14 Jul 2010 00:00:00 GMT

In response to changes in real estate and financing markets, the Federal Housing Administration made revisions July 6 to its Multifamily Housing programs that are intended to mitigate the Department of Housing and Urban Development’s risk while ensuring the continued availability of FHA insurance. The FHA’s policy changes in HUD Mortgagee Letter 2010-21, will take effect in September. Included in the FHA’s changes are updates to the agency’s underwriting policies, plans to increase lender and underwriter quality, and new policies to align loan application, submission and approval standards.

Mortgage Rates Continue Falling to Record Lows: Bankrate

James Sobiesczyk — Wed, 14 Jul 2010 00:00:00 GMT

National mortgage rates fell again to record low levels, according to Bankrate.com’s weekly national mortgage survey released July 7. Mortgage rates have dropped over concerns of the economic recovery as investors move funds into safer investment vehicles, including Treasury securities, Bankrate said.

Missouri Governor Signs AMC Legislation into Law

Aaron Hultgren — Wed, 14 Jul 2010 00:00:00 GMT

Missouri became the 19th state to enact a framework for the regulation and oversight of appraisal management companies when Gov. Jay Nixon signed House Bill 1692 into law on July 12. The measure will require appraisal management companies operating in the state to register with theMissouri Real Estate Appraisers Commission. Any individual who owns 10 percent or more of an AMC will be required to register, and each AMC must post with the commission and maintain on renewal a surety bond in the amount of $20,000.

Banks Re-establish “No-doc” Loans

Heather Norgaard — Wed, 14 Jul 2010 00:00:00 GMT

No-doc and low-doc loans – loans in which no or minimum documentation of income is required – disappeared in 2009, but according to FirstAmerican Corelogic, these loans resurfaced to account for 8 percent of newly originated loan pools as of February 2010, Forbes reported July 8.

Wells Fargo Downsizes, Cuts Nearly 4,000 Jobs

Heather Norgaard — Wed, 14 Jul 2010 00:00:00 GMT

Wells Fargo & Co., the fourth-largest U.S. bank by assets, plans to eliminate 3,800 jobs, or about 1.4 percent of its total workforce, and close its consumer-finance branch network of 638 independent consumer-finance branches, Bloomberg reported July 8. Wells Fargo purchased Wachovia Corp. for $12.7 billion in 2008 and is restructuring as it merges the two franchises.

Federal Bank Closures Mount to 87

Heather Norgaard — Wed, 14 Jul 2010 00:00:00 GMT

Federal regulators on July 9 shut down Bay National Bank, based in Baltimore, marking the second failure in Maryland and the 87th failure of a federally insured bank this year. The bank had $282.2 million in assets and $276.1 million in deposits as of March 31. Its failure is expected to cost the deposit insurance fund $17.4 million, The Associated Press reported July 9. The pace of bank failures this year far surpasses that of 2009, which was a brisk year for shutdowns. By this time last year, regulators had closed 45 banks. The number of bank failures is expected to peak this year and be slightly higher than the 140 that fell in 2009.

25 Percent of Americans Hurt by Low Credit Scores

Heather Norgaard — Wed, 14 Jul 2010 00:00:00 GMT

Based on consumer credit reports as of April, Fair Isaac Corp. said that 25.5 percent of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders, The Associated Press reported July 12. It's unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.

OCC Head Dugan to Resign

Aaron Hultgren — Wed, 14 Jul 2010 00:00:00 GMT

Comptroller of the Currency John Dugan said in a July 8 letter to President Obama that he will resign in August when his five-year term in office expires. Originally appointed by President George W. Bush, Dugan he said he will depart the job Aug. 14. The OCC oversees national banks and U.S. divisions of foreign banks. It regulates the largest Wall Street retail banks, as well as 1,500 smaller institutions. Financial institutions that are overseen by the OCC control more than half the banking assets in the industry.

Shift in FHA Policy Creates Demand for Brokers

James Sobiesczyk — Wed, 14 Jul 2010 00:00:00 GMT

Demand for mortgage brokers has been on the upswing since the Federal Housing Administration shifted broker supervisory responsibilities to lenders, American Banker reported July 13. While some critics argue that the shift may drive brokers away from the lending process, several lenders have actively increased broker recruitment efforts. American Banker reported that FHA Commissioner David Stevens justified the agency’s decision to transfer oversight responsibilities at a recent conference in San Francisco.

FHFA Taking Steps to Recoup Fannie, Freddie Losses

Aaron Hultgren — Wed, 14 Jul 2010 00:00:00 GMT

The federal regulator in charge of overseeing Fannie Mae and Freddie Mac has issued 64 subpoenas seeking documents related to private-label mortgage-backed securities in which the government-sponsored enterprisesinvested, according to a July 12 news release issued by the Federal Housing Finance Agency, conservator of Fannie and Freddie.

Debate over Future of Fannie and Freddie Begins

Aaron Hultgren — Wed, 14 Jul 2010 00:00:00 GMT

Lawmakers returning to Capitol Hill July 12 had a new financial issue to tackle: what to do with struggling government-sponsored enterprises Fannie Mae and Freddie Mac, which have combined to cost U.S. taxpayers more than $145 billion in bailout relief, according to a Bloomberg News article. Sen. John McCain, R-Ariz., has been leading the Republican fight to abolish Fannie and Freddie. According to Bloomberg, he and many fellow Republicans want the government to abandon any role in housing finance.

Financial Reform Bill Receives Republican Support in Senate

Aaron Hultgren — Wed, 14 Jul 2010 00:00:00 GMT

Two Republican senators have signaled they will support the pending financial regulatory reform bill, giving Senate Democrats a near filibuster-proof majority. According to a July 13 article in MarketWatch, Sens. Olympia Snowe, R-Maine, and Scott Brown, R-Mass., have announced they will vote in favor of the legislation.

Appraisal Institute Designates 23 Members in June

James Sobiesczyk — Wed, 07 Jul 2010 00:00:00 GMT

The Appraisal Institute conferred the MAI designation on 14 members in June, including four from China, and the SRA designation on nine members. The newly designated MAI members for June are:

AQB Issues Exposure Draft on Validity of Exam Results

Heather Norgaard — Wed, 07 Jul 2010 00:00:00 GMT

The Appraisal Qualifications Board of The Appraisal Foundation is seeking comments on an exposure draft regarding the validity of exam results for credentialing. Written comments are due Sept. 24, and oral comments may be made at the AQB’s Oct. 1 meeting.

AI’s Valuation Magazine Wins National Design Award

Staff — Wed, 07 Jul 2010 00:00:00 GMT

Valuation, the Appraisal Institute’s quarterly magazine, recently received an Award of Excellence in the 22nd annual Awards for Publication Excellence, recognizing excellence in publications work by professional communicators. Valuation magazine was among 15 winners honored in the best redesign category, which received 343 submissions. Overall, this year’s competition received more than 3,700 entries. Valuation was judged to be among the top 5 percent of entries in its category. APEX awards are based on excellence in graphic design, editorial content and the ability to achieve overall communications excellence.

Chinese Bank Infiltrates U.S. CRE Market

Heather Norgaard — Wed, 07 Jul 2010 00:00:00 GMT

Industrial & Commercial Bank of China is targeting U.S. commercial real estate owners in need of loans that exceed $100 million with the launch of its “large loan” program. Most U.S. banks avoid this category because of the risk involved, The Wall Street Journal reported June 29. The move by ICBC, which is 70 percent owned by the Chinese government, is part of a broader push into the U.S. market and comes as China's regulators are encouraging domestic financial institutions to expand overseas.

Online Lending Application Volume to Triple by 2013

Heather Norgaard — Wed, 07 Jul 2010 00:00:00 GMT

Although few banks have adopted online lending systems, online application volume is expected to triple by 2013 with volume growing from just 4 percent in 2010 to 13 percent of total volume, according to a Mortgagebot survey, American Banker reported June 30. The survey found that lenders still expect loan officers to be the dominant channel, accepting 57 percent of all mortgage applications by 2013, down from 67 percent in 2010. Even though most bankers agree that online lending applications can attract customers and drive up volume, only 18 percent of banks and credit unions currently accept mortgage applications online.

MBA: Mortgage Refinancing Activity Up in Latest Survey

James Sobiesczyk — Wed, 07 Jul 2010 00:00:00 GMT

Mortgage application refinance activity jumped to its highest level since May 2009 in the week ending July 2, according to the Mortgage Bankers Association’s weekly Mortgage Application Survey. Purchase application activity fell for the eighth time in the last nine weeks. The July 7 survey showed that the Market Composite Index, which measures mortgage loan application activity, increased 6.7 percent on a seasonally adjusted basis from the previous week and 6.5 percent on an unadjusted basis.

Four Members Named AI “Volunteer of Distinction” for July

Aaron Hultgren — Wed, 07 Jul 2010 00:00:00 GMT

Region IV’s Patricia Amidon, MAI, a member of the Maine Chapter; Region VI’s Ryan Hlubb, SRA, of the Maryland Chapter; Region VIII’s M. Lance Coyle, MAI, North Texas Chapter; and Region X’s Jacqueline Green, SRA, East Florida Chapter, each have been named an Appraisal Institute “Volunteer of Distinction” for July. The Appraisal Institute’s member recognition program honors one member in good standing per region each month for their service to the organization, the profession and their community.

NAR: May Pending Home Sales Fall after Tax Credit Expires

James Sobiesczyk — Wed, 07 Jul 2010 00:00:00 GMT

The National Association of Realtors’ pending home sales index plunged 30 percent in May to 77.6 from April’s figure of 110.9, down 15.9 percent from the same period a year ago. The drop, reported July 1, follows three consecutive monthly increases as homebuyers took advantage of the federal tax credit. The dip in sales did not surprise NAR Chief Economist Lawrence Yun. “Consumers are rational, and they rushed to meet the tax credit eligibility deadline in April,” Yun said in a news release.

Distressed CRE at Nearly $167 Billion

James Sobiesczyk — Wed, 07 Jul 2010 00:00:00 GMT

According to an analysis from Delta Associates, the total value of distressed commercial real estate nationwide has reached $166.8 billion in the second quarter, MBA NewsLink report June 25. The figure, compiled with data from Real Capital Analytics, represents an 11 percent decrease from the previous quarter when the total value of distressed commercial real estate was $187.4 billion. “We believe that the declining growth of distressed real estate reflects the fact that in many markets commercial property values are no longer falling,” Delta told NewsLink.

Discounts on Foreclosures Averaged 27 Percent

James Sobiesczyk — Wed, 07 Jul 2010 00:00:00 GMT

Homes in the foreclosure process sold at a 27 percent discount on average compared to non-distressed properties in the first quarter, CNNMoney.com reported June 30. During the first quarter, REO home sales averaged a 34 percent discount while pre-foreclosure sales averaged a 15 percent discount.

U.S. Office Vacancy Rate Highest in 17 Years: Reis

Staff — Wed, 07 Jul 2010 00:00:00 GMT

A Reis Inc. report found that second-quarter U.S. office vacancies rose to the highest level since 1993, according to a July 6 Bloomberg article, citing a sluggish economic recovery that continues to soften corporate tenants’ demand. The vacancy rate reached 17.4 percent, compared to 17.3 percent in the first quarter and 16 percent one year ago. The amount tenants actually pay landlords, known as effective rents, fell 0.9 percent from the first quarter and 5.7 percent from a year ago, Reis’ report said.

FHFA Imposes Energy Retrofit Restrictions to GSEs

James Sobiesczyk — Wed, 07 Jul 2010 00:00:00 GMT

The Federal Housing Finance Agency has imposed new restrictions on the Property Assessed Clean Energy program, which allows homeowners to repay costs associated energy improvement retrofits through annual property tax surcharges, according to a July 6 blog on The New York Times’ website. In issuing the guidance, the FHFA was critical of the government program that has generated $150 million in stimulus funding from the Obama administration.

Mortgage Rates Sink to Lowest Level in 50 Years

James Sobiesczyk — Wed, 07 Jul 2010 00:00:00 GMT

Rates for 30-year fixed loans sank from 4.69 percent to 4.58 percent — the lowest since the 1950s — in Freddie Mac’s July 1 Primary Mortgage Market Survey, The Associated Press reported July 1. Although mortgage application volume rose nearly 9 percent the week ending June 25, the Mortgage Bankers Association said that activity remains roughly half the level reported in early 2009.

Closing Date for Homebuyer Tax Credit Extended

Aaron Hultgren — Wed, 07 Jul 2010 00:00:00 GMT

President Obama signed into law July 2 an extension to the homebuyer tax credit program, ensuring that homebuyers who entered into a binding contract before April 30 would be given until Sept. 30 to close the sale of their home, Reuters reported.

AI in the News: AI President Hails Financial Reform Bill

James Sobiesczyk — Wed, 07 Jul 2010 00:00:00 GMT

Appraisal Institute President Leslie Sellers, MAI, SRA, was prominently featured in a DSNews.com article concerning sweeping financial reform legislation calling for a new set of industry-wide appraisal rules. If signed into law, the legislation would ensure appraiser independence, require appraisal management companies to register with state agencies and address appraiser compensation issues.

House Passes Financial Regulatory Reform Bill; Senate Vote to Come

Aaron Hultgren — Wed, 07 Jul 2010 00:00:00 GMT

The federal financial regulatory reform bill, including appraisal provisions supported by the Appraisal Institute, cleared the House by a 237-192vote June 30, setting the stage for a Senate vote some time after senators reconvene July 12. Title XIV of H.R. 4173 includes a federal appraisal independence standard that intends to replace the Home Valuation Code of Conduct and also includes major changes to Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), including funding for state oversight, administration and enforcement.

AI Praises New Fannie Mae Guidelines

Staff — Wed, 07 Jul 2010 00:00:00 GMT

The Appraisal Institute applauded June 30 guidelines from Fannie Mae aimed at improving the quality of residential appraisals, including a requirement that lenders cannot use inexperienced or incompetent appraisers. A July 2 American Banker story said Fannie wants lenders to explain any changes made to a property’s appraised value and that Fannie provided further guidance on how to determine comparable sales.