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The Norris Group Real Estate News Roundup 1/31/12

Tuesday, January 31st, 2012

Today’s News Synopsis:

According to the latest Standard & Poor’s/Case-Shiller Index, the prices of homes decreased 3.7% from last year. In other news, the Conference Board reported consumer confidence declined again this month after having increased at the end of 2011. The Congressional Budget Office expects taxpayers will pay $27 billion to aid Fannie and Freddie from 2013 to 2022.

In The News:

CNN Money – “Freddie Mac: A mess, and likely to stay that way” (1-30-12)

“It’s not tough to find critics of Freddie Mac and Fannie Mae on either the right or the left. But there has been little progress made in rehabilitating the mortgage giants.”

Housing Wire – “S&P/Case-Shiller Nov. home prices down 3.7% from year earlier” (1-31-12)

“The average price of a single-family home fell again in November, with decreases in 19 of the 20 largest metropolitan areas during the month, according to the Standard & Poor’s/Case-Shiller index.”

Realty Times – “California Association of REALTORS® To Build Ethics Violations Data Base” (1-31-12)

Approve that C.A.R. build a system, to be developed by staff, to create a database that contains all final findings – within the last three (3) years – of a member’s Code of Ethics and membership duty violations, including whether the member fulfilled the sanction imposed, for use by local Associations in making their decision on membership applications.”

Housing Wire – “CBO slashes cost of Fannie, Freddie over next decade” (1-31-12)

“Taxpayers will spend another $27 billion between 2013 and 2022 subsidizing Fannie Mae and Freddie Mac, according to the Congressional Budget Office estimates released Tuesday.”

DS News – “Appraisal Institute Offers Guidance on Distressed Comparables” (1-31-12)

“The Appraisal Institute recently released new guidelines to instruct its members on how to deal with distressed sales and foreclosures when seeking comparables.”

Housing Wire – “Consumer confidence retreats in January” (1-31-12)

“Consumer confidence slumped in January after rebounding in the final months of 2011, The Conference Board said in its consumer sentiment index.”

Bloomberg – “Foreclosures Draw Private Equity as U.S. Rents Homes” (1-31-12)

“Private equity firms are jumping into distressed housing as the U.S. government plans to market 200,000 foreclosed homes as rentals to speed up the economic recovery.”

Inman – “LPS asks Nevada court to throw out consumer fraud suit” (1-31-12)

“Lender Processing Services Inc., provider of real estate technology, services, and mortgage performance data, today filed a motion to dismiss a consumer fraud lawsuit against the company filed by the state of Nevada that alleges the company falsified foreclosure documents.”

Housing Wire – “Foreclosure claims dominate CFPB mortgage complaints” (1-31-12)

“More than 38% of the 2,300 mortgage complaints sent to the Consumer Financial Protection Bureau in December related to loan modification and foreclosure concerns, the largest share in this category.”

Hard Money Loan Closed

Rialto, California hard money loan closed by The Norris Group private lending. Real estate investor received loan for $125,000 on a 4 bedroom, 2.5 bathroom home appraised for $200,000.

California Real Estate Investor Events:

Bruce Norris of The Norris Group will be at the Advanced Investing Skills and Strategies 2.5 on February 4, 2012.

The Norris Group posted a new event. Bruce Norris of The Norris Group will be at the 2012 Kick Off Brunch on February 18, 2012.

Looking Back:

Rismedia reported that new home sales increased 17.5% in December of 2010. However, the Obama Administration reported that sales were still lower than levels at the beginning of the year. According to Bloomberg, the rate of unoccupied homes increased to 2.7%, making the number of people who own homes the lowest it had been in 10 years. Standard and Poor’s announced that home prices were still declining and most likely would continue, according to the Realty Times.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Tags: Appraisal Institute, bruce norris, California Association of Realtors, Case-Shiller, congressional budget office, Consumer Financial Protection Bureau, fannie mae, foreclosure, freddie mac, GTIS Partners, home-price index, Lender Processing Services, Standard and Poor's, The Conference Board, the norris group
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252-TNG Radio – I Survived Real Estate 2011 part 5 11-19-11

Friday, November 18th, 2011

I Survived Real Estate 2011

(Full Bio)

On October 14, 2011, The Norris Group returned with its award-winning event I Survived Real Estate. An expert line-up of industry specialists joined Bruce Norris to discuss current industry regulation, head-scratching legislation, and the opportunities emerging for savvy real estate professionals. 100% of the proceeds support the Orange County Affiliate of Susan G. Komen for the Cure. This event would not have been possible without the generous help of the following platinum partners: ForeclosureRadar and Sean O’Toole, Housing Wire, the San Diego Creative Real Estate Investors Association and President Bill Tan, Investors Workshops with President Shawn Watkins and Angel Bronsgeest, Invest Club for Women and Iris Veneracion and Bobbie Alexander, San Jose Real Estate Investors Association and Geraldine Berry, Real Wealth Networks, Frye Wyles, MVT Productions, and White House Catering. The event video can be found on isurvived2011.com.

Bruce continued his discussion with the panel on an interesting appraisal they had. Someone with no experience in a very unusual area where you received a lot of money for a certain located lot had a $1.3 million comp for the model-match house. They had the right location, but The Norris Group did not. They had a home for sale for about $700,000 for 90 days, which is not worth $1.3 million. When they went pending, the home was appraised for $1.3 million because it was a model-match house; someone had come in from out of the area who did not have a clue that it mattered there. This did, however, help lock in the sale.

Bruce wondered what the intent is on the mortgage side. He asked what the function of the appraisal management company was and if they are really supposed to just make sure that appraisal independence is accomplished. Sara confirmed saying this is the main function, and it was intended to be the main function to begin with. Unfortunately, it has become a clearing house for fees lower. The management company is going to make the money, and Sara said what her company finds is that when many consumers close a loan are confronted with an amount for an appraisal that includes not only the appraiser’s fee but also the management company fee. Sometimes the management company fee is more than what the appraiser is actually making on the particular sale. Sara related to Bruce on a personal instance where she had a friend who called and asked her if about $300 the usual in customary fee for a residential appraisal. Sara said this sounded a little high an asked her to call the appraiser. When she called the appraiser, she found out that a good part of the fee that she was going to be paying for the appraisal was actually going to the management company and not to the appraiser.

To earn their cut, the management company usually engages the appraiser and is responsible for the documentation securing the appraisal, getting the appraisal back to the file, and getting it to the lender. They act as the middle man. Bruce jokingly said they basically take an email and forward it. They do not necessarily have to have expertise as appraisers, however. In a lot of states like Arkansas and most likely in California, they have certain requirements for AMCs. The Appraisal Institute has been very active in trying to monitor the appraisal management companies and try to obtain some kind of regulation process, some bonding or some kind of law that supports the appraiser in the event that there is some kind of argument with regard to fee and process. In some states they are not regulated at all, and in other states they are closely regulated. This actually brings up a confusing situation. Bruce wondered if the Appraisal Institute has national and state regulations that overlap or contradict, which Sara confirmed.

Debra Still began talking about how her company works in 29 states and files 29 states worth of appraisal regulations, fees, forms, disclosures, and predatory lending. The variation is pretty stunning. The Dodd-Frank Act had tried to solve the reasonable customary fee, and Bruce wondered if this has changed in practice where the appraiser is now getting paid what they used to. However, Sara said this is not the case as there is still a big issue in this area. When Sara testified before the Congressional Subcommittee in July, this was one of the things that she continued to talk about with the subcommittee. The idea of reasonable and customary and the intent of Dodd-Frank was never to include the AMC fee into the reasonable and customary estimation. The Appraisal Institute has done a lot of research, a lot of study, and they have looked at VA schedules and others to try to help these AMCs and try to help the Congressional Subcommittee to take a look at what a reasonable and customary fee might be to an appraiser. They would like to see the HUD-1 form simply separate the fees. The appraisal fee needs to be on one line and one transparent number, and the appraisal management fee should be on another. An appraiser needs to be paid for the time, the education, the professionalism that they have and that they bring to the experience. The AMC should also be compensated for the work that it is doing. There are pretty severe fines for not paying reasonable fees. In the Legislation, it gets into the millions, and it is uncertain if any of these fines have been levied.

One thing that existed at one time and it is good that it does not anymore is undue pressure. However, Bruce gets the feeling it actually does exist but on the back end. He feels like there are buyers who are willing to say about a house that it is the one they want at the price they want it, but somewhere along the line there is pressure to get it at a lower price. He doesn’t know if it is the review appraisal process, an automated system, or it is an underwriter who says it should be lowered. He really doesn’t know, but he does know that as a seller he is confused sometimes why it comes back less. It’s not reasonable. People look out for their own best interests. For example, a seller checks out the market and goes pending, to Bruce this is a comp. If it disagrees with all the other comps severely, then this might be a problem. When The Norris Group fixes up houses, they might spend $30,000, but they do not automatically think about if they will receive $50,000 back for it. There are, however, times where a buyer looks at this and says they would not be able to do it for $30,000, and a $20 grand price difference at 4% interest is so minimal per month that the answer is they will take the $30,000 over the $50,000, especially when you have 70% comps against REOs and short sales. This is a problem. The real question is how they are viewed. One does not show up and say a property is a comp but it does not have a kitchen. You can’t get the truth with the push of a button.

Sara said all this points out the need for local market expertise, for people who are trained professionals, people who are trained to go to the market and interview the buyer and seller, to investigate the comparables, and make sure they are comparables. Secondly, Sara believes that a lot of appraisers, as they begin to turn in their appraisal reports, face a lot of undue pressure, for example, added comparables, extra questions, and more scrutiny placed on their valuation and their judgment. Bruce wondered if for some reason the pressure is there or a review appraiser disagrees that they could lose business because they came in at a higher number than the review appraiser. Sara said this is something that might happen on some instances, but it really falls to the appraiser to defend himself over and over again. If the information is there and the valuation has been done to the best of the appraiser’s ability, then you need to just get to the point in time where you have to say, “This is it; this is all I can do.” Sara said often times when this situation confronts the people at the company, they will say, “Could we pick you up? Could we drive those comps and take a look at them?” A lot of times you are talking to somebody who is sitting at a desk who never looks at the property and never goes to the particular comparable. He never inspects the interior and doesn’t have any information. It is a communication problem sometimes because as an appraiser and as a person who is writing the report, the communication skill needs to be there to convey extraordinary measures you may or may not have taken to include the sale and why. It is a difficult environment, and it is very difficult sometimes to meet the requirements that are piled on, that are additional, and seem perfect in terms of the final valuation result.

Debra Still said you do have underwriting guidelines and some investor overlays that are now causing some of this challenge where you might have an investor that requires that two comps be outside the community. Outside the community possibly means a foreclosure. This is one of the homebuilders’ top 4 issues. As we see some of these sub-markets beginning to heal and prices starting to stabilize, we have to think about how do we move forward and recognize that in a declining area we might have a very stable sub-market. How do we recognize that some investors want four comps or six comps or justify the time valuation? It becomes very complex when you combine both the appraiser’s work and the underwriter’s work on top of it.

Bruce gave an example of something that really changed their business model. They bought a property in Moreno Valley for $52,000, without a kitchen and other necessities, and they fixed it for around $25,000. They put it up for sale and went pending for $123,000, and they had seven offers within two days. This is a pretty good statement of market value. The appraisal came in at $100,000, and the review came in at $80,000. Consequently, they kept it as a rental at $1100, and they rented it in one day. The statement basically by the appraisal said that given $100,000 at 5%, the rental payment was worth twice as much as the value when you consider what it was worth in mortgage payment. What it prevented was them fixing the next 50 properties in Moreno Valley because what it told them was due to the changes that HVCC brought in, the appraiser was incapable of coming to that decision because no one would allow him to do it. This is a challenge for the industry right now, especially in the areas that have the overwhelming vacant REO as the comp. One of the reasons they concentrate in a specific area is because they provide their own evidence that a decision has been made before, which is what you are in a way stuck with as an appraiser. You have evidence that somebody made a decision.

Sara said one of the other things the aforementioned points out is a relationship with the purchaser and with the person who is going to be working with the mortgage as well as conversation and dialogue on the front end certainly might help to solve some of the problems. The Appraisal Institute is beginning to look at how they can develop some relationships in sub-markets that would allow them to try to take a look at what they have in the market in which they are working. The technique, theory, and ideas going forward are pretty new, and therefore they may have a lot of risk in them for a lot of lenders. It goes back to educating both the lender, the appraiser purchaser, and the investor in what is going on in the market and how they can handle some of the consequences of the downturn that we have seen.

Debra Still said this is one of the things that is difficult with HVCC. The spirit of the HVCC was right on target, not doing anything to exert undue influence on an appraiser. On the other hand, it is now law; and having those good, constructive conversations are very delicate. You have to be very careful and very thoughtful, and there is a protocol to have an appropriate dialogue with an appraiser as you are trying to get to the right place. It is using coercion when it really just needs to have better information.

In order for a company to not require an appraisal management company to act as the middle man and go directly to the independent appraiser, they would have to be a reasonably large lender. Debra Still’s company has a national subdivision processing department, so everything that has to do with properties is done by a department that is outside of the origination, the processing, the underwriting, and the closing. As long as you can set up an arms length environment, you don’t have to use an AMC. Most companies, however, would use that as their way to ensure arms length and to stay within the law. Sara said this is a big factor with a lot of lenders right now as they do not want to cross the line.

There is definitely a sense that there is some rotation system that is necessary where no matter what the experience level or knowledge of an area, it is just a specific person’s turn to obtain an appraisal. Debra Still’s company does a 1 in 5 rotation in each sub-market and probably has about 300 appraisers nationally that they use. It is very important not to use one person solely for a community. There needs to be team partners. All of the appraiser’s business would be dependent upon the company giving, so they have to do at least a 1 in 5 rotation. This is how they have set up their due diligence. They will review the appraisals, review for error, review any quality control audits, and they would make sure they have qualified individuals on their appraiser panel. Sara believes in this type of environment you would have more control over the quality of the appraiser. This is one of the things she does not find happening with a lot of the AMCs. They will gravitate toward cheap and quick and possibly overlook the qualifications that the appraiser has such as market expertise, which Sara says is extremely important. What really matters is the person who is willing to travel, to finish the appraisal, and turn it in completed. A quick turn-around time might be a day to a day and a half. There is no way that if you are not familiar with the market you can simply march in, collect the comparables, talk with the buyers and the sellers, get a sense of what is going on in the market, make the inspection, get a feel for what the property contributes, what are its overall attributes in relationship to the others that are on the market or the other sales that have occurred, go back to make the appraisal, and then write and convey it in a quick amount of time. It just cannot be done. Bruce said it is hard to want to do this if you are getting paid half of the appraisal fee. It may not even be feasible to spend as much time because you just cannot possibly do it. You might as well just go to Multi-list and get a couple of comps and move on.

When asked about broker-price opinions, Sara said one of the things about this is in some instances it might be a good vehicle, but for mortgage-lending purposes and for decisions a lender has to make; by in large the opinions are unregulated. An appraisal that is put forth and signed by a state-certified appraiser, which is what the Appraisal Institute does, has some education. They are unbiased and a third party out there taking a look at the property. They really don’t have anything more in the game than just to report and analyze the market. Sara believes sometimes in the terms of broker-price opinion you have a disinterested person. They are an advocate for the property owner and for another entity. They are certainly not regulated like the appraiser is in terms of adherence to certain educational requirements. There are so many things that are missing. The broker-price opinion might have its place in some part of the real estate picture, but certainly not in terms of making a decision to buy or sell. It’s a different approach; it’s a different mindset, and it should be for a different use.

Bruce speculated that when there is an REO created, there is a series of things that happen including a couple of BPOs and an appraisal. It’s uncertain which is weighed heavier, but there is evidence that everybody is getting a turn in saying what the value is.

Bruce asked the panel if they see anything in Dodd-Frank or the changes in qualified mortgages that threaten a 30-year mortgage for some of the stratuses of loans. Debra said she does not really see anything in the QM or the QRM that would specifically attack the 30-year mortgage. For the most part this has been a product that housing in America has depended on for many years.

To find out more, tune in next week for I Survived Real Estate 2011, part 6. The Norris Group would like to thank their gold sponsors for the event: Adrenaline Athletics, Coldwell Banker Pioneer Real Estate, Conaway and Conaway, Delmae Properties, Elite Auctions, Inland Empire Investors Forum, Inland Valley Association of Realtors, Keller Williams of Corona, Keystone CPA, Kucan & Clark Partners, LLC, Las Brisas Escrow, Leivas Associates, Mike Cantu, Northern California Real Estate Investors Association, Northern San Diego Real Estate Investors Association, Pacific Sunrise Mortgage, Personal Real Estate Magazine, Raven Paul and Company, Realty 411 Magazine, Rick and LeaAnne Rossiter, Southwest Riverside County Board of Realtors, Starz Photography, uDirect IRA, Wilson Investment Properties, Tony Alvarez, Tri-Emerald Financial Group, and Westin South Coast Plaza. Visit isurvived2011.com for more

Tags: AMC, Appraisal Institute, appraisal management company, appraisals, bpo, broker-price opinions, bruce norris, Congressional Subcommittee, Debra Still, Dodd-Frank Act, Gary Thomas, HVCC, i survived real estate, mortgage, mortgage bankers association, norris group, QM, QRM, reo, Sara Stephens, Susan G. Komen
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251-TNG Radio – I Survived Real Estate 2011 part 4 11-12-11

Thursday, November 10th, 2011

I Survived Real Estate 2011

(Full Bio)

Bruce continued his discussion with the panel on rental properties and homeownership. If some gigantic company owns 10,000 rentals, then Bruce for example would not know what to do with his because he would not know if the playing field was legit and if they are going to put 10,000 houses for sale. However, as a builder Bruce certainly would not carve up dirt waiting because that risk is out there that others could be his competitor at the drop of a hat. We should give investors a shot at taking the inventory down because it is manageable if we do not put it on the market.

Doug mentioned how he had come out of the venture capital industry, and a lot of folks in his industry put a lot of money into bad companies back in the late 90s. When there was a crash, they lost their money from bad investments. Therefore, the question is if Doug, for example, were to lend Bruce $100,000 and does not figure out what his ability to pay is and Bruce ends up stopping payments, then whose fault is it? The answer in this case is the lender. If you want to know how to fix things like this, from a market perspective the foreclosures should work through the system and let the banks take the loss. The issue in Washington is that the public has poured a lot of money into Fannie Mae and Freddie Mac, and a lot of those losses are going to rebound back onto taxpayers. You see the functions of the GSEs in terms of working other options other than the principle write-down piece, which will put those losses right back on taxpayers. Part of the reason that he hosted a meeting with some people at I Survived that night was to explore the investor option. They have a rule to have no more than ten loans per single investor. In the course of the bubble, the homeownership rate got well ahead of what was sustainable. There is not a broad based program to tear the properties down, and when Doug made a suggestion that it would be a good idea to tear them down, he was labeled within the company as “Dozer Duncan.”

Bruce said this actually happened in California with a brand new housing tract that The Norris Group made a bid on. Someone had sent Bruce an email with a YouTube video, and when Bruce saw the housing he thought they looked familiar. He asked Greg, and he told him those were the houses they had just made a bid on earlier. These were all brand new homes; the originals had all been torn down. Doug mentioned the evidence with the company’s portfolio from how they treated the properties, whether or not they were sold to owner occupants or to small investors and hedge funds was that the loss severity was greater. The loss severity on hedge funds is the greatest when you sell to owner occupants or small investors.

Sean talked about how you have 600,000 people right now who are 90 days or more delinquent, and there are another 200,000 who have a notice of default or are in the process of foreclosure. However, even though there are 800,000 in these groups, we have 2.4 million who are underwater. Between short sales and foreclosures, we’re cleaning up about 18,000 houses a month, so we’re looking at a span of five years if things stay at the same pace. It’s amazing that our pace of sales has stayed as high as it has, and it clearly would not have stayed this high without investors in California because repeat home-buying is gone.

Bruce next talked with a second group of representatives from the Mortgage Bankers Association, the National Association of Realtors, and the Appraisal Institute. The first, Debra Still, is President and Chief Executive Officer of Pulte Mortgage, a national lender headquartered in Inglewood, Colorado. She is the vice-chairman of the Mortgage Bankers Association, and she has been in the mortgage industry for 30 years. This year marks the first time Debra Still has been on the panel for I Survived Real Estate.

The next person was Sara Stephens. Sara is the 2011/2012 president of the Appraisal Institute, and she will become president on January 1, 2012. She serves on the organization’s board of directors and on its executive committee. Sara has been active in appraisal institutes up to regional and national levels for 20 years, and she is owner and principal of Richard A. Stephens and Associates, the oldest appraisal firm in Little Rock, Arkansas.

The next representative, Gary Thomas, is the first vice president of the National Association of Realtors. He is the second-generation real estate professional and owns Evergreen Realty in Villa Park. He has owned the business for over 30 years and has served the industry in countless roles. One of the things that struck Bruce was he has 16 grand kids.

Debra Still went first to say that her company is a national company, so they do business in 29 states, wholly on subsidiary of the homebuilder. She is very pleased to say that real estate is very stable and feels pretty flat, even with some of the dramatic headlines they have had in the last couple months. Their new orders and sign ups are very steady. In the third quarter they ran around a 22% cancellation ratio.

Sara Stephens said the market in Little Rock is doing well, and their public supply is officially in the office area. The retail properties are multi-family, while the residential market is stable in some parts of the city, more than other parts. It’s specifically in the Delta where they see declines and real problems.

Gary talked about how Orange County has faired pretty well for Southern California. It’s actually the best performing county in the Southern California area. They are holding their own and doing fairly well. He has not seen any challenges with loan reduction amounts, but he thinks we will sometime, especially along the coast where the average sale price is much higher and will therefore have an effect there. Bruce wondered what his down payment would look like if he was getting a down-payment loan and if he would be able to be self-employed. Gary said this would be very tough as it is harder to get a loan when you are self-employed. He would probably still be able to make a 20% down payment, but the loan would be harder to obtain.

Legislation passed the Dodd-Frank bill about a year ago, but it is almost to be figured out later what it needs. We’re arm-wrestling right now for the terms of what Dodd-Frank is even though it already passed a year ago. Bruce wondered what they did and if they had said what they wanted accomplished and were still trying to find a way to get there. Debra said the Dodd-Frank Act has about 250+ rules that need to be written, about 100 focused on mortgage lending. Now, the regulators are charged with actually writing the rules and the definition to meet the spirit of the law. There is a lot of facets to it, but one of them is a qualified residential mortgage. This could be a problem for our industry because if in fact they adopt the rule, it would mean to receive the better rate, you would have to have a 20% down payment. The problem with the thinking that you have to have skin in the game or it’s not a performing loan is because they’re not concentrating enough on the underwriting, which is what they really need to focus on rather than the down-payment. If somebody can afford the payment, it does not matter whether they have put 10% down or 20% down, or even 5% down. It’s really about whether or not they are a qualified buyer and if they can afford the property that they are buying. That went out the window in the past, so now it has to come back. There is a thought that that is getting back to basics, so Bruce wondered when the basics existed because it was not true in his first house purchase.

The risk retention rule is the rule that the definition of QRM comes up under, and the rule would say that someone who securitizes mortgages needs to retain 5% risk or reserve for the loans that they securitize. When the rule was originally published, there was no exemption other than FHA, USDA, and VA. One of the things the Mortgage Bankers Association lobbied very hard for was the notion of a carve-out for a qualified residential mortgage, and the definition of a QRM was left to the regulators to write. The regulators put out the first definition of a qualified residential mortgage that required the 20% down payment, a 28/36 jet ratio, and required no late payments within the previous 24 months. This is what the industry has been reacting to asking whether the regulators wrote a rule that was more conservative than the spirit of the law. Hundreds and hundreds of comments were filed, and whether it was mortgage bankers, realtors, homebuilders, or consumer groups, Debra believes everyone agrees that the rule went too far and we need to try again. The sound goal of it all was to encourage sound lending behaviors that reduce future default without harming responsible borrowers and lenders. This is where the rub is in that if it’s a 20% down purchase or 30%, it’s 30% equity for a refi. That is a big chunk of equity. The Mortgage Bankers research would suggest that if you look at the law, it provides for fully documented loans, no negative amortization, no exotic loan programs like IOs or payoffs in arms. Their research would suggest that the loan parameters inside the law were strong enough to prevent extraordinary default, and you don’t need the other underwriting restrictions that normal protocol for underwriting should prevail.
Risk retention sounds almost like a good thing because somebody who is creating a loan would have skin in the game, but there are unintentional consequences. If you think about the spirit of the regulation, it was to protect consumers; yet the regulation has gone so far that it is probably denying credit to well-qualified borrowers. Statistics would show that you can have the right risk balance without going as far as the 20% down or the debt-to-income ratios. MBA’s stats would show if you look at the 2009 Book of Business, which was a pretty conservative underwriting year, you see that still 70% of the consumers that received loans in 2009 would not qualify for a QRM loan. For a non-QRM loan, the difference in the interest rate would probably range from 100 basis points to 300 basis points. This would apply to a lender who would want to put capital reserves up and make a non-QRM loan. This is the concern as the Mortgage Bankers Association won’t have that kind of capital, so there would be too many of us that will not be making non-QRM loans. It would also eliminate a lot of buyers from the marketplace if your interest rate was 1 ½% higher. If it was necessary for safety, it would make sense, but if not then it would not make sense.

Another part of the bill is reps and warranties. This basically means that the person who has represented their mortgage as exactly what MBA would buy then has something go wrong with it; this person would be asked to re-buy it. If you look at one of the things those lenders are struggling with right now and the primary driver of some of the behavior that you see from lenders in terms of concerted underwriting guidelines is the notion of reps and warrants. When MBA sells a mortgage in the secondary market, they make reps and warrants to the investor as to certain parameters. They are always on the hook for borrower misrepresentation as well as on the hook for not following the investors’ underwriting guidelines. As investors have gotten more and more conservative and as loans have been put back to lenders, the lenders are starting to get more and more conservative in today’s environment because we are on the hook for reps and warrants. One of the parts of the law suggests that a third party do all of the reconfirming of verifications. This would probably get to the stated income loans that the industry was doing in the past. The fact that we did not have a third party with a verification of employment or depositor bank statements means it would address more a fully documented loan.

Sara went on to say that the appraisal business has not been left out of the Dodd-Frank Act. HVCC came first, and this did a fair amount of damage to the appraisal industry. Bruce wondered what changes happened with HVCC and if that has been replaced with what is intended with Dodd-Frank. Sara said one of the things that most real estate appraisers, especially those who are doing residential real estate, found was that the firewall was initially installed between the appraiser and the lender. Rather than communicating directly to the lender, the appraisers would be placed in a situation where they were directly communicating with the management system and management company. In many cases, their residential appraisers surveyed who worked with them extensively have lost 40-60% of their business. Whereas, when they had a direct relationship with the lender, they were suddenly thrust into the idea that they had to communicate with a management company. In many cases, rather than look for quality, expertise, education, things became quick and cheap. This is what so many of our people are facing now. We see people coming in from 250-400 miles away from markets where they probably had very little expertise. This has been a real problem for the Appraisal Institute, and it has changed the face of residential lending activity in a huge way.

Bruce said if he was an appraiser who had gone to sleep in 2007 and woke up in 2010, he would have been quite surprised at what had happened. You would have your income divided by multiples because you would have the assumption that you must be doing something crooked if you have a relationship, and you also now have to have a middle person taking half of your fee. This would be very frustrating, and the industry has unfortunately lost a lot of people who said they are not interested in this anymore. The statistics on renewal for our specific certification requirements has seen that in some states the renewal rate is as low as 30-40%. If you cannot continue to support your family doing what you are trained to do and what you have expertise to do, then you have to look for something else. This is what so many member of the Appraisal Institute have had to do. It is extremely difficult to re-train yourself to work in a lending environment where your expertise, education, and you qualifications really don’t mean that much to the person or persons that you are communicating with. This is unfortunate, especially for the consumer.

Bruce talked about how they had an interesting appraisal that happened the opposite way. Someone with no experience in a very unusual area where you received a lot of money for a certain located lot had a $1.3 million comp for the model-match house. They had the right location, but The Norris Group did not. They had a home for sale for about $700,000 for 90 days, which is not worth $1.3 million. When they went pending, the home was appraised for $1.3 million because it was a model-match house; someone had come in from out of the area who did not have a clue that it mattered there.

To find out more, tune in next week for I Survived Real Estate 2011, part 5. The Norris Group would like to thank their gold sponsors for the event: Adrenaline Athletics, Coldwell Banker Pioneer Real Estate, Conaway and Conaway, Delmae Properties, Elite Auctions, Inland Empire Investors Forum, Inland Valley Association of Realtors, Keller Williams of Corona, Keystone CPA, Kucan & Clark Partners, LLC, Las Brisas Escrow, Leivas Associates, Mike Cantu, Northern California Real Estate Investors Association, Northern San Diego Real Estate Investors Association, Pacific Sunrise Mortgage, Personal Real Estate Magazine, Raven Paul and Company, Realty 411 Magazine, Rick and LeaAnne Rossiter, Southwest Riverside County Board of Realtors, Starz Photography, uDirect IRA, Wilson Investment Properties, Tony Alvarez, Tri-Emerald Financial Group, and Westin South Coast Plaza. Visit isurvived2011.com for more details.

Tags: 2009 Book of Business, Appraisal Institute, bruce norris, Debra Still, delinquent, Dodd-Frank Act, Doug Duncan, Eric Janszen, Evergreen Realty, fannie mae, foreclosures, freddie mac, Gary Thomas, gse, hedge funds, i survived real estate, mortgage bankers association, norris group, Pulte Mortgage, reps and warranties, risk retention, Sara Stephens, SEAN OTOOLE, Susan G. Komen, The National Association of Realtors, venture capital industry
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Poor Federal Implementation Has Made Real Estate Appraisals More Costly While Forcing Experienced Professionals Out Of The Appraisal Business

Wednesday, September 14th, 2011

Sara W. Stephens, the 2011 president-elect of the Appraisal Institute, will join real estate analyst Bruce Norris on a panel of experts who will meet Oct. 14th at the Nixon Presidential Library to discuss the effects of current and proposed legislation and solutions to the nation’s real estate crisis

YORBA LINDA, Calif., Sept. 12, 2011 – Federal regulators’ efforts to lessen the influence of banks in the real estate appraisal process have ended up making residential appraisals more costly while forcing experienced professionals out of the valuation business.

“Strangely, real estate agents have reported that consumers are paying higher appraisal fees, yet fees actually paid to appraisers have declined in some cases by more than 40 percent,” Sara W. Stephens, MAI, the 2011 president-elect of the Appraisal Institute, stated in recent testimony to Congress.

Stephens will elaborate on this problem on Oct. 14th when she joins real estate analyst Bruce Norris of The Norris Group and other nationally known real estate experts at the Nixon Presidential Library to discuss solutions to the nation’s continuing real estate crisis.

The event, dubbed “I Survived Real Estate 2011,” is organized each fall by The Norris Group and features some of the most respected voices in real estate. This year’s lineup also includes:

* Doug Duncan, chief economist for Fannie Mae
* Vicki Golder, immediate past president of the National Association of Realtors
* Eric Janszen, founder and president of iTulip, Inc.
* Debra Still, chairman elect of the Mortgage Bankers Association
* Sean O’Toole, president of Foreclosure Radar

Norris, who has built a following in the real estate community and with news reporters after producing consistently accurate real estate forecasts, said the panelists should provide a clearer picture of what we can expect to happen in real estate markets in California and elsewhere in the coming months in addition to identifying potential solutions to the crisis as well as opportunities for real estate professionals and investors.

In a recent interview on Norris’s weekly radio program, Stephens said the problem in the appraisal industry is due to improper implementation of well-intended new policies – embodied in the Home Valuation Code of Conduct (HVCC) and the Dodd-Frank Wall Street Reform and Consumer Protection Act – that have prompted banks to obtain appraisals through appraisal management companies rather than working with appraisers directly.

While the new rules have effectively reduced “value pressure” on appraisers by creating a firewall between lenders and appraisers, they have also led to a situation where appraisal management companies are siphoning off a significant portion of the fees that were previously paid directly to the appraisers.

So instead of using the most experienced appraisers in each real estate market, who understandably command higher fees because of their local knowledge and expertise, some appraisal management companies often hire less experienced appraisers, sometimes including appraisers from out of the area who have little or no knowledge of local market conditions, in an effort to take a greater portion of the appraisal fees for themselves.

Stephens said this situation has been happening without the buyer’s knowledge and is leading to a devaluation or “commoditization” of appraisals, which ultimately hurts banks as well as consumers who count on an appraiser’s opinion of value to be as reliable and credible as possible.

Norris regularly interviews lenders, economists, builders and other housing experts on his weekly real estate radio talk show, which airs at 6 p.m. Saturdays on KTIE 590 AM in San Bernardino. Podcasts of Norris’s radio interviews can be accessed through his company website, www.thenorrisgroup.com.

100% of proceeds from the Oct. 14th event will be donated to the Orange County affiliate of Susan G. Komen for the Cure, the world’s largest grassroots organization dedicated to finding a cure for breast cancer.

The event has more than 25 sponsors, including ForeclosureRadar, HousingWire Magazine, Investors Workshops, InvestCLUB for Women, Frye Wiles Web and Branding, Real Wealth Network, the San Jose Real Estate Investors Club, and the San Diego Creative Investors Association.

For tickets and other information involving the Oct. 14th event, please visit www.isurvived2011.com. Reporters seeking advance interviews with Norris and panel participants before or after the event should contact Aaron Norris at (951) 780-5856.

Tags: Appraisal Institute, appraisers, avm, bruce norris, i survived real estate, investing, investors, Sara Stephens, the norris group
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241-TNG Radio – Sara Stephens 9-3-11

Friday, September 2nd, 2011

Sara W. Stephens

President Elect of the Appraisal Institute

(Full Bio)

On October 14th, 2011, The Norris Group returns with its award-winning event I Survived Real Estate. An expert lineup of industry specialists join Bruce Norris to discuss current industry regulation, head-scratching legislation, and the opportunities emerging for savvy real estate professionals. 100% of the proceeds support the Orange County Affiliate of Susan G. Komen for the Cure. This event would not be possible without the generous help of the following platinum partners: Foreclosure Radar and Sean O’ Toole, Housing Wire, The San Diego Creative Real Estate Investors Association and President Bill Tan, Investors Workshops and President Shawn Watkins and Angel Bronsgeest, Invest Club for Women and Iris Veneracion and Bobbie Alexander, San Jose Real Estate Investors Association and Geraldine Berry, Real Wealth Networks, Frye Wiles Web and Branding, MVT Productions, and White House Catering, who will provide the 3-course meal for this black tie event. Visit iSurvived2011.com for more details.

Bruce is joined today by Sara W. Stephens. Sara is the 2011 President Elect of the Appraisal Institute. Fresh from testimony in front of Congress in July, Sara has been active at the Appraisal Institute in various capacities for 20 years. Sara graduated Magna Cum Laude from the University of Arkansas at Little Rock and has a Masters Degree from University of Arkansas at Fayetteville. She and her husband Richard own the oldest appraisal firm in Little Rock.

The Appraisal Institute is a professional association of more than 24,000 members. They provide the best and most comprehensive education, and their ethics and standards are a part of what has maintained them through the years. Their designations indicate quality and outstanding achievement on the part of those who have earned them. They are also a worldwide organization, located in about 60 countries in addition to the United States. They have members in China, Japan, Korea, Germany, and they are continuing to grow internationally as well as in the States. With several different countries, it is interesting the way people approach the idea of market value. They’re still looking at willing sellers and willing buyers, but in a lot of the countries they’re looking into working with and have contacts and relations with it’s a very different concept and therefore challenging for them to understand the nuances of each of the markets that they’re in. There are a lot of different property rights, and in some of the countries the state owns the ground and the individual owns only the improvement. But at the same time, it is very exciting to be able to expand their scope and membership past the United States boundaries.

If Bruce were an appraiser, in the last five years he would be very happy that there was an organization with access to Congress to talk about his industry and see if they could get some things not going their way to get back to normal. The Appraisal Institute is a voice for all appraisers, and while they represent their designated members and the quality they bring to the appraisers’ profession, their efforts are really for all people who are doing valuation work. Their voice is strong, and they have the only Washington D.C. office as well as lobbyists there who are working every single solitary day for appraisers and for the efforts that they need to continue to make their service to the public a continued part of the financial picture of the United States. The first time Legislation passed something that really affected the appraisal world was the HVCC and the Dodd-Frank Legislation, both of which they are still feeling the effects. The Dodd-Frank Legislation, especially, was an enormous effort and is beginning to be implemented this year. All appraisers are certainly looking at the different processes and trying to not only understand them but also understand how they impact their practice and their relationship with their clients and with the regulatory scene that they are certainly involved with them. The one thing that HVCC did was to reduce value pressure, which was very important. A lot of business at the time was refinancing, and the appraiser was asked quite often to reach for a number or there was a chance they wouldn’t get the appraisal. This was very common in a lot of situations, and the one thing HVCC did was it put a firewall between the appraiser and the person who was continually reaching for a specific number. Unfortunately, some of the good things about HVCC were overshadowed by some of the things that have become a real problem for appraisers, especially for residential folks who are finding themselves working not in concert with a particular lender or client with whom they may have developed a long-standing relationship. However, now the appraisal management companies and their interaction with appraisers are certainly different from the client/appraiser relationship that many knew in years past.

One of the things we really have to clarify is that long-standing relationships in most cases are earned because of expertise, not because of compliance with a number. You have a lot of appraisers that really deserve their status of being the first choice, and then all of a sudden they can’t be first. One of the things that has happened that the Appraisal Institute has seen more and more is that appraisers who have skills, training, professional development, and spend a lot of time with education and have concentrated in trying to be the best are now looking at valuation assignments for a much smaller fee than they had before and are often being passed over. They are often passed over because someone will agree to perform an appraisal for a cheaper fee and a quicker turn-around time. It has almost been like a rush to the bottom in some instances where timing and fee are the overriding concerns rather than professional expertise and looking for a person who really has the qualities that are needed to perform a valuation that is noteworthy.

With the invention of automated valuation models, one of the things The Norris Group always stressed in teaching people to be investors is nothing is as easy as pushing a button to determine a value. A lot of people think it’s a lot easier than it sounds and they have a real grasp on what something is worth because they can get some kind of results from pushing a button and getting a Zillow estimate. This is not really going to provide you an accurate number a certain percentage of the time. People seem to forget that an AVM is really a mathematical model that is combined with the database. The big issue with most of the AVMs is that they rely on public information, some of which might be incomplete or inaccurate. What is missing from the automatic valuation model is the personal touch, the on-the-ground person taking a look at the condition, the amenities, and all the features that contribute to value. This is where a trained professional appraiser, such as an SRA designated or an MIA designated appraiser from the Appraisal Institute makes all the difference. The automated value ignores the idea that all properties are not created equally and have the same size structure that makes it the same size lot, but that is where the differences begin. It is a quicker and better look at what you have rather than just size and a data sale.

In a recent example in Palm Springs, The Norris Group bought a custom home on a golf course, but there were definitely superior lot locations that they did not have. There was a comp for the same house, basically the same size and builder that was over $1 million and The Norris Group had their home for sale for $799,000 for 4 months before it went pending. One of the people that shouldn’t have been given the appraisal was given the appraisal assignment and came in at $1.2 million. They really did The Norris Group a favor because the buyer was thrilled to get a property that was $400 grand below what it was worth. However, it was not worth $1.2 million, and he did not have local expertise; he just had a comp he thought was a model match. The Appraisal Institute is seeing a lot of instances where the issue of geographic confidence is huge and with a lot of the instances with the rush-to the cheap and the fast, they are finding that appraisers are driving 400-500 miles to look at a market that they have no connection with whatsoever. They simply capture a comp, and that is it. Everybody will probably agree that there is no substitute for the competency that one has in a geographic area with which they are very familiar and with which the data is there for them to make the effort and the time to verify the data with a buyer, seller, or both. In this they will try to understand what happened in their transaction. You don’t get this when somebody is driving in 400-500 miles, takes a quick picture or two, picks up a comp or two, and then drives back to finish up the assignment. It is also hard for the person who is used to making a certain living to have part of their fee taken.

Most appraisal management companies are owned by large groups of people. Some of the financial institutions actually have their own appraisal management company, and the biggest problem with the appraisal management companies for their real estate appraisers is that they are asking their people to take a part of the fee, and then they’re taking a part of the fee themselves. The Appraisal Institute recently did some sampling on the idea of reasonable and customary fees, and this is one of the issues that the Dodd-Frank bill has presented. When a person acquires a loan, portfolio, or piece of property to be appraised, then they go to an appraiser and ask about doing an appraisal. However, one of the big problems and issues is that the appraiser is often forced to take much less than what their normal fee would be, and then the appraisal management company tacks on their fee. There is really no way that a consumer at this point knows how much of the fee that they pay for the appraisal goes to the management company or to the appraiser. For a HUD-1 form, that fee is lumped up in one number. There may be some instances where some of the management companies are forthcoming with the amount of fee to the appraiser and the amount of fee to the management company, but by and large this is not happening. Many of their appraisers have been forced to leave the business because they cannot support a family or a business when they are working for 50% or less of what they have been working for. This is a huge concern, and they all have invested a lot of time and effort into becoming educated and acquiring, in terms of the appraisal institute, a designation in keeping themselves current and becoming as professional and having the expertise they need to go to the market and to help consumers make the decisions they need to make on the loans and the properties that they are trying to buy. People have decided in some instances that they cannot continue to do that and be paid 50% of what they are usually paid. A lot of consumers see this when they go to close; they see a large fee for an appraisal, and they don’t really understand that part of that fee goes to the management company.

In Sara’s testimony, one of the things she said was that the appraisal institute would like to see just simply either a division of the fees or something to come forward through Congress that says the appraisal fee will be paid to the appraiser. Then the management company can pay or be paid the fee that they charged. There would be a different line item, and it would be more expensive for the consumer because this was what Dodd-Frank was supposed to take care of as opposed to HVCC. There was going to be fair compensation for appraisers that was customary before HVCC, but this did not happen. This is one of the things that she advocated for when she spoke to Congress. They must have a return-to and must compensate their people. There was not any doubt in Dodd-Frank that the Appraisal Institute was not looking to provide a reasonable and customary fee for their appraisers. Unfortunately, that fee was always considered the fee to the appraiser and not the fee to the management company and the appraiser. That was where there was a big difference.

In a market like California and in Riverside County, it was 80% REO sales at its worst. These were closings. You could not ignore these as comps, at least some of the time, because they were definitely going to set the bar. One of the things that investors have problems with is that appraisals now are not easy. You have a really fixed up house and you might have seven offers on the house, which to Bruce is stating market value, and then you have comps where 80% of them don’t have a kitchen. It takes a little work to figure out if your house that you had seven offers on is actually a valid sale. Without compensation, it would have a hard time to spend the time necessary to come up with the right number. This speaks even more to the fact that as time passes and we see more and more of a market that is up and down, having someone working with you and having a real estate appraisal performed by a competent, qualified person who is invested in education and put themselves in a position to keep up with the trends that are in the market, has geographic competency, will take the extra time to check the comps, and catch a comp that is missing something is absolutely going to be the most important thing that you could have as a buyer. As a lender, you know this is the most important decision to buy a home and own a property that most of us make. You should want the best and desire the very best person working for you and working on that. They would like to say that kind of person is a designated member of the Appraisal Institute who has the SRA or MAI designation or the SRPA. These letters really used to mean something, but from what Bruce has heard, when you own an appraisal management company, these are completely ignored.

The overriding feature for most of the people who are working for management companies is the fee and the timing. The idea is to get it done quickly and get it done cheap. For someone who is going to continue to be a professional, completing an assignment in a tiny turnaround time without the opportunity to extend that expertise to go look at the property, understand what is happening in the market, and view the comparables, it is not possible. A lot of people think appraisal management companies are necessary because they think they are a provision that the banks have to follow, but there are other ways to get around the idea of the firewall being built. It’s a misconception.

When Sara was in front of Congress, she definitely had the sense that they understood the subject matter and took the time to read her document. She was asked three questions, which were right in tune with what she had talked about to them. On the panel that spoke that day, there were sixteen people who were invited. It was such a large panel that they had to divide them into two parts. Sara really thought they were making an enormous effort to try to understand what is happening in the market and try to help the consumer not only to protect them, but to give them the opportunity to be dealt with as fairly and expeditiously as possible. There was an article just a couple days ago that talked about appraisals now coming in too low and that about 16% of transactions were falling out because the appraisal wasn’t coming up to the purchase price that was agreed upon between the buyer and seller. This is because one of the things happening now is a real misconception of what the role of the appraiser is. We are reporters of the market; we reflect what is happening in the market and we don’t set it. The assumption that a lot of buyers and sellers have is that an appraisal is somehow wrong if it doesn’t match the listing and the sale price. There is no reason to assume that the contract price is correct simply because it might be higher than the appraiser’s values. The Appraisal Institute is a disinterested third party, and we try to reflect what is in the market. The best reflection of that market is going to come from someone who has good training and good education. What they are asking Congress to do is to refrain from legislating the appraisal process and to take a look at exactly what these bills are mandating. This would be taking away their right to report the market, and this is what they are. It would take away their right to be a disinterested third party. What is really interesting about all this is Bruce buys and resells homes, so he can say it is definitely part of the market when he puts his up for sale. You cannot ignore the fact that it is going to compete with whatever you have and therefore is a valid part of the market.

Sara is a real optimist and is hopeful that there is some reasonable thought going into this process and that a reasonable decision will be made. There are people who are extremely interested in the consumer and in trying to make sure that the consumer is protected and that we have an opportunity to allow the services that protect our financial markets and to be the best that they can. Sara really got the impression from speaking in Congress that there is a possibility that a reasonable decision will be made. Bruce is very hopeful too because this would be a very big positive for the industry.

Sara Stephens will be on the panel for I Survived Real Estate 2011, taking place on October 14th. The Norris Group would like to thank their gold sponsors for the event: Adrenaline Athletics, Coldwell Banker Pioneer Real Estate, Conaway and Conaway, Delmae Properties, Elite Auctions, Inland Empire Investors Forum, Keller Williams of Corona, Keystone CPA, Kucan & Clark Partners, LLC, Las Brisas Escrow, Leivas Associates, Mike Cantu, Northern California Real Estate Investors Association, Northern San Diego Real Estate Investors Association, Pacific Sunrise Mortgage, Personal Real Estate Magazine, Realty 411 Magazine, Rick and LeaAnne Rossiter, Southwest Riverside County Board of Realtors, Starz Photography, uDirect IRA, Wilson Investment Properties, Tony Alvarez, and Westin South Coast Plaza. Visit isurvived2011.com for more details.

Tags: Appraisal Institute, appraisal management companies, appraiser, avm, bruce norris, congress, Dodd-Frank Legislation, Gold Sponsors, HVCC, I Survived Real Estate 2011, Platinum Sponsors, President Elect, Sara Stephens, the norris group, The Norris Group Real Estate Radio Show, zillow
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The Norris Group Real Estate News Roundup 8/31/10

Tuesday, August 31st, 2010

Today’s News Synopsis:

According to Capital Economics, business investment rose 17% during the second quarter. Multiple forecasters suspect the housing market and the economy are in a double dip. Zillow reports that 18.2% of all O.C. homes sold for a loss. The Case-Shiller 20-city home price index shows prices increased 1% from May to June.

In The News:

Housing Wire – “Dallas Fed says fiscal stimulus is a quick fix, not a permanent solution” (8-30-10)

“The fiscal stimulus plan, formally known as the American Recovery and Reinvestment Act, signed into law by President Obama in February 2009 has succeeded in everything it planned to do, in theory. It designated the majority of funding toward the people who need it the most and at the most crucial time they need it. But Jason Saving, senior economist at the Federal Reserve Bank of Dallas, doubts the plan is showing the anticipated results in practice.”

Housing Wire – “Restricted credit for small businesses driving delinquencies up” (8-30-10)

“According to Capital Economics’ U.S. Quarterly Outlook, business investment in Q210 rose 17%. However, Moody’s Analytics reported last week that commercial mortgage-backed security delinquencies spiked since after Sept. 2008, passing 23% by March 2010.”

Housing Wire – “Home values drop 0.2% from a year ago: Freddie Mac” (8-30-10)

“Home values in the U.S. fell 0.2% in the second quarter of 2010 from the same quarter last year, according to the Freddie Mac Conventional Mortgage Home Price Index (CMHPI).”

Orange County Register – “1-in-5 O.C. homes selling at a loss” (8-30-10)

“While 18.2% of all homes sold for a loss, that’s down about 2.5% from the same period a year earlier. Zillow spokeswoman Jill Simmons said that losing deals in O.C. peaked at 25% in February 2009, the month after median home prices hit bottom.”

Orange County Register – “Apartment occupancy up in first half of year” (8-30-10)

“A survey of large apartment managers indicated that U.S. apartment occupancy has recovered steadily throughout the first half of 2010, following more than two years of decreasing occupancy.”

Orange County Register – “Realtors report increase in house supply” (8-30-10)

“Steve Thomas of Altera Real Estate reported that the supply of unsold homes on the Orange County market increased to 11,650, up from 7,300 in January. Still, at 7.2 months, O.C.’s July inventory is below a countywide average of eight months dating back to the early 1990s.”

Associated Press - “Home prices rise in 17 cities in June” (8-31-10)

“The Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday posted a 1 percent increase in June from May and was up 4.2 percent from a year ago. Home prices nationally were up 4.8 percent in the second quarter compared with the first quarter. That was largely because buyers could take advantage of government tax credits of up to $8,000.”

Inman - “Appraisers publish homebuying guide” (8-31-10)

“A new homebuying guide offers consumers advice on timing their purchase, selecting a real estate agent, and choosing the best home on the market from the ‘uniquely unbiased perspective’ of a real estate appraiser, according to its publisher, the Appraisal Institute. Because appraisers are not paid by sales commissions, ‘they have the unbiased perspective needed to help homebuyers weigh their options carefully, make logical decisions and effectively navigate the sales negotiation and mortgage application processes,’ the Appraisal Institute said in announcing the publication of the 190-page book.”

Housing Wire – “FDIC bank ‘problem list’ hits highest point since 1993″ (8-31-10)

“The number of banks on the Federal Deposit Insurance Corporation’s (FDIC) ‘Problem List’ rose to 829, the highest level since March 1993, according to second-quarter earnings released today. The 829 figure is up from 775 problem banks in Q110 and accompanies a total of 45 failed FDIC insured banks for the second quarter.”

Housing Wire – “More borrowers refinance to shorter FRMs with higher monthly payments: CoreLogic” (8-31-10)

“An increasing number people are choosing to pay off their mortgage loans in a shorter time period, according to data provided by CoreLogic. The data shows at 26% of all loans, or 252,600 loans, were refinanced to a 15-year fixed-rate mortgage (FRM), up from 18.5% in 2009 and 16.3% in 2008. In 2007, only 9.4% of loans were refinanced to a 15-year FRM.”

Housing Wire – “Consumer confidence rises in August, but conditions weaken” (8-31-10)

“An improved short-term outlook boosted consumer confidence for the first time in two months in August but the average American’s take on current economic conditions continued to weaken during the month, according to the private research firm The Conference Board. The board’s consumer confidence index for August was 53.5, topping the consensus analysts’ estimate of 50.5, according to Thomson Reuters, and up from a revised July figure of 51.”

Bloomberg – “Home Prices Probably Cooled, U.S. Consumer Sentiment Languished” (8-31-10)

“‘The housing market is in the midst of a double dip, with sales declining and prices likely to,’ said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia.”

Realty Times – “Real Estate Outlook: Mixed Figures” (8-31-10)

“Affordability is another key area where things have been slowly improving with little attention. The Wells Fargo-National Association of Home Builders ‘housing opportunity index’ — which looks at home prices, mortgage rates and what median-income families can afford to buy — is at a near record high point. Thanks to 30-year mortgage rates in the mid-four percent range, 72 .3 percent of median-income American families can now afford to buy the median-priced house. Historically that number has stayed in the low 60 percent range, and sometimes slipped below 50 percent.”

Realty Times – “American Savings” (8-31-10)

“Nowadays, the average American has 3.5 open credit cards, with an average household carrying credit card debt equaling $15,788 (Federal Reserve). And on that they pay an average of nearly 15 percent interest!”

Realty Times – “When Should an HOA Be Able to Restrict an Owner’s Right to Rent Out His Unit” (8-31-10)

“Is it fair for an HOA (Homeowner Association) to prohibit or restrict a unit owner from renting out his property? Should there be a law about this? In California, these issues are currently being argued in both the legislature and the courts. In some other states the issues may already be settled; in others the debate is no doubt going on.”

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor event calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Tags: affordability, Altera Real Estate, apartment, Appraisal Institute, appraiser, bank, Capital Economics, Case-Shiller, delinquencies, double dip, economist, FDIC, Federal Reserve, freddie mac, Guy LeBas, investment, Janney Montgomery Scott, Jason Saving, Jill Simmons, morgage, occupancy, problem list, steve thomas, stimulus, Thomson Reuters, Wells Fargo, zillow
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188-TNG Radio – Joseph Magdziarz 8-21-10

Friday, August 20th, 2010

Joseph Magdziarz

2011 President,
The Appraisal Institute

(Full Bio)

This week Bruce is joined by Joseph Magdziarz. He is the current Vice President of the Appraisal Institute and he will become the President Elect in 2010 and President in 2011. He has been associated with the Appraisal Institute for 38 years.

Bruce begins by asking if Joseph if he considers business nowadays to be usual or unusual. Joseph has seen similar conditions in the late 80s and early 90s, but for many people, this is a new experience.

Bruce asks Joseph to explain what is similar about our current market and the market of the late 80s. The declining prices of real estate but the cause of these declines is significantly different.

Something radically changed a few months ago in the appraisal business. The Home Valuation Code of Conduct (HVCC) agreement between the Attorney General Cuomo and Fannie Mae and Freddie Mac caused this change. A few years before the HVCC came out, Joseph was lobbying with Congress about the pressure being put on appraisers to make inflated home appraisals. People were happy with many appraisers, because they received high appraisals, but this problem put ethical appraisers out of business, because they would not cooperate with people who wanted their home values inflated. Some of the new people coming into the business may have given into the pressure to make bad appraisals because they did not have the established relationships with lenders that some of the well known appraisers had.

The goal number for an appraiser is market value. Bruce asks if that is still the goal that appraisers are shooting for. Joseph says that is what appraisers are trying to estimate but some of the values coming out are closer to distressed asset value rather than market value.

Bruce asks if something has changed in the appraising process or if the changes are coming in after the appraiser states a market value and someone attempts to correct them. The definition of market value has not changed since 1989. The methodology has not changed either. Joseph thinks that many appraisers have not experienced a distressed market such as the market we are currently in. The HVCC, and the lenders’ choice to move much of their business to appraisal management companies, have caused a lot of problems.

This is one of the first markets we have had in 10 years in which we have declining prices. It is legitimate to have a 90 day old comp that is worth less today than it was when you first got it. Bruce asks if the big problem is that we do not have enough fully repaired homes as comps in comparison to vacant REOs. Jospeh says it’s very localized. Joseph says this is a big problem in some parts of the country, but the real problem occurs when all the occurring sales are foreclosures and short sales.

The definition of market value is the meeting of the minds between a buyer and a seller, each equally motivated and knowledgeable, and without undue pressure. If you have a bank with many foreclosures, they are more motivated than a typical seller would be. They will often dispose of those assets at a lower price which makes none of those properties a valid comp. The motivation of the buyer and seller is important when evaluating market value.

TNG’s business is buying and fixing properties that need work. TNG typically puts $35,000 dollars into a repair job, and they typically end up with a property that is worth about $140,000. It is very hard to get $35 grand worth of credit. There seems to be a rule which only allows a ten percent credit limit for the kind of properties that TNG deals with. Bruce asks Joseph to explain this issue. Joseph explains that this issue relates back to a Fannie Mae/Freddie Mac guideline that says when you have an adjustment greater than 10 percent, you need to explain it. As the percent of adjustment increases, the sale becomes less comparable. There is no ten percent requirement. This is just a guideline, but unfortunately, some of the underwriters believe it to be a rule.

Bruce has had trouble with this guideline. For example, Bruce had 6 offers on a property being sold at 122,000, but then the appraisal came at 102,000, and then the review appraisal came in at 85,000. That is far from what 6 buyers thought the market value was. In the end, Bruce did not sell this property and he kept it as a rental home. If an appraiser is not able to honor the market decision of a buyer, then the market price in some areas will go down further for no good reason. Part of this problem goes back to the HVCC stating that there needs to be a firewall between people originating a loan and people doing appraisals. At this time, that firewall is the appraisal management company. One of the main complaints that Joseph is getting is that many appraisals are being done by appraisers who are not experienced enough in their geographic region.

Bruce asks how appraisers are assigned properties to appraise. Some companies broadcast assignments to everyone on their approved list, so the first person to sign up for the job gets it. The problem with the AMC is that they are not giving these jobs to experienced appraisers. The AMC is focused on getting these jobs done quickly rather than effectively. Better appraisers are missing out on jobs because they cost more. They are hiring people with not enough experience.

The Appraiser’s Institute company has 26,000 members. Each one of these members receives notifications saying that they need to have the proper experience necessary to get jobs done properly, otherwise the Appraisers Institute will take aggressive enforcement against any member who accepts a job that they are not qualified for. These members are also given information on how to turn in unqualified appraisers.

In July, the current president of the Appraisal Institute met with Congress to discuss this issue. He also reminded them a few years before that these problems were occurring, and they failed to act on those problems back then. These problems do not look like they will be dealt with until some time next year. A few bill are pending but nothing will be done until next year.

Bruce asks if the Appraisal Management Companies has to be run by someone with an appraisal background. This is a problem that the Appraisal Institute has been lobbying for as well. There are appraisers who have had their licenses revoked that are now supervising other appraisers. Joseph thinks it would be better if appraisers were required to be licensed within their state.

Bruce asks if communication is allowed between agents and appraisers who are working for Fannie or Freddie. Joseph says this is not forbidden. The loan officer is not allowed to communicate with the appraiser, but Realtors and management companies can communicate with appraisers. Appraisers have an obligation to verify information given to them about a sale. This is a misunderstood rule that Bruce has had difficulty with. Bruce has called appraisers who told him that he was not allowed to talk to them.

Bruce asks Joseph about what the fee was for an appraiser before HVCC and what that fee is now. This is one of the five biggest problems that the Appraisals Institute currently has. Not all appraisal management companies are the same. In Chicago, GAMCO uses Appraisal Institute members, and they give designated members 90 percent of the fee, and they give non designated members 80 percent of the fee. What Joseph has heard nowadays is that management companies are starting to take 50 to 60 percent of the fees. When that happens, the better appraisers refuse to work for those companies. That leaves the new appraisers with the ability to get into the business, and they may not be qualified. Joseph fears that these rules may cause some very knowledgeable people leaving the business. Another problem with management companies is that they require a 24 to 48 hour turn around time. This does not allow appraisers to get to know the market value of a specific market.

We now have the ability to use automated appraisals (AVM), but these automated appraisals are trumping appraisals made by actual appraisers. These automated appraisals are done on a statistical basis. The problem with these reports is that they do not use comparable sales. These automated appraisals essentially come up with a median value rather than a market value. These mechanical appraisers are not capable of looking next door to a certain property in order to obtain a better understanding of the value of the home being examined.

Joseph is can be seen September 11th at our I Survived Real Estate 2009 event.

Joseph C. Magdziarz, MAI, SRA is the 2009 vice president of the Appraisal Institute. He will become the president elect in 2010 and president of the Appraisal Institute in 2011.

Magdziarz has been an active member of the Appraisal Institute for 38 years. He has served in a variety of capacities at all levels of the organization.

At the regional level, Magdziarz has served two terms as Regional Vice Chair and two terms as Region III Chair. He has also been a regional representative for many years. On the national level, Magdziarz served two terms on the Appraisal Institute’s National Board of Directors. He has served as Chair of the Education Committee for five years and has also chaired the National Audit Committee, Instructor and Faculty Committees, and Education and Publications Committees. In addition, he has served on a number of project teams. Presently, he is serving on the ADAPT (MAI demonstration report alternative) project team and the International Education and Designation project team.

Magdziarz has been President of Appraisal Research, Inc. in Rockford, Illinois for 38 years. He resides in Rockford, Illinois with his wife Sandra of 41 years and his bulldog Bella.

Magdziarz is an approved Appraisal Institute instructor for 26 courses in the Appraisal Institute’s QE, AE, CE, and USPAP curriculums. He has also had international assignments in Naples, Italy; Istanbul, Turkey; Seoul, South Korea; and Beijing, Tianjin, and Shanghai, China.

Tags: appraisal, Appraisal Institute, appraiser, bruce norris, foreclusure, Home Valuation Code of Conduct, HVCC, investing podcast, joseph magdiarz, market value, real estate radio, the norris group
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The Norris Group Real Estate News Roundup 2/26/10

Friday, February 26th, 2010

Today’s News Synopsis:

According to the NAR, existing home sales decreased by 7.2 percent in January. The rise in GDP exceeded the median forecast of economists surveyed by Bloomberg. Freddie Mac reports the 30-year FRM increased to a rate of 5.05 percent. A recently proposed plan from the Obama administration would give homeowners an extra 30 days after receiving the HAMP non-approval notice before the foreclosure sale can proceed.

In The News:

NAR - “Existing-Home Sales Down in January but Higher than a Year Ago; Prices Steady” (2-26-10)

“Existing-home sales – including single-family, townhomes, condominiums and co-ops – dropped 7.2 percent to a seasonally adjusted annual rate1 of 5.05 million units in January from a revised 5.44 million in December, but remain 11.5 percent above the 4.53 million-unit level in January 2009.”

CNBC - “Housing Recovery Is Looking A Lot Shakier Than Expected” (2-26-10)

“Even the optimists never expected a traditional housing recovery with unemployment stubbornly high, the consumer balance sheet still in repair mode and credit conditions stingy, but right now there’s palpable worry about momentum—especially given a string of solid months in mid- to late-2009.”

Bloomberg - “U.S. Economy Grew at 5.9% Annual Pace Last Quarter” (2-26-10)

“The U.S. economy expanded at a 5.9 percent annual rate in the fourth quarter, more than the government reported last month, reflecting stronger business investment and a greater contribution from inventories. The rise in gross domestic product, which exceeded the median forecast of economists surveyed by Bloomberg News, marked the best performance in more than six years, the Commerce Department said today in Washington. Inventories added 3.88 percentage points to GDP, more than previously reported, and investment in software and equipment grew at the fastest pace in almost a decade.”

Inman - “30-year fixed punches through 5 percent” (2-26-10)

“Rates on 30-year fixed-rate mortgages broke through the 5 percent mark this week for the first time in three weeks, Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey. The 30-year fixed-rate mortgage averaged 5.05 percent with an average 0.7 point for the week ending Feb. 25, up from 4.93 percent last week but down from 5.07 percent a year ago.”

Housing Wire – “As Commercial Real Estate Weakens, Moody’s Considers Action on Related CDOs” (2-26-10)

“The credit rating agency Moody’s Investors Service put a total of $6.2bn of commercial real estate linked CDOs up for possible downgrade today, citing growing concerns over the ability of the underlying assets to continually perform.”

Housing Wire – “BB&T Originations Nearly Doubled in 2009″ (2-26-10)

“BB&T Corp. (BBT: 28.53 +1.06%) said it originated 72,500 mortgages through its retail operation, including 53,500 refinance loans and 19,000 purchase mortgages, a 97% increase from 2008’s origination level. In addition, BB&T said it closed 6,600 loans worth nearly $1.3bn Homeowners Affordability and Stability Plan, as known as the Making Home Affordable program, to help stave foreclosure for distressed borrowers.”

Housing Wire – “Homeowner Estimates as Good as Zillow? Appraisal Academics Think So” (2-26-10)

“When it comes to using the Zillow.com automated valuation model (AVM) to get a free listing price on a house, users may be getting what they paid for, according to a report published by the Appraisal Institute that finds the Web site overestimates the values on homes almost as often as the actual homeowners.”

Housing Wire – “Obama Aims to Prohibit Foreclosure to Give HAMP a Chance” (2-26-10)

“The Obama Administration is drafting a proposal that would prohibit foreclosure on delinquent mortgages until servicers get a chance to evaluate a borrower for the Home Affordable Modification Program (HAMP). According to the presentation to lenders obtained by HousingWire, the Administration would also give borrowers an extra 30 days after receiving the HAMP non-approval notice before the foreclosure sale can proceed.”

Housing Wire – “Republicans Say Government-Led Mortgage Modifications are a Failure” (2-26-10)

“The US Treasury Department launched HAMP in March 2009 to allocate capped incentives to servicers for the modification of loans on the verge of foreclosure. The $75bn program aims to modify 3-to-4m mortgages by the time it expires in 2012. Through January, participating servicers provided 116,000 permanent modifications, an increase from 66,000 in December. In November 2009, the Treasury initially estimated 375,000 permanent modifications by the end of the year.”

Realty Times – “Top Affordable U.S. Housing Markets” (2-26-10)

“The HOI [Housing Opportunity Index] showed that 70.8 percent of all new and existing homes sold in the final quarter of 2009 were affordable to families earning the national median income of $64,000, slightly higher than the previous quarter and near the record-high 72.5 percent set during the first quarter of 2009, according to a press statement from the National Association of Home Builders.”

Realty Times – “Commercial Real Estate Losses Could Reach $1 Trillion” (2-26-10)

“We estimate that between $800 billion and $1 trillion of losses to commercial real estate equity and debt will be realized over the next few years. The annual volume of commercial mortgage maturities is expected to increase each year through 2013, according to Ken Rosen, during the Commission’s first hearing on January 15, 2010.”

Tags: Appraisal Institute, avm, BB&T, bruce norris, Commerce Department, credit, distressed, economist, economy, employment, freddie mac, gdp, hamp, loan, Moody's, mortgage, NAR, Obama, origination, real estate
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The Norris Group Real Estate News Roundup 9/30/09

Wednesday, September 30th, 2009

Today’s News Synopsis:

Experian and Wyman estimate that the number of strategic defaults in 2008 were up to 600,000. Senators are supporting new legislation that would lend 200 million dollars for the prosecution of mortgage and real estate fraud cases. The MBA reports that the mortgage loan application volume decreased by 2.8 percent on a seasonally adjusted basis. The $8,000 dollar tax credit is soon to expire while approximately 1.8 million people are expected to receive the credit. Freddie Mac announced that it will work with Titanium Solutions to do door-to-door loan modifications.

In the News:

Appraisal Institute – “Appraisal Institute Urges Practicing Fundamentals, Hiring Qualified Appraisers, Enforcing Regulatory Oversight” (9-30-09)

“At a residential real estate roundtable hosted by the National Association of Home Builders, representatives of the Appraisal Institute urged the mortgage and housing industries to hire qualified appraisers and encouraged government regulators to redouble efforts on enforcement. Appraisal Institute President Jim Amorin, President-Elect Leslie Sellers and Bill Garber, director of government and external relations, participated on the panel last week with industry and government officials.”

DSNews - “Who Walks Out? New Studies Shed Light on Strategic Defaults” (9-29-09)

“According to Experian and Wyman, numbers of strategic defaults are far greater than you might expect. Nearly 600,000 borrowers nationwide fell into this category in 2008, more than double the number in the previous year. That number also represents 18 percent of all serious delinquencies from last year.”

Arizona Republic – “Kyl bill targets real-estate fraud” (9-30-09)

“New national legislation calls for setting up a $200 million fund to help states prosecute mortgage and real-estate fraud cases. Sen. Jon Kyl, R-Ariz., is teaming with Sen. Charles Schumer, D-N.Y., to back the Fighting Real Estate Fraud Act of 2009, which would set up a grant program that local prosecutors, state attorneys general and Native American tribes could apply for to fund investigations.”

Washington Post – “Lack of Equity Slows Federal Aid Program” (9-30-09)

“A federal program to allow borrowers with little or no equity in their homes to refinance is struggling to gain traction, according to government data released Tuesday, showing that only 93,070 borrowers have been helped since the effort was launched in April. The program has encountered difficulties that government regulators had not expected, such as the limited capacity of lenders to carry it out and the large proportion of borrowers who could not initially qualify because their home values had fallen so sharply.”

The Raw Story – “US secretly tried to make deal with Goldman Sachs in wake of financial crisis” (9-30-09)

“The government secretly tried to orchestrate a deal involving Goldman Sachs in the week following Lehman Brothers’ collapse and considered using the Federal Reserve to help support such a transaction, Andrew Ross Sorkin reports in the new issue of Vanity Fair.”

Seeking Alpha – “Mortgage Delinquencies Rising” (9-30-09)

“All types of delinquencies were up, but most distressing was the information about serious delinquencies, or mortgages that are more than 60 days past due. They reached 5.3% of all mortgages, up from 4.7% in the first quarter, an increase of 11.5%. Foreclosures-in-process reached 2.9% of all mortgages, up from 2.4% in the first quarter — a 16.2% increase.”

Real Estate Channel – “FHFA Refinance Report Underscores Impact of Interest Rates on Refinance Volumes” (9-30-09)

“Fannie Mae and Freddie Mac refinanced more than 3.2 million mortgage loans in 2009 through August of this year. In the month of August alone, nearly 360,000 mortgages were refinanced. The numbers were announced today by Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA), in its monthly report on Enterprises’ refinance volumes and the Administration’s Making Home Affordable Refinance Program (HARP).”

New York Times – “CIT Plans for Exchange Offer and Potential Bankrucpty” (9-30-09)

“The CIT Group, nearing a Thursday deadline to present a comprehensive restructuring scheme, is planning to roll out a massive debt exchange offer to its bondholders, along with votes for a potential prepackaged bankruptcy, people with direct knowledge of the talks told DealBook on Wednesday. CIT, a major lender to the nation’s small and mid-sized businesses, plans to ask bondholders to exchange their current holdings for new debt and equity, these people said. The offer would be introduced within days and would run for about 20 business days.”

Philly.com – “Government tweaks mortgage-change efforts” (9-30-09)

“Speaking today at the Philadelphia Federal Reserve Bank, Treasury Department senior policy analyst Mark McArdle said changes were in place or become effective next week to better monitor performance of the 62 servicers involved in the Home Affordable Modification Program (HAMP), which has a Nov. 1 target of 500,000 ‘trial’ modifications, designed to test whether borrowers can handle easier terms on their home loans.”

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (9-30-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending September 25, 2009. The Market Composite Index, a measure of mortgage loan application volume, decreased 2.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3.1 percent compared with the previous week and increased 44.3 percent compared with the same week one year earlier. ”

Mortgage Bankers Association – “Commercial/Multifamily Market Feels Impact of Continued Economic Pressures” (9-30-09)

“The Mortgage Bankers Association (MBA) today released its Commercial Real Estate/Multifamily Finance Quarterly Data Book for the Second quarter of 2009. The analysis focuses on how the continued economic downturn in the United States placed further pressure on the commercial and multifamily real estate markets during the second quarter. While the second quarter likely marks the recession’s end, it also marks a very low point in terms of jobs, consumer spending, industrial production and other drivers of commercial real estate demand. As a result, various areas of the commercial/multifamily real estate market have been impacted including originations, mortgage debt outstanding and mortgage performance. ”

San Francisco Chronicle – “First-time home buyer tax credit set to expire” (9-30-09)

“The $8,000 federal tax credit for first-time home buyers is soon to expire, causing anxious house hunters to hustle and prompting a debate in Congress over extending a program that some say is central to the fragile real estate recovery. Critics argue that American taxpayers are simply footing a windfall for purchasers who would have bought homes anyway. Real estate industry statistics suggest that approximately 1.8 million people are expected to receive the credit. They also indicate that the rebate spurred 350,000 home sales.”

Inman - “Freddie doing loan mods door-to-door” (9-30-09)

“Freddie Mac on Tuesday announced it’s going even farther, hiring a company to go door-to-door to meet with delinquent borrowers in their homes to collect missing information and documents needed to begin three-month trial loan modifications under the Obama administration’s Making Home Affordable Program.”

Inman - “Lenders more generous with loan mods” (9-30-09)

“More than three out of four loan modifications made by lenders during the second quarter reduced borrowers’ monthly payments, up from 54 percent in the first three months of the year, according to a report released today by federal bank regulators.”

Orange County Register – “O.C. house building down 85% in a decade” (9-30-09)

“Just one California metro area did better percentage wise than O.C.: The Vallejo-Fairfield area saw single-family home building permits rise 36% as of August, the only California metro with an increase.”

Tags: 8000, Appraisal Institute, building, CIT Group, credit, default, distressed, equity, Experian, Federal Reserve, FHFA, fraud, freddie mac, Goldman Sachs, home, Jim Amorin, loan, MBA, modification, mortgage, mortgage bankers association, permits, real estate, tax, Titanium Solutions, treasury, Wyman
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137-TNG Radio – Joseph Magdziarz 8-29-09

Friday, August 28th, 2009

Joseph Magdziarz

2009 Vice President, The Appraisal Institute

(Full Bio)

Bruce asks Joseph to explain what is similar about our current market and the market of the late 80s. The declining prices of real estate but the cause of these declines is significantly different.

Joseph is can be seen September 11th at our I Survived Real Estate 2009 event.

Joseph C. Magdziarz, MAI, SRA is the 2009 vice president of the Appraisal Institute. He will become the president elect in 2010 and president of the Appraisal Institute in 2011.

Magdziarz has been an active member of the Appraisal Institute for 38 years. He has served in a variety of capacities at all levels of the organization.

Magdziarz has been President of Appraisal Research, Inc. in Rockford, Illinois for 38 years. He resides in Rockford, Illinois with his wife Sandra of 41 years and his bulldog Bella.

Tags: appraisal, Appraisal Institute, appraisal management companies, appraiser, bruce norris, cramdown, CUOMO, fannie mae, FREDDIE, Home Valuation Code of Conduct, HVCC, I SURVIVED REAL ESTATE 2009, joseph magdziarz, KOMEN, legislation, national, the norris group
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Poor Federal Implementation Has Made Real Estate Appraisals More Costly While Forcing Experienced Professionals Out Of The Appraisal Business

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