November  2008

ELLIOTT® IS A NATIONAL SOURCE FOR FHA APPRAISALS

Loans backed by the Federal Housing Authority (FHA) have made quite a comeback lately. FHA loans went out of style in recent years because of the liberal variety of subprime loans offered in recent years along with the Department of Housing and Urban Development’s (HUD’s) refusal to liberalize its own program.

Lately, however, with the failure of so many subprime loans and legislation allowing more flexibility for FHA products, the FHA is regaining its market share. According to HUD Secretary Steve Preston, FHA now is involved in 25% of the mortgage loans, compared to only 2% in 2006.

ELLIOTT® has been offering FHA appraisals anywhere in the United States since 2000.

“We keep a database of FHA approved appraisers so that we can enable our clients to get an FHA appraisal in any part of the country,” said Carlyle Holt, ELLIOTT’s director of client services. “We encourage other appraisers who are registered with us to take the necessary steps needed to obtain FHA approval.”

HUD SELLING HOUSES FOR A DOLLAR

Few people realize that the Department of Housing an Urban Development (HUD) actually sells certain houses for a dollar. Unfortunately, for the bargain-hunting consumer, these houses are available to municipalities, the cities and/or towns where the properties are located.

The federal department has been offering houses in its Dollar Homes program since 2001. All houses offered in this program are available because of foreclosures from FHA loans and have been back on the market for at least six months. The municipalities have 10 days to take HUD off on its offer.

Up until last year, only about 100 houses were sold under this program, but this year over 380 homes have been sold by HUD to municipalities at such a price. Of those, 150 Dollar Homes were sold in Michigan and 140 in Ohio. Some are refurbished and re-sold and some are razed.

“Rather than continuing to recycle properties that really can’t sell, we want to get them in the hands of local communities,” said Laurie Maggiano, HUD’s deputy director of asset management. “They can determine what is done with them.”

CHARLIE ELLIOTT TO SPEAK AT NEW ORLEANS CONFERENCE

Charlie Elliott, MAI, SRA, and president of ELLIOTT® & Company Appraisers, will conduct a seminar for Granite Loan Management’s 2008 Strategies for Success in Construction Lending. The seminar, entitled “Under the Microscope: The Inexact Science of Commercial Appraisals,” will be held Thursday, December 4, at 11:30 a.m. in the Ritz-Carlton-New Orleans.

“I am looking forward to speaking with commercial lenders, from around the country, about the nuances of commercial appraisals, particularly in the current economy,” Mr. Elliott said.

For further information on the conference, e-mail sscl@graniteloan.com or call (866) 710-4087.

CONGRESS’S ONLY APPRAISER RE-ELECTED

Travis Childers, the only real estate appraiser serving in Congress, was re-elected to his seat in Mississippi’s 1st District on November 4. The Democrat defeated Republican Greg Davis, the same candidate he beat when he won the seat after a special election last May.

Rep. Childers became a Realtor while attending the University of Mississippi, where he earned a bachelor’s degree in business administration. The Congressman, who owns Travis Childers Realty & Associates in Booneville, MS, is a member of the Financial Services Committee and expects to be appointed to the Agriculture Committee.

STRIP SHOPPING CENTERS OUTPERFORMING
MALLS AS ECONOMY STRUGGLES

As consumers around the country become more frugal, retail malls tend to suffer while strip shopping centers seem to carry on, as long as they have an anchor tenant that draws traffic.

The National Association of Real Estate Investment Trusts reported that REITs of shopping centers with supermarkets and/or big-box retailers returned 4.56% on their investment this year, through September 30, while regional mall REITs declined 11.38% during the same time period.

These figures support the analysis of Susan Smith, manager U.S. real estate industry practice of Price WaterhouseCoopers, who said, “During times of economic strength and economic weakness, I would say that most investors feel you can’t go wrong with grocery-anchored strip shopping centers.”

LACK OF SALES MAKE FINDING COMPS HARDER

Another disadvantage to the slowdown in housing sales is the fact that, with fewer transactions, real estate appraisers are having a more difficult time finding fresh comps. This is further complicated because of the housing-price decline in many parts of the country.

“In soft and declining markets, lenders recently have begun making comps a big deal,” mortgage consultant Kenneth Harvey wrote in hid syndicated column. “Some sellers are being forced to renegotiate lower prices with buyers, even after they’ve got a signed contract.”

Such a situation keeps the pressure on appraisers to come up with fresh comps, even when there aren’t any.

“Appraisals have become a real hassle,” said Steve Stamets, a loan officer with Nationwide Home Mortgage. “[When the appraisal comes in below the signed contract price], sellers are taking a beating.”

ASK MARTITIA

QUESTION:  If I, as an appraiser, promise to complete an assignment in two days and then find out it will take three days to get the necessary data in three days (because of computer problems from the source) what should I do?

MARTITIA: You must contact the client and ask to modify the assignment, in order to allow enough time for the research, or withdraw from the assignment.
 

Martitia Mortimer, Elliott’s executive vice president, answers appraisal questions on a regular basis in Elliott Real Estate News.

QUOTES

“Half of the American people have never read a newspaper. Half never voted for president. One hopes it’s the same half.” -- Gore Vidal

“Never spend your money before you have it.” -- Thomas Jefferson

“Creative work is play.” -- Stephen Nachmanovitch

“Experience is the name everyone gives to their mistakes.” -- Oscar Wilde

“One cannot review a bad book without showing off.” -- W.H. Auden

“Anger makes you smaller, while forgiveness forces you to grow beyond what you were.” -- Cherie Carter-Scott

 

Newsletter Editor: kevin@elliottco.com
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