December  2008

FANNIE MAE MANDATES APPRAISAL POLICY CHANGES

Fannie Mae issued an announcement last month that addressed changes in its appraisal-related policies.

“Due to current conditions in the real estate market, it is paramount that appraisers are provided with sufficient guidance to properly appraise and document the appraisal report,” the announcement began. “Fannie Mae recognizes the Uniform Standards of Professional Appraisal Practice as the minimum appraisal standards for the appraisal profession. In addition, Fannie Mae has established its own requirements to supplement the Uniform Standards.”

Beginning April 1, Fannie Mae will require the new Form 1004MC for all appraisals involving mortgage loans involving properties of one-to-four units. This form is posted on efanniemae.com.

Click here to read more

MERRY CHRISTMAS FROM ELLIOTT & COMPANY APPRAISERS

All of us at ELLIOTT® & Company Appraisers wish you a Merry Christmas and a Happy New Year. During this holiday season, we would like to take a step back and express our appreciation for the business we have received from our long-time clients, as well as the ones who have started doing business with us this year.

Our office will be closed on Thursday, December 25, and Thursday, January 1, for the holidays. We will be open all other weekdays during the holiday season, including Wednesday, December 24, Friday, December 26, Wednesday, December 31, and Friday, January 2, offering appraisal service in all 50 states.
 

APPRAISAL REPORTS DISCREPANCY AND LEADS TO LAWSUIT

The Texas Court of Appeals reaffirmed an award for damages by an Austin jury to Jason and Ashley Bradford, who had learned from an appraisal report that the house they had purchased was not as big as they had been led to believe.

In 2005, the Bradfords purchased a home in Temple, TX, The local MLS reported the “approximate heating area” of the home to be 1,824 square feet. At the closing, the Bradfords learned that their lender had ordered an appraisal on the house and that they had the right to receive a copy of it, which they did.

While reading the report, the couple learned that actually had 253 square feet of floor space less than what they had been led to believe. They then sued the seller’s agent, Margaret Pleasant and her realty company, Prudential Synergy Realtors. In 2006, the jury awarded the Bradfords $2,621.08 in damages, as well as attorneys’ fees, court costs and interest. In an appeal, the verdict was recently upheld.
 

SPRING HOUSING RECOVERY PREDICTED BY ECONOMISTS

Some economists have expressed belief that the housing economy in the United States will improve during the spring.

“Most of the U.S. economy should have a decent housing recovery in 2009,” said John Silva, chief economist at Wachovia Corp.

Silva was not as optimistic regarding the housing economy in California, Florida, Nevada, Ohio, Michigan and other states that are suffering from overbuilding and/or declining industries. He also expected to see delinquencies and foreclosures to increase for the next five months.

“Hopefully, by the spring, the banks will start easing up on the credit and we will start to see higher sales and more optimism about the housing market,” said Scott Anderson, senior economist at Wells Fargo & Co. “The Fed is going to keep working on lowering mortgage rates.”

FACILITY FOR TESTING WEATHER DAMAGE TO BE BUILT

The Institute for Business & Home Safety (IBHS) is building a $27 million state-of-the-art research facility for the purpose of testing the impact of hurricanes, wildfires, hailstorms and other natural disasters on buildings and learning how their impact can be minimized. The effects of other catastrophes, such as interior fires and plumbing failure will also be tested there.

IBHS, a nonprofit organization funded primarily by insurance providers, is based in Tampa, FL, but its leaders chose to build The Insurance Center for Building Safety Research on a 90-acre plot of land in Chester County, SC, not far from Columbia.

“Our lab will be a unique, world-class operation,” said IBHS President Julie Rochman. “It was not easy to find the right home.”

ASK MARTITIA

QUESTION:  A homeowner asks an appraiser for an appraisal on his house without an inspection of his property. He is being transferred to another state and only needs a general estimate of his home’s value so that he can negotiate the amount of relocation allowance with his employer. Later he will probably asked for an appraisal that would include an inspection.. Is the appraiser permitted under USPAP to perform as desktop appraisal under such circumstances?

MARTITIA: Yes. Uniform Standards of Appraisal Practice permits such an appraisal providing enough information from sources, such as public records, appraisers’ files and previous listings of that property, is available. The appraiser must, of course, comply with any requirements for extraordinary assumptions, if they need to be included as part of the appraisal. A statement must be included in the report saying the appraiser did not inspect the property.

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

QUOTES

“Bureaucrats write memoranda both because they appear to be busy when they are writing and because the memos, once written, immediately become proof that they were busy.” -- Charles Peters

“Some people are born on third base and go through life thinking they hit a triple.” -- Barry Switzer

“To succeed as a team is to hold all members accountable for their expertise.” -- Mitchell Caplan

“Generosity is giving more than you can and pride is taking less than you need.” -- Kahlil Gibran

“Democracy is the theory that the common people know what they want and deserve to get it good and hard.”
                                                                                                                                                          -- H.L. Mencken
 

Newsletter Editor: kevin@elliottco.com
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