The appraisal volume slipped in the week of July 19, tracking along with a late July slowdown in other housing metrics.
HousingWire is partnering with a la mode, inc., an appraisal forms software company which has since 2006 tracked the appraisal volume throughout the country, to provide a weekly read on appraisal volume.
Appraisal volume is an indicator of the market strength and has a few advantages over mortgage applications, especially since fallout is less for appraisals since they are ordered later in the mortgage process after credit worthiness has been approved.
a la mode captures 50% of the appraiser market – more than 6 million appraisals per year since 2007, making it the most comprehensive record of national appraisal.
Here are the latest figures.
(Source: a la mode)
Appraiser home value opinions fell further below homeowner estimates in June, marking the fifth consecutive month of this trend at the national level, according to Quicken Loans.
Appraiser opinions of home values were 1.4% lower than homeowner estimates, according to Quicken Loans’ monthly national Home Price Perception Index.
Quicken Loans’ national Home Value Index (HVI) reported a slight increase of 0.74% in June, with home values increasing in all regions of the country except for the South, which posted a decline of 0.09%. National home values are up 4.38% from the year prior.
June marks the fifth consecutive month appraisers have estimated home values below homeowner estimates. During this five-month period, the gap between homeowner and appraiser estimates has increased each month, with an average 1.4% difference in June.
Not everyone is seeing the “home prices reach all-time high” euphoria that some in the industry are clamoring about.
Here’s the take at AppraisersBlogs.
Do you buy into the hype, or do you actually do local comparable property market research to verify trends? I just completed an appraisal on a property I appraised 2 years ago. I did a 5 year market study on comparables then, and found the market for that type of property had been DECLINING at that time. I did another 5 year market study on this same property this time around. And guess what? The property values for this type of property are STILL DECLINING. For this particular property, the land held the highest component of overall value. In fact, the land value was 90% of the overall value. The lender actually called me today and understands, from reading the report, why my OMV is significantly lower than the contract sale price. It’s paramount that we appraisers take the time to actually do proper market studies, based around characteristics of the appraised property, and not just accept what others say about “all” properties in an area. It means you cannot assume what transpires for “all” actually relates to the appraised property. The two may not correlate, and in fact, may be quite different. This is one jaundiced issue I have with some ‘regression’ programs being touted as the be-all, end-all answer to appraisal adjustments.
The LOGS Network hired Richards Smith as chief financial officer. LOGS is a centrally-managed network of professionals that includes attorneys, trustees, title personnel, and collection staff who represent the mortgage servicing and consumer credit industries.
So who is Llano Financing Group, who is Carrington Capital Management, and why are they suing so many appraisers? That’s the question over at Appraiser Law Blog.
…(T)here is now a second round of cases being filed by different investors. This round is being led by Llano Financing Group LLC, which also acquired the rights to sue appraisers from the same sources. Like the other entities filing lawsuits, this is an investment entity, not a real lender, though its name might have been chosen to sound like a lender. It acquires the purported rights to sue appraisers from lenders or mortgage investors in connection with loans that long ago went into default and were foreclosed. Llano did file nine cases in the failed first round -- mistakenly using the wrong name "Llano Funding" -- and seven of those cases have been dismissed against it to this date.
In most or all the cases filed by Llano in the second round, the original loans were funded or purchased by Impac Funding which then purportedly assigned the rights to sue appraisers to Savant LG, who then purported to assign the rights to Llano. An example assignment is included here -- in the assignment Impac states that it "does hereby assign . . . any and all of its rights to pursue any and all claims . . . against the real estate appraiser(s) and/or the appraisal company."
Another entity recently filing such lawsuits against appraisers is Carrington Capital Management -- which is apparently under the same umbrella of ownership as Carrington Mortgage. While the lawsuits being filed now relate to old appraisals, I do think appraisers and appraisal firms/AMCs need to consider the liability risk these particular clients pose to them with regard to current and future appraisal work, if appraisers are working for them now; these clients have a far greater propensity to sue appraisers and firms than others when a loan goes bad.