Fannie Mae

The Must Have Home Buying Guide For Anyone Thinking of Buying A Home

Buying  A Home Guide    I wanted to let you know I have completed a guide for individuals wanting to buy a home.  Whether you are a first time  homebuyer or a repeat buyer there is a lot of great info for you to review.  If you would like me to email me you a FREE COPY of the guide just let me know.  This is a MUST HAVE for all buyers thinking of buying a home in 2015.    – Zackry Cooper  925.338.9225

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Appraisal Changes Coming January 2015. Read This and Understand How To Be Prepared. Don’t Read This and Learn The Hard Way!

I have had a lot of questions lately in regards to the upcoming changes to the appraisal process, known as the CU Program, with Fannie Mae.  Many of you watched this link:

http://thenationalrealestatepost.com/appraisal-time-bomb-coming-in-january-2015/

and after watching my email was full of questions on how this would effect upcoming transactions.  I decided to dig in and talk to the head of our appraisal department.  The key item to remember when dealing with HomeStreet is we own and operate our appraisal department, so our appraisers are hand selected by HomeStreet for the panel and have to pass rigorous standards in order to be a part of our panel.  “Our appraiser panel nearly rejects 1/3 of its applicants, so most of our panel has already been weeded out” as  per our head of appraisal department.  With that said what we believe at HomeStreet is the companies that do not own/operate their AMC’s, Appraisal Management Companies, will have issues due to lack of experience and whom is sitting behind the desk trying to review these appraisals and interpret this new change.  Below you will read the commentary straight from the head of all appraisal at HomeStreet and how we interpret the changes. Bottom line, HomeStreet Bank is positioned very, very well to tackle these changes and we can protect your sellers and buyers.

Tip:  If you are listing agent accepting offers you are looking pre approval letters from lenders whom own operate their appraisal panel.  Typically your large banks, brokers, and most correspondent lenders do not.  They use a 3rd party AMC typically.

Tip#2:  If you are working with buyers I would also make sure the lenders they are pre approved with have the above criteria as well.

Tip#3:  If you are working my team and HomeStreet Bank we will make sure to let the listing agents know on the offer going in we can help both their seller and agent navigate this new uncharted territory.

Here is the email from the head our appraisal department, Clark Dickson, in response to the upcoming CU changes:  (READ THIS)

My thoughts are that it is simply too early to determine how this all will affect appraisals/appraisers/mortgages, going forward.  As usual, there are always “The sky is falling” folks in the mix who always predict doom and gloom.

 

None of us here at the bank in the appraisal department has actually “seen” what CU will actually be.  All of us are aware of it and our compliance officer has been in any number of meetings and seminars to determine how it may affect us moving forward.

 

When I was in Las Vegas in November listening to the head FNMA appraiser discuss the implications of this “CU” program, he was downplaying it’s immediate influence.  The way he described it was as a double-check against appraiser’s choosing inferior comps, to inflate values and additionally, some minor level of insurance that the appraisers at least considered the most appropriate comps.

 

Generally, I believe that good appraisers, doing good appraisals, will be just fine, doing what they have historically done, provided that they explain what they did and why they did it.  To that end, we just finished an all-day seminar in both Carlsbad and Pasadena (and Fairfield/Dublin-Cathy), where we strongly encouraged appraisers to stop being form-fillers and gave them permission to become appraisers again.  This seminar was CA-approved for continuing education credits for appraisers.  We gave them specific language and techniques to more-strongly support their appraisals, along with a myriad of other issues.  Between the four venues, we had nearly 300 HomeStreet-only appraisers in, to re-learn how to work for us and provide well supported, credible appraisals for the secondary market.

 

FNMA appears to be trying to weed out weaker appraisers.  Our appraiser panel rejects nearly 1/3 of it’s applicants, so most of our panel has already been weeded out.

 

One of the assumptions made by the article below, is that AMC’s don’t have access to local data for ROV purposes and won’t be able to respond to the now-available 20 additional “low risk” comps.   Our experienced appraisal review team all have over 20 years of technical appraisal experience each, and we have MLS access to data for almost every area that we service.  In addition, our review team is residentially certified in all states that we serve.  We have three dedicated, experienced review appraisers stationed in or near Southern CA with MLS data for all So Cal counties.  We have three more in Northern CA.

 

It is a sure bet that many cost conscious AMCs will use low cost unlicensed staff to ‘review’ these computer generated comparables and ask for the originating appraiser to respond to any that have a lower ‘risk rank’ than the comparables selected by the appraiser.  This is not the case with us.  We will read the appraisal to determine if the appraisal has performed a reasonable analysis and supported his/her assertions in a credible manner, irrespective of computer generated printouts.  Based on all of the appraisal, we will question or have the appraiser respond to issues, based on sound reasoning and not a printout.

 

The directives from FNMA are that the neighborhood IS the neighborhood and that the data from the 1004MC (market conditions report) is dependent upon the actual sales data.  Irrespective of how they think they will be able to use CBG (Census Book Groups) to determine neighborhood data, they won’t.  It’s an apples-to-oranges comparison, which will never fit.

 

Every one of our HomeStreet appraisers on staff is already registered for THREE different units of FNMA training in January/February to become expert in CU.  Our compliance officer will keep us up to date and compliant.  But the sky is not yet falling and there is always a knee-jerk, over-reaction when these edicts come out from FNMA.

 

If there are truly issues to be addressed, then we will do so in a rational, compliant manner, leaving the sky where it belongs.  There is truly no need to panic at this point, although the dooms-dayers are already at it.