Austin Real Estate Blog

The new home valuation code of conduct is a lazy tool of weak minds. If you can’t stand by your estimation of value in the face of scrutiny, then maybe you should be changing your values. And if you don’t like working for a bank that pressures you to inflate values or do other things that you don’t like, FIND OTHER CLIENTS! That’s what everyone else in the business world does.

I just had a transaction get pushed out a week, a family lose a weeks worth of on the market time for their existing home, and a family end up putting $5k extra down that they didn’t have to put down because of an appraiser who did a sloppy job. Of course, I pulled the data that showed an error in the comparable lot size the day we got the appraisal a week before the originally scheduled closing. I forwarded the evidence of the error to the lender, who forwarded it to the appraisal management company, who forwarded it to the appraiser, who did nothing about it. Why should he? He can’t be fired from the bank’s list of appraisers. We can’t talk to him or say hey man, are you retarded? Look at the lot? Turn your head 90 degrees and look at the lot next door, can’t you tell that it’s not twice the size of the lot you are appraising and that therefore your adjustment and the data on the appraisal should be fixed? I plan on filling a complaint with the Texas licensing board for this and every single apathetic appraiser that I run across now.

In what other free market do people get handed business with their license and then get removed from responsibility for the quality of work they do and professionalism with which they do it? Your license is your ticket to the game, not tenure and guarantee of business. Sorry, but real estate is a rough and tumble business. 95% of agents don’t make it 5 years. It should be the same way with appraisers as with all other new businesses. Find a way or find the door.

I’m open to hearing other viewpoints, but right now, this whole deal seems like a cop out.

One last thought. When other groups like NAR put aout a Code of Conduct or Code of Ethics as NAR calls it generally speaks to how the group’s members should act. When the appraisers lobby for and get passed a Home Value Code of Conduct it speaks to what everyone else must do. Strange huh?

A slightly miffed Austin Realtor.

Joe

What Did Interest Rates Do This Week?
** according to Freddie Mac **

30-yr Fixed – Down Slightly
This Week:  5.67%
Last Week:  5.68%
1yr Ago:  6.28%

15-yr Fixed – Down Slightly
This Week:  5.15%
Last Week:  5.17%
1yr Ago:  6.02%

5/1 ARM – Lower
This Week:  5.21%
Last Week:  5.32%
1yr Ago:  5.99%

Highlight of This Week’s Major Economic Reports

Congress passed its much-talked-about economic stimulus package, which is aimed at putting more money back in consumers’ hands.  More money in our pockets means more spending, which means more economic activity to thwart a recession.  At least we hope.

On the mortgage side, it allows for Fannie Mae and Freddie Mac to increase their loan limits up to $729,750.  But only for “high cost” areas.  For places like Austin, Texas, the “confirming limit” will stay put at $417,000, which means any loan above this amount will still be considered a jumbo loan and will therefore be subject to different (stricter) underwriting guidelines and higher interest rates.

Will this economic stimulus package actually help the national housing downturn?  We’ll just have to wait and see how the markets react to the changes.

One thing has been clear, though:  lenders are continuing to tighten their underwriting requirements, making it harder to obtain a new mortgage loan.  According to a recent Fed survey of Loan Officers, 53% tightened requirements for “prime” borrowers, 72% for “subprime” borrowers, and 85% for “non-traditional” borrowers (i.e., those seeking such products as interest-only loans).  While the tightening for subprime and non-traditional borrowers comes as no surprise, it’s amazing to see how much even those with good credit scores are being impacted.

What to Look for Next Week

January Retail Sales and an appearance by Fed Chairman Ben Bernanke will highlight the economic show next week, but neither is expected to significantly impact mortgage rates.

Short-Term Rate Outlook

Stable to Slightly Higher