From Our Desk to Yours
An editorial by Michael Simmons
Last month I started our Newsletter with a conversation about Summer. Except it really wasn’t about Summer. It was really just a way to introduce the topic of transitions in the world and their velocity of change – and how our industry gets impacted. So let’s continue the conversation.
A little over a month ago Fannie announced that they’d no longer require the 1004MC. (By the way, Freddie followed suit nearly a month later … but then we all knew that would occur). That engendered a number of questions, some rejoicing (some with a few concerns) and a lot of silence. In the ensuing period there’ve been no ‘official’ pronouncements, but in my view, a process seems to be taking place. In recent times, whenever the GSE’s want to drive change, they announce their intentions, wait for the water to boil, ask for feedback and then offer a solution – or directive – depending on one’s perspective. Then they appear to allow you some freedom to craft a solution that meets their criteria. In fact, they said as much in their announcement.
But the problem is, allowing everyone to ‘find their own path’ to the answer of defining a market (or markets) creates a fundamental dilemma for the Agencies. Information – and conclusions – won’t match. Perspectives will be in conflict. How will this process integrate with Collateral Underwriter where one goal is to drive some element of market consensus around a specific property? For that matter; why did Fannie drop the 1004MC if they still want the appraiser to provide that information? Was it because the form was deficient (cue the sound of hands clapping) or the anticipated conclusions failed to sufficiently (and regularly) support the underlying report? And how will a free-for-all solution solve that problem? The answer is, in my opinion, it won’t. I think I know what will be proposed, but to be fair to the GSE’s (and to build suspense), I’m going to put my opinion in a sealed envelope and placed in the care of the well know law firm of Dewey, Cheatem & How – and wait until you’ve had an opportunity to weigh in with your thoughts. When you’ve clarified your comments; send them to us at email@example.com. Next month we can compare answers.
The economic environment appears to be stuck. Uncertainty in the face of potential restrictive trade tariffs – or perhaps the elimination of all tariffs – creates unease in the markets. We see it reflected by bond prices that suggest a market slowdown while the stock market indicates otherwise. Fewer sales, falling listings…typical summer doldrums. While we’re all waiting to see if markets pick up now that people are back to work, we’ll see if we can get some of the potential clients we’ve been working with to the active status condition.
Lastly, we’re moving into that time of year where the largest industry events dominate our calendar. The Appraisal Summit is just over 2 weeks away in some quiet small out-of-the-way-city: Lost Vegas. I’ll be on a panel addressing the issue (and benefit) for Appraisers of Trainees. There are also opportunities to grab some CE hours. If that event doesn’t fit your schedule, Valuation Expo and CRN are right around the corner (literally) in the 1st days of October. It also takes place in Vegas and also with CE available. Kim will be moderating one of the sessions there regarding legislative updates. Then, after a short stint to rehab from the effects of too much neon lighting, it’s off to the Annual MBA Convention in that other city of iniquity on the east coast, Washington DC. This pattern continues until the first week of December. Not sure what to expect after all that; therapy maybe. Let’s end with this:
This just in from a Chief Appraiser of one of our clients: In many recent conversations with some of our other vendor partners, it has become apparent that some appraisers are NOT aware that a “use code” is not Zoning. We have seen reports lately where appraisers are unable to provide zoning information for the subject property and are not skilled in the process of actually determining the zoning for their appraisal assignments in their market areas. A recent quote from an appraiser in during the course of my conversation with him on a HUD loan that was uninsurable was “Wow! Looking up the zoning is a lot of work.” He had never visited the city building and planning website and was unfamiliar with the GIS mapping system. He further stated that this is “really challenging since each city and county would have their own website and systems.” Please consider some manner in which you can distribute guidance via your newsletter and if you can, find a way to focus appraisers attention on this issue. Thanks so much for all AXIS and their appraisers do for us (Editor’s note: and thanks for not being the subject of this comment!)