Post HVCC: What's Next For Appraisers?
While it is still far too early to analyze the impact of the HVCC on appraisers, reports from around the country are suggesting a variety of changes in their practices.
Many are reporting a loss of longstanding client relationships with the acceleration of the trend towards the usage of appraisal management companies. This certainly comes as no surprise with Fannie Mae and Freddie Mac loans but anecdotal evidence suggests that an increasing percentage of FHA business may also be moving through management companies. While FHA loans are not subject to the HVCC it appears as though many FHA loans are being processed through similar channels as their FHFA counterparts.
Appraisers who count on management companies for a large percentage of their work report that their appraisal volume has been good. Many appraisers who typically relied less on appraisal management companies are reporting that their business is dormant, while others report that they are still receiving a steady flow of full fee (or close to full fee) FHA appraisal assignments from both appraisal management companies and mortgage companies.
The tumultuous events of the past year have taught appraisers to hedge their bets and not rely upon the conventional wisdom. Proposed legislation at both the federal and state levels could materially change the playing field in unexpected ways during the next six months. Regulation of appraisal management companies appears likely in the future with the exact nature of such regulation uncertain at this time and the impact on appraisers unpredictable. Pending litigation and new regulatory mandates could also result in changes in the way appraisals are ordered and processed.
The mortgage loan business appears to be headed for a good year with low interest rates projected for the near term and governmental initiatives stimulating loan demand. This is likely to exert an upward force on appraisal fees as the procurers of mortgage appraisal services seek appraisers for appraisals in new geographic areas along with needing new appraisers to supplement their existing appraisers who cannot handle the increased volume.
The Return of Hope for Homeowners?
The FHA's Hope for Homeowners Program finally appears to be a viable program with the strong potential for a large increase in FHA appraisal assignments. On May 20th, President Obama signed into law the Helping Families Save Their Homes Act of 2009. In a statement later that day, HUD secretary Shaun Donovan stated "Today, President Obama signed into law the Helping Families Save Their Homes Act of 2009. This is another critical step forward in this administration's effort to strengthen our nation's housing market and help millions of American homeowners stay in their homes. Specifically, this law improves FHA's Hope for Homeowners Program, making it a more flexible and attractive option for homeowners and lenders alike. By reducing the cost of this program and easing the eligibility requirements, we believe Hope for Homeowners is better able to help struggling families. The law also permits FHA lenders to offer families more substantial loan modifications, similar to those currently provided under the Making Home Affordable program."
Mortgage lenders appear to be anticipating substantial interest in this program as evidenced by two full page ads placed in the New York Times within the past week by Lend America, announcing that they became the first lender in the country to receive Unconditional Lender Insurance Approval from HUD for the Hope for Homeowners program.
Value Slump Presents New Opportunity for Appraisers
The need for Tax Grievance and Tax Appeal appraisals is growing substantially in many areas as declining property values have lead to millions of over-assessed properties and property tax owners taking actions to reduce the unfair burden of paying too much real estate property tax. The Appraisal Institute reported yesterday in their Appraiser News Online that the difficult market conditions in South Florida have created a great opportunity for appraisers in that area performing appraisals for property owners challenging their assessments.
On a personal level, our appraisal company on Long Island has had its busiest year ever with property owners in many municipalities grieving their assessments in record numbers.
Performing appraisals for Tax Grievance and Tax Appeal purposes not only help appraisers increase their appraisal business now but they often lead to a relationship with property owners, attorneys, and others that result in future business and a growth in their non-mortgage, private appraisal practice. While this does not seem important at a time of high mortgage appraisal volume, the private business creates long term stability for an appraiser's practice as it evens out the work flow and prevents cycles of boom and bust.
A number of appraisers have requested that we provide them with some of the links that we included in our last newsletter related to the HVCC, so here they are:
Appraisal Institute's HVCC Myths and Realities
We really hope you find our newsletter to be informative! If you have any input on future topics for discussion, please email me your questions and I will do my best to address them in the next issue. If you want to look back at past issues you can see our archive at www.fhaappraisernewsletter.com
Regards,
Bill Collins
FHA Appraisers.com - Find a local FHA Appraiser Today
FHA Roster.com - Find a local FHA Appraiser Today
Tax Grievance Appraisers.com - Appeal or Grieve your Property Taxes
Appraiser Help Inc. - Targeted Marketing for Appraisers
(877) 4FHA-VALU
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