What's Happening with Appraisals?

The debate over appraisals is inflamed by a natural tension: Real-estate agents and mortgage brokers, who need to complete transactions to collect their fees, are unhappy when an appraiser nixes the sale price. But it also suggests that there may be unintended consequences to an attempt by New York Attorney General Andrew Cuomo to reform the appraisal business.Using the threat of litigation, Mr. Cuomo last year prodded the government-backed mortgage investors Fannie Mae and Freddie Mac into adopting a new code of conduct for appraisers. Since those two companies provide funding for the bulk of U.S. home mortgages, the code, which took effect May 1, has become the national standard for most home loans.The code bars loan officers, mortgage brokers or real-estate agents from any role in selecting appraisers. One result is that more lenders have outsourced the selection to appraisal-management companies, or AMCs, which take a sizable cut of the appraisal fee, often 40% or more. The AMCs pay appraisers as little as $175 to $200 per assignment, compared with the $350 or more that many get when they work directly for a lender."Many appraisers are struggling to survive on the fees paid by the AMCs," says Bill Garber, a spokesman for the Appraisal Institute, a trade group based in Chicago. Appraisers are being asked to work faster even as their fees are cut, and that conflicts with the goal of getting reliable appraisals, he says.Entire article here....http://customsites.yahoo.com/financiallyfit/finance/article-107568-2325-0-your-homes-value-threatened-by-appraisers

Take today's Housing News With a Grain of Salt

First-time buyers purchased 30% of all homes in July;

• Distressed homes accounted for 31% of transactions;

• The month-to month gain was aberrational, marking was the single biggest gain since 1999;

• Total housing inventory rose 7.3% to 4.09 million existing homes a 9.4-month supply;

• National median existing-home price fell 15.1% from July 2008 to $178,400;

For entire article:

http://www.ritholtz.com/blog/2009/08/strong-seasonal-gains-in-existing-home-sales/