Uniform Appraisal Dataset

Uniform Appraisal Dataset is less than a month away from implementation!

This week we thought we’d explore changes to location and view adjustments.  Currently on an appraisal, you might see:  typical, residential, bay, mountains, good, none, street. 

September 1^st will bring two components, first, one of three letters: a, b, n followed by up to two standardized and abbreviated descriptors.  

A= adverse              Example: A;Ind;PwrLn            

Meaning: adverse as the view is industrial and of power lines

B = beneficial          Example: B;AdjPrk                 

Meaning: beneficial as it is located adjacent to a park.

N= neutral               Example: N;Res                     

Meaning: neutral as the view is residential, no specific feature 

A list of abbreviations can be found on page 37 of Appendix D on the Fannie or Freddie website.  And of course questions emerge:  What if there are more than two view components?  What if one location feature is beneficial and one is adverse?  All good questions and it is why we believe appraisers’ narratives will become that more critical in the coming months and why you may see the same descriptor on the grid yet the adjustments

Kim Perotti
Director of Operations
http://www.axis-amc.com

AC Weekly Update

GDP Falls Short

Amid all the turmoil surrounding the US debt ceiling talks, weaker than expected economic data and increased concerns about Europe helped mortgage rates improve this week.

A lack of progress in the debt ceiling talks has left investors with a high level of uncertainty, causing a great deal of volatility in mortgage markets. The current debt ceiling will be reached soon, but this time around many lawmakers from both parties are reluctant to raise the limit without an agreement to control the deficit. The two parties have been unable to reach a compromise on spending cuts and tax reform, though. Investors doubt that lawmakers would actually allow the US to default on its debt, but the US is at risk of a downgrade of its credit rating if a credible fiscal plan is not passed. As this is uncharted territory, investors don't know how large the impact of a downgrade would be on bond markets.

Due to the economic troubles in Europe, the earthquake in Japan, and the rise in oil prices, investors knew that US economic growth during the first half of the year was slower than forecast at the beginning of the year. Still, Friday's report on Gross Domestic Product (GDP) was a shock. Second quarter GDP increased 1.3%, which was well below the consensus forecast of 1.8%. In addition, first quarter GDP growth was revised lower to just 0.4% from 1.9%. Fortunately, the consensus outlook is for faster economic growth during the second half of the year.

Also Notable:

• June Pending Home Sales rose 2%, New Home Sales fell slightly
• Consumer Sentiment fell to the lowest level since March 2009
• S&P cut the debt rating of Greece again

The Beige Book reported the pace of the economic recovery slowed in many regions

Week Ahead The debt ceiling talks will remain in the spotlight next week, and an agreement could be reached at any time. The biggest economic report will be the important Employment data on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before the employment data, ISM Manufacturing and Construction Spending will come out on Monday. Personal Income and Core PCE inflation will be released on Tuesday. ADP Employment, Factory Orders, and ISM Services are scheduled for Wednesday.

 Allen Cravello

UAD Changes Effective September 1, 2011

To improve the quality and consistency of appraisal data, Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency (FHFA), have developed the Uniform Appraisal Dataset (UAD), which defines all fields required for an appraisal submission for specific appraisal forms and standardizes definitions and responses for a key subset of fields.

Here is what is and is not changing:

Changes	No Changes
Appraisers must use UAD compliant software.	The forms stay the same.
Appraisers must use standardized abbreviations  and values for many fields on the form.	Narratives and addendum pages remain free flowing and important.
Appraisers must use standardized ratings and definitions for quality, condition, view, and location sections of the appraisal.	Picture requirements for all baths, main living areas, and photos of both deferred maintenance & improvements stay the same.
Affects single family and condominium exterior and full forms only.	Multi family, review forms, and minor forms are not impacted at this time.

 

Kim Perotti
SVP Operations
http://www.axis-amc.com

The 411 on Mortgage Insurance

As a mortgage professional, these are questions I hear all the time, “Will I have mortgage insurance?”, “What can I do to avoid mortgage insurance?”, and “When can I drop mortgage insurance?” 

What is mortgage insurance anyway? Mortgage insurance is an insurance policy which protects lenders or investors against losses due to the default of a mortgage loan. Mortgage insurance can either be private, as in the case with Conventional loans or public, as is with FHA loans. Not all mortgage loans require mortgage insurance. 

Private mortgage insurance (PMI) is typically required on Conventional loans when down payments or equity positions are below 20%. Currently PMI may be obtained on conventional loan amounts up to $417,000 in some areas with as little as 5% down payment or equity. PMI rates vary depending on a variety of factors such as loan-to-value (LTV), fixed or variable interest rates, and credit score. The rates may be paid in a single lump sum, annually, monthly, or in some combination. PMI may be paid by the borrower or the lender. Ask your mortgage professional for which PMI options you may be eligible. PMI will automatically drop off your mortgage loan at 78% LTV. However, you may contact the current loan servicer when the LTV reaches 80% and request PMI be removed at that time. 

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Appraisal Tip - Carbon Monoxide Detection

 As of July 1, a new California state law requires homeowners to install carbon monoxide detectors. The Carbon Monoxide Poisoning Prevention Act, Senate Bill 183, mandates that all single-family homes with attached garages, gas appliances, or fireplaces (by July 1, 2011) and multifamily or rental units (by January 2013) have the devices installed.  The California Legislature also modified both the Transfer Disclosure Statement (TDS) for residential one-to-four unit real property and the Manufactured Home or Mobile Home Transfer Disclosure Statement (MHTDS) to include a reference to carbon monoxide detector devices (see page two paragraph 4-b of the Residential Purchase Agreement). Expect to see California appraisers call for this item as they do for hot water straps, smoke detectors, and other jurisdictional requirements.  Help reduce re-inspection fees by having your borrowers and realtors install this item prior to an appraisal inspection.

Michael Simmons
National Director of Business Development

michael@axis-amc.com