Appraisal Institute Goes to Washington DC; LO Recruitment Survey


Just how much did rates go up recently? Freddie Mac’s Primary Mortgage Market Survey showed a 37 basis point (.375) jump in the average 30-year rate, week-over-week, to 3.95%. Convincing anyone with rate less than that to refinance is going to be tough…roll out the home equity lines of credit!

Rain on the scarecrow, blood
on the plow? The Fed reports the number of banks seeking additional collateral
on farm loans is now the highest level in 25 years. A drop in farm land values and a global crop surplus
has led to a decline in loan payments so banks are acting. In
addition, yesterday I had CFPB updates. After the commentary went out the CFPB published a
list of counties
 determined to be “rural” and a list of counties determined to be
“rural or underserved” during 2016 for purposes
of applying certain regulatory provisions related to mortgage loans during 2017
(2017 lists). Rural counties are generally defined by using the USDA
Economic Research Service’s urban
influence codes
, and underserved counties are
defined by reference to data collected under the Home Mortgage Disclosure Act.

Appraising ag
land can be a real challenge. Heck, appraising a house in Phoenix or Ramsey, MN
can be a real challenge as well. This
week The Appraisal Institute, the largest professional
association of real estate appraisers, went to Washington DC told a Congressional hearing there is
a “better, less-complicated approach” that would modernize the U.S.
appraisal regulatory structure by improving quality, reducing costs and
addressing fundamental concerns that drive appraisers from the profession.

In Capitol
Hill testimony
 before a subcommittee of the House Financial Services Committee, the
Appraisal Institute suggested that Congress realign the appraisal regulatory
structure with those of other industries in the real estate and mortgage
industries. The Appraisal Institute recommended using as a model the National
Mortgage Licensing System cooperative among state agencies. “Appraisers
are being choked by rules and regulations in nearly every facet of their
business,” Bill Garber, Appraisal Institute director of government and
external relations, said in written testimony. “Appraiser’s’ professional
lives have become extremely complicated, more expensive and less productive due
to a dated and archaic regulatory structure. Thus, consumers suffer from
increased turnaround time, delays in loans and potential higher costs.”

Noting that the federal regulatory
structure for real estate appraisal essentially has been untouched since 1989,
the Appraisal Institute’s written testimony said regulation is
“overwhelming” appraisers and proving to be
“counter-productive” for the profession and for users of appraisal
services. “Real estate appraisers face a ‘layering effect’ of rules and
regulations that creates a disincentive for potential entry into the
profession, while also diminishing the profession’s profitability,” the
Appraisal Institute said in its written testimony. 

As examples of these rules, the Appraisal
Institute cited background checks with no federal mandate or efficient
processing system, and unappealing supervisor-appraiser and trainee-appraiser
requirements, among others.

“Presently, real estate appraisers
pay for the operation and maintenance of the regulatory structure in a variety
of ways, including imposing license renewal fees, course requirements, and
mandates to purchase rules and regulations. After almost 27 years, it is time
to make the appraisal regulatory structure and process more efficient and
responsive to the needs of practitioners and consumers,” Garber told the
subcommittee at the hearing.

The subcommittee’s hearing on
Modernizing Appraisals: A Regulatory Review and the Future of the
Industry” took place in Room 2128 of the Rayburn House Office Building.
Representatives of the Appraisal Subcommittee, The Appraisal Foundation,
Clearbox, the National Association of Home Builders and Mountain State Justice,
Inc., also were scheduled to testify at the hearing.

Mortgage now maintains and
distributes a monthly Appraiser
Exclusionary List. Correspondents are encouraged to review
the Nationstar Mortgage Appraiser Exclusionary List prior to submitting a loan
for loan purchase.

Flagstar has updated its
Conventional guidelines to clarify that one-unit properties that contain
multiple accessory units on the same property are not permitted. 

One discussion topic that
comes up any time appraisers and/or underwriters have a drink or two is why
manufactured housing still has a bad connotation. A recent article from our
neighbors to the north is, “Factory
Built homes Could Help Cities with Housing Crunch
These aren’t tiny homes that you see on the backs of the trucks driving on the
freeway, or with wheels and a license plate. “The public’s negative perception
of new construction methods is a considerable factor that hinders the
development and use of modular construction as they are often thought to be
similar to mobile homes found in trailer parks.” But, I think it is important
to pay attention
to the fact that they aren’t mobile homes. These homes can be
thousands of square feet. They are built in a factory then transported in
blocks and assembled at the building site. There are transportation challenges
and perceived product inferiority. The positives are cheaper, faster results,
fewer workplace injuries, and construction in a controlled environment. The
idea should be considered because in a time when housing pressures mount,
alternatives need to be heard. 

on to interest rates, supply and demand set mortgage rates, not the U.S.
Government. Traders have seen a shift in bond markets since post-crisis
regulations discouraged lenders from acting as market makers, with investors
facing difficulties finding attractive deals due to a lack of trading activity.
Two percent of outstanding bonds are traded daily compared with 3.5% in 2008,
per SIFMA. That may very well change…

who didn’t lock prior to Tuesday, if they could have, is ruing that decision,
and every LO out there is tending to their locked pipelines, knowing that the
market is three points worse and “free” extensions don’t make much sense from
an economics perspective. In fact, yesterday the U.S. Treasury market, and
agency MBS, took another leg lower although the losses were concentrated in the
longer maturities after Fed Chair Yellen maintained her relatively dovish tone
in her remarks. The case for a rate hike has begun to build rather rapidly as
market-based inflation expectations have ripped higher over the past week,
although Yellen merely said that a rate increase could be appropriate
“relatively soon.”

the economic news of late certainly bears that out. We had a strong jump in
housing starts during October, and Initial jobless claims fell to a 43-year
low. What do bond traders think? As ThomsonReuters put it, “Further adding to
the malaise of 30-year 3% and 3.5%, in particular, was the long end leading the
market lower as the recent curve flattening was a welcome reprieve for the MBS
basis as traders became more comfortable with their durations. That was being
threatened in the afternoon, with the long bond breaking back through 3% with
10s comfortably through 2.25%.” There you have it. But by the end of the day
the 10-year sold off .5 in price to close at 2.28% and agency MBS prices
worsened .250.

is no scheduled news to move rates, although Leading Economic Indicators is
later this morning. There are plenty of Fed Presidents speaking around the
country, pretty much all saying the same thing but in sly, subtle, varying
ways: rate increase in mid-December. Fortunately, it is pretty much priced into
the current market. In the
early going the 10-year’s yield is still 2.28% and agency MBS prices are better
about .125. 

Jobs and Announcements

In job news Genworth Mortgage Insurance is currently seeking applicants for a Regional Vice President to lead the South Central sales team. Key responsibilities include executing growth strategies across all Mortgage Insurance segments to achieve New Insurance Written, Operating Expense targets, and ongoing business initiatives. Building a positive results-based culture within the region by employing leadership skills. Motivating and driving individual and team accountability, while providing coaching on effective selling techniques and value proposition knowledge. The successful candidate will have several years’ experience leading professional teams in accomplishing stretch goals, mortgage banking and/or mortgage insurance sales experience, and leadership experience of multi-level teams including management of other people leaders. Think flexible hours with extensive overnight travel. This position can be based in Dallas or other remote areas in the region. Interested candidates should send their resume to Andre Ford or click here to see the full job description and apply online.

Floify, mortgage automation software provider, announces the results of an industry-wide study on loan officer recruitment and retention. The study solicited over 13,000 mortgage originators, specifically loan officers, branch managers, and area sales managers. The analysis focused on loan originators with an annual loan volume of $21 million or more to distinguish the needs and priorities of “high-achieving” loan officers. Mortgage industry professionals can download the full study for details. “One of the main priorities for lenders right now is addressing the challenge of recruiting and retaining top talent”, said Dave Sims, CEO of Floify. Equally important to high-achieving loan officers is partnering with lenders who offer the technology, culture and infrastructure to help them scale loan volumes. This study reveals how technology, compensation, executive management culture, and coaching drive an LO’s decision to stay or leave their lender. Download the full study! For more information on Floify’s mortgage automation platform email us at

In wholesale job news, Angel Oak Mortgage Solutions is pioneering a fresh approach to today’s mortgage lending challenges, offering a breadth of alternative lending products to retail broker partners. Through their strategic affiliation with Angel Oak Companies and its expertise in mortgage lending, asset management and capital markets, their collective teams function as a fully integrated enterprise from loan submission to loan securitization. To fulfill their aggressive growth plans, they are hiring experienced Wholesale Account Executives who thrive when challenged and can deliver a level of service unparalleled in the industry. If you’d like to be a part of their highly entrepreneurial organization that embraces a strong, service-based culture with uncapped earning potential, look no further. Come join the nation’s top Non-QM lender by emailing immediately for consideration.

And on the retail side, “Assurance Financial has a solid reputation for closing loans on time. It’s what we do. Our back office supports its mortgage loan originators and branch managers so they can focus on originating more new loans rather than worrying about closing their pipeline. Assurance is expanding its footprint, selectively hiring Branch Managers and MLOs in good markets. For more information, contact Paul Peters, CMB (225-239-7948) or visit”

Is the only thing better than a closed loan a free party? This industry works hard and plays hard. National Mortgage Professional Magazine knows that! That’s why this year’s Holiday Networking Parties in December in Irvine, CA, Fort Lauderdale, FL and in Long Island, NY they’re giving originators a powerful program of business building workshops before it’s party time….and it’s all FREE. These events include strategies on building your purchase business from Ron Vaimberg, a powerful presentation from Frank and Brian of National Real Estate Post, a Certified Military Home Specialist Workshop by Boots Across America, learn how to “Knock Out Your Competition” with Barry Habib, and a Renovation Lending Workshop with Damon Richardson. Workshops will be followed by a networking party where attendees will mix and mingle with other successful mortgage loan officers and celebrate the evening with music, complimentary food, prizes and a heavy dose of holiday cheer! Learn more about these Holiday Parties here.

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