Matrix Blog


[Fox Business TV] Risk & Reward with Deirdre Bolton 5-29-14

May 29, 2014 | 4:43 pm | realtytraclogo | TV, Videos |

It was great to reconnect with Deirdre Bolton after she made the move to Fox Business from her long time home at Bloomberg TV.

We talked housing, touching on NAR’s pending home sale index release as well as research from Realtytrac concerning record prices in a growing number of urban markets.


Tags: , , , , ,

Manhattan Home Sales Are NOT 80% All-Cash (They Are 45%)

May 17, 2014 | 11:04 am | delogo | Favorites |

Actually, overall Manhattan Home Sales are 45% All-Cash. I want to make sure that the 80% number doesn’t become embedded in our housing market mindset.

[click to expand]

I’ll explain.

Recently a friend passed along a post in the Washington Post titled: 8 in 10 Manhattan home sales are all-cash and my jaw dropped. The author, who I am a fan of, got this information from Realtytrac, who I am also a fan of, but I knew it was either wrong or misinterpreted.

Over the years I’ve played around with NYC mortgage data, usually incomplete and very dirty, from various sources and have combined that with frontline feedback from our own experience as appraisers, as well as from real estate brokers and lenders. I had come to the conclusion that roughly half of Manhattan home sales (co-op, condo & single family) were probably all-cash and condos are definitely well over 50%. I used the logic that foreign and high-end buyers are a large part of the all-cash market, especially within the new development space. And it makes sense – while condo end loan financing is tight, new development condo end loan financing is beyond tight.

The reason the Realtytrac 80% figure jumped out at me was the fact that co-ops account for about 60% of sales and have the highest concentration of entry level and middle class demographics in Manhattan. I was very skeptical that virtually all the market-majority co-op buyers were paying all-cash, especially in the tepid economy we are stuck with.

So I reached out to Daren Blomquist, Vice President at RealtyTrac who is often the point person on their data releases. I indicated that the 80% figure seemed off and wondered if it excluded the co-op market. It didn’t. However even an 80% all-cash share for only single family and condo sales seemed like a stretch. He said he would look into it and within an hour they could see an issue with their co-op data feed. They were already working on the issue (and why I like Realtytrac). He shared their 1Q14 Manhattan information (I omitted the suspect co-op data) and here are the key numbers:

Their Results
All-Cash Condo Sales 60.78%
All-Cash Single Family Sales 73.08%

I came up with a new methodology, which looked at the ratios seen in Douglas Elliman sales – the largest real estate brokerage company in Manhattan – with a sales mix is generally consistent with the overall market mix and applied their results to the overall market, and I saw this:

Our Results
All-Cash Co-ops 36% (no revised Realtytrac results yet)
All-Cash Condos 58% (similar to Realtytrac’s 60.78%)

I didn’t have the single family (fee simple) results compiled so I went with Realtytrac’s 73% because: their fee simple (condo) data was consistent with ours, the single family market is skewed much higher price-wise than the condo market (i.e. skewing towards cash buyers) and the single family market share is very small. In fact the market share is so small that the overall 45% all-cash ratio wouldn’t change unless I dropped the single family market share down to 6% from 73% but even then the overall cash ratio would only drop to 44% from 45% – so you get my point (my apologies for the excessive wonkiness on this but it was necessary).

As a result and represented in the table at the top of this post, it is reasonable to say that the overall Manhattan all-cash home sale market in 1Q 2014 was 45% of all residential sales. Got it?

Tags: , , , ,

Housing Data as Pop Culture

February 14, 2013 | 7:00 am | delogo | Charts |

[click to open article]

A recent post in CNN/Money featured Andy Warhol’s 1984 “U.S. Unemployment Rate. No Campbell Soup Cans but it feels strange to associate his art with economic data from the 1980s. It somehow works for me. One of the coolest property inspections I made was through “The Factory” years ago.

In 2007 the “Stand-up Economist” Yorman Bauman led the way with this much watched video on the difference between macro and micro economists. “Microeconomists are wrong about specific things while macroeconomists are wrong about things in general.” HI-larious.

And recently the TV game show “Teen Jeopardy” had 5 questions about the “Federal Reserve.”

Christie’s sales rep said:

“Economic data has become popular culture. While we used to think of it as being some kind of verified information only for people who are really knowledgeable about the economy, it’s popular culture now. You can talk to a taxi driver about it.”

I completely agree. Gangnam Style and GDP now go hand in hand.

We devour housing data ie the recently released Real Deal Data Book (I’ve got a lot of charts and tables in there!)

Throw in the heavy downloads of our report series for Douglas Elliman, NAR Research, CoreLogic, Case Shiller, RealtyTrac, etc. it’s clear to me that housing data is an obsession and embedded in popular culture (thank goodness).


Falling Inventory Has Created a Housing “Pre-Covery,” not “Recovery”

January 28, 2013 | 9:00 am | nytlogo |

I was speaking at the New York Real Estate Bar Camp recently and asked the audience what to call the state of housing market right now, since I objected to the use of the word “recovery” and “a period of better stats without underlying fundamentals” wasn’t catchy. Philip Faranda came up (more like shouted out) a brilliant suggestion. We’re in a “Pre-Covery!” I loved it and it stuck.

I thought about the new word when I read a great Robert Shiller piece in the New York Times this weekend called: A New Housing Boom? Don’t Count on It.

Shiller questions the substance of the happy housing news we’ve all been reading about:

It’s hard to pin down, because nothing drastically different occurred in the economy from March to September. Yes, there was economic improvement: the unemployment rate, for example, dropped to 7.8 percent from 8.2 percent. But that extended a trend in place since 2009. There was also a decline in foreclosure activity, but for the most part that is also a continuing trend, as reported by RealtyTrac.

What’s missing from all the metrics being tracked and discussed is sharply falling inventory - that’s what is driving prices higher even though little else has changed.

The reason for falling inventory? Sellers, when they sell, become buyers (or renters) and with >40% of mortgage holders having low or negative equity, they don’t qualify for the trade up. We have been so focused on negative equity that we’ve paid short shrift to the impact of low equity.

Not only don’t many sellers qualify – they simply aren’t under duress i.e. they haven’t lost their job, don’t need to move, etc. so what will they do when they realize they don’t qualify?


They expect/hope hope the market improves eventually.

This has created yet another form of “shadow inventory.”

Although I certainly agree that the long term trend of mortgage rates doesn’t really correlate with housing prices since rates have been falling for years, weak employment and personal income are not justifying the last 6 months of housing market improvement.

I see falling mortgage rates as simply keeping demand steady (but rates can’t fall much further) and falling inventory is either pressing prices higher or to stabilization depending on the market.

Here is a simplistic generic but typical scenario in most of the markets I follow over a 2 year window:

  • The number of sales in a market rises 2%.
  • The number of listings in same market falls 30%.

In this scenario the rise in sales is NOT working off inventory – the math doesn’t work so something else is in play – low or negative equity is choking off new listings entering the market against steady demand caused by falling rates.

Since low inventory is not a local market phenomenon but is happening in nearly every housing market I can think of (sales rising modestly and listing inventory falling sharply) it makes this a credit phenomenon. I like to say “housing is local but credit is national.”

To make this discussion really crazy we could even say that tight credit conditions are actually prompting the pre-recovery something that on the surface is very counterintuitive. But in reality, tight credit is choking off supply and low rates are keeping demand constant. Then prices rise.

Tags: ,

Ignore The False Positives, Foreclosure Sales Are Rising Again Now

December 6, 2012 | 12:16 pm | nytlogo |

,br> [click to open RealtyTrac Report]

RealtyTrac released their Q3 2012 U.S. Foreclosure & Short Sales Report which shows a pretty clear recent trend:

A timeline that counters the national “recovery” discussion over the past year. Record low mortgage rates and held back distressed activity goosed housing sales and price up using year over year comparisons.

I feel like I have to qualify myself as NOT being a housing bear (a distressed housing apologist) but I still can’t figure out the math: flat to falling incomes, high unemployment, rising taxes and tight credit = housing recovery? What’s missing? (memories of my contrarian sentiment feels the same as 2006, just not nearly so dire).

Distressed sales have been held out of the mix as RealtyTrac’s report shows in my distressed housing timeline:

  • 2008-2010 – Heavy foreclosure volume as a result of the fallout from the tanking economy and housing market
  • 2010 (fall) – Robo-signing scandal combined with huge backlogs in judicial states causes a sharp decline in distressed sales entering the market in 2011.
  • 2012 (1Q) Major servicer agreement with state attorneys general as distressed volume drops to its lowest crisis level.
  • 2012 Calculated Risk and other respected sources call the bottom (and they may be right) but doesn’t factor in the distressed sale phenomenon. “Bottom” does not equal “recovery” but rather it’s a step on the way to recovery.
  • 2012 (2Q) Distressed sales begin to rise again. By adding lower priced distressed sales in the mix, housing prices stabilize or slip next year nationally (I see Manhattan rising with low distressed exposure and limited inventory).

Foreclosure levels need to resume their elevated levels or we simply don’t create a real, sustainable housing market recovery. We won’t see a tsunami like 2010 as short sales continue at their high levels and the courts are still backlogged, but I believe we will see a more distressed activity in the next few years than we did during the 2012 lull and that will offset rising prices .

Call me crazy.

Q3 2012 U.S. Foreclosure & Short Sales Report [RealtyTrac]


[Interview] Rick Sharga, Senior Vice President, RealtyTrac

December 12, 2010 | 7:00 pm | realtytraclogo | Podcasts |

Read More

[Eye on Real Estate] WOR NewsTalk Radio 710 June 12, 2010

June 14, 2010 | 10:40 am | nytlogo | Public |

For each week’s Eye on Real Estate Show on WOR NewsTalk Radio 710, we include a segment called “The BlogCast” where I discuss several housing related (sometimes a stretch) posts from some of my favorite blogs. They cover topics that are current, funny or simply a “must read”.

Saturday’s BlogCast covered the following blog posts:

[City Room/NYT] Life Costs More Here, Unless You’re Hiring In both Boston and the San Francisco Bay area, the average worker receives more in wages and benefits than does the typical worker in the New York metropolitan area, according to figures released this week by the federal Bureau of Labor Statistics. Boston and San Francisco are also the only big American cities where the cost of providing health care, year-end bonuses and other benefits is higher than it is in New York, the numbers show…

[Naked Capitalism] RealtyTrac: Most foreclosures have positive equity Of all of the foreclosures in the RealtyTrac online database, less than 50% have mortgages worth less than what is owed, said Rick Sharga, senior vice president at RealtyTrac, during a session at REO Expo, which concludes in Dallas Wednesday…

[Sienna Research Institute] 4.7% of New Yorkers Want To Buy, Most Since Lehman Tipping Point Ok, so this isn’t really a blog, but it pertains to the listening area and I covered it here on Matrix. 4.7% of consumers in the state plan to buy a home this year, compared with just 3.4% in April and 3% in May 2009. As good as it is, the latest reading is still far shy of the three-year high set in June 2007, when 5.6% of New Yorkers said they wanted to buy. Conversely, in January 2009, at the lowest ebb in the last three years, a mere 2.2% said they would buy a home.

If you missed this past Saturday’s show or any prior show, you can listen to the podcast at any time or subscribe to it for free via iTunes to always get the latest show delivered automatically to your computer or handheld device. My Blogcast is usually in the first hour of the show.

Listen to the most recent Eye on Real Estate podcast.

Subscribe to the free weekly Eye on Real Estate podcast.

Become a fan on Facebook.

Or visit the Eye on Real Estate Website.

Tags: , , ,

[RealtyTrac] Overall Foreclosure Activity Surpasses 300,000 For 15th Straight Month

June 10, 2010 | 12:17 pm | realtytraclogo |

[click to open report]

While the headline of RealtyTrac’s May 2010 US Foreclosure Activity report indicates foreclosures fell 3% in May (322,920).

The numbers in May continued and confirmed the trends we noticed in April: overall foreclosure activity leveling off while lenders work through the backlog of distressed properties that have built up over the past 20 months,” said James J. Saccacio, chief executive officer of RealtyTrac. “Defaults and scheduled auctions combined increased by 28 percent from 2007 to 2008 and another 32 percent from 2008 to 2009 — creating a build-up of delayed bank repossessions. Lenders appear to be ramping up the pace of completing those forestalled foreclosures even while the inflow of delinquencies into the foreclosure process has slowed.

[click to open report]

The press release headline suggests some modest improvement, but when its bad, a little less bad is not really better, its just less bad. The numbers are still huge. 15th month in a row with filings in excess of 300,000.

I dubbed 2010 as the “Year of the Short Sale” because lenders will find this alternative cheaper than actual foreclosure.

Here are some of the metrics of the report:

  • Nevada (1 in every 79 housing units receiving a foreclosure notice), Arizona (1 in every 169 properties received a foreclosure notice), Florida (1 in every 174 Florida properties received a foreclosure notice) post top state foreclosure rates
  • 10 states account for more than 70 percent of national total
  • 22% of filings are in California

Here’s the master table:

[click to open report]

[Eye on Real Estate] WOR NewsTalk Radio 710 May 22, 2010

May 24, 2010 | 10:03 pm | trulialogo | Public |

For each week’s Eye on Real Estate Show on WOR NewsTalk Radio 710, we include a segment called “Jonathan Miller’s BlogCast” where I discuss several housing related posts from some of my favorite blogs. They cover topics that are current, funny or simply a “must read”.

Last Saturday’s BlogCast covered the following blog posts:

[The Curious Capitalist] The hidden changes in financial reform The Senate passed its financial reform bill. Huzzah! What did the Senate wind up with after three weeks of such intense lobbying and debate?…

[Trulia Blog] Trulia RealtyTrac Survey: American Attitudes Towards Foreclosure Today, and RealtyTrac released the latest results of an ongoing survey tracking home buyers’ attitudes towards foreclosures. The new online survey conducted on their behalf from May 10-12, 2010 by Harris Interactive® showed a notable decrease in consumers’ willingness to buy foreclosed properties compared to one year ago…

[WSJ/Developments Blog] U.S. Mortgage Delinquencies Appear to Level Off The number of American households behind on mortgage payments appears to be leveling off at a high level, a survey showed Wednesday… I also discussed the MBA confusion over the results in a great New York Times article.

If you missed this past Saturday’s show or any prior show, you can listen to the podcast at any time or subscribe to it for free via iTunes to always get the latest show delivered automatically to your computer or handheld device. My Blogcast is usually in the first hour of the show.

Listen to the most recent Eye on Real Estate podcast.

Subscribe to the free weekly Eye on Real Estate podcast.

Become a fan on Facebook.

Or visit the Eye on Real Estate Website.

Tags: , ,

[Trulia/RealtyTrac Survey] Attitudes Get Hammered

May 20, 2010 | 11:02 pm | trulialogo |

Today I Iistened in to an informative conference call hosted by Trulia’s co-founder and CEO Pete Flint and RealtyTrac‘s Rick Sharga. As always great stuff, and I got to act like a reporter and ask a question – lots of reporters were on the line. More on my question in a later post.

Pete commented that as we go into a housing market of declining government support, foreclosures will continue to become an integral part of the housing market – loan mod programs were not making an impact on foreclosure volume. Rick suggested the “short sale” phenomenon was over hyped because it will not solve the significant foreclosure problem. Foreclosures will peak in 2011 and then return to normal levels by 2013. 5.5M properties in serious delinquncy, 100k new foreclosures per month with a 55 month supply.

Interesting survey results (press release or on Trulia Blog)

  • 59 Percent of homewoners with a mortgage would not consider walking away from their home no matter how much their home is “underwater”.
  • 1 Percent of Homeowners With A Mortgage Say Walking Away Is Their First Choice If Unable To Pay; 69 Percent Say Modifying Their Loan is Their First Choice
  • While the stigma around owning a foreclosure has subsided, interest in purchasing a foreclosure is significantly down year-over-year
  • For every borrower who avoided foreclosure through HAMP last year, another 10 families lost their homes. It now seems clear that government programs will not reach the overwhelming majority of homeowners in trouble
  • 18 percent of U.S. adults expect bank-owned homes to offer a realistic price discount of less than 25 percent off the value of a similar home that was not in foreclosure
  • 36 percent saying that they expect to receive a discount of 50 percent or more when purchasing a bank-owned property
  • 78 percent of U.S. adults believing there are downsides to buying foreclosed properties compared to 85 percent in May 2009
  • The majority of U.S. adults (92 percent) said they would be willing to invest in improvements such as renovations and remodeling if they purchased a foreclosed home
  • Renters are showing strong interest in buying foreclosed properties, with 57 percent at least somewhat likely to purchase a foreclosed home in the future

[RealtyTrac] 10% Drop In Foreclosures, Surge Expected Over Next Few Months

February 11, 2010 | 4:20 pm | nytlogo |

[click to open]

RealtyTrac just released its monthly report covering January foreclosure activity.

  • 10% decrease in overall activity from the December surge
  • 15 percent above the level reported in January 2009

“January foreclosure numbers are exhibiting a pattern very similar to a year ago: a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January,” said James J. Saccacio, chief executive officer of RealtyTrac “If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works.”

The Sand States remain true to form (Nevada, Arizona, California, Florida)

  • Nevada’s foreclosure rate remained highest among the states for the 37th straight month. One in every 95 Nevada housing units received a foreclosure filing during the month — more than four times the national average.

    • Arizona’s foreclosure rate to second highest among the states in January. One in every 129 Arizona housing units received a foreclosure filing during the month.
    • Foreclosure activity decreased by double-digit percentages from the previous month in both California and Florida, and the two states registered nearly identical foreclosure rates — one in every 187 housing units receiving a foreclosure filing.
  • Six states account for nearly 60 percent of national total

  • Phoenix only top 10 metro area to post monthly foreclosure increase

In other words, the foreclosure rush in December to file by end of year, then subsequent lull in January do not suggest that the foreclosure problem is improving if seasonality has anything to say about it.

Tags: ,

Appraisers and Foreclosure Sales Bring Havoc to Housing Markets

January 29, 2010 | 12:30 am | nytlogo | Articles |

I authored the following article for RealtyTrac which appeared on the cover of their November 2009 subscriber newsletter called Foreclosure News Report. It features a column for guest experts called “My Take.”

When Rick Sharga invited to write the article, he provided the previous issue which featured a great article by Karl Case of the Case Shiller Index and I was sold.

I hope you enjoy it.

Appraisers and Foreclosure Sales Bring Havoc to Housing Markets
By Jonathan Miller
President/CEO of Miller Samuel Inc.

In many ways, the quality of appraisals has fallen as precipitously as many US housing markets over the past year. Just as the need for reliable asset valuation for mortgage lending and disposition has become critical (fewer data points and more distressed assets) the appraisal profession seems less equipped to handle it and users of their services seem more disconnected than ever.

The appraisal watershed moment was May 1, 2009, when the controversial agreement between Fannie Mae and New York State Attorney General Andrew Cuomo, known as the Home Valuation Code of Conduct, became effective and the long neglected and misunderstood appraisal profession finally moved to the front burner. Adopted by federal housing agencies, HVCC, or lovingly referred to by the appraiserati as “Havoc” and has created just that.

During the 2003 to 2007 credit boom, a measure of the disconnect between risk and reward became evident by the proliferation of mortgage brokers in the residential lending process. Wholesale lending boomed over this period, becoming two thirds of the source of loan business for residential mortgage origination. Mortgage brokers were able to select the appraisers for the mortgages that they sent to banks.

Despite the fact that there are reputable mortgage brokers, this relationship is a fundamental flaw in the lending process since the mortgage broker is only paid when and if the loan closes. The same lack of separation existed and still exists between rating agencies and investment banks that aggressively sought out AAA ratings for their mortgage securitization products. Rating agencies acceded to their client’s wishes in the name of generating more revenue.

As evidence of the systemic defect, appraisers who were magically able to appraise a property high enough to make the deal work despite the market value of that locale, thrived in this environment. Lenders were in “don’t ask, don’t tell” mode and they could package and sell off those mortgages to investors who didn’t seem to care about the value of the mortgage collateral either. Banks closed their appraisal review departments nationwide which had served to buffer appraisers from the bank sales functions because appraisal departments were viewed as cost centers.

The residential appraisal profession evolved into an army of “form-fillers” and “deal-enablers” as the insular protection of appraisal professionals was removed. Appraisers were subjected to enormous direct and indirect pressure from bank loan officers and mortgage brokers for results. “No play, no pay” became the silent engine driving large volumes of business to the newly empowered valuation force. The modern residential appraiser became known as the “ten-percenter” because many appraisals reported values of ten percent more than the sales price or borrower’s estimated value. They did this to give the lender more flexibility and were rewarded with more business.

HVCC now prevents mortgage brokers from ordering appraisals for mortgages where the lender plans on selling them to Fannie Mae or Freddie Mac which is a decidedly positive move towards protecting the neutrality of the appraiser. Most benefits of removing the mortgage broker from the appraisal process are lost because HVCC has enabled an unregulated institution known as appraisal management companies to push large volumes of appraisals on those who bid the lowest and turn around the reports the quickest. Stories about of out of market appraisers doing 10-12 assignments in 24 hours are increasingly common. How much market analysis is physical possible with that sort of volume?

After severing relationships with local appraisers by closing in-house appraisal departments and becoming dependent on mortgage brokers for the appraisal, banks have turned to AMC’s for the majority of their appraisal order volume for mortgage lending.

Appraisal management companies are the middlemen in the process, collecting the same or higher fee for an appraisal assignment and finding appraisers who will work for wages as low as half the prevailing market rate who need to complete assignments in one-fifth the typical turnaround time. You can see how this leads to the reduction in reliability.

The appraisal profession therefore remains an important component in the systemic breakdown of the mortgage lending process and is part of the reason why we are seeing 300,000 foreclosures per month.

The National Association of Realtors and The National Association of Home Builders were among the first organizations to notice the growing problem of “low appraisals”. The dramatic deterioration in appraisal quality swung the valuation bias from high to low. The low valuation bias does not refer to declining housing market conditions. Despite mortgage lending being an important part of their business, many banks aren’t thrilled to provide mortgages in declining housing markets with rising unemployment and looming losses in commercial real estate, auto loans, credit cards and others. Low valuations have essentially been encouraged by rewarding those very appraisers with more assignments. Think of the low bias in valuation as informal risk management. The caliber and condition of the appraisal environment had deteriorated so rapidly to the point where it may now be slowing the recovery of the housing market.

One of the criticisms of appraisers today is that they are using comparable sales commonly referred to as “comps” that include foreclosure sales. Are these sales an arm’s length transaction between a fully informed buyer and seller is problematic at best. While this is a valid concern, the problem often pertains to the actual or perceived condition of the foreclosure sales and their respective marketing times.

Often foreclosure properties are inferior in condition to non-foreclosure properties because of the financial distress of the prior owner. The property was likely in disrepair leading up to foreclosure and may contain hidden defects. Banks are managing the properties that they hold but only as a minimum by keeping them from deteriorating in condition.

In many cases, foreclosure sales are marketed more quickly than competing sales. The lender is not interested in being a landlord and wants to recoup the mortgage amount as soon as possible. Often referred to as quicksale value, foreclosure listings can be priced to sell faster than normal marketing times, typically in 60 to 90 days.

The idea that foreclosure sales are priced lower than non-foreclosure properties is usually confused with the disparity in condition and marketing times and those reasons therefore are thought to invalidate them for use as comps by appraisers.

Foreclosure sales can be used as comps but the issue is really more about how those comps are adjusted for their differing amenities.

If two listings in the same neighborhood are essentially identical in physical characteristics like square footage, style, number of bedrooms, and one is a foreclosure property, then the foreclosure listing price will often set the market for that type of property. In many cases, the lower price that foreclosure sales establish are a function of difference in condition or the fact that the bank wishes to sell faster than market conditions will normally allow.

A foreclosure listing competes with non-foreclosure sales and can impact the values of surrounding homes. This becomes a powerful factor in influencing housing trends. If large portion of a neighborhood is comprised of recent closed foreclosure sales and active foreclosure listings, then guess what? That’s the market.

Throw in a form-filler mentality enabled by HVCC and differences such as condition, marketing time, market concentration and trends are often not considered in the appraisal, resulting in inaccurate valuations. As a market phenomenon, the lower caliber of appraisers has unfairly restricted the flow of sales activity, impeding the housing recovery nationwide.

In response to the HVCC backlash, the House Financial Services Committee added an amendment to the Consumer Financial Protection Agency Act HR 3126 on October 21st which among other things, wants all federal agencies to start accepting appraisals ordered through mortgage brokers in order to save the consumer money.

If this amendment is adopted by the US House of Representatives and US Senate and becomes law, its deja vu all over again. The Appraisal Institute, in their rightful obsession with getting rid of HVCC, has erred in viewing such an amendment as a victory for consumers. One of the reasons HVCC was established was in response to the problems created by the relationship between appraisers and mortgage brokers. Unfortunately, by solving one problem, it created other problems and returning to the ways of old is a giant step backwards.

We are in the midst of the greatest credit crunch since the Great Depression and yet few seem to understand the importance of neutral valuation of collateral so banks can make informed lending decisions. Appraisers need to be competent enough to make informed decisions about whether foreclosures sales are properly used comps. For the time being, many are not.

Tags: , , , , , ,