John Murphy Reports

Mortgage Insider published this story about the new rules put in place May 1, 2009 by Fannie Mae and Freddie Mac.  If you want to do business with the government, you must now order your appraisals through AMC (Appraisal Management Companies).   You have to read the story from Mortgage Insider to get some of the specifics.

I am working a transaction right now that doesn’t close for another 6-7 weeks.  That said, the appraisal normally would be done by next week so we can coast in to closing.  The mortgage broker is a big, reputable firm in town.  They use another big appraisal firm in town.  I don’t know yet if they got “stuck” with this AMC nonesense, but nonetheless, we actually CAN’T get the home appraised until June 2nd…and this was after I placed several phone calls to the appraisal company, talked with the buyer’s agent and the loan officer.  The answer was, sorry, we’re busy.  The earliest we can do it is June 2nd.  Are you kidding?

The real estate market has overwhelmed appraisal companies because so much of the work is FHA.  There aren’t enough FHA appraisers.

The government doesn’t want loan officers colluding with their appraiser buddies because of course, all those loan officers were thinking of committing fraud.  The government has to stop them.  So because there were some bad characters doing loans in the past few years all of us are stuck with a mediocre experience at best when it comes to getting appraisal work done.  Will it become like going to the DMV?
I’ll have more comments on this matter is a future post.  This is a precursor to the nationalized real estate.  Stay tuned.

Housing Wire reported this story today.  It’s supposed to be released next week.  It will be interesting to get the details when they come out.

FHA loans are accounting for probably 75% of the transactions these days so this is big news.  FHA bumped up the down payment requirement over the past year from 3% down to 3.5% down.  Now if buyers can front load the $8,000 tax credit, I would think many people are going to be able to buy homes with no money down again.  Haven’t we seen this movie before?

Also, the tax credit will likely be extended in to next year.  I also suspect this will become a permanent benefit and will only grow.  Within 5 years, the tax credit will be up to $12,000 – just my opinion.
Well, I’ll withhold my judgement on this until I see the details next week.