25th March 2011

Welcome to Appraiser Income

Here is to an epic 2018!  Time to get back in to marketing your business and stop relying on AMC work!

Since 2015 I have been slammed with too much work…   It is crazy how things have changed in recent years. When I made this video in 2014 the work seemed to be drying up.  Is this going to happen again soon?  If you are in need of work, please watch this video and make sure you sign up to my Appraiser Marketing System!

If you would like to know a little bit more about me and why I write this blog, please visit this post A little about me – Bryan Knowlton

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15th October 2018

FHA: We saw appraisal issues on 37% of HECM loans

Related imageThe Federal Housing Administration’s investigation into possible appraisal inflations on reverse mortgage loans revealed an issue the agency decided it must address.

On Friday, the FHA announced that it will require a second appraisal on select reverse mortgage loans that have been flagged by the agency as having the potential for an inflated property valuation. As part of the new guideline, which takes effect Oct. 1, 2018, lenders must submit their appraisals to FHA to undergo a collateral risk assessment.

In a call with reporters on Monday, the FHA revealed its reasons for making the changes.

The FHA told reporters that out of the 134,000 appraisals inputted into its automated valuation model, approximately 50,000 (37%) were inaccurate by at least 3%.

“We were trying to understand why, in a still relatively low interest rate market where house prices have returned in most major markets including in many of these states where reverse mortgages were, why were we still hemorrhaging money,” FHA Commissioner Brian Montgomery said. “We thought this was a contributing factor that required further due diligence.”

In regard to the assessment methods the agency will use to enact the new policy, FHA Deputy Assistant Secretary Gisele Roget said only that it will involve multiple review factors.

“The disclosure of the tools and the methodology could result in appraisals being adjusted to conform to these factors, and therefore to preserve the integrity of this new process, we are going to be treating the assessment methodology and the valuation tools as proprietary and confidential,” Roget said.

Roget said the impact on the origination timeline should be minimal, with the risk assessment taking no longer than three days once the lender uploads the appraisal into FHA Connection.

Roget also said FHA expects to fully automate the process by December 1st.

“In the interim, we will be using the FHA Resource Center to use case warnings to let our FHA reverse mortgage lenders know whether or not, following the collateral risk assessment, a second appraisal will be required,” she said.

When asked how many appraisals FHA expected to require a second look, Montgomery said it was hard to know. He said the agency used three separate models to evaluate the presence of appraisal inflation, and that all three revealed pronounced levels in 2008, 2009 and 2010.

“It’s hard to predict going forward, especially given the fact that it has come down significantly through the years, but since it’s not yet zero or close to zero, we felt it was prudent to issue this policy change at this time,” Montgomery said. “We will be monitoring it daily and we’ll certainly be reporting outage as we get more results.”

“One unique attribute also is that we’ll be able to follow these certainly by lender,” he continued, “so we’ll be looking at patterns, as some lenders are more outside the tolerance than others.”

Montgomery said putting an appraisal review process in place was the least disruptive of the potential HECM policy changes the agency considered. He also said the agency is looking at issuing another HECM program change soon, but he failed to elaborate on what this might entail.

In November, FHA will issue a report to Congress on the state of the reverse mortgage program and its impact on the Mutual Mortgage Insurance Fund, after a 2017 report revealed its negative net value of $14.5 billion. Changes made to the HECM program last October, which reduced principal limit factors and adjust mortgage insurance premiums, were designed to help tackle the issue, but Montgomery said it won’t solve the problem entirely.

“I can tell you that the changes FHA made to the principal limit factors and the adjustments to the HECM insurance premium we instated in 2017 were designed to help, but did not – and were not intended to – and will not fully solve the financial volatility of the program,” he said.

The latest guideline is yet another measure FHA is implementing to stop the bleeding.

The agency said it plans to work closely with lenders on implementation and acknowledges the guidelines may present some challenges for both lenders and FHA as the industry adapts.

Montgomery said it will monitor the process closely to determine its effectiveness.

“We want to make sure we reassess the efficacy of the program as we go along and see where we’ll be at the year-end mark and whether this is something we’ll continue or whether or not this is something that’s been beneficial,” he said.

Roget said implementing a valuation assessment is a forward step for the reverse industry.

“The use of collateral validation tools and is truly an industry best practice, and FHA using this in the reverse mortgage space is bringing FHA in line with the rest of the mortgage industry,” she said.

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12th October 2018

Home Sales Fade Despite Robust Economy

FM-Outlook_Forecast-Snapshot_9.2018_Instagram-2400x2400MCLEAN, Va., Sept. 24, 2018 (GLOBE NEWSWIRE) — Even with slightly improving inventory conditions and relenting home price pressures, home sales this year are now expected come in just below last year’s level, according to Freddie Mac’s (OTCQB: FMCC) September Forecast.

Although the U.S. economy and job market are firing on nearly all cylinders, the housing market has essentially stalled. Weaker affordability, homebuilder constraints and ongoing supply and demand imbalances over the summer resulted in fewer home sales and less home construction compared to earlier this year.

Freddie Mac expects many prospective homebuyers to continue to have difficulty reaching the market through the rest of the year. Total home sales (new and existing) are now forecasted to decrease 0.9 percent, and home price growth is expected to moderate to 5.5 percent.

“The spring and summer home buying and selling season ultimately ended up being a letdown, despite a faster growing economy and healthy demand for buying a home,” said Freddie Mac Chief Economist Sam Khater. “Unfortunately, too many would-be buyers continue to be tripped up by not enough affordable supply and the one-two punch of much higher home prices and mortgage rates.”

Added Khater, “Prospective buyers are being squeezed the most where demand is the strongest: the entry-level portion of the market. While price appreciation is welcomingly starting to ease in many markets, weakening affordability continues to hamper overall activity.”

Forecast Highlights

  • The U.S. economy during the second quarter grew at its fastest pace (4.2 percent) in nearly four years. Solid consumer spending and business investment should keep the economy on a very strong growth path of 3.0 percent this year.
  • Mortgage rates inched backward over the summer, but have most recently started to trend higher again. Overall, the 30-year fixed-rate mortgage is expected to average 4.5 percent this year and 5.1 percent in 2019.
  • Weakening affordability and not enough moderately-priced homes on the market continue to affect housing activity. Total home sales (new and existing) are now forecasted to decline modestly this year to 6.07 million (6.12 million in 2017), while prices are expected to moderate, but still at a pace above inflation.
  • Decreasing refinance activity and home sales from a year ago are expected to cause single-family first-lien mortgage originations to slide around 9 percent this year to $1.65 trillion.
  • The share of cash-out refinances last quarter was the highest since the third quarter of 2008 (78 percent). However, the total dollar volume of cash-out refinance activity remains much lower than the peak seen more than a decade ago. An estimated $15.5 billion in net home equity was cashed out last quarter, which is substantially less than the peak cash-out refinance volume of $102.3 billion in the second quarter of 2006.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.


A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/dd173e75-3bac-4f90-ac02-dbdbab16983f

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10th October 2018

Appraiser Income ???

I just love this image and had to use it.  It has been way too long since I used it in an actual post.

With appraisers across the country giving me calls stating things have really slowed down and asking what they can do to get more appraisal jobs, I decided to make a post sharing some recent ideas that seem to be working for me as well as other appraisers.

This is not going to be super detailed, but if you search around online, you can learn all the steps you need to take to get more business using these techniques.  I have also broken down most of the information inside of the Appraisers Club as well.

A few things I have yet to mess around with but have heard of other appraisers having great success is as simple as getting your certified general license.  Sure it will take a lot of work, but it will be well worth your time over the long run and should help to make you a better residential appraiser as well.  I have taken a few classes online to head in that direction, but the last CG that I referred all my commercial work retired so I am looking for a couple new CGs to work with to get the experience.  If any CG is interested in San Diego, just hit me up!  I get a fair amount of commercial calls each month.

I have been a licensed real estate broker for almost 8 years now, getting the license was as easy as studying and taking the test.  I was also a license manufactured home broker as well, but will be looking to get my manufactured home sales license to promote manufactured homes as ADUs in San Diego County.  I kinda got my license as a ‘Plan B’ if things got really screwed up in the appraisal industry.  But I know many appraisers that also sell real estate and even more than get a commission for referring potential sellers.  This could be very lucrative if you have a lot of estate work.  I should have been working this angle for years and will be making referrals in the future.

But the top techniques to make more money doing a job that you love is by doing more appraisal work.  You can get more work a number of different ways.

  1. Expand Service Area
  2. Sign up to more AMCs
  3. Market your Business better

I love marketing, so I don’t mind doing most of it myself.  But if you don’t have a clue where to start, you might be better off finding a company that will help you with your ‘local’ online presence.  They will focus on things like Yelp, Google, Bing, Homeadvisor, Homesnap and most likely all the areas that your business can show up locally in your market.

By having a good search engine presence you can easily get 10x’s more work annually than you would if you don’t show up online.  If you aren’t getting any non-lender work right now, then the sky is the limit.

If you focus on non-lender marketing and create good follow up systems to keep your clients, your business will continue to grow.

I am currently working on an all new ‘Appraisers Club‘ that will be more of a step-by-step program to teach you how to properly market your appraisal business, increase your appraiser income and keep your clients.  The fee to become a member will be slashed and appraiser website building services will be available if needed.  I will also have my own personal VA available to people that would rather just pay him to get a step completed when needed.  Look for the re-launch in January 2019!

Thanks again to everyone that has been a long time reader and supporter of all my endeavors.  I will be updating the AMC Directory for 2019 as well as the Non-Lender Marketing Guide.  I truly enjoy giving back to the community and will hopefully be posting a lot more articles in the near future to help you stay an appraiser during this slow period.  I have seen my lender work drastically decrease over the past 6 months and I can only imagine that work will continue to dry up as interest rates rise and home sales slow.

It is again a great time to focus on that non-lender work, build up that client base and not worry about where you orders will be coming from for the next 8 years.


Bryan Knowlton



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7th October 2018


Image result for hud logoNew policy designed to reduce ‘appraisal inflation’

WASHINGTON – The Federal Housing Administration (FHA) today announced that it will begin requiring lenders originating new Home Equity Conversion Mortgages (HECMs), commonly referred to as reverse mortgages, to provide a second property appraisal under certain circumstances. FHA is instructing lenders to provide a second independent property appraisal in cases where FHA determines there may be inflated property valuations.

FHA’s new requirement takes effect for case numbers assigned on or after October 1, 2018 through September 30, 2019. FHA will periodically review this guidance and, based on the results, may renew these requirements beyond fiscal year 2019. Read FHA’s Mortgagee Letter.

FHA will perform a risk assessment of appraisals submitted for use in new HECM originations.  Based on the outcome of that assessment, FHA may require a second appraisal be obtained prior to approving the reverse mortgage for an insurance endorsement. Under the new policy, lenders must not approve or close a HECM before FHA has performed the collateral risk assessment and, if required, a second appraisal is obtained. Where a second appraisal is required by FHA, lenders must use the lower value of the two appraisals.

The appraisal validation policy announced today will further reduce risks to FHA’s Mutual Mortgage Insurance Fund (MMIF) and protect the health of the HECM program. The financial soundness of FHA’s reverse mortgage program is contingent on an accurate determination of a property’s value and condition. The property value is used to determine the amount of equity that is available to the borrower and it is also used by FHA to determine the amount of insurance benefits paid to a mortgagee.

In a 2017 evaluation, the U.S. Department of Housing and Urban Development (HUD) found higher-than-expected losses in the HECM program could be attributed in part to “optimistic estimates of collateral value driven by exaggerated property appraisals when the loan was originated.” Read Reverse Mortgage Collateral: Undermaintenance or Overappraisal?.

FHA is addressing the accuracy of appraised property values due to continuing volatility in the HECM program. Last year, FHA’s Fiscal Year 2018 Annual Report to Congress found the agency’s reverse mortgage portfolio had a negative capital ratio of 19.84 percent and a negative net worth of $14.5 billion. To begin to address the financial solvency of the program, FHA instituted several reforms to the HECM program to improve its financial health and to ensure reverse mortgages remain a resource to allow senior borrowers to remain in their homes and age in place. FHA is continuing to analyze the impact of these reforms and expects to provide an assessment in its Annual Report on the financial status of the MMIF.


HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
More information about HUD and its programs is available on the Internet
at www.hud.gov and https://espanol.hud.gov.


4th October 2018

Mortgage Rates Jump for the Fifth Straight Week


MCLEAN, Va., Sept. 27, 2018 (GLOBE NEWSWIRE) — Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that mortgage rates in the past week surged to their highest level in over seven years.

Sam Khater, Freddie Mac’s chief economist, says the 30-year fixed-rate mortgage rose for the fifth consecutive week to 4.72 percent – a high not seen since April 28, 2011 (4.78 percent). “The robust economy, rising Treasury yields and the anticipation of more short-term rate hikes caused mortgage rates to move up,” he said. “Even with these higher borrowing costs, it’s encouraging to see that prospective buyers appear to be having a little more success. With inventory constraints and home prices starting to ease, purchase applications have now trended higher on an annual basis for six straight weeks.”

Added Khater, “Consumer confidence is at an 18-year high, and job gains are holding steady. These two factors should keep demand up in coming months, but at the same time, home shoppers will likely deal with even higher mortgage rates.”

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.72 percent with an average 0.5 point for the week ending September 27, 2018, up from last week when it averaged 4.65 percent. A year ago at this time, the 30-year FRM averaged 3.83 percent.
  • 15-year FRM this week averaged 4.16 percent with an average 0.5 point, up from last week when it averaged 4.11 percent. A year ago at this time, the 15-year FRM averaged 3.13 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.97 percent with an average 0.3 point, up from last week when it averaged 3.92 percent. A year ago at this time, the 5-year ARM averaged 3.20 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.


A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/393afe40-c2da-4183-9b1f-bbedda97898c

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3rd October 2018

California Law Eases Intended User Restrictions for Some Appraisals

Image result for california symbolsCalifornia Gov. Jerry Brown on Sept. 29 signed SB 70, legislation that allows the state’s appraisers to name intended users other than a client in a restricted appraisal report.
State-certified real estate appraisers in California are required to comply with the Uniform Standards of Professional Appraisal Practice and therefore cannot provide a restricted appraisal report in situations where it may be shared amongst intended users other than the client or clients who engaged the appraiser. Examples include attorney/adviser, accountant/auditor and a taxing authority.
When SB 70 takes effect Jan. 1, state-certified real estate appraiser in California will be able to produce a restricted appraisal report that identifies one or more intended users in addition to the client. The appraiser must first obtain the client’s consent, and the intended use of the appraisal cannot be for A) a mortgage lending transaction engaged by a federally regulated bank, B) the purchase or refinance of a residential dwelling of one to four units or C) a broker investment transaction, where users may not be well enough versed in the subject matter to properly understand information contained in a restricted appraisal report.
Additionally, appraisers producing a restricted appraisal report that names multiple intended users must clearly identify all users and state that the opinions and conclusions set forth in the report may not be properly understood without additional information in the appraiser’s work file. It also must be stated that there may be assumptions in the restricted appraisal report that the appraiser has not verified and that could impact the appraised value of the subject property.
The law likely will most benefit appraisers engaged for tax appeals, financial reporting and estate and tax — the types of assignments where users of the appraisal services are informed enough to understand a restricted appraisal report but do not need all the information and analysis required for an appraisal report.
The Appraisal Institute sees SB 70 as a commonsense measure that allows appraisers to better meet client needs and to compete with unlicensed service providers who are not subject to the same limitations to appraisal report provisions. It also might encourage more real estate valuation professionals to become state certified since the scope of services they can provide will no longer be arbitrarily restricted.
The provisions in SB 70 will expire Jan. 1, 2020 unless further extended by the California legislature.
The legislation was sponsored by Sen. Patricia Bates (R-Laguna Niguel) and strongly supported by the Appraisal Institute’s California Government Relations Committee, which consists of the state’s five AI chapters.

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8th May 2018

FHFA Working Paper Compares AMC, Non-AMC Appraisals

The FHFA has released a new paper, authored by Jessica Shui and Shriya Murthy, that examines how appraisals conducted by appraisal management companies compare to those conducted by lenders themselves. What’s the verdict? According to the FHFA paper, “the results indicate no clear evidence of any systematic quality differences between appraisals associated and unassociated with AMCs.” In other words, the FHFA data suggests that the appraisal results provided by AMCs are statistically very similar to those provided by lenders working without a middleman. …continue reading the rest of this post: FHFA Working Paper Compares AMC, Non-AMC Appraisals

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7th May 2018

The Appraisal Subcommittee Denies Bank’s Request for Appraisal Waiver

The Appraisal Subcommittee unanimously rejected a temporary waiver request from TriStar Bank of Dickson, Tennessee, during a special meeting April 23 in Washington. The Appraisal Institute led industry efforts opposing the bank’s request for a waiver of certification requirements, which would have allowed appraisals to be completed by non-certified appraisers. …continue reading the rest of this post: The Appraisal Subcommittee Denies Bank’s Request for Appraisal Waiver

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5th May 2018

Appraisals are not required for commercial real estate transactions from $250,000 to $500,000

Federal Agencies Approve Rule Doubling Appraisal Threshold for CRE

The Federal Deposit Insurance Corporation on March 20 approved a final rule that will double the appraisal threshold for commercial real estate transactions. The Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System are expected to adopt the rule soon.

The federal banking regulatory agencies maintained the $250,000 threshold level for one- to four-unit single family residential loans. They also maintained the $1 million threshold level for business (owner occupied commercial real estate) loans. …continue reading the rest of this post: Appraisals are not required for commercial real estate transactions from $250,000 to $500,000

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1st May 2018

Transitioning Into Non-Lender Work

Seasoned appraiser Philip G. Spool discusses the differences between working for AMCs and lenders compared to working for non-lenders.

Editor’s Note: The current edition of Working RE is in the mail. OREP E&O insureds enjoy it free!

Transitioning Into Non-Lender Work

By Phil Spool, ASA

I am fortunate that all of my appraisal work is for non-lenders. I gave up assignments for lenders around 10 years ago and have never looked back. I would say the bulk of my appraisal assignments are from sellers, buyers, Realtors®, attorneys (usually for litigation) and accountants (usually for estate planning).

…continue reading the rest of this post: Transitioning Into Non-Lender Work

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