Steve Mun, e-PRO®, QSC®, CDPE® (650) 605-3188

We Realtors keep hearing about how the HVCC (Home Valuation Code of Conduct) is negatively impacting transactions because appraisers who are not local and do not understand local issues are being brought in and are killing otherwise, perfect deals.

I was hoping I would just continue to read about other people's woes......

I just came back from meeting with an appraiser that Bank of America ordered on one of my short sales. I was happy to see that the owner of the company who had emailed me had a local phone number. I was thinking he will know the values in the area and felt good.

He was supposed to meet me at 10:30 AM today, he showed up at 11:00 AM. The guy who showed up was not the owner who had been communicating with me by email and his business card said he is a Trainee. It was a young guy, about 20 and he gave me his card which had a local phone number but the address was in Ceres, which is a small town next to Modesto. Now I understood why the email only contained the phone number and no physical address. Now I was concerned.

Nothing against young people since they have to learn the business, but why isn't a Trainee accompanied by the person who is training him? I don't want to offend this guy and have my sellers suffer, so I keep my mouth shut and bite my tongue.

I asked him how counties he covers. He told me he covers 9 counties! A Trainee who covers 9 counties??!!

He told me he does about 4-5 appraisals a day, so I asked him how the market was in Hollister and Sacramento and how they differed. He couldn't give me an answer, except that Sacramento is worse. I ask why Sacramento is worse, he mumbles there are more foreclosures. Duh. Sacramento is a metropolitan area with millions of residents, whereas Hollister is a city with less than 50,000 residents; of course there will be more foreclosures there!

I asked how is the market in Modesto? He says he hasn't done an appraisal in Modesto in two month. His office is essentially in a suburb of Modesto, yet he hasn't had a job there for two months, but he is in Mountain View, some two hours away appraising my listing? What's wrong with that picture?

Don't get me wrong, he was a nice kid learning the business to make a living. More power to him. But what is the owner of the company doing? Why is he sending a trainee alone two hours away working in an area he obviously does not know?

Luckily, I always show up to these appraisal in person and let them in myself, so I can figure out with whom I am dealing. In this case, there is a special circumstance, so I wanted to make sure the appraiser (even if he were from around here and knew things) was spoon-fed information about the construction litigation and how that impacts the value compared to other units that are not involved in litigation. I brought a letter explaining what the reason was for the litigation, what the price difference was between litigation and non-litigation units in the past 3 months, a copy of the actual lawsuit along with the most recent comps of properties involved in litigation. I mean literally, I gave him everything he needs to determine value.

The kid was obviously grateful for all of the information I spoon-fed him, but what if I had not been so prepared? What if I had left the lockbox and he showed himself in and spent the whole 10 minutes he spent today to take measurements? What kind of value would I get from him?

He still has not produced a report for me, so I don't know what effect my package of information will have on him, but I am writing this post as a point of reference, in case I have to challenge the valuation in the future.

Article

Talking heads on TV complain that the US will hit over 10% unemployment by the end of this year and are concerned about the negative impact that will have on the economy, blah, blah, blah…… Yes, it is rough for everyone out there and we should all be concerned.

But want to know how things are playing out in our own backyard? California has hit 12.2% unemployment in August 2009! That’s the highest ever since such data was tracked.

“Only Michigan, Nevada and Rhode Island, at 15.2%, 13.2% and 12.8%, respectively, have higher unemployment rates than California. The national unemployment rate in August was 9.7%.”

As I have been saying repeatedly, until we can resolve this issue of unemployment, foreclosure will continue at records levels, unless we can address one of the root causes: unemployment . People simply do have have sufficient cushion in their savings to allow for sustenance during their unemployment. Luckily, the government is aware of this situation and have started talking about helping out the unemployed stay in their homes.

We will have to see how this effort turns out, but at least we are headed in the right direction.

Article.

We've been hearing about banks shutting down HELOCs (Home Equity Line of Credit) without just cause. But the practice seems to be not so random but purposefully calculated using more computer models rather than actual appraisals to cut off people who are otherwise, not candidates for such measures. But, as described in the article, homeowners who were doing the right things are now suddenly finding themselves being cut off (sound familiar?): i.e. being fraudulently turned off. Just when homeowners who have built up equity and may need to tap in during some financial difficulty, they are being told their lines are suspended for unknown reasons.

These supposed fraudulent practices have occurred so frequently, there is, as described in the article, a class action lawsuit developing in the pipeline involving the major banks like Wells Fargo, Chase and other banks. Yes, there are people whose lines of credit should be turned off if they are not doing the right thing and trying to play games with the system. But remember, these individuals were are discussing are not that category; these are people who are paying on time and not necessarily over-extending themselves. These are the people who are and have been doing the right things. It seems the little people who have been pushed down and trampled on have had enough and are now willing to fight back for their rights. Good for them!

Steve Mun
www.stevemungroup.com