RATES 3/8% HIGHER NOW
Interest rates continue to climb in response to positive economic reports (strong retail and home sales numbers), inflation concerns relating to both price signals and massive increases in the money supply, and President Biden’s $1.9 trillion COVID Relief package.
Rates are now a solid 3/8% higher than where they were in January.
The entire mortgage industry is hoping they will come down again in order to re-stoke the refi furnaces, but, as I mentioned last week, nobody knows what rates will do.
Where rates go depends on consumer spending, supply chain recoveries, inflation, unemployment, the effect of the COVID Relief package, Fed policy, Fed power, the world economy and much else.
As I stated last week, borrowers should refi now if they can still lower their rate at “no cost” and/or if they can eliminate mortgage insurance or pay off consumer debts to the extent that the refi makes sense.
NERVOUS APPRAISERS
In the 1990s and early 2000s, I knew of appraisers who would do almost anything that was asked of them by lenders or loan officers.
I remember one incident in particular where an appraiser claimed a property, with no pool, had a pool in order to give it $15,000 more in value.
The appraiser even provided photos, and he eventually lost his license to the surprise of nobody.
Appraisers like that, however, were few and far between, as the vast majority of the appraisers I knew were honest to a fault.
AMERICA LOVES TO BLAME
After the housing crisis in 2008, everyone (especially regulators and politicians) was looking for someone or some group to blame.
And, unfortunately, appraisers fell victim to that need. This was of course exacerbated by the headlines generated by the few fraudulent appraisers.
As a result, many honest appraisers were sued and/or held liable in various ways for foreclosure losses that were often just a result of a sharp drop in value (that had nothing to do with the appraisal which reflected market conditions at the time of purchase).
Most appraisers working today well remember all of that and many tend to be cautious to this day b/c they don’t want to be caught up in the blame game again, should the market correct.
We have been seeing the results of this on occasion in particularly hot markets where appraisers are leery of coming at the higher end of the range of values specifically b/c they are worried about another correction and another round of the blame-game.
Some appraisers even tell us this outright, and it is very frustrating at times.
But, given what happened after 2008, I can understand an appraiser’s concerns.
Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167
