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NCAI Member Cal Morgan Appointed to NCAB

The North Carolina Chapter of the Appraisal Institute (NCAI) has been informed that Jack C. (Cal) Morgan III, MAI, SRA, AI-GRS, has been appointed to the North Carolina Appraisal Board (NCAB) by Tim Moore, NC House Speaker. We congratulate Cal on his appointment, and we thank him for his willingness to be a leader in the appraisal industry. We wish you well in this endeavor, and we know you will continue to promote the highest standards for real estate appraisal practice in the protection of the public trust. 

Cal is a graduate of the College of Charleston, in Charleston, SC. He has over 20 years of experience in real estate appraisal, construction, and investment analysis. He is the owner of JC Morgan Company in Wilmington, NC, which provides appraisal services as well as consulting and litigation support services. Cal is also a NC licensed general contractor and NC real estate broker. He served on the NC Property Tax Commission from 2013 to 2017 and currently serves as the Chairman of the Wilmington Zoning Board of Adjustment. Cal lives in Wilmington with his wife Seanna and their three children.

Congratulations Cal!

Housing is Recovering, but Economic Outlook Uncertain: Freddie Mac

According to Freddie Mac’s Quarterly Forecast, housing markets have been affected by the pandemic with both home sales and house price growth declining.

“While the housing market undoubtedly has felt the effects of COVID-19, we are encouraged by recent homebuyer demand as well as mortgage rates that should remain at record lows for the foreseeable future.” said Sam Khater, Freddie Mac’s Chief Economist. “However, beyond the initial rebound in the housing market, the economic and housing outlook will be heavily impacted by the prospects for a vaccine, fiscal policy and the underlying organic recovery of the economy which, in combination, make the outlook highly uncertain.”

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North Carolina Phase 2 Extended Three Weeks; Statewide Requirement for Face Coverings Added

Governor Roy Cooper announced yesterday that as trends move in the wrong direction, North Carolina will remain in Phase 2 for three more weeks. Executive Order 147 also requires face coverings in public and at various business settings where individuals cannot maintain a physical distance of six feet from others.

Construction sites are specifically included:

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Consumer Confidence in Housing Market Up: Fannie Mae

The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) increased 4.5 points in May to 67.5, building slightly after nearing its all-time survey low in April. Four of the six HPSI components increased month over month, with consumers reporting a somewhat more optimistic view of homebuying conditions and, to a lesser extent, home-selling conditions. Moreover, fewer consumers reported expectations that mortgage rates will go up over the next 12 months. Year over year, the HPSI is down 24.5 points.

“Although the HPSI’s precipitous declines of March and April did not continue in May, Americans’ financial, economic, and housing market concerns remain substantially elevated compared to survey history,” said Doug Duncan, Senior Vice President and Chief Economist. “Low mortgage rates have helped cushion some of the impact of the pandemic on consumer sentiment regarding whether it’s a good time to buy a home, which picked back up this month to late-2018 levels. Although weakened income perceptions and continuing job loss concerns, particularly among renters, are likely weighing on many would-be buyers, purchase mortgage applications have returned to mid-March levels when pandemic response measures began ramping up. Home-selling sentiment remains severely dampened due primarily to economic concerns, though increased purchase activity may improve the confidence of some potential sellers. As lockdown restrictions begin to ease across the country, we expect economic recovery to be largely shaped by consumers’ decisions regarding when and how to reengage in the economy. We believe this month's HPSI results and Friday's unexpectedly favorable labor market report to be encouraging signs for the months ahead.”

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FHFA Extends Appraisal Loan Processing Flexibilities

The Federal Housing Finance Agency (FHFA) is extending several loan origination flexibilities currently offered by Fannie Mae and Freddie Mac (the Enterprises) designed to help borrowers during the COVID-19 national emergency. Flexibilities extended until at least July 31st include:

  • Alternative appraisals on purchase and rate term refinance loans;
  • Alternative methods for verifying employment before loan closing;
  • Expanding the use of power of attorney and remote online notarizations to assist with loan closings; and
  • Authority to purchase mortgages in forbearance. 
View release.

2021 Slate of Officers Elected

The below slate was presented by the North Carolina Chapter’s 2020 Nominating Committee comprised of: Sheri Colvin, MAI (Chair); Joel Tate, SRA; Don Read, MAI; Chesney Baker, MAI, AI-GRS; and David Pope, MAI, SRA.

It was approved as per regulation at the 2nd Quarter 2020 Chapter Business Meeting held on June 11, 2020. 

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Office Market Sector Expected to See Negative Absorption Rates Until Late 2021: NAIOP

By Scott Baltic

National economic upheaval and surging unemployment will push U.S. office market absorption into negative territory through the second quarter of next year. That’s according to the NAIOP Research Foundation’s Office Space Demand Forecast for the second quarter.

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Recap: NCAI Connect - A Conversation with NCAB

North Carolina Appraisal Board’s (NCAB) Executive Director, Don Rodgers, and Deputy Director, Tom Lewis joined us on our NCAI Connect Webinar Series yesterday.

Don Rodgers gave an update on the changes to the leadership of the board, with Charles McGill stepping down as chairman and David Reitzel voted in as chairman. The board recently transitioned to the new appraiser standards and qualifications based on the AQB Standards, which are already having a positive impact on licensing. Highlighting the new online renewal system, Don commented that NCAB was pleased with the success of the new process and that most appraisers have utilized the process for renewal. NCAB is very supportive of the virtual learning platform (zoom, blue jeans, etc.) that has been utilized for USPAP courses and CE due to the COVID-19 pandemic. This hybrid classroom experience had not been contemplated by ASC or NCAB prior to the crisis, but with positive reactions from attendees, NCAB is supportive of considering its adoption. However, such adoption will first require approval from ASC, with a formal hearing and public commenting period, so it may be a while before it is adopted permanently. For now, it can be used until September 30, 2020.

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FHFA Final Rule to Provide Increased Mortgage Financing for Underserved Borrowers

To help underserved borrowers, the Federal Housing Finance Agency (FHFA) sent to the Federal Register for publication a final rule on the Federal Home Loan Banks’ (FHLBanks) Housing Goals. The new goals take effect in 2021 and enforcement of the rule will be phased in over three years. 

“By creating housing goal targets that are achievable for the Federal Home Loan Banks, the final rule helps ensure they make meaningful contributions to affordable homeownership,” said Director Mark Calabria. “This rule will expand responsible homeownership opportunities for underserved communities across the country.”

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Mortgage Rates Up as Homebuyers Re-enter Market; Selection Still Limited: Freddie Mac

Mortgage rates moved up slightly during the past week as prospective homebuyers re-entered the market, Freddie Mac reported June 4 in its Primary Mortgage Market Survey. While the economy slowly rebounds, signs indicate that home sales are picking up nicely even as the supply of available homes remains limited.

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US Economy Expected to Begin Recovery in Q3: ABA Forecast

The U.S. economy will experience about a 6% contraction this year, but will begin to recover from a severe second-quarter downturn in the third quarter, according to the latest forecast of the American Bankers Association’s Economic Advisory Committee.

While the group, made up of 16 chief economists from some of the North America’s largest banks, is unanimous that the economy will expand in the third quarter, there are a wide range of views as to the damage caused by the COVID-19 shock. Four committee members believe the economy will shrink less than 5% in 2020 while just as many see a greater than 8% contraction. The committee members were divided on when they expect economic output to recover to the pre-pandemic level, with the largest number of committee members forecasting it will happen in 2022.

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Don't Miss the Q2 Chapter Business Meeting on Thursday!

Join us Thursday to elect the 2021 Slate of Nominees for Officers, Directors, Regional Representative, & Alternate Regional Representatives, hear updates about what the Chapter has been doing, and congratulate our newly designated members!

Please make sure to register prior to joining the meeting in order to receive the 2 AI credits.

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AI Webinar - Is it Too Early to Evaluate Pandemic Impact on Real Estate Valuation?

The Appraisal Institute has assembled a stellar lineup of appraisers from the Top 10 Metropolitan Statistical Areas to help investors, developers, brokers, and other industry stakeholders understand initial buyer and seller reaction to COVID-19.

Residential real estate appraisers from across the country will summarize initial observations and identify considerations that appraisers will evaluate in the near and long term. We will also discuss trends in rural markets, appraiser reaction to policy changes of the GSEs, FHA and VA, and the dynamics with employee relocation appraisals, which require forecasting.

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AI ANSWERS: Weekly Updates from the World's Leading Valuation Authority

Now available!  Last week's AI Answers features a discussion with Lyle Radke, director of collateral policy at Fannie Mae. We received information on a range of issues, including a partnership between AI and Fannie Mae on diversity in the appraisal profession, the strong performance of appraisers in the COVID-19 pandemic, and what's ahead for Fannie Mae for the remainder of the year.  

Listen to the Conversation

FHFA Rereleases Proposed Capital Rule for Fannie, Freddie

The Federal Housing Finance Agency (FHFA) announced that it is seeking comments on a notice of proposed rulemaking that establishes a new regulatory capital framework for Fannie Mae and Freddie Mac (the Enterprises). The proposed rule is a re-proposal of the notice of proposed rulemaking published in July 2018. Comments will be due 60 days after the notice is published in the Federal Register. 

The 2018 proposal remains the foundation of the re-proposal. The enhancements in the new proposal preserve the mortgage risk-sensitive framework of the 2018 proposal, while increasing the quantity and quality of the Enterprises' regulatory capital and reducing the pro-cyclicality of the aggregate capital requirements. Together, the enhancements in the re-proposal ensure each Enterprise's safety and soundness and its ability to fulfill its statutory mission across the economic cycle, in particular during periods of financial stress. The re-proposal is also a critical step toward responsibly ending the conservatorships.

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AI ANSWERS: Weekly Updates from the World's Leading Valuation Authority

Now available!  This week's AI Answers features a discussion with Lyle Radke, director of collateral policy at Fannie Mae. We received information on a range of issues, including a partnership between AI and Fannie Mae on diversity in the appraisal profession, the strong performance of appraisers in the COVID-19 pandemic, and what's ahead for Fannie Mae for the remainder of the year.

Listen to the conversation.

AI Board of Directors Approves Both 45-Day Notice Items on Agenda During Meeting

The Appraisal Institute Board of Directors adopted both 45-Day Notice items on its agenda during its May 7 meeting, which was conducted via videoconference due to the coronavirus pandemic.
 
The Board of Directors adopted a 45-Day Notice item regarding proposed amendments to Appraisal Institute Regulation No. 5 regarding use of Appraisal Institute designations by non-practicing Designated Members. The Board also adopted the other 45-Day Notice item on its agenda, addressing proposed amendments to the Appraisal Institute Code of Professional Ethics and relevant governing documents relating to the deletion of “Service” as a defined term, the addition of the term "Valuation Practice” and the resultant conforming changes to other terms.
 
The 45-Day Notice including both items was distributed to Appraisal Institute professionals March 23.
 
The Board also approved two items for inclusion in an upcoming 45-Day Notice. The first item addressed proposed amendments to Regulation No. 4 regarding streamlining requirements for readmission to designated membership. The second item addressed proposed amendments to Regulation Nos. 1, 2 and 3 regarding the college degree requirement for the Appraisal Institute’s MAI, SRA, AI-GRS and AI-RRS designations. 
 
AI professionals are currently scheduled to receive the 45-Day Notice in mid-June. 
 
In other actions, the AI Board of Directors:
  • Approved appointments to the recently created University Relations Committee;
  • Approved an appointment to fill a vacancy on the Women’s Initiative Committee; and
  • Approved the transfer of funds from AI’s reserve fund to its operating fund.
The Appraisal Institute Board of Directors is next scheduled to meet Aug. 5-6.

National Nominating Committee Nominates Craig Steinley as 2021 AI Vice President

Craig Steinley, MAI, SRA, AI-GRS, AI-RRS, of Rapid City, South Dakota, was nominated for 2021 Appraisal Institute vice president by the AI National Nominating Committee at its May 6 meeting, which was held via videoconference due to the coronavirus pandemic.

National Nominating Committee Chair Stephen S. Wagner, MAI, SRA, AI-GRS, submitted the committee’s nomination to the AI Board of Directors at its May 7 meeting. Board members may file petitions for additional nominees in accordance with the Appraisal Institute Bylaws. The AI Board of Directors is expected to elect the 2021 vice president at its Aug. 5-6 meeting.

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Mortgage Rates Increase Slightly, but Remain Historically Low, Freddie Mac Reports

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 3.26 percent.

“Mortgage rates stayed at or near record lows for the fifth straight week and homeowners are taking advantage with refinance activity remaining high,” said Sam Khater, Freddie Mac’s Chief Economist. “Although purchase demand declined thirty-five percent year-over-year in mid-April, demand has improved modestly over the last three weeks.”

News Facts

  • 30-year fixed-rate mortgage averaged 3.26 percent with an average 0.7 point for the week ending May 7, 2020, up from last week when it averaged 3.23 percent. A year ago at this time, the 30-year FRM averaged 4.10 percent.  
  • 15-year fixed-rate mortgage averaged 2.73 percent with an average 0.7 point, down from last week when it averaged 2.77 percent. A year ago at this time, the 15-year FRM averaged 3.57 percent.  
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.17 percent with an average 0.3 point, up from last week when it averaged 3.14 percent. A year ago at this time, the 5-year ARM averaged 3.63 percent.
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Potential Home Sellers Gearing Up to List as Soon as Stay-at-home Orders Lift: NAR

More than 3 in 4 potential sellers – 77% – are preparing to sell their homes following the end of stay-at-home orders, with half completing do-it-yourself home improvement projects, according to a new survey from the National Association of Realtors®.

“After a pause, home sellers are gearing up to list their properties with the reopening of the economy,” said NAR Chief Economist Lawrence Yun. “Plenty of buyers also appear ready to take advantage of record-low mortgage rates and the stability that comes with these locked-in monthly payments into future years.”

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