Geo Competence Part 2

[Mr Rex]

So prior to 2006-2008 when evals were less in play things were hunky dory or at least better than now? What has changed other than banks know they can never fail no matter how reckless they are within the current dubious regs?

 

[George Hatch]

Non-lenders? Secondary market isn't universal. About 50% of bank lending is in-house or private non-FHA, VA, or Fan/Fred. Some banks have no loans thru secondary market. They are internally funded. Tyson, Walton, etc. are putting their own money to work, not the secondary market.
You need to get further from home George... you know, places where a 1800 sf house doesn't cost $1,000,000. Explain the demand for raising the de minimums to $500,000 then. In Wally World hdq. (Bentonville, AR) that's most commercial and residential property. 26 properties sold for over $500,000 (last six mo.) in a place with over 600 sales and the bulk of sales were between $250-500,000. Never mind Hel's, personal loans backed by RE, etc. The evals are running hot and fast as is. Ten years ago appraisers did almost all below de minimums work. A couple in house appraisers who also reviewed, a couple of small banks had a non-licensed evaluator.

So again, if all this is strictly a secondary market issue why would banks want to raise the de minimums? Whose skin is in the game?

We have homes in this region that sell for less than $100k. They're just distant from employment.

As for the little rural banks who think their teller can do appraisals, they're exactly the types of institutions that will fail if they make a 6-figure mistake; and in fact some of them do fail for that reason during every downturn. Relying on them as the backbone of a book of work might be a risky proposition if they're doing dumb things with their collateral decisions.

Regardless, I am not stuck in widget mode with commercial appraisals, so I can still make a buck at a competitive price with an eval provider. I've been doing that for years. Anything they can do, I can do better and faster. After all, this is what I do for a living.

It's not my license that protects me from non-appraisers and idiots; it's my competency.

 

[Terrel L. Shields]

they're exactly the types of institutions that will fail if they make a 6-figure mistake;

TBTF banks get bailed out. CA has the highest number of welfare recipients in the nation, and the cost of housing is sky high.

The three smallest banks in our region were the best capitalized (ratio wise) and sound around.The only one that was in serious trouble was because they owned $70 million in stock in a larger bank. That bank was taken over at the very beginning due to over-expansion into Jackson Hole and St. George financing builders, wiping out half the smaller banks reserves forcing them to call in loans and sell out to another subsidiary bank. That new bank was capitalized by some Walmart executives who dropped the appraisers and took on a evaluation company. They rarely make any loan over $250k. Another of those old banks will not lend over 50% LTV on commercial property. They were all in house, but examiners made them appraise all their commercial property after they had some high dollar defaults. But they were not in danger of being taken over. As for Jim Walton, I'm not too concerned about Arvest going under anytime soon. I have no idea where a branch of Wells, BoA, or Chase is in NWA. Our banks are mostly larger regionals, Iberia, Regions, Simmons, Bank of the Ozarks. And they are lending their own cash in many cases. The banks that came in as fly by night firms lending millions to developers were the bozos that got burned, not small rural banks.

 

[TRESinc]

They can, or might expand that precedent of reviewers doing out of state/area to appraisal work regarding value opinions.

then again they couldn't, or probably won't expand. you are starting arguments for the sale of arguing, possibly to boost your post count as well. res beat you last month...