Log Cabin Appraisal And FHA Lending Issues

[CANative]

If Heritage.org is where you get your information you'll never want for moonshine. (Paraphrased from Ted Sandyman the millers son. Lord of the Rings.)

http://www.rightwingwatch.org/content/heritage-foundation

 

[CANative]

John Ligon

• Senior Policy Analyst and Research Manager

• Center for Data Analysis

The Institute for Economic Freedom and Opportunity at The Heritage Foundation

Oh brother., rolls eyes.

 

[Elliott]

If you don't think tax payers are picking up the bill on FHA or that you think these organizations are "self-supporting," remember that were it not for the boobs at the government running it and getting great retirement and medical benefits, far superior than us peasants get, remember that were it not for the government monopoly on this insurance there would be private companies who could run circles around FHA, who would generate profits and real taxes.

 

[CANative]

What do you mean by tax payers picking up the bill on FHA. Be specific.

 

[Michigan CG]

...............We are having a problem with getting it appraised. We have a contract on it, and the buyer is going through FHA at the bank. They have put the appraisal up for bid, but the rotation they are using has not resulted in any appraiser taking the job..................

The biggest problem you have is who the buyer is using for a lender. You don't mention the bank but if the bank uses an AMC they aren't looking for the most competent but just someone to do it, most of the time based on fee and turn time.

If the buyer was going through a local bank most local banks know their appraisers personally and have that one guy/gal or maybe two guys/gals that they choose for the tough ones. AMCs don't rate appraisers based on who is good at the tough assignments or has the ability to take on the weird one, but they absolutely know who the turned a report in six hours late or who they have never used because their fee is too high.

I do commercial for a local bank and once every six months or so they contact me to do a residential assignment. For their typical homes they have their normal people that suit their needs fine. I get contacted for the goofy stuff and the joke at the bank is that I charge too much and I will take a long time. The joke doesn't offend me.

You need a buyer who isn't going through a lender who uses an AMC and puts it out to bid but rather a lender who knows the talents of the appraisers on their roster.

The FHA financing is the final nail in the coffin. You need a different buyer.

 

[CANative]

FHA will accept log houses as eligible collateral.

 

[Elliott]

CAN asked, What do you mean by tax payers picking up the bill on FHA. Be specific.



Crucially, the FCRA accrual method significantly understates the costs of these insurance guarantee subsidies in the FHA single-family mortgage insurance practice.[27] In fact, between 1992 and 2012, there was a $60 billion difference between the accounting method required under the FCRA and a method that would more appropriately reflect market risk. The accrual accounting method shows the single-family mortgage insurance practice “saving” the taxpayer $45 billion compared with a “cost” of $15 billion using the fair-value accounting method.[28] In recent years, the FHA has treated the 2 percent capital reserve requirement casually. In 2012 and 2013, the FHA required several billion in appropriated funds to cover deficits in the MMIF program and the lack of loss reserves in the capital reserve account.

http://www.heritage.org/research/re...housing-administration-what-record-of-success

 

[CANative]

Yeah Elliot. Others posted the link from the RW/Tea Party writer. It's a hatchet job. Even if you give the story credit, a mere $60B over the life of the 80 years that FHA has been enabling the little guys the chance at home ownership and the benefits that accrue to society is a drop in the bucket and has returned way more than that.

 

[Elliott]

So where do you get your information? Huffington Post?

"Most importantly, the FHA has had a negligible impact on homeownership rates over the past several decades. Specifically, substantial research shows that the FHA’s single-family mortgage insurance portfolio has had little effect on increasing total homeownership. At best, the FHA has accelerated the purchase of a home by a few years.[15] In other words, if FHA mortgage holders had waited to borrow, they would have most likely done so in the conventional mortgage market instead of relying on government-insured loans."

 

[CANative]

http://www.mortgagenewsdaily.com/11172014_mmi_fund_fha.asp