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This Reminds Me Of The 1986 Refi Wave!

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Verne Hebert

Senior Member
Joined
Feb 25, 2002
Professional Status
Certified General Appraiser
State
Montana
It's getting harder and harder to maintain any "holes" in the schedule to handle really important emergencies.

Reminds me of 1986 boys and girls.
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Not that bad yet..

We had refi appraisals in process for six months back in 1986...appraiser's were getting sued back then because sales were falling through since the mortgage company did not meet the commitment date and the sellers were canceling the sales contract and reselling the home at a much higher price to a new buyer...who couldn't get a mortgage commitment either and the process would be repeated. So sales had the priority and the refi's just sat there and waited. Man, I remember buyers for new homes at $80,000, with a 5% down deposit, closing with the builder and reclosing on the same home later in the same day with a new buyer at $125,000. They would stay in their old home and just pocket the $45,000.

I would leave the phone off the hook for an hour at a time because I didn't want to take all the status request messages... or the requests for new orders or listening to new clients calling looking for an appraiser...Like Duh..if your appraisers are busy..don't you think that all of the other appraisers are busy too...All I can say is thank God there were no fax machines back then.. I'd have to unplug it.... :D

Thanks for the memories...So you remember those 18% interest rates also? My brother in law bought a row home in Philly back then for $20,000. Interest rate was 17.5% plus .5% for MIP and 9 points. Most yuppies would faint at those rates today. They complain about 1/4% increases...boy, they've got lots to learn....

Ben
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
You guys are just kids. I can remember the day the world stopped spinning just before the interest rates skyrocketed around the mid 70’s. We had plenty of free time them. The market was buzzing along at a steady pace. I remember I was in the real estate business and we had a big diary farm for sale. I found two old boys that wanted to go partners and buy the farm if they could get a loan. We found some insurance company that made long term loans on diary farms and they sent one of their LO’s to meet us and inspect the farm. You guys won’t believe what this idiot told us when he walked into our office. Quote: “I can tell you before we ever get started that your client is not going to get a loan because just before I left my office I was instructed to freeze all loan commitments until further notice. The only reason I came was because I didn’t have anything else to do and I love to look at diary farms.” Wasted my whole damn day and my gas. He was right too. The money market dried up for a few months and then the rates rocketed to record levels. That whole deal was planned for some reason and I believe it was to stem hyperinflation. It worked too. If I could get minimum wages for the wild goose chases I have been on I would have been retired years ago.
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Austin,

No kid here. I was around in 1974. That's when I started appraising full-time... when I was 20. The reason that the market froze was every state had a usury law back then and the only way to get around it was to sell the loan in the secondary market to Fannie or Freddie. You had one year to sell them. If not, then the interest rate went back down to the state usury limit and the excess interest had to be refunded to the borrower. Our usury limit in NJ was between 9 and 10% back then.

The old pres at my S&L got really PO'd if a loan was bounced by Freddie or Fannie because of an appraisal and he had to refund the excess interest. That fear alone killed off the "space command" at the S&L. Remember those guys, the Directors that also did the appraisals in-house as a side job??? They were a hoot. The oldest guy did the first floor and the younger guys did the basement and the second floors... got to watch out for those heart attacks...

Ben
 

Verne Hebert

Senior Member
Joined
Feb 25, 2002
Professional Status
Certified General Appraiser
State
Montana
How sweet it was!

...And those teak trash "cans".
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
It was that period that caused me to buy my first computer and appraisal software. Would you believe nearly $5,000 for an 8086 with tractor feed forms????

We are either more organized or more efficient this time. Still a couple of weeks behind but nothing like the 80s where 90 days was the common response to turn time.
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Hey Garrett,

I got a TRS-80 Model 1, 3 and 4P in the attic...interested???? :D :D How about a giant Diablo daisy wheel printer???? :blink: :blink:

Actually, we had to buy the Model 1 for the software that Don/John Dorchester??, MAI wrote because no one had mortgage constants in print for interest rates that high......

Hey, anybody remember those 3M copy machines with the pink rolls and the vacuum cleaner lids that sucked the original off the pink roll while it zoomed by??? They were a trip...

Ben
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Let me tell you kids another one. Back in those days the S & L picked four Realtors to do the appraisals. My dad was a Realtor that had some of the society courses so he was one of them. He did their appraisals on Tuesdays. I knew all of the appraisers very well as they were always in our office and two of them once told me that one day working together they did 35 appraisals and turned them it. It was simple back in those days. The entire market was compressed to within a range of $30,000 so you couldn't be but so far off.
The old appraiser that was considered the local guru was not even a Realtor, he was in the insurance business. Years ago after I had taken all of the MAI required classes he would come by to get my opinion on something. He came by one day and he had just appraised the local AT&T service garage facility where the installation and repair service operates out of. He had just sent the appraisal in and as an after thought dediced maybe he should bounce it off young Austin. The appraisal was for the lessor and there was 20 years left on the lease. He used the cost & sales comparison approach and appraised the fee simple interest completely ignoring the lease income which was considerable. When I told him what he had done I wish you could have seen his face.
If you kids think LO's are bad now, this S & L called me once and asked me if I wanted to do their appraisals, and I said sure. They told me to come by and pick up some forms. I went by and this LO took me into his office, went into a file cabinet and took our a 1004 form and explained what their appraisal policy was which consisted of that form and three pictures. I explained that to make it compliant with USPAP we had to do more than that. His reply was: "We are not concerned with that, we make our own rules."
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
My brother was one of those REALTOR® appraisers back in the late 60s. He was (or says he was) the first FHA appraiser for Colorado Springs. Appraisal fee was $15. When I started in 1980 we used a "house form" (pre URAR) and attached a single black and white poloriod pic. The fee was $35. All FHA's were done in pencil on a one page form.

I recently gave away two computers and color monitors because there was no market for them. Have two more I will be selling in a garage sale, pentium IIs. Nice machines, just too slow.

Ok, now for the really funny part. I got my real estate license in 1968. I bought a four function Casio calculator for almost $200. Little tiny display (red numbers). Now I buy one for $3.88 at Walgreens, doesn't even need batteries and the display is really big...even the old guy can read it! :rofl:
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Mike: You raised another interesting subject about appraisal fees. Back in the 60’s my dad was doing appraisals for $15. I think the S & L was paying $35. When I started doing appraisals in about 1973, for a second mortgage company they paid $75 and all I had to do was fill out a 1004 form in pen and use two comps with three very bad pictures with no reviewer, no or USPAP. We appraisers were like gods back in them days. Our word was law. I didn’t want to do appraisals so the company raised the fee to $125 then to $175, then in the early 80’s to $200 or basically name your fee just do the work. People talk about prices going up but if you adjust appraisal fees for inflation we are the only profession charging less now then we were 20 years ago by far. When you adjust for the added content and detail, licensing and CE, etc., if you adjusted the fees we should be charging $600 +++ per pop.

Mike, when I lived in Colorado Springs I took a really good real estate class from a company that was developing a new city south of Colorado Springs called Colorado City. They had the roads and infra structure in place and were selling lots. At the time, a real scam operation in my view but they had a good course. What ever happened to Colorado City? I did learn one of the most valuable real estate facts I know from that outfit though. They shot us this line about all of the growth projections like you would not believe and how the country would be out of land for development by the year 2,000 etc., and they were telling us this crap as we were riding down the highway to the City. I could look out the bus window and look for 100 miles in either direction and see nothing but rolling prairie country. When we got to Colorado City I realized that this country has millions of acres of land but due to certain factors like water, power, and transportation etc., there are very limited places for civilization to exist on this planet.
 
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