Phil Grossfield's Blog

MERRY CHRISTMAS!  Wishing you and your family the most wonderful Christmas!  And for those of you where English is a second language, I’ll say Merry Christmas to you in your first language.  And for those of you not celebrating Christmas, have a wonderful long weekend.  I think that about covers it!

My Market Update – 12/24/2014

Passenger Shame.  Flying this year?  I hope you don’t run into any of these people.  A former flight attendant reports on her Passenger Shaming Facebook Page the disgusting behavior of our fellow travelers.  Yich!  Check out the CNN video:

My Market Update – 12/23/2014

That’s My Dad!  I posted last week about my childhood visits to the Dayton’s (now Macy’s) Holiday Display in downtown Minneapolis.  I didn’t know it, but we actually got a group picture, my father included.  I never thought in a million years I would ever see my Dad (82) posing with Santa…but here it is, indisputable evidence of the same.  It just goes to show that anything is possible!

My Market Update – 12/22/2014

The 30-year Fannie Mae bond is trading at par since Friday’s close.  Generally a lender’s pricing improves when the bond is being bought and gets worse when selling off.  Today neither is happening so you’d expect pricing to be the same as Friday’s close…and it is.

It’s not broken, but it is sprained, and that’s good, I guess. Quite frankly, I really don’t care if its a strain, a sprain, or a fracture…I just want it to heal quickly. Everyone I’ve spoken to has an opinion about what heals faster. My doctor said a sprain can take 4-6 weeks and a fracture can be longer. A trainer I know said a sprain can take longer than a fracture…ugh. Without exercise I could go batty, and, I could get large(r). Aiaiyyaiiaii!

Let the record reflect, I’m not one of those people that does real well on a diet and without the ability to exercise I fear all the new clothes I’m going to receive for the holidays won’t fit in 3 weeks. That is, I like to eat. And, I like to eat things that aren’t typically found in many dieting books. Moreover, I celebrate both Hannukkah and Christmas which means there are twice the treats. This time of year I like to eat cookies… lots and lots of cookies. My Mother-In-Law makes serious cookies… back-from-the-olden-days-cookies if you know what I’m saying. What’s a brother to do?!?!!!

What a B.E.A.U-tiful morning yesterday, particularly for a run. And after a nice pre-jog stretch my running partner Pongo and I started off. The first 5 minutes or so are always the hardest for me but then I always catch my wind. I freed Pongo from his leash as we entered the park. Man, I was feeling good…happy actually…and I thought this might be a good morning for an extra long journey.

WABAMM!  Next thing I knew I was face down in the wet grass. Pongo ran right through my legs in full speed and took me out. I wish I had a video of it as I imagine it would have made Laurence Taylor proud. However, as I got up I realized my ankle was tweaked. And as I tried to walk on it I realized it was likely more than tweaked. I’ve had many ankle tweaks throughout my illustrious career as an amateur basketball player but this ranks right up there with the best of them. After an entire day of staying off the wheel and icing it down, it’s no better…I’m headed for an x-ray. I’ll let you know…

It’s out of control, wouldn’t you agree?  The HVCC and Dodd-Frank rules seem ineffective in protecting the victim…the borrower. Instead, the result is a much more difficult loan process, paranoid appraisers, and borrowers who pay more for the appraisal and often times have to pay more than once.  But that’s just my opinion.

I’m sure many of you agree.  One such reader is my friend and OC broker Jeff Lazerson who writes for USA Today.  In his latest published article entitled “Appraisal Hypocrisy Hits Home,” he claims its far worse for borrowers in terms of appraisal costs and resulting valuations.  He says if you ask any veteran loan originator the number 1 reason transactions fall apart is low-ball appraisals, not what most people think which is tighter credit standards.  As he puts it, “the emphasis is now on volume, not quality.”  We’ve all seen this…an appraiser who is under-paid and now paranoid for getting scrutinized will low-ball the value when we can easily identify the overly conservative approach in his appraisal and counter it with different comps or an entirely new appraisal.  What a waste of time and money since lenders have virtually no power to influence corrections.

Equally frustrating to me is the inability of many lenders to transfer an appraisal or accept the same.  I don’t understand this.  After all, the borrower is paying for the appraisal…it’s theirs…they own it.  Yet many lenders will not accept a perfectly valid appraisal even if was performed just days previous by a respectable AMC.  This is particularly true of Jumbo investors whose wholesale broker clients must require the borrower to pay for another appraisal…and on a jumbo loan it’s typically more expensive and guidelines require two original appraisals for loan amounts >$1m.  In these circumstances I feel horrible for the borrower…it makes no sense!

I’d love to hear your feedback on this issue.  Check out Jeff’s article on USA Today:  USA Today “Appraisal Hypocrisy Hits Home” by Jeff Lazerson.