December 2009

STUDY CONCLUDES AMC APPRAISERS TRAVEL
AN AVERAGE OF 13 MILES TO NON-RURAL ASSIGNMENT

A survey conducted by the Title Appraiser Vendor Management Association (TAVMA) concluded that "the typical driving distance traveled by independent appraisers, retained by the nation's largest appraisal management companies (AMCs), averages 13 miles in urban and suburban areas this year," TAVMA announced in a press released last month.

"We polled our AMC members in light of unsubstantiated statements that AMCs send out-of-market appraisers great distances to value properties," said Jeff Schurman, executive director of TAVMA. "Based on what our members are reporting to us, that's simply not the case."

There is no question that appraisers tend to travel further, on the average, to reach their assignments in rural areas. The United States has more than 3.5 million square miles of land and about 60,000 residential real estate appraisers. This breaks down to one appraiser for every 59 square miles of land.

Schurman said the organization, of which ELLIOTT® & Company Appraisers is a member, would continue to monitor the situation.

"Going forward, we will survey and report on average driving distances quarterly," he said.

MERRY CHRISTMAS FROM
ELLIOTT & COMPANY APPRAISERS

All of us at ELLIOTT® & Company Appraisers wish you a Merry Christmas and a Happy New Year. During this holiday season, we would like to take a step back and express our appreciation for the business we have received from our long-time clients, as well as the ones who have started doing business with us this year.

Our office will be closed on Friday, December 25, and Friday, January 1, for the holidays. We will be open all other weekdays during the holiday season, including Thursday, December 24, Monday, December 26 and Thursday, December 31, offering appraisal service in all 50 states.

FANNIE AND FREDDIE MIGHT SELL
THEIR NONPERFORMING MORTGAGES

According to an article by Paul Muolo for National Mortgage News, Fannie Mae and Freddie Mac have been putting out feelers on the possibility of their putting collectively about $250 billion worth of nonperforming single-family-home loans on the open market.

"There's been a lot of meetings and they're talking to a lot of people about it," an anonymous investment banker told Muolo about these GSEs and their interest in unloading such nonperforming loans (NPLs). "But they're a long way from doing anything yet."

If Fannie and Freddie eventually do sell the NPLs, the buyers, according to Muolo, would most likely be hedge funds and investment partnerships.

"The NPL market continues to operate in a somewhat secretive manner, with little public disclosure on auctions and sales," Muolo wrote in his article. "But if Fannie and Freddie eventually decide to unload their NPL wares all that could change. It also might mean that, potentially, $250 billion in delinquent mortgages might flood a market that already has plenty to offer."

Muolo indicates in his article that such action could have a downward effect on home prices. His anonymous sources appear to be telling him that NPL owners, including the two top GSEs, are somewhat reluctant to sell because they are disappointed in the amount buyers for these troubled assets seem to be willing to pay.

"Then again, Fannie and Freddie are owned by the government and have already set up massive reserves," Muolo pointed out. "They no longer have to answer to shareholders and can afford losses that the private sector cannot stomach."

SILVERDOME SOLD FOR PEANUTS

The Pontiac Silverdome, which was home to the Detroit Lions and Detroit Pistons and hosted Pope Paul II and concerts by Elvis Presley and other legendary acts, has been sold for about 1% of its original price. The legendary stadium was built for $55.7 million in 1975 for the purpose of hosting the NFL Lions. The suburban city of Pontiac sold it at auction recently to a Toronto-based family real estate business run by Andreas Apostalopoulos for $583,000.

In addition to serving as the home of the Lions (1975-2001) and Pistons (1978-88), who broke NBA attendance records there, the Silverdome hosted a Super Bowl, an NBA All-Star game, a visit by Pope John Paul II, which was the largest attended mass ever, and other history-making events. When Elvis gave a New Year's Eve concert there in 1975, he said he would close out every other year by performing at the Silverdome. He died less than two years later. Other famous musical acts to perform there include Michael Jackson, Led Zeppelin and Pink Floyd.

The Canadian owners are said to be planning on refurbishing the Silverdome and making it home to a Major League Soccer team, as well as a women's professional soccer team.

"The Silverdome will now be in the hands of professionals who can devote their time to transform this high-profile property into a vital asset, instead of enabling it to continue to languish as an empty facility," said Fred Leeb, the city of Pontiac's emergency financial planner.

ASK MARTITIA

QUESTION: A lender obtains a copy of an appraisal report done for a different client. He then contacts the appraiser to ask questions about the report. Does USPAP allow the appraiser to answer this lender's questions?

MARTITIA: Under the Uniform Standards of Professional Appraisal Practice, an appraiser is not allowed to discuss assignment results or confidential information with anyone but the client, people authorized by the client, or individuals authorized by the legal process, appraiser regulation agencies or, under special circumstances, a professional peer-review committee. In other words, the lender asking the questions to the appraiser must be authorized by the appraiser's client in order to receive answers to his questions.

Martitia Mortimer, Elliott’s executive vice president, answers appraisal questions on a regular basis in Elliott Real Estate News.

AUCTION RESULTS

REAL PROPERTY: Two New Orleans mansions owned by actor Nicholas Cage went for 2.3 million and $2.2 million, respectively. They had been appraised at $3.45 million apiece prior to last month's auction. Cage, who is going through IRS and other financial problems, calls one of the homes, the infamous LaLaurie Mansion, "the most haunted house in America."

PERSONAL PROPERTY: Three bottles of Vieux Cognac, dated 1788, went for $37,000, $31,000 and $27,300, respectively, during an auction held earlier this month in Paris. Tour d'Argent, a landmark restaurant in France's capital and largest city auctioned 18,000 bottles from its cellar. Proceeds from these ancient bottles of cognac went to charity.

QUOTES

"A government big enough to give you everything you want is big enough to take away everything you have."  –Thomas Jefferson

"Adopting the right attitude can turn a negative stress into a positive one. "  –Hans Selye

"People think computers will keep them from making mistakes. They're wrong; with computers you make mistakes faster."  –Adam Osborne

"Human beings are the only creatures on earth that allow their children to come back home."  –Bill Cosby

"No man needs a vacation so much as the man who has just had one."  –Elbert Hubbard
 

Newsletter Editor: kevin@elliottco.com
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