Louisville Magazine

AUG 2013

Louisville Magazine is Louisville's city magazine, covering Louisville people, lifestyles, politics, sports, restaurants, entertainment and homes. Includes a monthly calendar of events.

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Cutline it's given an identifcation number. Most lenders send it of to someone at an AMC who then assigns an appraiser. Adam Hall worked as a mortgage loan ofcer for 16 years, specializing in afordable mortgage products. He now performs community outreach for Fifth Tird Bank. On the phone one afternoon, he sighs at the mention of the HVCC, calling it a "conundrum." In Kentucky, approximately 110 appraisal management companies have been licensed since 2011. All but one are based out of state. Hall feels that's resulting in a loss of appraisers who intimately understand communities, their history and potential. "What we're seeing is that many appraisers who sign up with these AMCs will say, 'I cover all 120 counties of Kentucky,'" he says. "And that's completely unrealistic that an appraiser could have market knowledge in all those areas." Te Kentucky Real Estate Appraisers Board has received complaints. Larry Disney, the board's director, says his agency works to improve appraisers' knowledge on specifc regions. 36 LOUISVILLE MAGAZINE 8.13 Good bureaucratic intentions often fumble, hitting unforeseen snags. Another HVCC stipulation that might ft in the conundrum column involves what's called a market-conditions report. As part of the appraisal process for any federally insured loan, appraisers must fll out a form indicating whether foreclosures plague the area. Boxes labeled "increasing," "stable" or "declining" await check marks for a series of questions involving area sales prices and active listings. If a large percentage of vacancies and distressed sales exist, that "declining" box may get tagged repeatedly. "For a lender, that's an incredibly risky transaction," Hall says. "Because if I own a home there and a fourth of my neighborhood is vacant, how long will I hang on before I bail?" Appraisers have always had to analyze comparable sales. Now, though, in struggling neighborhoods, the only recent sales may be short sales or foreclosures. Not only does this zap neighboring homes' worth, but it also results in a dubious market-conditions report, making it more difcult to secure a loan. The under-appraised Russell-neighborhood home of William and Anita McGruder. Realtors were among the frst to notice that stricter rules were yielding lower appraisals. In 2012, the National Institute of Realtors estimated that about onethird of all deals were canceled, delayed or renegotiated to a lower price due to low appraisals. Of course, it's unfair to blame appraisers for a depressed housing market, or for acting conservatively after the loans-forall model crippled the economy. And real estate's divine trinity — location, location, location — guides values more than anything. Hot neighborhoods attract investment. Purchasers multiply. Values soar. It's all quite logical — until a location stops being hot. Activity dwindles. Values tumble. No easy, quick remedy exists. I f Lisa J. Houston harbors a less-thankind streak, it's undetectable. Her voicemail greeting charms: "You've reached the voicemail of Lisa J. She can't get to the phone right now, so hopefully

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