New Real Estate Business Rules Affect Appraisers

New rules instituted by Fannie Mae and Freddie Mac in May have left some real estate appraisal businesses in the lurch. Until the new rules went into effect, banks and other lenders were free to choose their appraisal firms. Since May however, lenders must contact an appraisal management company, which then assigns an appraiser to evaluate a property.

Banks and other lenders say that they prefer to choose the appraisers they work with and that the new rules are slowing down the process of approving or denying real estate loans. Appraisers, many of whom operate their businesses from their homes say that appraisal management firms are cutting their pay by as much as half, and awarding work to inexperienced appraisers who aren’t familiar with the neighborhoods in which they’re working. This in turn produces property valuations that are either too high or too low, and is causing otherwise solid home sale offers to fall through.

Restaurant Business Is Giving Mixed Signals

Restaurant spending was up in August for the first time in months. Eating out is considered a discretionary expense, and is often the first cut consumers make when they’re trying to save money. Although restaurant spending did rise by 0.1%, analysts say that the rise is more likely attributable to an increase in the price of food, rather than a vote of confidence on the part of consumers. Restarant financing is still a big problem for restaurant owners, who say that poor sales combined with tight credit are keeping them in a holding pattern.

Photo Credit: Liz West, via Flickr

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