Financial Update #3/ Week of August 17, 2009

Good Morning Everyone and Happy Wednesday! Yesterday the stock market ended the day having made up about ½ of its losses from Monday, and today, it appears that they will make up the other ½. The Dow Jones IA has just jumped about 100 points in the last hour or so. We were down 25 points, and now are up about 75. This is having a damper effect on the credit instruments which started the day with some healthy gains.

Our pricing, as you can see, is basically flat from yesterday morning. Investors have a “deer in the headlights” response to all the volatility in the market place this week, due to the fact that the volatility has been within a relatively tight trading range. There are no economic reports today and no Fed or Treasury speakers due to make any announcements or speeches. HP and Deere reported better than expected earnings this morning, possibly this is the reason for the upbeat tone on Wall Street.

The Wall Street Journal article recently published regarding HVCC has garnered a lot of attention in the last couple days. They say that the new HVCC code is squeezing appraisers by making them drive longer distances to accomplish their work, handle more assignments, and work faster to deliver the appraisals as quickly as possible. All this to be done with lower fees – anywhere from $175 to $200 per appraisal. Also, they are being called upon to appraise homes in towns and neighborhoods with which they are not familiar. Have we seen any of this taking place? Of course . . . we all have.

Who is benefitting from this new code? The consumer? Well, according to a spokesman from Andrew Cuomo’s office, the code is working well and helping to protect appraisers from the pressure of having to deliver inflated values. According to realtors and brokers, it’s a train wreck and consumers are getting punished the most. The AMC’s are making money hand over fist and are not really providing that much of a benefit, in my opinion, due to the fact that a large percentage of our appraisals received are needing field reviews anyway. What a mess. All we can hope for is that the legislation for a moratorium of the HVCC gets passed soon.