This graph shows the continuous flow of foreclosure activity in Clark County Washington for the last two and three quarters years.

The foreclosure activity was in the 75 to 100 per month range in the beginning of 2005.  Then it dropped to around 50 to 60 per month in the fourth quarter of 2005 and the first quarter of 2006.  After that began the continual increase to the beginning of 2008 when it leveled off.

As noted in the last posting here (which showed only 2008 numbers) the foreclosure activity was very stable for the first two quarter of 2008.  It was running at an average of 3,000 filings per year.  But, as you can see it became irradic during the third quarter of the year.

Also, as you read this chart, you should keep in mind that the notice of trustees sale doesn’t get filed until the loan has become delinquent and been delinquent for a time.  So, these statistics always FOLLOW the problems with the loans they represent.  That would mean that the  erratic behavior of the summer of 2008 was indicative of the performance of the market in the spring of 2008.

What is your prediction of the statistics for the winter of 2008 to the spring of 2009????  I say that the numbers will be higher in the fourth quarter of this year than they are now, then will level off (if not drop a bit) in the late winter and spring of 2009.  This would be because the Fed has taken a lot of us taxpayers money and promised to use it prudently to save our sorry selves.  And, when have you ever known the Fed to not act prudently with our money??????

Ralph Olsen, IFA

Pacific West Appraisal Services, Inc.

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 Here are the latest statistics from Clark County.  Following is a graph of foreclosure filings for the first nine months of 2008.  The trend line is pretty flat in the fist six months, then jumps, dives and returns to about the same level of approximately 250 filings per month.  Of course, if you have been following these reports for the last year of so, you realize that this rate is about four times what it was two to three years ago.

Perhaps the ups and downs of the summer were in anticipation of the current state of the market.  I will keep tracking this to see where it goes.

Ralph Olsen, IFA

Pacific West Appraisal Services, Inc.

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The FHA no longer uses the Valuation Contingencies sheet.  There is no A-Z list of specific inspection requirements.  However, there are some things that the appraiser is required to look at during the house inspection part of the appraisal process.  The following items were mentioned by the FHA at their recent presentation here, but my notes does not represent their complete list of concerns.

The appraiser must inspect all electrical, mechanical and plumbing systems and state that they are acceptable and working normally.  They either are or they aren’t.  It is unacceptable to say that they “appeared” to be working property.  You have to say they “are” or they “aren’t.”  If a house is “weatherized” and it is summer, you have to have the systems turned on so you can inspect their operation, before you complete the appraisal.  If there is any problem with any of these systems, call for a professional inspection.

If the lender, in any way, suggests a value level or threshold you (the appraiser) is expected to meet, you are to report this to the FHA immediately.

The photos of the subject property must show all sides of the subject improvements.

ALL buildings on the subject site MUST meet all FHA standards, or be removed from the property.  No exceptions.

Interior photos are not required, but are advised.

There is no requirement by the FHA to measure distances from roads to wells or septic systems, etc.   Nor is it required to measure distances from wells to septic systems.

Well inspections are no longer mandatory.

The FHA case number must be on every page in the report.

The “Intended User” is the FHA.

Properties “off the  grid” are acceptable to HUD/FHA.  The appraisal must provide documentation of market acceptability.

Bare exterior wood surfaces must be painted before the loan will close.

Accessory dwellings are acceptable, but must be connected to the main house utilities.  The accessory dwelling can not have its own utilities connections with its own meters.

An estimate of Remaining Economic Life is required for all appraisals.

Ralph Olsen, IFA

Pacific West Appraisal Services, Inc.

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