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The Week Ahead: Homeowner, Appraiser Opinions Separating

ups-and-downs-graphHome values assigned by appraisers were nearly 2 percent (1.93) lower than what homeowners perceived them to be in June, according to Quicken Loans’ Home Price Perception Index (HPPI). The gap between appraisers’ assigned values and homeowner perceptions has increased slightly since May, when it was 1.89 percent.

“Perception is everything. It can make or break a home sale or mortgage refinance,” said Quicken Loans Chief Economist Bob Walters. “That’s why it’s so important for homeowners to realize how they perceive their home’s value could vary widely from how an appraiser views it. If the estimate is lower by just a few percentage points, the buyer could need to bring as much as another several thousand dollars to the table to avoid having to restructure the loan.”

Quicken’s national Home Value Index (HVI) showed a modest increase of 0.84 percent for appraised values from May to June. Year-over-year growth in June was much stronger at 4.47 percent.

“Nationally, home value increases are well within the healthy range,” Walters said. “Although, the variances across the country can influence owners’ perception. Owners in the West, where appraised values are rising more quickly, tend to underestimate their home’s value. The opposite is true for those in the Northeast, with appraised values showing slower growth.”

Walter Investment Q2 Earnings: Tuesday, August 9

With Walter Investment Management Corp.taking a loss during Q1 and both Ocwen Financial Corp. and Nationstar Mortgage Holdings reporting net losses for Q2, all eyes will fall on Walter to see what their Q2 earnings report holds this Tuesday, August 9.

A significant rate decline in the first quarter negatively impacted earnings for Walter, and as a result, the company took a net loss of $172.7 million during the three-month period, according to the company’s Q1 2016 financial results released in May.

The net loss represented a year-over-year decline of about $142 million in net income; in Q1 2015, Walter suffered a net loss of $31 million. Walter’s total serviced portfolio had $275.7 billion in unpaid principal balance (UPB) at the end of Q1 2016, an increase of 3 percent from the previous quarter, and the company was ranked nationally as a top 10 servicer, according to the announcement from Walter. The company’s total revenue in the first quarter declined by $244.1 million year-over-year down to $66.8 million, largely due to a $196.6 million decline in net servicing revenue and fees reflecting a $197.3 million change in fair value changes to mortgage servicing rights, according to Walter.

Likewise a similar disappointing outlook found both Ocwen and Nationstar during Q2. Financially, it has not been a good year for Ocwen. through the first six months. After reporting a net loss of $111 million for the first quarter of 2016, the nonbank servicer came back in the second quarter with a net loss of $87.2 million (71 cents per share), according to Ocwen’s Q2 earnings report released earlier this month. Following Ocwen’s reported net loss last week of $87 million for Q2, Nationstar Mortgage Holdings reported a net loss (for GAAP purposes) of $92 million for the three-month period ending June 30.

This week's schedule

Tuesday, August 9

Walter Investment Corp. Q2 Earnings

Home Price Perception Index (HPPI) for June 2016, Quicken Loans

Friday, August 12

Consumer Sentiment for August 2016, University of Michigan's Consumer Survey Center

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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