Appraisal News and Appraisal Tips For Real Estate Appraisers - Your source for appraisal industry news, appraisers' opinions, and discussions of appraisal issues

Warning: General Liability and FHA Appraisals 7

Warning: General Liability and FHA Appraisals

I called Peter Christiansen of LIA Insurance to ask him some questions about the new FHA requirements and the change from “should” to “must’. FHA appraisers are vulnerable to lawsuit because there is a greater incidence of defaul among FHA properties due to the high percentage of loan to value (97%). However, not only are they more vulnerable for suits as the result of foreclosures, they are also more vulnerable for other suits because of the added requirements of FHA. Peter brought up the issue of general liability and the exposure that an appraiser faces by doing the things required...

Is It Possible to Commit Fraud Unknowingly - Imagecredit Flickr - GotCredit 0

Is It Possible to Commit Fraud Unknowingly?

I have recently read several different posts and articles on the Internet stating that some appraisers have committed fraud unknowingly. Some describe instances of stating condition to be average when the property needed work, or “tweaking” the numbers to make the deal work. First of all it is important to note, the FBI defines mortgage fraud as “any material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan”. By that definition, such fraud can clearly be committed by both lenders and applicants, even though the latter may not think their misrepresentations...

AMC Dangers: Appraisal Management Companies (AMC) are changing how our profession works - Imagecredit Flickr - Yahann Legrand 3

AMC Dangers

Appraisal Management Companies (AMC) are changing how our profession works. It’s important to know exactly how they are affecting the real estate process, especially if you are a home-owner, looking for real estate or are involved in another part of the property. Who does an Appraiser work for? An appraiser works for “The Client” named in the report who ultimately responsible for the appraiser’s compensation. It is important to realize that while a borrower may have paid a lender or third party the cost of the appraisal, “The client” remains the only party authorized to use the report. The appraiser...

Is AQB Potentially Changing Course on Appraiser Qualifications - Imagecredit Flickr Judit Klein 55

Is AQB Potentially Changing Course on Appraiser Qualifications?

Appraisers & others, The Appraisal Qualifications Board (AQB) is one of the voluntary Boards under The Appraisal Foundation. Their role is to analyze, debate, review, and decide the minimum qualifications necessary for a person to become an appraiser. While all who currently or in the past have served on this Board, are individually good and experienced people, collectively by Board action they have nearly caused residential appraising to grind to a halt due to their highly restrictive policy decisions. Yes, this a strong statement, and ‘halting’ won’t happen until the majority of current residential appraisers retire or leave not long from...

Appraisal Fee Disclosure - Call To Action - CFBP requesting comments 8

Appraisal Fee Disclosure – Call To Action

Important – Call to Action This must be done by Tuesday July 7 The Consumer Financial Protection Bureau (CFPB) is requesting comments on the proposed amendment to the “Know Before You Owe” mortgage disclosure rule, which proposes to move the rule’s effective date to October 3, 2015. We feel it is very important that the appraisal fee be disclosed separately from any add on fees such as an AMC fee. Recently 23 state appraiser coalitions including the Louisiana Appraisers Coalition worked together and submitted a letter to the CFPB about making it a requirement to separate the fees of the...

Separating Appraisal Fees from AMC Fees - Imagecredit Flickr Tax Credits 3

Separating Appraisal Fees from AMC Fees

On July 1, 2015, the Network of State Appraiser Organizations (NSAO) submitted a joint letter in response to the CFPB request for comments on the proposed amendment to the “Know Before You Owe” mortgage disclosure rule, which proposes to move the rule’s effective date to October 3, 2015. It specifically addresses the lack of requirement to mandate disclosure to the consumer that the fee paid for an “appraisal” be clearly defined and break down what portion is being paid to the lenders’ third party appraisal management company and which portion of the fee is actually paid to the appraiser. Dear Ms. Jackson, This letter...

Do you laser - laser distance measuring tool 3

Do You Laser? Watching the Red Dot

Laser Measuring Tool One of the fastest and reliable ways to measure properties is with a laser distance measurer.  These devices are accurate to 1/8th inch over long distances, not that we ever need that preciseness. I started in this business like most other appraisers using a 100′ tape and a 25-30′ tape. I still carry those in my ‘tool pouch’ when measuring, but a majority of the time I use my laser. There are times when I find the tapes better for a particular situation. There are several manufacturers of laser distance measurers, with probably the best known having...

Is Your Facebook Brag Violating USPAP - Social Media & Appraisers - Imagecredit Flickr - mkhmarketing 8

Is Your Facebook Brag Violating USPAP?

When is it acceptable to tell others about your assignments?  Is it okay to tell someone that you just appraised a famous movie star’s home? It is human nature to share the weird, unique and exceptional with others.  Recently there was a debate on a social media site about appraising celebrity homes and naming the names of said celebrities.  We have all done something similar, sometimes in an open forum, sometimes between close colleagues.  We are all human and it is within our nature to share the oddities and unusual stuff we have the opportunity to see, or even appraise.  The only other...

You are Not Valuing Property - Value Real Estate - Imagecredit Flickr - Got Credit 2

You are Not Valuing Property

What do you do for a living?   I am a real estate appraiser. What does that mean?   I value real estate. Actually, that is not quite true.  Okay, technically it is, but what is the value of real estate really?  Real estate is given a value only based on what a seller is willing to settle for and a buyer is willing to part with.  Of course, it is much more complicated than that (which is why appraisers are so needed), but that is the gist of it. For a moment, I want you to think about the psychology of...

Appraisers Participation Needed - NMAC Tackling BPO & CU Issues - Imagecredit Flickr - Miles Heller 2

Appraisers Participation Needed – Tackling BPO & CU Issues

The appraisal industry was blindsided once again only this time by the AG’s office when they determined that the Real Estate Appraiser Board cannot regulate BPO’s. The New Mexico Appraiser’s Coalition and the Rio Grande Chapter of the Appraisal Institute sent a joint letter to the Appraisal Board prior to a hearing that was held in January to discuss the BPO language in the Appraiser Act. Although we feel we provided enough information to guide the Board, the Attorney General Representative at the meeting made the determination that the Appraisal Board had no jurisdiction over the BPO product. Even though...

Condo Density Primer 1

Condo Density Primer

In the project section of Fannie Mae form 1073 the first line addresses topography, size, density and view. Many appraisers still seem confused as to what the form means by density. Appraisers enter and AMCs approve phrases like: average or typical or even a calculation such as 50 units / 12,975 square feet. Appendix D regarding UAD reporting offers no guidance. What are they asking for and what does it mean? Fannie is looking to see if the existing density can be rebuilt following a catastrophic loss. In most instances the density limitations are found in the municipality’s zoning code....

Appraiser-Client Relationship - Imagecredit Flickr - Dennis Hill 15

Don’t You Value our Relationship?

Relationships, we all have them.  And despite the efforts of Dodd Frank to destroy them, we have somehow managed to keep them. A big bank that I had a great relationship dropped me because their portal system decided there were too many appraisers last year and left me hanging. No orders for a year. Now they’re busy and want me to do appraisals. Great! But between the portal fees, underwriting charges, title surpluses, software charges, destination charges, taxes, etc. the fee works out to be substantially lower than most work I have. They asked me “don’t you value our relationship?”. I replied where...

What is Gross Living Area and What Does it Include 3

What is Gross Living Area and What Does it Include?

Appraisers, There are certain properties where aspects of Gross Living Area (GLA) might not be obvious. It’s more confusing when the selling real estate agents lump all “living space” together, because that’s what they are selling, or when the county assessor includes basements with upper level areas. These include homes with a detached ADU, additional rec room or sleeping space above a garage, additional living space with roof attached to the primary dwelling via covered breezeway, basement living spaces with separate entry, etc. Fannie Mae has a giant book called the Seller’s Guide, a portion of which describes how they...

AMC Regulation Rule Finally Published in the Federal Register - Imagecredit Flickr - Steven Lilley 1

AMC Regulation Rule Finally Published in the Federal Register

Appraisers and others, On June 9, 2015, the Federal Register published the new AMC Registration and Regulation Final Rule: The OCC, Board, FDIC, NCUA, Bureau, and FHFA (collectively, the Agencies) are adopting a final rule to implement the minimum requirements in the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) to be applied by participating States in the registration and supervision of appraisal management companies (AMCs). Thanks to Bill Garber, Appraisal Institute Director of Governmental Affairs, for sending me this info today. I first wrote & sent info about this topic on April 22, so it’s taken...