Tagged: AI

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GSEs Still Finding Problems with Home Appraisals

Three years after the creation of a database seeking to standardize the home appraisal process, Fannie Mae and Freddie Mac continue to see major issues in numerous appraisals submitted by mortgage lenders, American Banker reported Sept. 12. Fannie Mae conducted a sampling of appraisals and determined that 17.6 percent contained contradictory information, typically pertaining to the condition or quality of the property, Robert Murphy, the GSE’s director of collateral and single-family risk policy, told a Phoenix conference of risk managers. He added that those two factors are the most important in determining a property’s value. Elevated appraisals contributed to the...

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Appraisal Guidelines

In the August edition of the AppraisalPort Newsletter, I reported on some of the general information covered at the National AI Connect Conference in Indianapolis, July 23-25, 2013. This was a great conference, covering a wide range of topics. This month, I want to pass on some information covered in one of the breakout sessions for residential appraisers. The session was titled, “Residential Chief Policy Roundtable” and included presentations from Fannie Mae’s Robert Murphy, the Appraisal Institute’s Bill Garber, HUD’s Ada Bohorfoush, and the VA’s Gerald Kifer. At Fannie Mae, Murphy handles many of the issues regarding appraisers and the...

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Mortgage Takings: The Next Appraisal Frontier or Liability?

According to the Appraisal Institute’s recently published 2013 Real Estate Appraisal Outlook, U.S. appraisers anticipate that litigation valuation/forensic appraisals will be one of the top five areas of growth in the next one to two years in both commercial and residential appraisal.  Indeed, approximately 33% of surveyed commercial appraisers anticipate more demand from law firms and lawyers in the near future, with 24% of those surveyed expecting an increase in valuation consultation and studies in support of litigation.  The appraisers’ prediction may be spot on the money as at least one U.S. municipality has begun to implement a plan to...

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How to Identify a Bubble or Bust Housing Market

Bubble or bust? The nation’s home prices continue to climb, with some cities posting double-digit annual growth rates during 2012–13. While the continued economic recovery seems to trend in a positive direction, consumers, appraisers and other market participants should be on high alert for red flags that could signal the possibility of another housing bubble in the near future. How can appraisers tell if the current housing market is “bubble” or “bust”? Here is some guidance from the Appraisal Institute’s “Guide Note 12: Analyzing Market Trends.” Appraisers should be able to spot the symptoms of a changing market. Appraisers and...

Appraisal Institute Urges ASB to Make USPAP More Flexible 0

ASB Urged to Make USPAP More Flexible

The Appraisal Institute Urges ASB to Make Uniform Standards of Professional Appraisal Practice More Flexible The Appraisal Institute announced Aug. 16 that it has asked the Appraisal Standards Board to institute a principles-based approach to appraisal standards that would, over time, require fewer changes to the Uniform Standards of Professional Appraisal Practice and enhance understanding of the document. Representatives of AI attended a public ASB meeting in July, during which Paula Konikoff, JD, MAI, chair of AI’s Appraisal Standards and Guidance Committee, urged the ASB to: Modify USPAP to be “principles-based” and not “rules-based,” as it has become over time;...

BPO bill consumer confusion 0

NJ Governor Vetoes BPO Cites Consumer Confusion

NJ Governor Vetoes BPO Legislation, Cites Consumer Confusion On Aug. 19, New Jersey Gov. Chris Christie vetoed bill S. 2551, legislation that would have significantly expanded the ability of the state’s real estate professionals to provide broker price opinion and comparative market analysis services. In his veto message to the Legislature, Christie said, “While I appreciate the desire to facilitate additional business for real estate licensees in the state of New Jersey, I am concerned about potential consumer confusion.” The Appraisal Institute chapters in New Jersey testified in strong opposition to this bill when it was going through the legislative...

Appraiser Trainees Hiring to Remain Weak: AI Survey 3

Trainees Hiring to Remain Weak

Appraiser Trainees Hiring to Remain Weak: AI Survey Hiring of real estate appraiser trainees will remain weak for the next one to two years, according to an Appraisal Institute survey released July 17. About one-fifth (21 percent) of commercial appraisers said they would add full-time trainees; fewer than one-tenth (9 percent) of residential appraisers said they would do so, according to the survey of U.S. real estate valuation professionals conducted in May and June. Commercial appraisers account for less than one-third of practicing U.S. appraisers. According to the survey, 93 percent of the residential appraisers who employ trainees employ one...

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Appraiser Confidentiality: USPAP Absurdity

Appraiser Confidentiality: Loose Lips, Big Claims, USPAP Absurdity, and Subpoenas Allegedly “Loose Lips” Cause a Big Claim. A recent and relatively big appraiser liability claim involved a commercial appraiser’s alleged breach of confidentiality.  The damages paid to the plaintiff were significant.  According to the plaintiff’s complaint (my recounting of the facts here is simplified), a lender had engaged the appraiser to perform an appraisal for a construction loan to the developer of a shopping center.  Some of the information received by the appraiser included lease commitments from prospective tenants. The anchor tenant was a well-known retailer.  The appraiser completed the assignment, but...

Independent contractors pros cons 2

Independent Contractors vs. Employees Pros and Cons

Business owners must determine whether to hire appraisers as employees of the company or as independent contractors. Because many appraisers are self-employed or run small businesses with few staff, recruiting and staffing employees can present a unique set of challenges. Business owners must determine whether to hire appraisers as employees of the company or as independent contractors. According to a recent article in Valuation magazine, businesses are increasingly taking the independent contractor option whenever possible due to the significant savings and flexibility for the employer. However, there are pros and cons to both angles. Benefits for appraisal firm owners and...

Bank of America Appraisals Reviewed in India 6

Bank of America Appraisals Reviewed in India

Bank of America Reportedly Sending Property Reviews to India Bank of America reportedly opened a unit in India to review valuation reports in an effort to boost its share of the U.S. mortgage market at a lower cost, Bloomberg reported June 28. Workers in the new Bangalore office use checklists to decide if appraisals are complete, according to people who talked to Bloomberg on the condition of anonymity. Bank of America also eliminated positions at its Plano, Texas-based LandSafe appraisal division, which made $78.8 billion in loans in 2012. “One of the biggest problems in the mortgage business is all...

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