Posts tagged appraisal organizations
ASA, NAIFA Tell Banking Agencies that Proposed AMC Rules Fall Short on Guidance, are Inconsistent with Congressional Intent2
In comments filed June 6 with several federal banking agencies, the American Society of Appraisers (ASA) and the National Association of Independent Fee Appraisers expressed our concerns that rules proposed to regulate appraisal management company (AMC) conduct lack sufficient detail to allow for effective implementation. Additionally, the organizations expressed concern that some provisions of the proposed rule depart from Congress’s intent when the enabling law was included in the Dodd-Frank Act, and could negatively affect the overall public policy goals.
In the comment letter, ASA and NAIFA cover numerous concerns with the proposed rule, including:
- The lack of detail regarding the treatment of appraisers by AMCs is insufficient to allow for consistent application by the numerous federal and state agencies who will be required to enforce these rules;
- The absence of a specific, enumerated process in the rule under which appraisers and others can level complaints against AMCs who fall short of their responsibilities under both these rules and the existing Appraisal Independence rules;
- The letter strongly objects to the decision to (more…)
For the past two months, VaCAP has participated in a networked council consisting of 13 professional state appraisal organizations in responding to the Agencies request for comments of the Proposed Rules on Minimum Requirements for Appraisal Management Companies:
This letter is in response to the Agencies’ request for comments on the Proposed Rules on Minimum Requirements for Appraisal Management Companies. The undersigned represent a networked council of professional state appraisal organizations. We appreciate this opportunity to comment and thank the Agencies for their work and interest in creating and implementing appraisal management company (AMC) regulation.
The proliferation of AMCs is a relatively recent phenomenon, resulting from the May 2009 Fannie Mae implementation of the Home Valuation Code of Conduct (HVCC)/Appraiser Independence guidelines.
By their design, AMCs’ operations cover an extremely large amount of geographic and lending territory. As a result, they handle a tremendous amount of monies and interests associated with the various services they attempt to offer to lenders and consumers. Many AMCs not only supply appraisal services, but also title and other real estate related services. The potential for a single AMC to affect an enormous number of transactions should not be underestimated. Our members have already witnessed several large AMCs closing their doors without notice and filing for bankruptcy.
The professional appraiser’s business, as well as the appraisal profession, have been decimated by the increasing market dominance of AMCs. Trust and credibility (more…)
This is directed at commercial appraisers and appraisers that are involved in litigation, those appraisers who might use DRAFT APPRAISALS with their clients. It concerns the Second Exposure Draft of the 2016-2017 USPAP.
Within this draft USPAP are new regulations that would impact draft reports for an appraiser and record keeping for those drafts or what they are now calling Interim Reports. These new rules may have a great impact on you and your clients. These rules coupled with the new “assignment results” interpretation, also discussed in this document could cause you a lot of grief.
AAREA is sending me to represent our members (Arizona appraisers) at the Appraisal Board meeting on June 6th in Sacramento, California. I would appreciate you sending me your thoughts on this legislation and writing to the Appraisal Standards Board if you have concerns and then copying AAREA on your letter.
The due date for responses to the ASB is June 1, 2014. Please send them earlier to me so I can be prepared for the meeting on June 6th. (more…)
“Voice of Appraisal” is a show designed to deliver the most up to date news and information for the working real estate valuation professional. The show provides top analysis of real estate trends and issues that affect appraisers nationwide. Our no-nonsense approach to appraisal, real estate, banking and politics creates a cutting edge program that provides an insight into the appraisal profession that is seldom heard.
The past 25 years of appraisal organizations, affiliations, coalitions, and designations have left our industry splintered and broken. We have become a group too caught up in our own egos and titles to see how our profession is now crumbling before us.
We have divided ourselves, and our house will not stand!
We don’t need any more regulations to hinder us, or unions to protect us, or dwindling organizations to speak for us, or financial institutions to threaten us.
What we need is a voice, a movement (more…)
RE: Richard Gilmore, ARA article – "A Wakeup Call for the Valuation Industry: Is Anybody Listening?"
I would like to offer some comments regarding Mr. Gilmore’s article in the April 9, 2013 issue of Ag News. I also read most of the NAHB report – "A Comprehensive Blueprint For Residential Appraisal Reform" dated February 2013. I disagree with most of Mr. Gilmore’s comments regarding the NAHB report. The NAHB report lacks a realistic understanding of what is taking place in the real estate appraisal profession today.
Most of what is commented on in the NAHB report has been required and/or in place for more than 20 years in the form of USPAP and FIRREA and other standards required by various professional appraisal organizations. Since licensing has been in place, the value of a professional appraisal designation (more…)
On February 13, 2013 the National Association of Home Builders (NAHB) published a fascinating critique on the world of valuation. The document: “A Comprehensive Blueprint for Residential Appraisal Reform” should be read by every appraiser, every user and every client. NAHB is telling us our core systems are not working and to take another look at our process and procedures. Our systems are too inconsistent, too cumbersome, and NAHB is asking us to improve our efficiency which impacts their and our profitability. NAHB is asking the industry to provide them a uniform, consistent, quality product utilizing well trained staff. These exact same issues exist in the certified general/commercial valuation industry as well.
The concept they are presenting has significant merit in my opinion. The streamlining of regulatory (more…)
The Appraisal Institute and the American Society of Farm Managers and Rural Appraisers jointly sent a letter Feb. 12 to the Appraisal Subcommittee asking that it make its proposed protocol for operating the “appraisal hotline” available for public comment prior to its March 29 implementation.
In the letter, AI and ASFMRA said that while the concept of a hotline is sound, there exists almost no understanding among state appraiser regulatory officials, practicing appraisers and real estate and mortgage professionals as to how the hotline would function or even of its intended purpose. (more…)
North Carolina Governor Beverly Purdue signed S.B. 521 into law July 12, and the legislation will significantly expand the ability of the state’s licensed real estate brokers to offer a broker price opinion or comparative market analysis.
The legislation included two amendments provided by the state’s appraisal organizations.
Prior to the new legislation, North Carolina real estate brokers were limited to providing a CMA only in the real estate sales context, and they had to have a reasonable expectation that a listing would result from the performance of the CMA.
Under the new law, brokers (other than provisional brokers) (more…)
Congressional Hearing Provides Opportunity to Clarify Purpose – FOR IMMEDIATE RELEASE June 29, 2012.
Washington, DC – The Appraisal Foundation (TAF), a non-profit education organization dedicated to professional valuation, testified yesterday before the U.S. House of Representatives, Committee on Financial Services, Subcommittee on Insurance, Housing and Community Opportunity. The hearing, entitled Appraisal Oversight: The Regulatory Impact on Consumers and Businesses, focused on the Appraiser Regulatory System in place today and whether there is need for modifications or improvement of this system.
One issue discussed at the hearing was The Appraisal Foundation’s Appraisal Practices Board (APB), which was created by the Foundation in 2010. Testimony regarding the APB was quite varied. Providing testimony on behalf of the American Society of Appraisers (ASA) and the National Association of Independent Fee Appraisers (NAIFA), Karen Mann stated that, “We reject the view expressed by some that TAF has engaged in inappropriate ‘mission creep’ by establishing the Appraisal Practices Board (APB) and that the establishment of the APB infringes on the prerogatives of the professional appraisal organizations. The establishment of the APB for the purpose of drilling down on the meaning of certain USPAP provisions and addressing complex appraisal issues in the marketplace was widely requested; and, we believe serves important functions.”
This view was not shared by Appraisal Institute President Sara Stephens, whose testimony regarding the APB stated that, “This is a dangerous and unjustified move that risks hamstringing and jeopardizing the real estate appraisal profession altogether. The regulatory burden for appraisers is on the cusp of being expanded exponentially.”
In his testimony, TAF President David Bunton told the Congressional Subcommittee that there is currently a great deal of misinformation circulating about the APB and that he wanted to take the opportunity to clarify, for the record, the APB’s purpose and mission. Specifically, he pointed out that:
- The APB does not have any Congressional authority and adherence to the guidance is strictly voluntary;
- The APB does not operate with any public/grant funds;
- APB Valuation Advisories do not establish new valuation methods or techniques; rather, they are a compilation of existing valuation methods and techniques; and
- APB Valuation Advisories are available to anyone at no cost.
The genesis of the APB was the collapse of the housing market in 2008. For many appraisers this was the first time that they were confronted with declining prices, short sales and foreclosures. Because a majority of appraisers in the United States do not belong to any professional appraisal organization, the question became “Where do appraisers get guidance for their practice?” The Foundation established the APB to fill an existing void in the area of recognized valuation methods and techniques. This board offers voluntary guidance to appraisers, regulators and users of appraisal services on recognized valuation methods and techniques for all valuation disciplines.
To reflect the needs of the marketplace, the APB annually solicits stakeholders to identify topics where additional guidance appears to be needed. Teams of experts are then selected to work with the APB in developing the appropriate guidance. This guidance is known as a Valuation Advisory and may include more than one recognized method or technique that addresses the specific issue.
Valuation Advisories issued to date include the following (which are available at www.appraisalfoundation.org):
- APB Valuation Advisory #1: Identification of Contributory Assets and Calculation of Economic Rents
- APB Valuation Advisory #2: Adjusting Comparable Sales for Seller Concessions
- APB Valuation Advisory #3 Residential Appraising in a Declining Market
Valuation Advisories currently under development include:
- Identifying Comparable Properties
- Appraising Green Buildings – Background Competence
- The Valuation of Customer-Related Assets (Business Valuation)
- Control Premiums for Financial Reporting (Business Valuation)
- Contingent Consideration (Business Valuation)
~ Source The Appraisal Foundation
About The Appraisal Foundation
The Appraisal Foundation, a Congressionally authorized non-profit organization established in 1987, is dedicated to the advancement of professional valuation. The Foundation accomplishes its mission through the work of its three independent Boards: the Appraisal Practices Board (APB), the Appraisal Standards Board (ASB) and the Appraiser Qualifications Board (AQB). More information on The Appraisal Foundation is available at www.appraisalfoundation.org.
On June 28, 2012 appraisers, appraisal organizations, and others testified before the US House of Representatives, Committee on Financial Services, Subcommittee on Insurance, Housing and Community Opportunity, on proposals to improve oversight, regulation, and enforcement of the housing appraisal process. Among the topics addressed were the implementation of new financial service regulations under the Dodd-Frank law, appraisal fraud, the role of state regulators, and oversight of the appraisal process at the local level.
The topic of the hearing was Appraisal Oversight: The Regulatory Impact on Consumers and Businesses. You will can read the testimony by clicking on the following link. View the CSPAN video coverage below: (more…)
Speaking at a March 14 hearing in Washington, D.C., the Appraisal Institute urged a federal judicial agency to require the use of real estate appraisals when calculating loss in mortgage fraud cases.
In prepared written testimony, Appraisal Institute President Sara W. Stephens, MAI, told the U.S. Sentencing Commission, “We believe the Commission should adopt a special rule for determining the fair market value of real property if the mortgaged property has not been disposed of by the time of the sentencing. However, this rule should require use of real estate appraisals prepared by qualified appraisers in accordance with the Uniform Standards of Professional Appraisal Practice, as opposed to tax assessments, to ensure fairness and consistency.” (more…)
Appraisal Institute Calls for Transparency on Home Buyers’ Forms saying that consumers deserve to know what they’re paying for, the Appraisal Institute asked the federal Consumer Financial Protection Bureau on Nov. 16 to require more transparency on home buyers’ forms.
In a joint letter with the American Society of Farm Managers and Rural Appraisers, AI asked the CFPB to separate appraisal fees from administration and processing fees on the settlement forms that consumers receive when purchasing a home. Created by Congress, the CFPB oversees consumer disclosure laws and is authorized to develop new forms to inform consumers and charges assessed in processing mortgage loans.
“We see no consumer benefit with continuing to bundle two separate services and not fully disclosing such information to borrowers,” the letter said. “We urge the CFPB to revise these forms with a separate line for Appraisal Management (or management fees in total) as Congress authorized last year when it enacted the Dodd-Frank Act.” (more…)
The Appraisal Institute launched its new blog, Opinions of Value, on November 14. Content will feature the appraiser perspective on legislative and regulatory issues, enhanced discussion about recent industry media coverage and thoughts from AI leaders about upcoming trends.
While a great deal of content exists in the blogosphere, the Appraisal Institute is uniquely qualified to provide expert analysis on all appraisal-related topics because the organization is the nation’s oldest and largest professional association of real estate appraisers with more than 24,000 members in 60 countries. (more…)
If you’ve paid for a home appraisal within the last five years, a chunk of that charge likely went to a middleman you never knew existed. And because a third party was used, it might have driven up your closing costs and affected the quality of the valuation.
Lenders often use appraisal management companies to block collusion between mortgage brokers and appraisers — and to comply with anti-fraud rules the industry adopted in May 2009.
The hotly debated reforms have boded well for the appraisal managers, whose presence in the U.S. has jumped from a handful in the 1990s to roughly 800 now. Their growth also has fueled industry concerns of increased borrower costs, compromised appraisal quality and unchecked authority.
These middleman companies — some of which are owned or controlled by the nation’s biggest banks including Bank of America and Well Fargo — say they protect consumers by ensuring appraisals are timely, accurate and untouched by fraud.
Their services have been around for 20-plus years, but the discourse on what they can and can’t do by law is fresh. Appraisal Institute, including California, regulate appraisal management companies. The rest have until 2013 to 2014 to catch up.
“It’s patchwork,” said Steve Sousa, the executive vice president of the Massachusetts Board of Real Estate Appraisers. “In some ways, I feel bad for the appraisal management companies … having to tailor operations state-by-state. It makes compliance that much more difficult.”
Who are the middleman companies?
During the housing boom, appraisers succumbed to pressure from loan officers to overvalue homes. The result was bigger mortgages, which meant bigger commissions for those involved.
Andrew M. Cuomo, then attorney general of New York, detailed the widespread scheme in a November 2007 lawsuit that placed blame on now-defunct Washington Mutual and eAppraiseIT, which was hired by WaMu to manage appraisal orders.
The landmark case led to a May 2009 requirement to separate mortgage brokers and appraisers in the lending process. The change, considered well-meaning then but is reviled by appraisers now, was folded into the Dodd-Frank Act, comprehensive financial reform that passed in 2010. (more…)
American Guild of Appraisers Fights to Overturn Federal Regulations that Dramatically Cut Fees and Threaten Profession2
WASHINGTON, Nov. 7, 2011 /PRNewswire-USNewswire/ — The American Guild of Appraisers (AGA), a national organization of real estate appraisers that is an affiliate of the AFL-CIO’s Office and Professional Employees International Union (OPEIU), announced today it has retained a law firm as part of a broad-reaching effort to overturn recent federal regulations that dramatically cut the fees that appraisers are paid to perform appraisals, and threaten the viability of professional appraisal practice and the reliability of appraisals used in real estate transactions.
In the aftermath of the national financial collapse brought on in part by badly underwritten subprime loans, Congress found that inadequate appraisals resulting from undue pressure on the appraisal process was a contributing factor. To address the problem, Congress enacted a series of appraisal reforms in the Dodd Frank law to ensure appraiser independence and accountability. A key component of the legislation is a requirement that appraisers be paid Reasonable and Customary fees for their work. Under the legislation, Reasonable and Customary fees are defined to ensure that appraisers are not undercompensated relative to the market and the nature of the assignment. Responding to evidence that Appraisal Management Companies (AMC’s) have been dominating the market and pressuring appraisers to accept assignments with unreasonable requirements and unreasonably low fees, the law specifically prohibits basing fees on the current practices of Appraisal Management Companies.
Earlier this year, however, the Federal Reserve Board adopted implementing rules that have been interpreted by the banking industry and AMC’s as permitting paying appraisers a fraction of Reasonable and Customary fees. Appraisal industry experts also point out that in addition to controlling virtually all of the business, AMCs also dictate the turn-times for assignments that, in many cases, have been unreasonably set at 24 hours while at the same time increasing the details and requirements for documentation in the appraisal report. (more…)