Posts tagged appraisal organizations
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.
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. Roughly half of the states, 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…)
The federal government, with the reluctant support of the two leading professional appraisal organizations, has sanctioned the use of computerized, appraisals using algorithms and computerized databases of property data to determine a property’s value.
Can more widespread use of computer-driven valuations by programs called Automatic Valuation Models or AVMs, in mortgage origination be far behind?
Millions of homeowners use AVMs to check the value of their homes on a half dozen web sites. Even though more sophisticated versions have been developed for professional use, AVMs have seldom been sanctioned to valuate properties for mortgage approvals.
In its new HARP 2.0 refinancing program the Federal Housing Finance announced two weeks ago, the Administration approved valuations by “reliable” automated valuation models provided by Fannie Mae and Freddie Mac to determine the value of the property. Where a “reliable” AVM is not available, however, they must use an appraisal. Using AVMs for valuation will save homeowners the cost of a professional appraisal and speed the refinancing approval process.
Actually, lenders refinancing loans through Freddie Mac are allowed on a limited basis to value the home using Freddie’s Home Value Explorer AVM. HARP 2.0 may bring Fannie Mae’s AVM usage more in line with Freddie Mac’s. (more…)
This article was published in the November 2011 issue of the IllinoisAppraiser Newsletter
Everybody complains that the states aren’t doing enough to police the profession. Appraisers are running amok. Fraud is rampant and the states are twiddling their thumbs while caseloads grow exponentially.
The handful of published state disciplines nationwide are a mere droplet compared to the vast ocean of chicanery that’s rising out there.
My question is, where are all the settled cases from the various professional standards and ethics committees of the big appraisal organizations? There should be a generous compendium of meaty disciplines somewhere.
But there isn’t.
If you go to their websites you’ll find plenty of references to ethics and even how to file a complaint about a member. Most have nothing in the way of published results. (more…)
This article was published in the November 2011 issue of the IllinoisAppraiser Newsletter
When a consumer calls the department in a rage and wants to know “what law says that an appraiser can take pictures inside of my house?”, Houston, we have a problem.
Actually, not Houston…and not the department. You, the appraiser and the client who ordered it have the problem because we will make it your problem.
Law? There is no law for interior photos. There are guidelines and stipulations cloaked as requirements. That’s it.
But, we do have privacy laws, don’t we?
Clients, whether lenders or AMCs have wanted something more than the standard front, rear, and street scenes of the subject for many years. Some want kitchens and baths. Some want attics, basements…and bedrooms.
The profession is now standing on the precipice of something dangerous. (more…)
ASA and NAIFA Send Joint Letter to FHFA, Fannie Mae & Freddie Mac Expressing Concerns on HARP Program Reliance of AVMs and Requesting a Meeting0
On October 25, the American Society of Appraisers (ASA) and the National Association of Independent Fee Appraisers (NAIFA) submitted a joint letter in response to yesterday’s announcement by the FHFA and the Government Sponsored Enterprises (GSEs) of changes to the Home Affordable Refinance Program (HARP) involving greater reliance on automated valuation models (AVMs) to value collateral property. In the letter, ASA and NAIFA expressed concerns regarding the GSEs quality control standards being used to ensure that the AVMs they utilize are reliable
On Monday, the Obama administration announced an expansion of their Home Affordable Refinance Program (HARP), which helps homeowners underwater on their mortgages to refinance into terms that lower their monthly payment. As part of this renewed effort, the Obama administration has approved reliance on “reliable” automated valuation models (AVMs) used by Fannie Mae and Freddie Mac (collectively termed the GSEs or Enterprises) to determine the value of the underlying collateral. Where a “reliable” AVM is not available, however, they must use an appraisal. (more…)
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