Illinois Appraisal Newsletters - Illinois Department of Financial and Professional Regulation

Hybrid Assignments, the Consequences

IDFPR Board — Thu, 07 Feb 2019 13:30:33 +0000

The concept of a third party providing one or more functions in an appraisal assignment is nothing new. Back in the 1970s and 1980s there were plenty of appraisers who used somebody else to do the sketch or to take the pictures or to pull comps. The “appraiser” put all of the pieces together and signed the report. Then came USPAP in 1989. Licensing followed shortly thereafter. Today, there are a number of lenders and AMCs who believe that they’ve invented something no one else has ever considered. The bifurcated or hybrid appraisal process. To be clear, we’re not talking...

Third Party Blues What is the significant part of significant contribution? Most lenders would rather not do the work of cultivating and curating…
Fannie Mae Filed a Complaint Against Me An appraiser shared the following with us which was posted on one of the appraisers’ groups. Fannie Mae filed a…
The New & Improved Fannie Mae “FRAUDULATOR 2.0” Originally known as Fannie Mae’s Collateral Underwriter (CU), and subsequently Collateral Underwriter 2.0 (CU-2)i this always dubious product of Fannie…

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Bankers Concerned About Appraisals

IDFPR Board — Wed, 18 Oct 2017 12:30:54 +0000

Community bankers said appraisals are becoming a concern… A survey was distributed by state banking regulatory agencies in April and remained open through July. More than 600 community bankers from across the U.S. lent their voices to this year’s survey, and those views are captured in this volume. Responses are summarized and presented in following five major areas: Local market conditions; regulation and supervision; small business lending; management structure and succession planning; and technology. The responses provide context for the data gathered through the survey and highlight some of the dierent challenges faced by community banks in different states. The...

Dear Representative, FNMA Has Gone Rogue! Dear representative, waiving/eliminating property appraisal for lending purposes is wanton recklessness. Fannie Mae’s decision to waive/eliminate property appraisal for lending…
The Town With No Bank: How Rural America Lost Its… For decades, we’ve been told that the problem is demand. That people don’t want to live in rural America anymore.…
The New & Improved Fannie Mae “FRAUDULATOR 2.0” Originally known as Fannie Mae’s Collateral Underwriter (CU), and subsequently Collateral Underwriter 2.0 (CU-2)i this always dubious product of Fannie…

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Third Party Blues

IDFPR Board — Wed, 19 Jul 2017 12:30:41 +0000

What is the significant part of significant contribution? Most lenders would rather not do the work of cultivating and curating a panel of appraisers. This is largely why AMCs exist. AMCs, in turn, quietly off-load some of their activities to other subcontracted entities. Some AMCs contract out state licensing and registration compliance responsibilities to outside concerns. A few use portals to send out engagements to their panel of appraisers. Others farm out payroll and invoicing. Still others outsource their QC work. This begs the question: What exactly do some AMC’s provide…directly? Some appraisers, too, don’t seem to be interested in...

Enough Already, Nobody is Listening AMC technology is not about efficiency of the appraisal process... I am very tired of reading all the articles from…
Do Associates Need to Be Licensed to Take Comp Photos? Do Associates Need to Be Licensed to Take Photos for a Property Inspection? I received a great question in my…
Bend Over and Ask for More... GUILTY of not using human brain power of thinking and communicating... More Please... How many of you can honestly state…

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Contract Amendments… When?

IDFPR Board — Fri, 17 Mar 2017 12:30:25 +0000

Amendments to Sales Contract & Updates to the Appraisal… Fannie Mae recently issued the following: Currently, we require the lender to provide the appraiser with all amendments made to a sales contract, including amendments that are made after completion of the appraisal. With this update, we have clarified when the appraiser must be provided with updates to the sales contract and circumstances that warrant updates to the appraisal. For example, if the contract is amended in a way that affects the description of the real property used by the appraiser, then the lender must provide the updated contract to the...

Shame on Us - Appraisal FAILS Replace LOW Appraisal Appraisal under contract price... Appraisers, The blame game just won’t quit. Now instead of dealing with a ‘low appraisal’, it’s…
Purchase Season Protection Our function as an appraiser is to estimate the market value... Sale Season 2017 We are entering the sale season…
Rules of Engagement Recently a particular engagement letter format has been circulating amongst residential appraisers from several nationally chartered banks. Aside from the…

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Life After Dodd-Frank

IDFPR Board — Wed, 25 Jan 2017 13:30:25 +0000

Do the agencies’ appraisal regulations apply to FHA, VA… Republican control of Washington DC will mean one of two things: A scaling back of Dodd-Frank, or The elimination of Dodd-Frank Like it or not, one of these two scenarios will play itself out in 2017 or 2018. What about AMCs? The AMC Final Rule was deemed that…the registration and supervision of AMCs is voluntary, and that a State may elect not to establish such a program for any reason, including if its resources do not support such a program. Will the states walk away from AMC regulation? Perhaps not all, but definitely some states will either bypass the...

The Partisan Battle to Eliminate Dodd Frank Dodd Frank created the illusion... I had a different “take away” from the Housing and Insurance Subcommittee "Modernizing Appraisals" hearing.…
Unintended Consequences of the Dodd-Frank Law and… For well over a year, the Columbia Society of Real Estate Appraisers and five other nonprofit appraiser groups have been…
Haven't We Learned Our Lesson? Lesson Learned or Lessons Lost? Many have heard me say that we should expect a large market correction around 2019-2020.…

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Appraisal Alternatives

IDFPR Board — Mon, 09 Jan 2017 13:30:00 +0000

Computers eliminating “boots on the ground” residential appraisers. An historian once quipped, “I cannot predict the future, but give me six months and I’ll tell you why it was inevitable.” Residential appraisers who work in the mortgage arena began to experience the sea change when UAD arrived amongst much fanfare in September of 2011. Years of portals, hard-stops, and overrides have settled into an uneasy routine. We’ve already seen changes to closing docs as a result of TRID (TILA RESPA Integrated Disclosures). That adventure began in November 2013. Washington DC, never content to maintain any level of consistency has already...

The Town With No Bank: How Rural America Lost Its… For decades, we’ve been told that the problem is demand. That people don’t want to live in rural America anymore.…
Dear Representative, FNMA Has Gone Rogue! Dear representative, waiving/eliminating property appraisal for lending purposes is wanton recklessness. Fannie Mae’s decision to waive/eliminate property appraisal for lending…
USPAP’s Typical Buyer Standard in the Fair Housing Era The Irreconcilable Conflict Between USPAP's Typical Buyer Standard and the Current Fair Housing Compliance Regime. Retain this document as a…

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AMC Indemnification

IDFPR Board — Mon, 31 Oct 2016 12:30:25 +0000

Appraisers signing off catch-all certification… When we crafted the language in the AMC Act back in 2011-2012, we followed what most every other state included insofar as indemnification was concerned. (225 ILCS 459/165) Sec. 165. Prohibited activities. (8) Requiring an appraiser to sign any sort of indemnification agreement that would require the appraiser to defend and hold harmless the appraisal management company or any of its agents, employees, or independent contractors for any liability, damage, losses, or claims arising out of the services performed by the appraisal management company or its agents, employees, or independent contractors and not the services performed...

What's Wrong with Most Indemnification Clauses in… Objectionable indemnification clauses purport to shift 100% of the liability to individual appraisers... AMC independent contractor agreements are now receiving…
Appraiser's Response to LandSafe Appraisal Appraiser's Response to LandSafe Appraisal Services Agreement In April of 2011, LandSafe Appraisal Services, a wholly owned subsidiary of Bank…
What Should an Appraiser Do? Burdensome indemnity language required by a lender or AMC Appraisers are often required to sign lengthy contracts to obtain assignments…

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AMC Fair Housing Mythodology

IDFPR Board — Tue, 09 Aug 2016 12:30:43 +0000

AMCs are on notice to cease demanding and insisting that appraisers do digital staging. You’ve seen the AMC’s orders. “Appraiser is to obscure, blur or remove individuals from photos.” Why? Fair housing laws say so, that’s why. Do they? I had my first settlement conference with an AMC recently. Appraisers have been participating in settlement conferences with Appraisal Board members and Department attorneys for years. Because there is no Board for AMCs, the opportunity falls to me. At issue was the ubiquitous “client requirement” involving digital masking of people from images. While lenders and AMCs wave the Fair Housing penalty...

What's Wrong With this Sentence? AMC says sentence was unacceptable based on one word in that sentence Beware appraisers, big brother is watching what you…
The Town With No Bank: How Rural America Lost Its… For decades, we’ve been told that the problem is demand. That people don’t want to live in rural America anymore.…
The Great Debate on Appraisal Fees She included several different fee split examples indicating AMCs retained as much as 70 percent of the total appraisal fee…

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To Eval or Not to Eval

IDFPR Board — Thu, 21 Jul 2016 12:30:44 +0000

An evaluation, when performed by an individual acting as an appraiser, is an appraisal… Recently, a document entitled, The Interagency Advisory on Use of Evaluations in Real Estate-Related Financial Transactions was released. Many in the lending and appraisal professions see this as a federal permission slip for evaluations to be completed by Illinois Certified Appraisers. The document reiterates what we already know about evaluations: Under the appraisal regulations, the following transaction types do not require an appraisal, but do require an evaluation: Transactions in which the “transaction value” (generally the loan amount) is $250,000 or less; Certain renewals, refinances, or other transactions involving...

Evaluations for Lenders & Appaisers Appraisal Institute Helps Appraisers Perform Evaluations for Lenders The Appraisal Institute’s “Guide Note 13: Performing Evaluations of Real Property Collateral…
Can You Do a Particular Assignment per USPAP?? Yes, I can Accept That Assignment! Types of assignments... Folks, The Appraisal Foundation, via John Brenan, has released the following,…
Valligent New $40 Alternative Valuation Assignment Valligent, an AMC with ‘national’ presence, is soliciting appraisers to complete a new alternative valuation product on behalf of their…

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There Go My Brackets

IDFPR Board — Thu, 23 Jun 2016 12:30:41 +0000

When appraisers fail to bracket… Forget college hoops and all of the upsets. This is about the upsets that occur when residential appraisers fail to bracket. Say that your subject property has a contract for $102,900. Ideally your three sales should surround the contract price like a cozy, warm blanket. Comp #1 might end up, after adjustments, at $100,000. Comp #2 might reach $102,500 and Comp #3 might conclude at $104,000. Yay! All you need is a pretty bow and you can deliver a lovely report to your client. But…it really doesn’t work that way on most days. Does it?...

Tax Appeal Work & Appraisers Taxing the System - Tax Appeal The Department receives a number of appraisal complaints related to property tax assessment appeals…
A New 'Standard' for ROV Requests Since beginning using this Standard, I have had ZERO ROV requests. Appraisers, the latest ‘buzzword’ around appraising is Standard. We’ve…
The Town With No Bank: How Rural America Lost Its… For decades, we’ve been told that the problem is demand. That people don’t want to live in rural America anymore.…

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Tax Appeal Work & Appraisers

IDFPR Board — Wed, 06 Jan 2016 13:30:28 +0000

Taxing the System – Tax Appeal The Department receives a number of appraisal complaints related to property tax assessment appeals each and every year. While most originate with assessors and boards of review, some come from appellants themselves. The most frequent complaint involves alleged undervaluation and advocacy on the part of the appraiser. The local assessor or board of review will allege that the appraiser deliberately omitted more relevant sales by “cherry-picking” distressed sales or choosing sales from inferior locations. Appraisers are not hired guns by counsel. Advocacy is a career-killer. Unlicensed practice is the next most frequent complaint. There...

Going the Distance in USPAP Arbitrary distance limitations.... When I was in private practice, much of my litigation work took me to Somonauck, Sandwich and…
Stop the Housing Tax for Transportation Hidden tax on homeowners The California Association of Realtors® in conjunction with the National Association of Realtors® has published a…
Unpermitted Additions "Zombie" Assignment Condition Unpermitted Additions This is a “zombie” assignment condition that seems to never die. Let’s agree that unpermitted means something was constructed without…

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Number of Applications Tell a Story

IDFPR Board — Thu, 10 Dec 2015 13:30:42 +0000

Applications plummeted another 74% Recently the AQB held a public hearing in Washington DC regarding Alternative Experience Requirements and what to do about the anemic number of appraisers nationwide. I read their concept paper when it came out and I’ve read the testimony of those who submitted ideas. I didn’t attend and I didn’t offer up any written solutions. Back in 2005, I remember when everyone was so fired up about finally raising the bar, insomuch as formal education was concerned. They were going to make appraisers in the image of CPAs and lawyers. Four year degrees would be the...

Why are Lenders not Allowing Trainee Appraisers? Appraisalbuzz recently posted a 'White Paper on Training the Next Generation of Appraisers. I thought it was a good enough…
Hire & Reverse the Mass Exodus of Appraisers If you are doing too much and not being paid enough, you are a PERFECT candidate to hire and train…
"Hiring of Trainees to Remain Slow" Shocking News? "Hiring of Trainees to Remain Slow" This is ‘Shocking News?’ According to a recent survey conducted by the Appraisal Institute,…

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Condo Density Primer

IDFPR Board — Thu, 18 Jun 2015 12:30:35 +0000

Many appraisers still seem confused as to what the form means by density. 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....

Dear Representative, FNMA Has Gone Rogue! Dear representative, waiving/eliminating property appraisal for lending purposes is wanton recklessness. Fannie Mae’s decision to waive/eliminate property appraisal for lending…
Uncovering Flaws in FHA Appraisal & Loan Review Process The story of this single mother's harrowing experience with a defective home purchase and HUD's negligent oversight exposes deep flaws…
The Town With No Bank: How Rural America Lost Its… For decades, we’ve been told that the problem is demand. That people don’t want to live in rural America anymore.…

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Unpermitted Additions “Zombie” Assignment Condition

IDFPR Board — Thu, 21 May 2015 12:30:04 +0000

Unpermitted Additions This is a “zombie” assignment condition that seems to never die. Let’s agree that unpermitted means something was constructed without a required written permit. There are plenty of jurisdictions that don’t issue permits because the permit process doesn’t exist. The assignment condition goes something like this: The appraiser is not to include any GLA from any unpermitted additions unless they use comparables that have similar unpermitted additions. Here’s what Fannie Mae stated in their September 2014 FAQs: If the subject property features an unpermitted addition, can the square footage of the unpermitted addition be included in the total gross living area reported on the appraisal report? If the appraiser has identified an addition(s) that does...

Security Bars Removal Law Debunks Alleged Racial… Complainant stated appraiser told them they should remove security bars from windows. Complainant stated this is evidence of "racist discrimination"...…
The Illogical Reality of Mortgage Appraisal Reviews Reforming the appraisal review process is essential to maintaining the integrity of the real estate market and protecting consumers and…
The Town With No Bank: How Rural America Lost Its… For decades, we’ve been told that the problem is demand. That people don’t want to live in rural America anymore.…

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Going the Distance in USPAP

IDFPR Board — Mon, 11 May 2015 12:30:27 +0000

Arbitrary distance limitations…. When I was in private practice, much of my litigation work took me to Somonauck, Sandwich and Plano, Illinois. That’s about 45 miles west of where I live. Still, I had so much work in those areas, you’d think I had an office there. However, if I were working for many AMCs, I’d have been considered too far out of my area for the assignment. Some AMCs, under the guise of authenticating geo-competency, restrict assignments to Illinois certified appraisers based upon arbitrary distance limitations. Most typically seen are 15 miles for urban/suburban locations and 25 miles for...

Geographical Competency Can we stop equating distance with geographical competency? There was a recent study completed that proved, beyond a doubt, what…
Uncovering Flaws in FHA Appraisal & Loan Review Process The story of this single mother's harrowing experience with a defective home purchase and HUD's negligent oversight exposes deep flaws…
Promoting False "Racist Appraiser" Narrative Some Lenders promoting false "racist appraiser" narrative to optimize profits via AVMs Like most businesses lenders want to optimize their…

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AMCs Renewal: Two Years Later

IDFPR Board — Tue, 05 May 2015 12:30:20 +0000

AMCs procrastinated or missed the renewal period We started registering AMCs about this time back in 2013. It was a slow roll from the nascent 9 applications received in March of 2013 to a peak of 42 applications received in August 2013 just ahead of the deadline to register. Since that time the number of AMCs in Illinois has ebbed and flowed. At one point we had 192. As of this writing, we stand at 155. Nationwide there are less than 700 AMC entities. The universe is small. We’ve already completed our first renewal that ended on December 31, 2014. Like...

Uncovering Flaws in FHA Appraisal & Loan Review Process The story of this single mother's harrowing experience with a defective home purchase and HUD's negligent oversight exposes deep flaws…
The Town With No Bank: How Rural America Lost Its… For decades, we’ve been told that the problem is demand. That people don’t want to live in rural America anymore.…
USPAP’s Typical Buyer Standard in the Fair Housing Era The Irreconcilable Conflict Between USPAP's Typical Buyer Standard and the Current Fair Housing Compliance Regime. Retain this document as a…

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CU and Appraiser Regulation

IDFPR Board — Tue, 03 Mar 2015 13:30:48 +0000

Whether you believe Fannie Mae’s comprehensive rollout of Collateral Underwriter will finally weed out the lazy form-fillers or it will end up euthanizing the aging residential leg of the profession once and for all, is not the subject of this article. There are plenty of blogs, articles, and seminars that are wrestling with the efficacy of CU and its long-term impact. To be sure, the profession has entered the new age of big data. Residential appraisers will need to navigate regression analysis, heat maps, trend lines, oblique aerial images, and especially how to tie it all together into something meaningful. From...

Dear Representative, FNMA Has Gone Rogue! Dear representative, waiving/eliminating property appraisal for lending purposes is wanton recklessness. Fannie Mae’s decision to waive/eliminate property appraisal for lending…
USPAP’s Typical Buyer Standard in the Fair Housing Era The Irreconcilable Conflict Between USPAP's Typical Buyer Standard and the Current Fair Housing Compliance Regime. Retain this document as a…
The New & Improved Fannie Mae “FRAUDULATOR 2.0” Originally known as Fannie Mae’s Collateral Underwriter (CU), and subsequently Collateral Underwriter 2.0 (CU-2)i this always dubious product of Fannie…

The post CU and Appraiser Regulation appeared on Appraisers Blogs.

I Can’t Talk About This Appraisal Even if They Waterboard Me!

IDFPR Board — Thu, 11 Dec 2014 13:30:12 +0000

Anyone who appraises real property long enough stands a decent chance of being swept up in a divorce. Someone else’s. There you are, minding your own business…opening the snail mail in hopes that your clients have finally sent those checks when… A subpoena pops out accompanied by a check for some chump-change amount. What you discover is a subpoena originating from a law firm you never heard of…about a couple getting divorced whose name is unfamiliar…but the property address looks vaguely familiar. Of course! You appraised this house in 2012…for a refi. But now some strange lawyer wants you to bring this dusty refi report to court with you…next Tuesday! Upon receiving a subpoena the natural first reaction for many...

The Town With No Bank: How Rural America Lost Its… For decades, we’ve been told that the problem is demand. That people don’t want to live in rural America anymore.…
USPAP’s Typical Buyer Standard in the Fair Housing Era The Irreconcilable Conflict Between USPAP's Typical Buyer Standard and the Current Fair Housing Compliance Regime. Retain this document as a…
Uncovering Flaws in FHA Appraisal & Loan Review Process The story of this single mother's harrowing experience with a defective home purchase and HUD's negligent oversight exposes deep flaws…

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Do Associates Need to Be Licensed to Take Comp Photos?

IDFPR Board — Tue, 02 Dec 2014 13:30:46 +0000

Do Associates Need to Be Licensed to Take Photos for a Property Inspection? I received a great question in my email the other day: I am writing on behalf of one of our appraisal managers who is a certified in Illinois. He wants to send one of his associates only to take the photos for a property inspection, but the associate is unlicensed. Is he authorized to do so, or would the associate need a temporary license of some kind? In some states this is considered clerical work, and some states are considered volunteer states, so a license is not required as long as the certified appraiser clarifies in the report who took the...

Uncovering Flaws in FHA Appraisal & Loan Review Process The story of this single mother's harrowing experience with a defective home purchase and HUD's negligent oversight exposes deep flaws…
USPAP’s Typical Buyer Standard in the Fair Housing Era The Irreconcilable Conflict Between USPAP's Typical Buyer Standard and the Current Fair Housing Compliance Regime. Retain this document as a…
First the Borrower Fee. Now the Appraiser… Two lawsuits place Class Valuation’s fee transparency and staff-appraiser compensation practices under federal scrutiny. Most appraisal disputes examine only one…

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Rules of Engagement

IDFPR Board — Fri, 30 May 2014 12:30:18 +0000

Recently a particular engagement letter format has been circulating amongst residential appraisers from several nationally chartered banks. Aside from the usual intended use and exposure time boilerplate requirements there are several new problematic inclusions. Personal Property All personal property transferring in a purchase transaction must be described in the appraisal whether or not it was listed in the sales contract. Any client is free to ask for a shopping list of tchotchkes, but if an appraiser is appraising an abandoned residence with piles of junk laying everywhere…they couldn’t afford my time to sift through it all like in an episode...

USPAP’s Typical Buyer Standard in the Fair Housing Era The Irreconcilable Conflict Between USPAP's Typical Buyer Standard and the Current Fair Housing Compliance Regime. Retain this document as a…
The Real Cause of the Home Value Gap Is the Income Gap Blaming appraisers for the income gap will never solve the real underlying problem... Blaming appraisers for the income gap is…
The Town With No Bank: How Rural America Lost Its… For decades, we’ve been told that the problem is demand. That people don’t want to live in rural America anymore.…

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Illinois Appraisal Newsletters - Illinois Department of Financial and Professional Regulation

Hybrid Assignments, the Consequences

Related Posts:

Bankers Concerned About Appraisals

Related Posts:

Third Party Blues

Related Posts:

Contract Amendments… When?

Related Posts:

Life After Dodd-Frank

Related Posts:

Appraisal Alternatives

Related Posts:

AMC Indemnification

Related Posts:

AMC Fair Housing Mythodology

Related Posts:

To Eval or Not to Eval

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There Go My Brackets

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Tax Appeal Work & Appraisers

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Number of Applications Tell a Story

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Condo Density Primer

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Unpermitted Additions “Zombie” Assignment Condition

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Going the Distance in USPAP

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AMCs Renewal: Two Years Later

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CU and Appraiser Regulation

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I Can’t Talk About This Appraisal Even if They Waterboard Me!

Related Posts:

Do Associates Need to Be Licensed to Take Comp Photos?

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Rules of Engagement

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