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...
Algorithms are everywhere… “Algorithms decide who gets a loan, who gets a job interview, who gets insurance and much more — but they don’t automatically make things fair. Mathematician and data scientist Cathy O’Neil coined a term for algorithms that are secret, important and harmful: “weapons of math destruction.” Learn more about the hidden agendas behind the formulas.” “Algorithms are opinions embedded in code. It’s really different from what you think most people think of algorithms. They think algorithms are objective and true and scientific. That’s a marketing trick. It’s also a marketing trick to intimidate you with algorithms, to...
Is Smartexchange Resulting in USPAP Non-Compliance? This blog is likely going to stir up controversy. It is likely going to have a few folks calling me a loyalist to a la mode, or other similar things. Am I a loyalist? I do not see myself as such, but a la mode has been the only software that I have used in my career for residential form reporting. I do use ACI in the corporate setting as a reviewer and manager in my firm. I like and consider many of the staff at a la mode to be my friends, and I have had long relationships...
…inducing another to violate… Appraisers Beware! VaCAP has been informed an email has been sent to Virginia Appraisers from Xome Vender Manager, Adam Burg. The email, addressed to “undisclosed recipients,” starts with “Dear Virginia Appraisers.” The body of the email announces that SunTrust Bank has begun ordering a bifurcated valuation product with an interior inspection. The appraiser is to use information from a third party property inspection for subject property data. VaCAP cautions appraisers on this product. Virginia Statutes and Regulations are very clear the appraiser who signs the appraisal report must have complete direction and control over the appraisal. The Virginia Real Estate Appraisal...
…the reasoning for changing the appraisal process has shifted… Is there are Crisis? Rahm Emanuel eloquently stated “You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.” There has been a narrative that there is a shortage of appraisers. Interestingly, this is not coming from lenders that engage appraisers directly. This is coming from Appraisal Management Companies otherwise known as “Middlemen” and the lenders that employ the Middlemen. These Middlemen will shop an appraisal assignment by blast emails to as many appraisers...
The current and proposed revised version of USPAP also opens the door to increased regulatory persecution of licensed and certified real estate appraisers, while leaving all others that opine about values with no constraints, rules or limitations. I was recently asked to consider a proposed change to USPAP. As received in my email: “Also this, in the 3rd exposure draft 239 The appraiser is not required to title an appraisal report using specific terminology because 240 USPAP compliance is measured by the substantive content of a report, not by what the 241 report is called. The use of labels such as analysis,...
The AGA wants to make that change. Do you? We have all seen the the commercials for Nationwide Insurance and that they are on your side. As real estate appraisers do we know who is really on our side? There are so many organizations that represent appraisers. Many claim to help appraisers, many do help appraisers, many are out there to fight for appraisers, many offer education and many just want us to join them in their own agenda journey made up of false narrative and false promises. I’m not here to force you to join anything. I support the...
Freddie Mac has an Enhanced Sweat Equity Program where borrowers (aka purchasers) can purchase a home and use sweat equity as a down payment and closing costs. No money to the table! Here’s what’s allowed: Sweat equity to be used for the entire amount of down payment and closing costs with maximum 97 percent LTV/105 percent total LTV (affordable seconds). Sweat equity for manufactured homes up to a maximum LTV ratio of 95 percent. Sweat equity as an eligible source of funds for: All repairs and improvements to be completed by the borrower that are listed in the sales contract...
We object to the proposal to increase the de minimis threshold at which no appraisal is required… Sirs: The American Guild of Appraisers (AGA), of the Office Professional Employees International Union (#44 OPEIU) of the AFL-CIO represents the members and extended family and retirees, taxpayer and consumer real estate appraisal interests of nearly Twelve and a half million citizens and voters. We object to the proposal to increase the de minimis threshold at which no appraisal is required from $250,000 to $400,000. Respectfully, if anything is done with it at all, lowering it to a range not to exceed $100,000...
Please comment now! VaCAP sent out a “Call to Action” a month ago to comment on the proposed increase in the appraisal threshold to $400,000. As of this writing, only 179 comments have been received. This is our future, please comment now! Comments must be received by February 5, 2019. The proposed rule would increase the threshold level at or below which appraisals would not be required for residential real estate-related transactions from $250,000 to $400,000.Consistent with the requirement for other transactions that fall below applicable thresholds, regulated institutions would be required to obtain an evaluation of the real property...
