According to FIRREA, and evaluation may NOT be called an appraisal.

“Germany’s economy is on the brink of collapse as its largest bank shutters 25% of its branches.

But financial expert Max Keiser has poured cold water on their claims, saying the bank is “technically insolvent” and runs a “ponzi scheme”.

Hey there! Didn’t Ocwen run with those guys? Figures. And what’s new? Would not be surprising to find they were eval guys. When I see Deutche, I often associate that with reo or junk.

“The bank needs to go out of business, because they are not solvent.

“But politicians, including Schaeuble, allow for financial engineering products to come onto the market that mask insolvency.

And that’s the heart of the matter, evals are just more smoke and mirrors.

Derivatives Contracts “Not worth the paper they’re written on” as Struggling Deutsche Bank closes nearly 200 branches

By the way excellent article and excellent comments above.

Here is the real problem: No two states treat how evaluations may be prepared the same. For example.

When USPAP first was adopted and state laws were implemented, I did NOT have to comply with USPAP and OREA (now BREA) had no clear cut jurisdiction for non federally regulated transactions. A LOT of non USPAP compliant alternative forms were designed by ACI and Ala Mode as well as others.

That was subsequently ‘corrected’ to “If I am perceived by the People of the State of California as acting in the capacity of an appraiser, then OREA HAS jurisdiction AND (at that time) I MUST comply with USPAP whether in a federally regulated transaction or not.” This was oddly enough in Business and Professions Code regulations rather than specific appraisal regulations found in checking OREAs site.

Recently I heard a State regulator state that non regulated transactions are (again) exempt from USPAP compliance…though presumably not state law which incorporated USPAP! For my part, it is easier to try to make sure everything complies with USPAP through a careful scope of work statement. OREA/Now BREA may have differing views.

The solution is NOT parsing evaluation estimates and appraisal opinions which I refuse to do. Nor is it in 50 individual states plus DC and our territories coming up with 57 (?) different interpretations.

The solution is for Congress to decide what the standard of care is that they expect for regulated institutions and to rewrite FIRREA accordingly. It should also offer guidance to states as to what types of exceptions can be permitted.

THEN it should include a requirement for every single lender or AMC or automated AMC service that orders ANY product other than a fully USPAP compliant appraisal to identify the specific States authorizing legislation that they believe that product to be permitted under.

There are a lot of other corrections and modifications that need to be addressed as well. It has been 27 years since FIRREA was passed. Dodd Frank modified it as a knee jerk stop gap “fix” that in many respects was worse than before they passed it. It created as much confusion and lack of clarity as it purported to fix.

When the new Congress convenes we need BIPARTISAN cooperation to analyze the needs of consumers; lenders and investors as well as the professionals involved in our housing finance processes.

IF all they want or need is an appraiser assisted AVM, for $100 Im fine with that AS LONG AS THEY DO NOT HAVE THE FORMS AND SOFTWARE DISIGNERS TRY TO MAKE THE PRODUCT LOOK LIKE SOMETHING MORE THAN THE UNRELIABLE, LIMITED  APPLICATION product that it is. Its an unreliable “comp check” that may or may not accurately reflect “market value” as PRESUMED but not defined.

A step above Zillow.  Marginally more reliable, but still limited and poorly suited to most loan purposes..

Georgia recently adopted Rules for Evaluation Appraisals

The Georgia Real Estate Appraisers Board published on March 27 its final regulations regarding standards for developing and reporting an “evaluation appraisal.” They clarify that, where permitted by federal law and policies, a state-licensed or certified appraiser performing an evaluation appraisal need not comply with the Uniform Standards of Professional Appraisal Practice.

The rules officially were adopted March 18.

The new regulations state that a licensed or certified appraiser may offer “an appraisal which is limited in its scope and development” where an appraisal by a licensed or certified appraiser is not required by federal law. These situations include transactions with a value less than or equal to $250,000, transactions where there is no advancement of new money other than funds necessary to cover reasonable closing costs and transactions with business loans with a value equal to or less than $1 million in which rental income from the property is not the primary source of repayment.

The regulations contain a list of approximately 20 items that a certified appraiser must include in each evaluation appraisal.

Also significant: the regulations state that the evaluation must contain “an estimate of the property’s market value” and that “a valuation that does not provide a property’s market value or sufficient information and analysis to support the value conclusion is not acceptable as an evaluation appraisal. While a broker price opinion, a competitive market analysis, an automated valuation model and a tax assessment value may be useful in developing an evaluation appraisal, the information obtained from these methods of valuation is insufficient standing alone to meet all of the criteria necessary to be an evaluation appraisal.”

This just in;  I’m no longer accepting quote fee requests by phone call or email. But they keep calling. These guys are calling me ringing me and I have never even signed up with them in the first place! I put them in the spam box, and their emails appear back in my inbox the next day. It’s 90’s style telemarketing all over again, the amc’s are the telemarketers, and I’m the succer who keeps answering the phone.

Brian, any advice from a regulatory standpoint? Amc fee quoting is like institutional harassment, it’s shockingly unethical and I don’t know, should there be a rule?