Hybrid Committee Meeting Recap
The VREAB Committee meeting on hybrid appraisals met last week. The turnout was a decent one. Some traveled a great distance to attend. There were appraisers, assessors, consumers and trade group representatives in attendance.
The meeting started with the Appraisal Foundation Video on Hybrid Appraisals.
Public comments followed and many spoke and shared their concerns. Examples of hybrid appraisal products were submitted to the committee.
Protecting the public was a key discussion and the following existing Virginia laws and regulations were discussed.
“Appraisal” means an analysis, opinion, or conclusion relating to the nature, quality, value, or utility of specified interests in, or aspects of, identified real estate or identified real property. An appraisal may be classified by subject matter into either a valuation or analysis. A “valuation” is an estimate of the value of real estate or real property. An “analysis” is a study of real estate or real property other than estimating value. The term “appraiser” or “appraisal” may be used only by a person licensed or certified by the Board.
C. Notwithstanding subsections A and B of this section, an individual who is not a licensed residential real estate appraiser, a certified residential real estate appraiser, or a certified general real estate appraiser may assist in the preparation of and sign an appraisal if:
1. The assistant is under the direct supervision of a licensed residential real estate appraiser, a certified residential real estate appraiser, or a certified general real estate appraiser; and
The following acts are prohibited and any violation may result in disciplinary action by the board:
1. Violating, inducing another to violate, or cooperating with others in violating any of the provisions of any of the regulations of the board or Chapter 20.2 (§ 54.1-2020 et seq.) of Title 54.1 of the Code of Virginia, or engaging in any acts enumerated in § 54.1-111 of the Code of Virginia.
2. Failing to act as an appraisal management company in a manner that safeguards the interests of the public.
C. Use of signature and electronic transmission of report.
1. The signing of an appraisal report or the transmittal of a report electronically shall indicate that the licensee has exercised complete direction and control over the appraisal. Therefore, no licensee shall sign or electronically transmit an appraisal which has been prepared by an unlicensed person unless such work was performed under the direction and supervision of the licensee in accordance with § 54.1-2011 of the Code of Virginia.
The general consensus of the committee was Virginia Statutes and Regulations already in existences were sufficient to protect the public. The committee clearly understood what was transpiring in the market may not be in compliance with these Statutes and Regulations and this is problematic for appraisers and amcs.
What Happens Next
The committee will report back to the full Board at the next meeting in February. Any action taken, such as issuing a guidance document, will be decided upon the full VREAB.
VaCAP wishes to thank the Virginia Real Estate Appraisal Board for forming the hybrid committee and taking the time to discuss the growing concerns over these products.
In the news
Last week, an article by Ken Harney appeared in the Chicago Tribune. The article titled “Push to Cut Back on Home Appraisals Sparks Controversy” talks directly to the consumer about how absurd the proposal to increase the threshold to $400,000 is. Please share this article to help the consumer understand the risks involved with what is being proposed.
Also, the Philadelphia Business Journal reports the Radian Group has purchased Independent Settlement Services. A Quote from the article:
“In an interview earlier this year, Thornberry said he would like to grow the company’s mortgage and real estate services businesses to the point where it consumes a larger percentage of the Radian’s total revenues. It currently is responsible for about 15 percent of total revenue (mortgage insurance is the dominant product) but did not turn a profit in 2017.“
See the article here.
We will most likely see more AMC’s merge or get bought out in the coming months.
- AMC Engagement Letter: Appraisers Do Not Include Your Invoice - July 28, 2023
- We the People… - April 9, 2023
- Federal Valuation Agency Impact on Appraisers & the Public - July 22, 2022