Monday, December 20, 2010
First quote from the document:
"Under the direction of the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac (the GSEs) have developed the Uniform Mortgage Data Program (UMDP) to enhance the accuracy and quality of loan data delivered to each GSE. The Uniform Appraisal Dataset (UAD) is a key component of the UMDP, defines all data points required for a complete appraisal report form, and standardizes key appraisal data elements for a subset of fields on the Fannie Mae and Freddie Mac uniform residential appraisal report forms.
For conventional loans delivered to the GSEs on or after March 19, 2012 (and with application dates on or after December 1, 2011), Fannie Mae and Freddie Mac will require lenders to deliver electronic appraisal data prior to the loan delivery date. The appraisal data must conform to UAD and be delivered through the Uniform Collateral Data Portal (UCDP). The UAD and UCDP will help lenders, the GSEs, and other industry participants manage collateral risk through efficient collection and use of high-quality appraisal data."
The rest from Michael Imes:
"If you are interested in letting FM know how you feel, the link for feedback is below. I also included my comments fyi. FNMA doesn’t have an email address or form I can find to send in comments. They obviously don’t want to hear from anyone. I wonder why?
Why isn't there a comment period from the industry...say appraisers to begin with, then lenders who have to try and read their appraisals?!?
You are recreating a wheel that has already been created by Marshall and Swift (M&S). Why didn't you use things that are already in place? Your system has some issues.
1. You are trying to change something that doesn't need changed, just specified. M&S already has these categories, so it is obvious where you got them from, but why can't you go ahead and use what makes sense? The standard word descriptors or the numbering system M&S uses? This would make much more sense. Everyone would understand it and be able to use it without much change. Instead, you decide to create more hardship.
2. You are using a ranking system that is opposite from what is already in place. This is going to cause much confusion.
3. You didn't leave room for that property that fits in the middle. M&S has a numbering system I am sure you are aware of (1.0, 1.5, 2.0, etc.) that accounts for those properties that don't quit fit into either category. Maybe we ought to rethink your move here? This is going to create so many headaches with lenders and appraisers. It also begs the question, does the appraiser assume/round to the higher or lower designation? Oh yes, higher and lower don't mean anything now...better or worse designation?
4. Has anyone mentioned how a "subject to" appraisal should be notated? The guidelines tell appraisers to tell you the actual condition/quality. But what if it is subject to? Do they tell you the before or after? Many will ask, be prepared.
I suggest you reopen, excuse me, open it to public comment rather than be dictators. Try working with the industry instead of against it which is what this readily demonstrates. Doesn't everyone want something easier to use that is more transparent rather than more difficult with more chances of errors? I agree that you all need to make this move. I don't agree with how you have gone about doing it, or how you did it. Again, get some feedback from the industry. Work with others rather than against them.
Michael Imes, IFA"
Wednesday, December 15, 2010
Here is the text of the "survey," which you attest to with name, address, and so on:
In response to an invitation to comment on Interim Final Rules we, the undersigned, offer the following comments:
As currently presented the Interim Final Rules have an inherent conflict within “Presumptions 1 and 2” of Customary and Reasonable Fees. This inconsistency is evident by allowing the lender to be compliant by adherence to two diametrically opposed options:
o Presumption 1: Established market fees without specific exclusion of fees paid by AMC
o Presumption 2: Established market fees with specific exclusion of fees paid by AMC (as proposed by the Act)
The existence of Presumption 1 is in conflict with the Congressional intent of Title 14 of the Dodd-Frank Act.
In order to protect lenders and consumers, Congress recognized the critical importance of engaging appraisers at a fee that allows for thorough analysis and diligence by the most competent appraiser. Not engagement based on lowest fee and rushed completion expectations.
o Removal of Presumption 1 in order to remain compliant with original Congressional intent as defined in Presumption 2
o If removal of Presumption 1 is not an option: Clarification that 100% of the fee paid by the consumer is the fee to be paid to the appraiser. Appraisal Management Company fees must be paid by the institution receiving the benefit of these services, the lender, not the consumer. AMC management fees can be defined any number of ways and customarily by Request For Proposal.
Appraisers recognize the valuable services AMCs provide to the lending community, however, the benefits enjoyed by a lender from the AMC’s national coverage, loan underwriting functions, appraiser independence compliance, etc should not be borne by the appraiser through the reduced appraiser fees paid by AMC’s.
Credible appraisal reports play an integral role in the safety and soundness of the lending process. As intended by Congress, Presumption 2 will provide consumer and lender with valuations established by professional appraisers with the resources and time to complete a thorough valuation.
Predictably, appraisers remain the perennial punching bag.
December 6, 2010
Department of Commerce
P.O. Box 42525
Olympia, WA 98504-2525
Re: Public Comment Draft—Department of Commerce 2011 Strategic Plan for Enhancing Energy Efficiency and Reducing Greenhouse Gas Emissions from Homes, Buildings, Districts and Neighborhoods
Dear Mr. Murray:
On behalf of the almost 4,000 real estate appraisers in Washington State, we would like to take this opportunity to provide comments on the issue relating to the valuation of green residential properties highlighted on Page 19 of the Public Comment Draft: Financing—Appraisals.
We applaud your effort to ensure that housing (and our community) is more energy efficient, healthy and environmentally sustainable. As professional appraisers, we are pleased to see attention being paid to the appraisal process by your department.
We are concerned about this proposal for a variety of reasons, 1) Cost doesn’t always equal value, 2) Appraisers need to have the information, and 3) Dictating value adjustments is inappropriate and jeopardizes the independence of the appraisal process. We are also concerned that input from the appraiser community was apparently overlooked in the four work groups, and we hope that this letter will rectify this oversight. It appears the work groups intend to elevate recognition of energy efficient items in the real estate appraisal process. While we support that goal, we believe your department should consider the following:
1. Many home owners or other property owners may not know that appraisers themselves do not establish the market for a property – the appraiser merely reflects and reports on the market, and uses empirical-based market data to estimate the market value of a property.
If the market and market participants (i.e., buyers) do not yet recognize and/or adequately account for the perceived benefits of a “green” building in the way of an enhancement to the market value of the property, then an appraiser cannot simply increase the estimated market value of the property in an appraisal report merely because some developers, builders, or lay persons “believe” or “feel” that the property “should be” worth more. All elements of value must be supported through and based on market activity (i.e., sales, predominantly, or through higher rents for example in commercial properties).
Unfortunately, despite the passion of “green” industry building representatives and advocates, in many or most cases, the greater market has not yet perceived a significant enhancement in the market value of “green” properties, and reflected that enhancement in the form of either higher sale prices and/or higher rents for properties sufficient to cover the added costs of this type of development.
It is critical and important for the lay person to bear in mind that “Cost” does NOT necessarily equal “Value” (i.e., “market value”). This is a fundamental appraisal issue, and that is why appraisers complete a highest and best use and/or feasibility analysis for many properties prior to their development – to answer the question as to whether the costs of a project will be recovered, inclusive of a developer’s profit, based on current market data. Just because a builder spends more money to construct a “green” (“energy-efficient”) home does NOT mean that the market will ultimately compensate for this in the form of a higher price for that home, or a price sufficiently higher to cover all costs (with or without a profit element).
2. We agree that providing information to appraisers “may also increase recognition of the value of the efficiency items”. The builders need to provide this information to the appraiser, and the appraiser needs to make the judgment as to the impact on value as evidenced by the market. An appraiser needs to have all of the information – from builder, realtor, home inspector, etc. – regarding energy efficient features in order to be able to consider this information as part of their analysis.
3. For the Department of Commerce to be coming up with set value adjustments for various energy efficient features is completely inappropriate and borders on inappropriate influence on the appraiser’s independent judgment. As I am sure that you are aware, pressuring appraisers to report values not supported by the market is illegal, and appraisers have been fighting this battle for years. An appraiser is required to be independent, objective, and unbiased. Appraisers are being blamed that – during the good economic times – they too often appraised properties “too high; now that the market has softened, and they are “too low.” With the passing of the Dodd-Frank Act earlier this year, there are sweeping new changes to “Appraisal Independence”; several agencies have recently released updated guidelines and announcements specific to this topic.
We would be pleased to meet with you or your staff to discuss alternative language that would achieve the goals of this task force in a way that is consistent with existing rules, regulations, methodologies, and current efforts underway.
Justin Slack, SRA
 For mortgage transactions secured by a consumer’s principle dwelling, refer to 12 CFR 226.36(b) under Regulation Z (Truth in Lending) through March 31, 2011. Also refer to 12 CFR 226.42, which is mandatory beginning on April 1, 2011. Regulation Z also prohibits a creditor from extending credit when it knows that the appraiser independence standards have been violated, unless the creditor determines that the value of the property is not materially misstated. Page 4 of 45 Footnote 14: Interagency Appraisal and Evaluation Guidelines (December 2, 2010—FDIC)
Sunday, December 12, 2010
As AppraiserNews.com has reported, the “Customary and Reasonable Fees” provision bodes well for appraisers, with this part of the act scheduled to be implemented on April 1, 2011. This “Interim Final Rule” has language that concerns appraisers in regard to whether the provisions related to appraisal fees will be truly enacted and not be a bad April Fool’s joke.
A link to the Fed’s “Interim Final Rule” is found here: Part 226 Truth in Lending: Interim Final Rule
More importantly, a link where you can register your comments with the Fed is found below. The deadline for comments is December 27th so please take a few minutes to make your voice heard.
Federal Reserve Board: Electronic Comment Form
(Thank you, Michael Imes)
Thursday, December 9, 2010
They are available in both HTML and PDF formats.
Saturday, December 4, 2010
Board of Governors of the Federal Reserve System
Office of the Comptroller of the Currency
Federal Deposit Insurance Corporation
Office of Thrift Supervision
National Credit Union Administration
Agencies Issue Final Appraisal and Evaluation Guidelines
The federal financial regulatory agencies issued final supervisory guidance today on sound practices by financial institutions for real estate appraisals and evaluations.
Financial institutions use reliable appraisals and evaluations to determine the value of collateral for mortgages and other loans; appraisals and evaluations are integral to institutions' real estate lending. Institutions base credit decisions primarily on borrowers' ability to repay, but institutions also consider the value of real estate collateral as a secondary source of repayment.
The Interagency Appraisal and Evaluation Guidelines, which replace 1994 guidelines, explain the agencies' minimum regulatory standards for appraisals. The guidelines incorporate the agencies' recent supervisory issuances on appraisal practices, address advancements in information technology used in collateral valuation practices, and clarify standards for the industry's appropriate use of analytical methods and technological tools in developing evaluations. Financial institutions should review their appraisal and evaluation programs to ensure they are consistent with the guidelines.
The guidelines emphasize that financial institutions are responsible for selecting appraisers and people performing evaluations based on their competence, experience, and knowledge of the market and type of property being valued. Institutions should demonstrate the independence of their processes for obtaining property values, and adopt standards for appropriate communications and information-sharing with appraisers and people performing evaluations, according to the guidelines.
In promoting sound credit decisions, the guidelines emphasize the importance of institutions maintaining strong internal controls to ensure reliable appraisals and evaluations. Institutions also are responsible for monitoring and periodically updating valuations of collateral for existing real estate loans and for transactions, such as modifications and workouts, according to the guidelines.
The Dodd-Frank Wall Street Financial Reform and Consumer Protection Act of 2010 underscores the importance of sound real estate lending decisions; future revisions to the appraisal guidelines may be necessary after regulations are adopted to implement the Act.
Michael Imes, IFA
Friday, December 3, 2010
Whidbey News Times Assistant editor
Responding the concerns about privacy and safety, Island County Assessor Dave Mattens decided to take down photographs of homes from the office's online database.
It's not the best or even a permanent solution, he said, but "a temporary stopgap measure."
"It didn't solve the problem, but just shifted the problem," Mattens said. "It's going to make some people happy, but it will upset other people."
Mattens spearheaded the acquisition this year of new software for the assessor and treasurer's office. When the mountains of data were transferred over to the new system, all of the photos that the appraisers had taken of houses ended up on the searchable online database.
A number of people in the community complained about the photos of their houses being online; they were especially concerned about images taken from backyards and places not visible from public areas.
Full Article HERE
Wednesday, December 1, 2010
“A return to common sense loan underwriting standards would go a long way toward achieving responsible, sustainable homeownership. In addition, all home valuations should be made by competent professionals with local expertise and full access to market data — there remains an elevated level of appraisals that fail to provide accurate valuation, which is causing a steady level of sales to be cancelled or postponed,” Phipps said.
A parallel NAR practitioner survey shows 10 percent of Realtors in October report they had a contract cancelled as a result of a low appraisal, and 13 percent report they had a contract delayed; 16 percent said a contract was negotiated to a lower sales price as a result of a low appraisal.”
According to FHFA, Fannie- and Freddie-backed mortgages that were recently originated show an outstanding performance, even better than during the pre-housing bubble years.
“A review of recently originated loans suggests that they have overly stringent underwriting standards, with only the highest creditworthy borrowers able to tap into historically low mortgage interest rates. There could be an upside surprise to sales activity if credit availability is opened to more qualified home buyers who are willing to stay well within budget,” Yun added.
Full article HERE.
Friday, November 19, 2010
Thomas P. Vartanian, Robert H. Ledig and Lawrence K. Nesbitt
Industry observers have been waiting to see when bank failures arising out of the recent financial crisis would produce a wave of Federal Deposit Insurance Corporation (“FDIC”) litigation similar to that seen in the early 1990s after the savings and loan crisis. With its second suit in recent months, the FDIC has shown that it will aggressively pursue claims against directors and officers in connection with failed depository institutions.
The FDIC has significantly increased its legal staff in the last few years and has engaged outside law firms to perform professional liability investigations and to conduct litigation in connection with recently failed institutions. Moreover, an FDIC spokesman recently stated that the FDIC has authorized legal actions against seventy former directors and officers of failed banking institutions in an effort to recoup more than $2 billion in losses...
The S&L crisis in the late 1980s brought into sharp focus the potential liability of directors and officers when an insured depository institution fails. The FDIC has stated that it and the Resolution Trust Corporation recovered approximately $6.1 billion from professional liability claims and brought claims against directors and officers in approximately 25% of all bank failures during the S&L crisis period.
Source (via Dave Towne)
Thursday, November 18, 2010
Stay in touch and informed. ACOW works for all appraisers in Washington and without your help, you will not have a voice in Olympia. Renewal for membership is coming up, and we have many financial needs to meet. Please go to the ACOW webpage, www.acow-wa.org and renew using the PayPal link, or send in your check. We appreciate your support, but remember, it’s for you, not us.
Monday, November 8, 2010
If so, I would recommend contacting Che (a staffer) through Sen. Cantwell’s Seattle office. I have filed a congressional complaint against several federally regulated institutions due to having outstanding invoices and not responding to payment demands or not paying late fees etc. Just like we are required to do when we don’t pay our CCs or Mortgages.
She asked if I knew of others that were having similar problems. I told her I could only speak for myself, but I am sure if it is happening to me, it is happening to others.
Michael Imes, IFA
Saturday, November 6, 2010
I am pleased to announce that MacDonald Dettwiler and Associates (MDA) has signed definitive agreements to sell Marshall & Swift/Boeckh (MSB) to TPG Capital (TPG) - a well known global investment firm with $47 billion in assets under management and with strong experience supporting companies in the insurance and financial services marketspace. The transaction is slated to close in late 2010 or early 2011, subject to customary approvals.
As part of this agreement, no changes to management, core initiatives, business direction or product roadmaps are expected to occur at MSB. TPG is fully supportive of and in total congruence with our business and strategic plans. We will maintain our long-standing commitment to you and your organization, continuing to serve you with industry-leading property solutions, thought leadership and the years of experience our people provide. Our employees will also continue to deliver the same exceptional customer service we are known for and you have come to expect.
Over the course of the next few months, MSB will keep you informed on our progress.
Chief Executive Officer
Marshall & Swift/Boeckh
Deadline for comments back to the Federal Reserve Board is Dec. 27, 2010.
Submit comments, identified by Docket No. R- 1394 and RIN No. AD-7100-56, by any of the following methods:
Δ Agency Web Site: http://www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
Δ Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for
Δ E-mail: firstname.lastname@example.org. Include the docket number in the subject
line of the message.
Δ Fax: (202) 452-3819 or (202) 452-3102.
Δ Mail: Address to Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, DC 20551.
All public comments will be made available on the Board’s web site at
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, unless modified for technical reasons. Accordingly, comments will not be edited to remove any identifying or contact information.
Public comments may also be viewed electronically or in paper in Room MP-500 of the Board’s Martin Building (20th and C Streets, N.W.) between 9:00 a.m. and 5:00 p.m. on weekdays.
Wednesday, October 27, 2010
"There is an AMC by the name of C2C from California that ordered an FHA appraisal from us last evening at a $350 fee.
"We wrote them back a decline with the fee we would accept. They reordered that appraisal this morning and less than 2 hours later they wrote they assigned to another 'vendor'. Well you should see their stips…..4 closed sales, 1 listing, 1 pending, complete the cost approach, 1004 MC form, etc. , etc., etc.
"You guys know me…I called California…got their phone monkey who said I would have to speak to his 'manager'. Well this clown sounded all of 18 years old.
"I informed him that they may have broken Virginia law…..I informed them of reasonable and customary fees….They are even so stupid as to put on the order a fee that was within $5 of our fee. I asked why they reassigned and the answer was they found another vendor who was cheaper at the R & C fee. I told them to take us off of their list…….NOW!
"Keep in mind I had already called the agent and set up the appointment. I cannot wait to find out who takes this assignment….and believe me, I will. The agent is an OLD friend of mine.
"This young punk said oh no we are not breaking any law….I said well we will just see about it….our Attorney General will get this….and we will now cost you more than you could ever save on cheap ass appraisal fees. Then this REAL HIGHLY TRAINED PROFESSIONAL hung up on me!
P. E. Turner (Pat), Jr., SRPA, SRA
P. E. Turner & Co., LTD.
Tuesday, October 19, 2010
As many of you may know, the Federal Reserve issued 132 pages of “interim final regulations” yesterday on the hot-button issue of “customary and reasonable” fees – and more – as mandated by the Dodd-Frank Act. Since I was preparing a broader memo on a wide variety of other timely topics anyway, I decided to combine a first look at the new regs with the other information, and so here you have it all together. It's a little long as a result, but there's a lot to cover, so bear with me.
First Look at the Dodd-Frank Act (or “DFA”) Regs
There's one bombshell hidden in here aside from what we expected. Everyone knew that the HVCC was being eliminated and that the issue of customary and reasonable fees would be covered, but I for one wasn't expecting the Fed to take the position that even though the DFA refers to “appraiser” and “appraisal”, the logical approach is to make the regulations include any person performing “valuations” and make them subject to the same rules.
So, under the new regs, BPOs and agents are subject to the same restrictions regarding coercion and direct or indirect interests as appraisals and appraisers. It doesn't mean agents have to abide by USPAP, but it does mean that incenting them with a shot at a listing (real or implied) when doing a BPO would be a violation, as would telling them to hit predetermined numbers.
Among the other issues that stand out:
• The big one, customary and reasonable fees, is a mixed bag. On the one hand, it seems that they bowed to AMC pressure and essentially made it “customary OR reasonable” fees, not customary AND reasonable. On the other hand, they seemed to signal to the legal community that there was more safety in advising lenders to follow a third party reasonable standard than just hide behind customary AMC fees.
• The crux of the fee issue comes down to allowing AMCs to include their own fees (seemingly in contradiction to the DFA's intent) in their determination of what are the recent market fees being paid to appraisers, and to have that be one of the two separate and alternative presumptions of compliance, so long as the AMC did not engage in anticompetitive behavior as defined by the Sherman Antitrust Act.
• The second presumption of compliance, using third party data, provides more shelter to the lender – avoiding $10,000 per day fines – than does the first, which the regulators signal by expressly defining what sort of evidence would not be sufficient to overcome the presumption of compliance. In other words, a lender using third party studies which eliminate the AMC fees will almost always win in court if someone challenges them and will almost never be fined, because simply using the fee studies or surveys is considered de facto compliance with the law. Trotting out a different third party study showing higher fees isn't enough on its own to overturn the fact that the lender used sufficient best efforts by relying on non-AMC third party data in the first place. That's great, and will provide the necessary added protection for many risk-averse lenders to refuse to allow AMC-tainted fees to be the basis of their customary and reasonable legal strategy.
• The HVCC is eliminated as expected. However, realize that the firewall restrictions of the HVCC are not eliminated, because they were nearly identically encoded in the 2008 Appraisal Independence Rules (often referred to as the “Interagency Rules”), and the interim final rule enshrines the Interagency Rules virtually unmodified as part of the new law. The chief distinction is that the Interagency Rules do not bar particular people (mortgage brokers, agents, etc.) from expressly engaging in the process of engaging or communicating with appraisers as the HVCC did in blanket fashion, but rather bar anyone – regardless of their position – from influencing the appraiser in a manner intended to materially mischaracterize the value of the consumer's residence.
• The Fed invalidated the fee stipulations that many AMCs have demanded appraisers sign, exactly as we've argued. In crystal clear language, they showed that one appraiser being forced to agree to a fee does not mean that appraiser has abdicated protection under the statute, nor has the appraiser given safe harbor to the AMC, since the appraiser cannot attest on his or her own as to what a customary and reasonable fee would be under the statute: “the Board understands that some AMCs have begun requiring fee appraisers to agree that the fee is customary and reasonable as a condition of obtaining the appraisal assignment. In these situations, the Board believes that an appraiser’s agreement that a fee is customary and reasonable is an unreliable measure of whether the fee in fact meets the statutory standard.”
This is just the quick summary. Meanwhile, you can and should read the regulations yourself at:
Monday, October 18, 2010
The link is http://www.ca5.uscourts.gov/OralArgumentRecordings.aspx
It is Docket No. 09-60804.
(Thanks to Richard Hagar SRA)
Monday, September 20, 2010
From Dave Towne, the direct contact person at the Federal Reserve Board where you can send a letter to discuss your personal AMC and Customary and Reasonable Fee situations, or anything else having to do with appraiser independence.
Please do so in the next few days, as new appraisal regulations are being drafted now, with implementation set for October, or perhaps sooner.
Here is the contact information for the person at the Fed that is handling the Interim rulemaking on appraiser independence (including customary & reasonable fees):
Ms. Sandra Braunstein
Division of Consumer and Community Affairs
Federal Reserve Board
1709 New York Avenue, NW
Washington, DC 20006
I strongly suggest you provide your own letter in your own words, rather than rely on ‘template’ content from another source. Keep it short and to the point.
The FRB needs to hear from as many ‘boots on the ground’ appraisers as possible.
Tuesday, July 20, 2010
Today is the deadline: MIDNIGHT
If you have responded to the ASB concerning the new USPAP for 2012-2013, I thank you for your proactive involvement in the profession.
If you have not. In as brief a fashion as I can, I'll tell you it is very bad.
It will mean more work for you, incorporates a new way to get comp checks and APOs without calling them reports and without benefit of an engagement letter, and hiding the fact by not calling it a report.
More confusion for the industry.
Has zero concern for public trust.
Will increase your costs to produce an appraisal and your liabilities.
Further convolutes the process and practice of appraising leaving gaping holes that you will be liable for, which probably will impact your E&O insurance.
Please sign the letter we have prepared or send your own letter tonight.
Sign the letter at the below link, or write your own.
(Via Michael Imes)
An excerpt regarding HVCC Fraud:
"Lenders are circumventing the Home Valuation Code of Conduct (HVCC) by using other non-commission employees to order appraisals. The HVCC agreement between the FHFA and the New York Attorney General's Office was intended to govern the way appraisals were ordered for all single-family mortgage loans (excluding government-insured loans such as FHA and VA) sold to Fannie Mae and Freddie Mac. In the fashion of a true arms-length transaction, all appraisals are to be ordered through a third-party appraisal management company to eliminate collusion between the appraiser and those who earn an income from loan closings (e.g., mortgage loan officers, brokers)."
The report is here.
AUGUST 27, 2010 9:00 AM
Department of Labor and Industries
7273 Linderson Way SE
Tumwater, WA 98501
Attendees will receive CE credit for attendance at the Commission meeting. However, you may only use attendance at one meeting for any renewal.
Monday, July 19, 2010
So, as I understand it, the REAC meeting is being rescheduled for the following week, in Tumwater, and now we will just have to make other arrangements for Friday morning at the Summit (I am working on options, and anticipate bringing a proposal to the ACOW Board’s attention sometime before this week is over – look for it).
I think it’s too bad that the DOL has taken this position, but that’s the way things have turned out…..
Stan Sidor, President
ACOW - Appraiser's Coalition of Washington
HVCC's Sunset and Other Appraisal Reforms on the Horizon
Congress is poised to eliminate the contentious Home Valuation Code of Conduct, (the “HVCC”), and with the HVCC set to sunset, more expansive (and expensive) appraisal reforms are on the horizon.
Tucked within the massive Dodd-Frank
While the HVCC may be fading into the sunset, don’t expect the same fate for AMCs, AVMs, and BPOs.
To view the complete alert online, click here.
Wednesday, July 14, 2010
Dear Seattle Chapter Members:
Please see the note below from the Appraisal Institute’s Washington DC office. New legislation, the Restoring American Financial Security Act of 2010, is now being discussed in Congress and would have a positive effect on many appraisers.
We request that as many Seattle Chapter members as possible take a few minutes to write a short note to our Senator Maria Cantwell encouraging her support on a Conference Report that will be coming in front of the Senate shortly.
You can use the following link to contact Senator Cantwell: http://capwiz.com/appraisal/issues/alert/?alertid=15219341.
Your help is greatly appreciated – thank you!
* * * * * * * * * * * * * * * * * * * *
Dear Chapter Leaders,
As you know, we’re on the “goal line” as far as financial reform is concerned. The House has voted to enact H.R. 4173, the “Restoring American Financial Security Act of 2010”, and in the next few weeks, the Senate is expected to bring the Conference Report to the Senate floor for a vote. This is where we need your help.
We have been approached by Senate Banking Committee staff to target specific Senators who are undecided on how they will vote. They are from your States. The Senators are:
Sen. Scott Brown (R-MA)
Sen. George Voinovich (R-OH)
Sen. Olympia Snow (R-ME)
Sen. Susan Collins (R-ME)- She has recently said she will support the bill, but we should still include her to be sure.
Sen. Maria Cantwell (D-WA)-Same as above.
Sen. Ben Nelson (D-NE)
Sen. Chuck Grassley (R-IA)
Sen. Richard Lugar (R-IN)
The Appraisal Institute’s Washington Office of Government Affairs asks that you send this email to all members in your State, and ask them to use the link below to contact their targeted Senator(s).
If you have any questions, please don’t hesitate to contact me.
Brian A. Rodgers
Manager of Federal Affairs
Friday, July 9, 2010
This graph shows the 30 year fixed rate mortgage interest rate from the Freddie Mac Primary Mortgage Market Survey®.
The red line is a quarterly estimate from the BEA of the effective rate of interest on all outstanding mortgages (Owner- and Tenant-occupied residential housing).
The effective rate on outstanding mortgages is at a series low of just under 6%, but the rate is moving down slowly since so many borrowers can't refinance because they do not qualify (either because the property value is too low or their incomes are insufficient).
(Again, the source is here.)
The graph is here as a larger jpeg.
Wednesday, June 30, 2010
This is a drive-by appraisal report for a (probable) 1004D fee, typically much lower in price than the drive-by fee would normally be.
Nowhere on the 1004D form Update does it indicate this level of reporting. The form says the appraiser must ‘summarize’ the info reported. There is no Fannie requirement (that I know of) that ‘new’ comps be driven and photo’d. But…you’d better damn well have a complete work file and data to justify how you answer the 1004D Update ‘Yes/No’ question. Fannie’s instructions to lenders say that if the question is answered ‘Yes’ then the lender must order a new appraisal.
This Chase requirement circumvents that process, and forces the appraiser to do a basically full blown appraisal prior to completing the 1004D.
What you do with this type of assignment is of course your own business decision. What you charge is your decision also. You do not have to accept the fee OFFERED by Quantrix (the senders of the Chase requirements). And you do not have to do the 1004D, even if you were the original appraiser.
This is just another recent example of escalating order and inspection requirements (probably) without properly compensating appraisers for what is being requested.
I hope you will make the correct decision for yourself and for appraisers nationwide when/if you get one of these new Chase 1004D requests.
(My BOLD below)
Chase’s NEW Appraisal Requirements for the following 2 products: 1004D-Appraisal Update and 1004D-Final Inspection and Appraisal Update. The requirements apply to the “Summary Appraisal Update Report” section of the 1004D. These requirements are in effective as of (6/16/2010).
Note: These requirements apply to the “Summary Appraisal Update Report” section of the 1004D form when either of the following products is ordered:
• 1004D-Appraisal Update
• 1004D-Final Inspection and Appraisal Update
The appraiser performing the Appraisal Update must, at a minimum:
• Perform an exterior inspection of the subject and new comparables from at least the street.
• Research, verify, and analyze current market data in order to determine if the property value has changed since the effective date of the original appraisal.
• Include an extraordinary assumption that the interior finish and condition are the same as the original inspection.
• Indicate on the 1004D form if the market value of the subject property has declined since the effective date of the original appraisal report.
• Provide a new sales grid with three new comparable sales that have closed since the effective date of the original appraisal to support your conclusion. Note: Listings may be included as a 4th, 5th comp, etc. if needed to support your conclusion. (We do recognize that the additional comparables being supplied with the Update may not be better, or more indicative of value, than the comparables used in the original report. Regardless, Chase underwriting needs to account for market activity occurring in the period since the original report date, so new comparables which closed after the effective date of the original appraisal must be provided.)
• Provide a new original front photo and a new original street scene photo of subject.
• Provide an original front photo of all new comparables provided on the grid.
• Provide a location map showing the subject property and all new comparables. Note: the neighborhood boundaries must be clearly visible on the location map.
The official name, as of today, is "Dodd-Frank Wall Street Reform and Consumer Protection Act." It passed a joint house/senate 20-hour conference Friday and is sent to Congress for voting. Of course, if it was just about appraisals, it would not have moved so fast.
If you have any other versions of the bill, don't use them as there have been some changes.
Hopefully, the bill will be approved by Congress this week. Lots of HVCC content such as no value pressure, etc. It requires AMC regulation and registration. The bill makes changes to FIRREA, RESPA, and other regulations.
Here's an excerpt:
From the Dodd bill "(i) CUSTOMARY AND REASONABLE FEE.-
"(1) IN GENERAL.-Lenders and their agents shall compensate fee appraisers at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised. Evidence for such fees may be established by objective third-party information, such as government agency fee schedules, academic studies, and independent private sector surveys. Fee studies shall exclude assignments ordered by known appraisal management companies."
It is the biggest federal changes for appraisers since FIRREA in 1989. FIRREA had many major requirements, such as appraiser licensing. I don't know what that means for appraisers and federal regulations.
The full Dodd Bill (appraisals start on page 2205)
Also of interest, Alamode publishes an Appraisal Fee Reference, which gives shows the median and average fees of reporting appraisers. So if you are not sure what the 'customary and reasonable' fees are in our area, you can look here. At least it gives an idea of what is happening, and is a little more reliable than individual anecdotal evidence...
Friday, June 25, 2010
Granting Wells' motion to dismiss, District Judge Claudia Wilken opined that ...to be held liable for violating the right to fair procedures, a private entity must have the power to “significantly impair” the individuals' ability to work in a particular field. “In essence,” she wrote, “the law concerns exclusion or expulsion from membership by a gatekeeper organization, like a union or an insurance company,” which she determined did not apply to Wells Fargo.
“Wells Fargo's extensive national involvement in originating and servicing mortgages does not necessarily mean that it wields significant power over the appraising profession in the geographic areas in which plaintiffs work,” wrote Wilken.
“It is especially important to note that, while loss of income after exclusion by a private entity is relevant, it is not 'conclusive proof' that the exclusion impaired the plaintiff's ability to continue in the profession,” she continued. In the judgment of the court, the percentage of business lost by Pearsall and Savage following their blacklisting was not enough to establish a duty to provide fair procedures. In addition, the blacklisting didn't affect Pearsall or Savage's ability to receive work from other mortgage companies.
“No authority requires the imposition of the fair procedure doctrine simply because removal from a single company's list of appraisers it chooses to retain substantially affects the economic interest of a removed appraiser. Defendants simply made a choice not to do business with plaintiffs; they did not exercise power as a gatekeeper of a profession nor did they prevent plaintiffs from pursuing employment by others,” said Wilken. On this reasoning, she dismissed the claim against Wells Fargo with prejudice, saying that any further amendment would be “futile.”
Saturday, June 12, 2010
Tuesday, June 8, 2010
Howard Johnson Summit Inn at Snoqualmie Pass
(formerly known as Snoqualmie Summit Lodge)
Snoqualmie Pass, WA 98068
Reservations at the Lodge: A block of rooms will be available at the Howard Johnson Summit Inn. Rooms are $80 for 1 king and $90 for 2 Queens.
ACOW at the Summit XII Schedule
Friday August 20, 2010
12:45 PM – 1:30 PM ACOW Summit registration
1:30 PM – 4:30 PM Session I - Washington’s New AMC Licensing Law: What It Does, What It Does NOT Do, and What You Need to Know To Ensure AMCs Are In Compliance and What To Do If They Are NOT!
Presenter: Stan Sidor, ACOW President
6:00 PM Poolside Barbecue
3 hours of continuing education credit from Washington State
Saturday August 21, 2010
8:00 AM – 8:30 AM ACOW Summit registration
8:30 AM – 11:30 AM Session II - AMC Problems: How to identify and resolve them
Presenter: Richard Hagar, SRA, Appraiser, American Home Appraisals
11:30 AM – 1:00 PM Lunch Buffet/ACOW Meeting - ACOW’s Lobbyist, TK Bentler, will be there to provide a brief overview of the last legislative session, and what might lie on the horizon.
1:00 PM – 4:00 PM Session III - Defining Market Value and How to Adjust for Concessions
Presenter: Richard Hagar, SRA, Appraiser, American Home Appraisals
6 hours of continuing education credit from Washington State
ACOW at the Summit XII Cost
Friday August 20, 2010
Poolside Barbecue $30.00
Saturday August 21, 2010
Seminars and Lunch Buffet $165.00
Complete package for all events $249.00
Washington State Real Estate Appraiser Commission Meeting - CANCELLED
Due to state budget constraints, all commissions and agencies are being prohibited from holding public meetings in private facilities. For this reasons REAC will have to reschedule their August meeting to a public facility, and will not be able to hold it at the ACOW Summit at Snoqualmie. The ACOW Board is working to substitute the planned REAC meeting time with another seminar for Friday morning, August 20. Watch for details, coming soon.
Friday, May 28, 2010
AAA – the Appraisal Association of America
NAREA – the National Association of Real Estate Appraisers
NSREA – the National Society of Real Estate Appraisers
According to their websites:
1)AAA has no real estate appraisers.
2)NAREA has some Washington appraisers (see http://sb.narea-assoc.org/landing.aspx?cf=ALL)
3)NSREA had no members shown in Washington (WA was not an option).
Gretchen M. Young
Stan et al –
I am not familiar with the Appraisal Association, but NAREA is part of what used to be called the “ Scottsdale group” – two cereal box tops and $150 to obtain their designation. The National Assoc of Review Appraisers & Mortgage Underwriters, the Assoc of Construction Inspectors and other groups all share the same address and phone number.
I believe the National Society is an organization of African-American appraisers, originally formed because they could not join any of the other organizations. Ira Oakes, one of the original Appraisal Advisory Committee members, was a leader in that organization, but I have not heard anything about them since he passed on.
And by our charter, membership in ACOW is limited to ‘sponsoring organizations’ of the Appraisal Foundation.
Barry C. Wilson
Friday, May 7, 2010
This year, as our budget is so tight, I have instructed Seaops that there are to be no comp’d rooms, meals, or registrations….everyone (excepting the presenters) attending will need to pay the full cost (even I will be foregoing a comp room and BBQ dinner).
Thursday, May 6, 2010
Wednesday, May 5, 2010
In a nutshell, what the court ruled was that only in the case where there is a contractual relationship can the “economic loss rule” be applied, with compensation limited based on the terms of the contract. Without a contract between the appraiser (Russell) and the litigants (Borish) that defines and/or limits damages (since in this case the appraiser was engaged by a lender to appraise the Borish property), then the litigants may sue the appraiser based on a tort claim of fraud or misrepresentation, which fraudulent appraisal the Borishes relied upon to close the purchase of a home, and seek damages against the appraiser to compensate them above and beyond what the P&SA contractual terms may have been the buyer (Borish) and seller.
In this case, claims against the sellers were dismissed, as the limiting terms of the P&SA prevailed; the buyers are still going after the appraiser, however, and this ruling allows them to do so, even though the appraiser was not directly engaged by the purchasers, and included limitations on who could rely on and use the appraisal within the report. The buyers did rely on the appraisal to proceed with closing the sale, and it apparently included some incorrect property information that, had the correct information been known, would apparently have impacted the valuation, and thus the buyers may have had a chance to walk away from the deal.
There has been a requirement in Washington law for at least 10 years that the lender provide the purchaser with a copy of the appraisal three days prior to closing. Many mortgage brokers only provided the report if the purchaser knew to ask for it.
I believe the RCW is strong enough that if the buyer asked for the appraisal report and did not receive it at least 3 days prior to closing, they could delay closing and the lender must maintain any rate locks that might have expired.
The appraiser was found not liable in Shaaf v. Highfield (WA supreme court, 1995) because the buyer had not seen the appraisal report prior to closing, but the decision did say the borrower could have relied on the information in the appraisal if he had seen it. And the current Fannie/Freddie certification has a list of parties who, although not intended users, have a right to rely on the report.
I know we discussed this at some of the ACOW @ The Summit sessions and at REAC meetings, but I also know that many appraisers were shocked when HVCC required the same. The RCW only applied to purchases in Washington , HVCC extended that to all Fannie/Freddie appraisals .
Barry C. Wilson
Residential Reviewer & Training Supervisor
Lamb Hanson Lamb Appraisal Assoc., Inc
There is more to that Shaaf v. Highfield than what you have stated. The Judge ruled that the buyer is a party and gets a copy of the appraisal and is an intended user (Washington only). Just remember that USPAP makes the appraiser hold to confidentiality and the appraiser CANNOT give a copy of the appraisal to the borrower. That copy must come from the lender, unless the lender has given the appraiser permission to provide a copy to the borrower (I would sure have it in writing).
Appraisal Foundation approved USPAP instructor
In this particular case, the buyer did receive a copy of the appraisal prior to closing, and – here is the crux for the liability issue/question – RELIED ON IT to proceed with the closing. Afterwards, it was apparently discovered that there were factual errors/inaccuracies about the property in the appraisal report that, if correct in the first place, would likely have resulted in a lower value (below the agreed upon purchase price), and thus the buyers would have had a chance to walk away from closing the sale.
Tuesday, May 4, 2010
"I'm sure this list will continue to be updated on a fairly regular basis. The website is now up in a Beta format. Please feel free to send any suggestions regarding the site to me at email@example.com. We probably won't be making major changes because of the cost involved, but we will create a wish list. For now we are looking at errors or parts of the site that may not be functioning correctly.
We would also like to get any news of legislative issues in your home state to post...Bills, Laws, Rules, etc.
Presently the coalition is a network of states working together to share and disseminate appraisal industry legislative and newsworthy issues. I'm sure we are all hopeful it will be a success and perhaps grow into a strong professional organization working to protect appraisers and users of appraisal services...that's a fancy way of saying consumers."
T.J. McCarthy & Associates, Ltd.
7903 W. 159th Street, Suite B
Tinley Park, Illinois 60477
Phone: (708) 614-7200
Fax: (708) 614-7228
Sunday, May 2, 2010
On Tuesday I'll be the speaker on a conference call with law enforcement officers across the US discussing this exact issue.
In the class How to Identify and Avoid Real Estate and Mortgage Fraud I'll tell appraisers what I told the cops and what they will be looking for in appraisal reports.
If you are interested in attending a class, let me know and I'll schedule one locally. 6 hours of CE.
Richard Hagar, SRA
As of December 31, 2009, Frontier Bank had approximately $3.50 billion in total assets and $3.13 billion in total deposits. ...
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $1.37 billion. ... Frontier Bank is the 64th FDIC-insured institution to fail in the nation this year, and the sixth in Washington. The last FDIC-insured institution closed in the state was City Bank, Lynnwood, on April 16, 2010.
Saturday, May 1, 2010
For your reading pleasure, you may want to read this blog about how to calculate the ‘increase in value’ for a “green” property:
I present this only as information... ...this is the first time I’ve seen ‘numbers’ applied to the green revolution.
There are assumptions made in this blog presentation, and direct comparison to ‘non-green’ comparable homes is barely made … only the perceived increase in value based on the installation costs, or on the utility cost savings.
...The danger of applying this kind of methodology is the energy costs or savings and green revolution energy-efficient installations within the comparable properties is not generally known to the appraiser. Without specific information, the appraiser must report a giant extraordinary assumption that the comparable properties do or do not have similar green revolution features if suggested formulas are used to give a value increase (via adjustments) to the subject property.
From Stan Sidor:
Dave, yes, this is a concern that I have: that the “green revolution” advocates are developing or creating these “formulas” for “cost savings” (such as on utilities), and suggesting that these cost savings should (not “could”) be capitalized to reflect an increase in “value” based on this factor; however, the key issue is whether or not BUYERS are actually electing to pay MORE for these properties based on this factor ….or any other energy-related factor.
It is not enough that energy efficient features will help the homeowner save money, but rather if they transform that perceived (or known) cost savings into a higher sale price.
From Michael Imes:
Follow the money!
Look at who is presenting this info also. They are not appraisers, and they have an obviously biased interest.
Friday, April 30, 2010
Priest will run for Federal Way mayor, leaving the Legislature. Rep. Skip Priest has decided to enter the race to become Federal Way's first elected mayor. Priest, R-Federal Way, said he made the decision Monday and won't be running for a fifth consecutive term as a representative from the 30th Legislative District. STEVE MAYNARD in the News Tribune. -- 4.29.10
Lack of endorsement could signal trouble. The Olympia-based Washington Federation of State Employees has snubbed all of the incumbent Democratic lawmakers running for re-election this fall. The union, one of the largest state worker unions in the state, withheld endorsements for many majority Democrats in the House, too, sending a message that state workers are angry with the way Democrats have dealt with state budget and state worker issues over the last two years. Olympian opinion -- 4.29.10
Other Legislators dropping out:
State Senator Dale Brandland, a Republican who represents the 42nd District, has announced his decision to retire from the Senate. He has held the seat since being elected in 2002. The 42nd Legislative District encompasses most of Whatcom County. It includes northern Bellingham plus all of Whatcom's other incorporated cities: Lynden, Ferndale, Blaine, Everson, Sumas, Deming, and Nooksack. The district's two Representatives are Doug Ericksen and Kelli Linville. Linville is a senior member of the House Democratic caucus; she currently chairs the House Appropriations Committee. She now has the option of running for the position Brandland is vacating; but if she does, House Speaker Frank Chopp would need to find a viable candidate who can hold the chairman’s seat. Rep. Ericksen, a sixth-term Republican, has indicated he will be seeking the Senate seat.
Sen. Bob McCaslin’s return to the Senate following heart surgery is uncertain. McCaslin, R-4, Spokane Valley, had hoped to make it through session before the operation; however, he was experiencing difficulties and had to be hospitalized during the session. McCaslin has been ranking minority member on Judiciary and a member of the Economy Trade Committee.
Sen. Darlene Fairley, D-32 Lake Forest Park, Chair of Government Operations and Elections has decided to step down after 16 years saying it’s no longer fun.
In a surprise announcement at Sine Die, Rep. Lynn Kessler, D-24, Majority Leader in the House said she is retiring and will not seek a 10th term. She has served as Speaker Frank Chopp’s second in command for many years.
Rep. Mark Ericks, D-1 representative since 2005, will be appointed to a U.S. Marshal position and leave the Legislature. He was previously Bothell Police Chief for 12 years. He has been serving on House Finance and is vice chair of Ways & Means Committee. District 1, northeast King County and south Snohomish County, which includes Bothell, Maltby, Mountlake Terrace, Brier and parts of Lynnwood and Edmonds, will be losing both its Representatives.
Rep. Al O'Brien, D-1, also will be leaving the legislature after 14 years. He is a retired Seattle Police sergeant and served five years on the Mountlake Terrace City Council. He is vice chair of the Public Safety & Emergency Preparedness Committee.
Rep. Dave Quall, D-40. Skagit, Whatcom and Island counties will be retiring after 18 years. A retired teacher, counselor and coach, he is chairman of the House Education Committee. Mount Vernon Democrat Thomas Boucher, a member of U.S. Rep. Rick Larsen’s district staff, has announced he is seeking the 40th Legislative District seat being vacated by Quall.
Rep. Alex Wood, D-3 Spokane, a former broadcast journalist and radio and television talk show host, will retire after his seventh term in the House of Representatives. He has served as vice chair of the House Commerce and Labor Committee.
Rep. Deb Wallace, D-17 in Clark County, former Director of Business Expansion for the Columbia River Economic Development Council and current Chair of the House Higher Education Committee, has stated her intent to not run for re-election after eight years in the Legislature.
Also leaving office is Rep. Brendan Williams, D-22 Olympia, Lacy and Tumwater, who is vice chair of the Audit Review and Oversight Committee as well as a member of Commerce & Labor. Williams is one of only five legislators with a 100% scorecard from the Washington State Labor Council, AFL-CIO. An attorney, business consultant in private practice and past executive director of the Washington Health Care Association, he says he’s considering a run for the state Supreme Court.
Rep. Dan Roach, R-31 Bonney Lake, will be leaving the House to run for Pierce County Council. Replacing him as ranking Republican on the House Transportation Committee will be 12th District Rep. Mike Armstrong. Armstrong spent 21 years with WSDOT and has been in the Legislature for ten years…eight on the Transportation Committee.
At the Federal level, Congressman Brian Baird, 3rd Congressional District Representative for six terms, will be retiring and has endorsed former Democratic legislator and State Capitol figure Denny Heck to take his place. State Rep. Jaime Herrera, R-18, has stated her intent to vie for the congressional seat, as well as Sen. Craig Pridemore, D-49 Vancouver.
Thursday, April 29, 2010
We are still planning for the August Summit, and I have been in touch with Dave Towne who is working on the membership drive. I recently spoke with Ralph Birkedahl of DOL about the rulemaking process for the AMC bill, but there is nothing that has to be done on this at the moment. I am watching and monitoring issues nationwide in terms of BPOs, other AMC laws and issues, and the possible “financial reform” from Congress, but nothing for us to act on now. If anyone has any issues that they feel we need to address, please let me know.
Wednesday, April 28, 2010
As it did the last time the real estate market tanked, the downturn has triggered an uptick in lawsuits against appraisers.
But what's a little different this time is that many of the lawsuits are generated by borrowers rather than lenders, lawyers who represent appraisers say.
"They're really coming out of the woodwork," said Peter Catalanotti, an associate at Manning & Marder, Kass, Ellrod, Ramirez in San Francisco. "We're seeing borrowers suing, saying, 'We never would have bought that house if we'd known it wasn't worth that.'"
...Still, overall the amount of litigation against appraisers is relatively small potatoes, Peter Christensen added -- annually about 1,200 lawsuits for professional liability before the mortgage crisis, and now around 2,000, representing about $100 million a year in damages nationwide. "It's a very small world," said Christensen, who is also the author of a blog about legal defense of real estate appraisers.
...In one case Catalanotti is defending in Santa Clara County, Calif., Superior Court, a borrower is suing the appraisers of two residential income properties, accusing the appraisers of trying to get a commission by inflating rental income.
With property values down around the San Francisco Bay Area, many of the suits against appraisers are "buyer's remorse cases," Catalanotti said.
But the lawyer for the borrower in that case said his client relied on the appraisers' information, and that they should be held accountable for violating rules to ensure that information is accurate...
Steven Dollar, managing partner of Ericksen Arbuthnot's San Jose, Calif., office, has been defending appraisers for 25 years and said he's seen more borrowers suing recently than during the savings-and-loan crisis. This time around, he said, borrowers were frequently getting 100 percent financing and approval for loans they couldn't afford...
Julia Wei, a real estate lawyer in Palo Alto, Calif., is already seeing more lawsuits by lenders in the "surge" she's seen in appraiser cases in the last two years. "I would say that it went from a lot of work defending [all real estate] professionals to pretty much exclusively defending appraisers," she said. "It was that dramatic of a shift in a focus."
Thursday, April 22, 2010
"What can appraisers do? In my lawyer, non-appraiser opinion, it comes down again to appraisers supporting professional associations such as the Appraisal Institute and NAIFA to apply organized political pressure. It's not just 'bad apple' appraisers who are being affected by the FDIC's actions -- good appraisers are being entangled too and, if unrestrained, the FDIC will have a negative impact on the profession as a whole."
It is not just the NAIFA and AI, but your local organizations also, like ACOW. If we don’t step up and be involved (pay dues) then these support organizations are going to go away and we will be all alone out here and at the mercy of regulators, lawyers and others. See the [article and link] below.
SUPPORT YOUR INDUSTRY! BE INVOLVED – GET INVOLVED!
Michael A Imes
The Single Biggest Liability Threat to Appraisers: the FDIC
By Peter Christensen
The single biggest liability threat to both residential and commercial appraisers is the Federal Deposit Insurance Corporation. The FDIC held a conference last week in Chicago for law firms interested in representing the FDIC. What came out of that conference made me very anxious for appraisers, but it's much more than just a threat to individual appraisers. What the FDIC is doing hampers the ability of the appraisal profession to deliver accurate valuations going forward. The reason is: if you're an appraiser doing work for a lender (which may or may not be one of the 700+ troubled banks on the FDIC's watch list), you know your risk of being sued by the FDIC for overvaluation in hindsight is eliminated by "coming in low" on the appraisal. That means more loans don't get made.
The FDIC has taken over more than 200 banks since the beginning of the mortgage crisis. When the FDIC takes over a failed bank, it usually sells off the banking assets to an existing lender but retains all of the potential legal claims against the failed lender's directors, officers, mortgage brokers, accountants, lawyers, appraisers, AMCs, etc. The FDIC is now in the business of suing these parties, blaming them for its failed banks' bad lending practices.
The entire article is here.