Wednesday, March 31, 2010

New FHA Mortgagee Letter 2010-13

To all FHA roster appraisers:

SUBJECT: Appraisal Update and/or Completion Report (Fannie Mae Form 1004D/Freddie Mac Form 442/March 2005)

This Mortgagee Letter (ML 2010-13) provides additional guidance to that contained in Mortgagee Letter 2009-51, which advised of the Federal Housing Administration’s (FHA) adoption of the Appraisal Update and/or Completion Report Form. Specifically, this Mortgagee Letter:

1. Provides two additional prohibitions on use of the Appraisal Update Report

2. Clarifies that the Market Conditions Form must be completed in conjunction with the Appraisal Update Form (This means a ‘new’ MC form must be researched and included, as of the 1004D Effective Date.)

3. Defines the validity periods for appraisals with and without an Appraisal Update Report…

To read this mortgagee letter and any attachments in their entirety, please visit: view the 2010 letters and click on the letter of your choice.

From Dave Towne: How to do a 1004D when there is a ‘second client’ involved:

If the first (primary) client orders a 1004D, you can complete that form (plus the ‘new’ 1040MC Form) and turn it in without attaching it to the original report and sending the entire package (as long as the client accepts that.) You ‘incorporate by reference’ the original report, and you should include that wording on the form.

If a secondary client is now using the original report, and asks for a 1004D, you MUST attach the original report to the 1004D (plus the ‘new’ 1040MC Form) and submit the entire package.

Tuesday, March 23, 2010

Governor Signs WA AMC Bill!

Congratulations! Gov. Chris Gregoire this afternoon signed Washington State ESHB 3040, which will require the licensing and provide for the regulation of Appraisal Management Companies!

This bill takes effect as of July 1, 2011. Between now and then, the Department of Licensing and other stakeholders, including the Appraisers’ Coalition of Washington (ACOW), will be working to codify the rules arising from this key piece of legislation.

Many were involved in the effort to push through this important and critical legislation in a very short period of time! This was an amazing feat arising from an unusual effort. As Rep. Steve Conway, who was the initial sponsor of the bill in the WA House of Representatives, said to me today: “This was the ‘sleeper bill’ of this session” – it seemingly came out of nowhere, and passed with nearly unanimous support in both houses.

To all of you who have been involved in and supported this effort, I want to express a hearty “thank you,” and again say, “Congratulations”!

Stan Sidor
President ACOW

Monday, March 22, 2010

ESHB 3040 Signing by Gov - TU 1:30p

I understand that the Governor will be signing our bill at 1:30p tomorrow, TU, March 23, 2010 (I think bill signing begins at 1:30p, including other bills, and not sure of EXACT time we will be called in for this), but – if you are planning to attend – you should likely be there by not later than 1:30p.


Stan Sidor
President, ACOW

Wednesday, March 17, 2010

Appraisal Groups Release, Invite Public Comment on AMC Statement of Principles

The nation’s largest professional organizations of real estate appraisers have set forth a list of business-related principles that they say appraisal management companies should adopt and advocate. The exposure draft of “Appraiser and Management Company Statement of Principles,” released March 11, is open for comment and discussion from all stakeholders through May 1.

“Adherence to these principles will help ensure that quality appraisals are prepared by competent appraisers for financial institutions and other clients in a timely manner,” Appraisal Institute President Leslie Sellers, MAI, SRA, said.

“Agreement with these principles will promote equality and a mutually beneficial relationship between professional appraisers and the AMCs using their services,” said Mike Evans, FASA, president of the American Society of Appraisers. “Most importantly, adherence to these principals will ensure consumers are protected, and safety and soundness fostered, when lenders use AMCs for valuation services.”

The statement is a joint effort of the Appraisal Institute, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers, and the National Association of Independent Fee Appraisers.

Following the public comment period, the professional appraisal organizations will request that AMCs formally adopt the revised Statement of Principles and agree to comply with them in their interactions with appraisers, their clients and consumers, according to Sellers.

After adoption, the appraisal organizations will continue to work with all stakeholders, including the AMC community, to provide further clarification of each of the principles through such means as guidance documents and responses to frequently asked questions, Sellers said. The Statement of Principles is intended to evolve as the AMC industry continues to mature, and state and federal laws applicable to AMCs continue to be enacted and implemented, he added.

“The organizations look forward to working with AMCs, state boards, local chapters and consumer groups as the business practices of AMCs are refined to comply with the principles. The principles are intended to promote mutually beneficial business relationships between management companies and professional appraisers,” Sellers said.

In 2008, the professional appraisal organizations drafted and released model legislation for the registration and regulation of appraisal management companies. Laws based upon this model legislation have been considered by at least 25 states, with 10 states passing the bills – some of which await enactment – and the rest still under consideration.

A copy of the draft Statement of Principles is available at .

To provide feedback, e-mail . Comments will be accepted until May 1.

For more information, contact Scott DiBiasio, manager of state and industry affairs for the Appraisal Institute, at 202-298-5593 or, or Peter Barash, government relations consultant, American Society of Appraisers, at 202-466-2221 or

Source (Appraiser News Online, Appraisal Institute)

Stan Sidor
President ACOW

Nevada Supreme Court Proposes Changes to Foreclosure Mediation Program Rules

Representatives of the Coalition of Appraisers in Nevada spoke against proposed changes to Nevada’s Foreclosure Mediation Program during a March 16 hearing in Carson City. The changes, which the state’s Supreme Court released Feb. 25, would allow a beneficiary of a deed of trust to submit a broker price opinion instead of an appraisal.

Rule 7 of the existing rules, “Documents to Be Submitted for the Mediation,” states, “The beneficiary of a deed of trust or its representative shall produce an appraisal done no more than 60 days before the commencement date of the mediation with respect to the real property that is the subject of the notice of default and shall prepare an estimate of the ‘short sale’ value of the residence that it may be willing to consider as part of the negotiation if a loan modification is not agreed upon.”

The proposed amendments would add language that states, “The mediator may accept a broker’s price opinion (BPO) letter” as long as the BPO complies with Nevada’s new regulations applicable to the production of BPOs.

In a March 12 letter to Supreme Court Chief Justice Ron Parraguirre, the Appraisal Institute said, “We strongly believe that allowing for the use of BPOs in the property valuation component in mediation will not adequately protect the public interest (consumer, borrowers, and others) or the interests of the various parties to the loan.”

The Appraisal Institute was joined by the American Society of Appraisers, American Society of Farm Managers and Rural Appraisers, and National Association of Independent Fee Appraisers in sending the letter,

“Understanding the market value of the underlying collateral is an essential element to any successful mediation program, as it empowers all parties with a basic understanding of the position of the collateral in question,” the groups wrote. They urged the court to retain Rule 7 as written,

To view a copy of the proposed rules, visit .

To view a copy of the AI-ASA-ASFMRA-NAIFA letter, visit

Stan Sidor
President ACOW

Monday, March 15, 2010

AMC Legislation

Here’s a couple of highlights from last week and a couple of previews for this week.

There are now four bills pending on Governor's desks: IN, OR, VA, and WA.

Hopefully some of this will spring loose this week.

Arizona – Bill passed the Senate on 3/8/10. Now goes to the House.

Colorado – The bill was postponed indefinitely (i.e., killed for 2010).

Florida – Senate Committee action is possible this week on the two Senate bills.

Georgia – Bill passed the House; Now goes to the Senate

Illinois – A shell bill with a strike all amendment is making its way through the House. Further negotiations/discussions about the content of the bill will take place in the Senate.

Kentucky – Bill is on the Senate floor today (3/15).

Oklahoma – Bill passed the House; Now goes to the Senate. Some additional amendments proposed in the Senate.

Tennessee – Hearing on Senate Bill on 3/17; House bill on 3/25

Virginia – Bill passed by both the House & Senate; Awaiting Gov. McDonnell’s signature.

Scott Dibiasio

Thursday, March 11, 2010

WA State Legislative Session Update

The 2010 legislative session is winding down, and the potential for a special session exists as lawmakers attempt to resolve their differences in the supplemental budget and a nearly billion-dollar revenue package to finance it.

Over the weekend, the Senate passed SB 6143 with a vote of 25-23. This bill replaces all other finance bills previously shared including HB 2970, HB 2971, HB 2972, HB 3176, HB 3191, SB 6873, SB 6874 and SB 6875. SB 6143 contains many of the onerous provisions found in these other bills including changes to an economic nexus standard, establishing tax avoidance authority and piercing the corporate shield. The Senate modified the economic nexus provisions to include a $250,000 threshold for out of state businesses instead of $500,000 and changed the four-year window of ongoing nexus to only two years. The Senate package also includes a sales and use tax increase, it funds the working family tax credit and applies a temporary .25% business and occupation surcharge on services (including appraisers). This expires in 2013 while permanently increasing the small business tax credit.

The House acted on SB 6143 Monday afternoon and into the late hours of the night and ultimately passed SB 6143 with a vote of 52-45. The House version contains many similar provisions as the Senate bill. The House does not adopt the sales tax increase, working family tax credit or the Senate language on economic nexus. Instead, they repeal additional incentives such as custom software, the non-resident sales tax exemption, and impose taxes on cosmetic surgery. The House also imposes a .5% business and occupation tax increase to certain service classifications (not including appraisers, as I understand it). While the House did not adopt the Senate changes to the economic nexus provision, they did vote to delay the date from April to July and provided clarification that the changes only apply to state B&O collection.

SB 6143 now goes back to the Senate for concurrence where they are expected conference with the House to resolve their differences. This will be a challenge for them to accomplish this goal before adjournment on Thursday, March 11. Many differences remain between the House and Senate especially on the imposition of a sales tax increase. Your phone calls to the House, Senate and Governor are critical to tell lawmakers to protect employers and help economic recovery. Call the legislative hotline at 1-800-562-6000, and/or your Senator and Representatives.

Thank you.

Stan Sidor
President ACOW

Wednesday, March 10, 2010

Board of Directors Meeting Agenda

Wednesday, March 10, 2009, 6:00 p.m. – Please Plan to Begin Promptly
Call to Order
1. Establish Quorum: Stan Sidor, President
2. Approval of Agenda: Stan Sidor, President
3. Approval of Prior Meeting Minutes: Michael Imes, Secretary

Officer Reports
1. President’s Report: Stan Sidor, President
2. Treasurer’s Report: Joe Creech, Treasurer
a. Monthly and Current YTD Status
b. Seaops payment requests – January,2010 ($1,426.31) and February, 2010 ($890.06)
c. Payment to TK Bentler, first half, 2010 – including carryover from 2009

Committee Reports

Old Business:
1. Legislative/Regulatory Issues:
a. Status of AMC Regulation Proposed to WA State Legislature
b. Proposal to create an “inactive” license status for appraisers
i. Need a Committee to investigate, and recommend a draft bill or language…
c. Bill to require “Green” building CE for all appraisers - status
d. Bill to eliminate Boards/Commissions, including the Real Estate Appraiser Commission (REAC) - status

2. Administrative Topics:
a. Winter Seminars held – report on Stan Sidor, President

New Business:
1. Legislative/Regulatory Issues
a. USPAP Exposure Draft, Consistent Enforcement

2. Administrative Topics:
a. ACOW At The Summit
i. Confirm Dates – August 20 – 21, 2010? (REAC Planning to hold their meeting at the same time)
ii. Confirm Place – Snoqualmie Summit Inn?
iii. Decide on topic(s)
1. Panel(s)?
2. Instructor(s)?
iv. Poolside BBQ?
v. Fees to charge?
b. Membership Drive?

1. Proposed ACOW Meeting Date Schedule, 2010: April 8, May 6, June 10, September 9, October 7, November 4, December 9

Adjournment: Stan Sidor, President

Last Call to Action of AMC Bill!


I have a call into the Governor’s office (her staff liaison for this bill) to discuss it this afternoon. Our lobbyist, TK Bentler, and I have discussed this topic and what I need to find out about what the Governor will need/want about this bill, so I can coordinate providing it to her. I also have a broadcast email ready to send out to all our chapter reps and to all appraisers on our email list. However, a statewide action call to contact the Governor to support this bill, through AI, would be good, too, especially if you can assist with links and formatting and such…

Here is draft sample message to consider sending (thanks to Dave Towne for drafting! – with minor editing by me…):

Dear Governor Gregoire:

I am writing to request your full support of ESHB 3040 relating to the licensing of Appraisal Management Companies (AMCs) when it is presented for your signature.

This bill has had overwhelming majority approval from both the House and Senate, and is the result of an extensive effort on the part of all stakeholders involved, including appraisers, AMCs, the WA Realtors, and various other mortgage professionals.

This bill is important to all appraisers and consumers in WA State so that Appraisal Management Companies (AMCs) can be licensed and regulated in order to ensure proper business practices and appraiser independence. A number of AMCs have engaged in negative business practices in this state already, impacting many WA State appraisers.

It is important that the entire bill be ratified by you.

Thank you for your support.

Appraiser Name
License type
WA State

Stan Sidor

Please Write to Governor Gregoire...

Please Write to Governor Gregoire to Urge that She Sign ESHB 3040 Into Law

To Appraisal Institute Members in Washington:

The purpose of this email is to request that you send a letter to Governor Gregoire requesting that she sign important appraiser legislation (ESHB 3040) into law.

ESHB 3040 will enact a reasonable registration and regulatory structure for appraisal management companies operating in Washington. HB 3040 promotes public trust and consumer protection, and establishes oversight and enforcement where there is none today.

A copy of this legislation can be found at

To make it easier to send a letter, we have setup our CapWiz grassroots contact system with a template letter that you can customize with your contact information and any additional information that you would like to add.

To access the CapWiz system, go to Enter your contact information on the right hand side, your name at the bottom, and click “Send Message”.

An e-mail message will automatically be sent to Governor Gregoire.

Thank you in advance for your assistance.

Scott W. DiBiasio
Manager, State and Industry Affairs
Appraisal Institute

Tuesday, March 9, 2010

AI Letter to Mr. Geithner

March 7, 2010

The Honorable Timothy Geithner
Secretary of the Treasury
1500 Pennsylvania Avenue, NW, Room 3330
Washington, DC 20220
Washington, DC 20500

Dear Secretary Geithner:

We are writing to express our deepest concern with regard to the Home Affordable Foreclosure Alternatives (HAFA) program, specifically, ongoing encouragements to conduct “short sales” without minimum safeguards to protect against conflicts of interests, waste and abuse. We understand the Administration is seeking ways to enhance short sales as a foreclosure alternative. However, we strongly believe continuing to allow “broker price opinions” (BPOs) in the property valuation component will not adequately protect the public interest (consumer, borrowers, etc.) or the interests of the various parties to the loan (lenders, loan servicers, etc.) and is likely to exacerbate mortgage fraud. To restore investor confidence around the world and dig out from the current financial crisis, we must end the culture of corruption that has permeated all levels of real estate finance. We urge the Department to reestablish independence in the valuation process to protect the safety and soundness of financial institutions, improve transparency, and safeguard the public trust.

As a preface to our concerns, we note that loan modification fraud (including short sales), has been highlighted as a new form of mortgage fraud by law enforcement officials in recent weeks. According to an independent fraud investigation firm, bank-owned fraud attributed directly to schemes involving shorts sales and REO inventories has increased by nearly 50 percent over the past year and 100 percent over the past two years.1 The Financial Crimes Enforcement Network and other major law enforcement officials have also issued advisories and notices highlighting fraud scenarios involving loan modification, which oftentimes include short sales2. Further, we also note a related trend called “property flopping,” which is similar to property flipping, but in reverse3. In this arrangement, the property is artificially deflated below its actual market value (using a BPO) and sold as a REO property to a related party of the real estate agent, who quickly sells the property at its market value for a profit.

Generally speaking, real estate agents and brokers are not independent or properly trained valuation specialists, and they have an inherent bias towards quick results and action which produces a fee for themselves irrespective of whether the lender/services/investor gets a fair return on the short sale. It is possible for the agent and broker to be the listing agent, or for their firm to be the listing agency, of which they may also have a financial reward without being the actual agent.

We believe that such conflicts can and should be mitigated by implementing basic requirements reestablishing independence and competency in the valuation process. Specifically, any arrangements to encourage short sales must require competently prepared appraisals prepared in accordance with the Uniform Standards of Professional Appraisal Practice. Such a requirement is a minimum safeguard to enhance the fiduciary responsibility of lenders, eliminate conflicts of interests, and ensure independence and objectivity in the short sale process.

We have expressed our previous concern with the acceptability of BPOs with the Administration’s loan modification programs. Under the Home Affordable Modification Program guidelines released last year, BPOs were allowed to assist in establishing net present value calculations and valuing large numbers of properties held Home Affordable Foreclosure Program March 7, 2010 2 in portfolio. The BPO allowance was carried over in the HAFA program guidelines issued in November 20094. Our concerns for this acceptance remain, but are deepened by the aforementioned reports of escalation in mortgage fraud involving short sales.

Lastly, in at least twenty-three states the ability of a real estate agent or broker to perform a BPO is specifically limited to assisting a buyer or seller, or a potential buyer or seller, in establishing a listing or offering price for real property. The lender that has ordered the BPO in order to make a decision related to a short sale is neither the buyer nor the seller in the transaction. Therefore, in the aforementioned states, agents and brokers may not be authorized to provide BPOs in short sale situations. At a minimum, we urge your administration to caution real estate professionals to review their state law regarding BPOs to ensure that they are authorized to provide this service in a short sale situation.

More specifically, we urge the Administration to revise the HAFA guidelines to prohibit the use of BPOs for property valuation requirements involving foreclosure alternatives including short sales. Doing so will reestablish independence in the valuation process and guard against conflicts of interest in short sales. There is an ample number of qualified real estate appraisers to perform these valuation services. Such a move would not only be in the best interests of financial institutions, but consumers and the public interest. We hope your Administration agrees.

We respectfully request a meeting to discuss these concerns in greater detail. Representatives from our organizations will contact your appointment secretary to confirm this discussion. Should you require any additional information or have any questions please contact Bill Garber, Director of Government and External Relations, at 202-298-5586 or or Peter Barash, Government Relations Consultant, American Society of Appraisers at 202-466-2221 or

Appraisal Institute
American Society of Appraisers
American Society of Farm Managers and Rural Appraisers
National Association of Independent Fee Appraisers

Cc: Mr. Michael Barr, Assistant Secretary for Financial Institutions, U.S. Treasury
Mr. Seth Wheeler, Senior Advisor, U.S. Department of the Treasury
The Honorable Barney Frank, Chairman, House Financial Services Committee
The Honorable Spencer Bachus, Ranking Members, House Financial Services Committee
The Honorable Christopher Dodd, Chairman, Senate Banking Committee
The Honorable Richard Shelby, Ranking Member, Senate Banking Committee

1 Available at Mortgage Fraud Risk Report, 4th Quarter.
2 Available at
3 Available at

Monday, March 8, 2010

Feds to Allow Lenders to Use Realtors to Set Short-Sale Values?

Is this opening the door to the ‘beginning of the end’ for single family residential appraisers?!?!

It's all in this article from MSNBC/NY Times:

The article notes: "Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it."

Ok, so what will we/should we do about this?

Stan Sidor
President ACOW

Thursday, March 4, 2010

Next to Last Call to Action of AMC Bill!

Well, things are really looking very, very good now for us to get the AMC bill (3040) passed into law this session! There were only ten bills passed by the Senate (so far) today, and ESHB 3040 was one of them!

Only two more steps: 1) Another vote by the House to concur with the Senate based on some minor amending language since the bill originally came out of the House, and then 2) the Governor to sign it! So, very soon, I will no longer be sending out so many emails and bothering everyone about this!! I do want to thank everyone so far who has supported ACOW’s efforts to get this bill introduced and passed to this point….your efforts have been appreciated!

Now, I am sending out this next-to-last call for action: Please forward this to your members, and ask that they (and I am asking that you) contact their Senator and Representatives of their Districts, and also email Sen. Jeanne Kohl-Welles and Rep. Steve Conway, and THANK THEM for their support for this bill! (There were only two Senators today who did NOT vote for this bill, and two others who were absent from voting…. I have not identified them yet, but…. ), and ask your House Representatives to pass once again the final version.

Soon, I will be asking everyone, I expect, to also contact the Governor, and ask that she sign this bill into law…. But, let’s wait to do that until the House gives final approval!

Thank you, everyone, again!

Stan Sidor, President ACOW

Wednesday, March 3, 2010

AMC Bill Just PASSED the Senate!

Our AMC Bill just passed the Senate!!!! A hearty thanks to everyone involved with this bill to this point!

Now, unless I hear otherwise from TK, the House needs to concur with the final Senate version, which was amended slightly from the House version, and then…… on to the Governor!!!!! (right, TK?)


Stan Sidor

Tuesday, March 2, 2010

AMC Pulled out of Senate Rules Committee to Senate Floor

Today, our ESHB 3040, pertaining to the licensing/regulation of Appraisal Management Companies (AMCs), was moved out (“pulled”) of the Senate Rules Committee to the Senate Floor Calendar for a full Senate vote!

Please ask those appraisers in Senator Tracey Eide's district (District 30, effectively the Federal Way area) to contact her and tell her “Thank you for pulling HB 3040 from Rules today to the Senate Floor Calendar.”


Stan Sidor
President ACOW