Would someone please volunteer to investigate whether or not any of the following appraisal organizations have chapters/members in WA, and whether they should thus be included as a part of ACOW?
AAA – the Appraisal Association of America
NAREA – the National Association of Real Estate Appraisers
NSREA – the National Society of Real Estate Appraisers
Thx.
Stan Sidor
President ACOW
Stan,
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 28, 2010
Friday, May 7, 2010
ACOW Summit - Volunteer(s) needed
For this year’s ACOW Summit scheduled for August 20 – 21 again at the Howard Johnson Inn at Snoqualmie Summit, we will need a couple volunteers to assist with registrations for the Summit… checking attendees in and collecting any fees still owed. This will be just prior to the Friday afternoon session, and also first thing prior to the Saturday morning session. Please let me know if any of you are interested and available to help, and/or pass the word around and drum up a volunteer or two, ok?
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).
Stan Sidor
President ACOW
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).
Stan Sidor
President ACOW
Thursday, May 6, 2010
Wednesday, May 5, 2010
WA Appellate Court Decision
If interested, there was an opinion passed down recently by the WA Court of Appeals involving a case that included an issue about appraiser liability. One of my attorney clients sent it to me today as an “FYI”, and if you want I can send you a copy. The citation is under WA Appeals Div. II, No. 37596-6-II, Borish v. Russell.
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.
Stan Sidor
President ACOW
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
Barry,
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).
Woody Woodworth
Appraisal Foundation approved USPAP instructor
All,
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.
Stan Sidor
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.
Stan Sidor
President ACOW
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
Barry,
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).
Woody Woodworth
Appraisal Foundation approved USPAP instructor
All,
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.
Stan Sidor
Tuesday, May 4, 2010
Appraiser Coalitions in Other States
From T.J. McCarthy, SRA, a list of appraiser coalitions by State.
"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 tj@tjmccarthy.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
Email: tj@tjmccarthy.com
"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 tj@tjmccarthy.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
Email: tj@tjmccarthy.com
Sunday, May 2, 2010
Kenneth Harney: Mortgage and appraisal fraud spiked
Perfect timing for the article by Ken.
On Tuesday I'll be the speaker on a conference call with law enforcement officers across the US discussing this exact issue.
http://www.washingtonpost.com/wp-dyn/content/article/2010/04/30/AR2010043000041.html
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
On Tuesday I'll be the speaker on a conference call with law enforcement officers across the US discussing this exact issue.
http://www.washingtonpost.com/wp-dyn/content/article/2010/04/30/AR2010043000041.html
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
Bank Failure #64: Frontier Bank, Everett, Washington
Frontier Bank, Everett, Washington, was closed today by the Washington Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...
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.
Source
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.
Source
Saturday, May 1, 2010
"Green" Value Increase Formulas
From Dave Towne:
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.
.
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.
.
Subscribe to:
Posts (Atom)
