Blog - Appraisal Today

Appraiser shortage – where will AMCs get appraisers?

By Ann O'Rourke on September 9, 2015 / 12 Comments

On the Path to Extinction? …Not So Fast

Excerpts:

An economic tragedy is unfolding silently across American neighborhoods.

With fewer young careerists joining the residential valuations industry, real estate appraisers foresee a future where lenders and consumers alike face added costs and lengthened real estate delivery timelines due to a shortage of trained appraisers in the residential valuations space.

“The rate of decline in the appraiser population within the U.S. has been averaging between 4 percent and 5 percent,” explained Greg Stephens, Chief Appraiser and SVP of Compliance for Metro-West Appraisal Co. “That number is expected to increase due to the high percentage of practicing appraisers who are in their 60s and 70s and who will either be retiring, dying, or leaving the industry within the next decade.”

“If this trend continues I believe we will see dramatic increases in the cost and time needed for field appraisals. At the same time, I believe we will see increased adoption of other valuation products, including desktop appraisals and other non-appraiser valuation alternatives.”

Michael Floyd, Chief Appraiser and SVP of Compliance for Streetlinks Lender Solutions, blames a complete “lack of incentive” for the dwindling ranks of new appraisers. “With the amount of additional required oversight involved with accompanying an appraiser trainee to every inspection and the liability of being completely responsible for their conclusions, there is simply no discernable ROI to such a relationship,” Floyd added.

Note from article: The Five Star Institute is the parent company of the National Appraisal Congress, MReport, and theMReport.com.

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http://themreport.com/news/secondary-market/09-07-2015/on-the-path-to-extinction-not-so-fast NOTE ON THIS LINK. As of today at 1pm pacific time, it had been hijacked by a spammer and shut down temporarily.

For info on NAC, go to http://nationalappraisalcongress.com Click on Advisor to read their Fall 2014 newsletter with more comments.

My comment: The National Appraisal Congress members are mostly larger AMCs, such as ServiceLink, Proteck, MetroWest, etc. Who will they get for cheap fees to do their appraisals, when they are having problems now? Hmm…. Not me!!

Posted in: AMCs, appraisal management company, lender appraisals

Amazon and AMCs

By Ann O'Rourke on August 26, 2015 / 2 Comments

Amazon and AMCs

You may, or may not, have heard about Amazon’s attitude towards employees – expected to be available 24×7, including holidays, significant health and family problems, etc. I don’t know if this is a bad way to run a company, but they do pay well and it is not bureaucratic. Demanding a lot of employees is not unusual for a tech company also. I do know that many other companies expect their employees to be available on weekends and evenings for emails.

But, I keep hearing from fee appraisers working for AMCs that they are expected to be available 24×7, including holidays. Phones and emails are sent at all times of the day. A quick response is expected. Cell phones ring on weekends and all times of the day and night. Appraisers have difficulty shutting off their phones and/or refuse to buy another phone for personal calls so they can shut off their only cell phone.

But… AMCs don’t pay well and have increasing Scope Creep, as compared with other clients. Why do appraisers put up with this treatment? Low self-esteem (no one else will give them work) or fear of having no business (common with self employed people)?

Posted in: AMCs, appraisal management company, lender appraisals

Tags: AMC, appraisal, appraisal fees, appraisal management company, lenders

The Power of Social Media and Appraisers

By Ann O'Rourke on August 26, 2015 / 2 Comments

A few months ago, an AMC sent out an email to all their appraisers saying it was requiring that they include a copy of their work file with the appraisal.

Within a very short period of time after it was sent, I saw the email posted to a Facebook group. There were 356 comments posted. It soon “went viral” spreading all over the Internet. The AMC backed down.

Within the past week, another AMC sent a very rude email response to an appraiser who declined applying for a staff position at the AMC. I saw it posted on a Facebook group. It also went somewhat viral, although not as widely distributed as the workfile email.

Read more, including the original email, in the very interesting Jonathon Miller’s Housing Notes – August 21 edition.

Click here – it is near the bottom of the page.

http://us6.campaign-archive1.com/?u=47540980899c1d755b4cddc48&id=eed1f01b99&e=e758e759fb

What does this mean? In the pre-Internet days, often it would take weeks, or months, for appraisers to find out about FHA and Fannie changes, for example. Now it is available within a few minutes.

What’s the downside for appraisers? Even if you post to a group that requires approval, your postings can be obtained by others. Group members can send them to anyone. This is a definite problem if do court testimony. A while ago an attorney asked me how many appraisals I had done in the past 6 months as I had a broken ankle. How did she know about my ankle? She did not subscribe to the email-only discussion group. She asked another appraiser to check online for anything that might help her case. Other appraisers have reported similar situations.

Remember the Primary Rule, which I learned when I first browser opened the Internet to us all. At that time you assumed it could be published on the front page of the New York Times, Wall Street Journal, etc. Now, it is even worse – it can go all over the Internet. The only communication that I know of that is private is the inside of postal mail envelopes. Government agencies can track what is on the outside, but not the inside without a special court order.

Posted in: AMCs, appraisal management company, lender appraisals

Tags: AMC, appraisal, appraisal fees, appraisal management company, Fannie, lenders

Facing AMC License Denial, Coester Sues Virginia Board

By Ann O'Rourke on August 12, 2015 / 4 Comments

Facing AMC License Denial, Coester Sues Virginia Board

by Isaac Peck, Editor, WorkingRE

Excerpt:

Facing denial of its license to operate an appraisal management company (AMC) in the state of Virginia, the AMC Coester VMS has filed a lawsuit against the Virginia Real Estate Appraiser Board alleging that the Board is engaged in “a conspiracy to restrain and monopolize trade” and is operating in violation of federal antitrust laws.

The suit follows Virginia’s recently passed AMC licensing laws, which set an August 18 deadline for applicants to obtain AMC licensure or cease operations in the state. The Board has issued dozens of AMC licenses but selected Coester for closer examination. On July 15, Coester attended an informal fact-finding conference and addressed several of the Board’s concerns, including Coester’s history of consent orders and settlement agreements in five other states, for alleged violations of state laws: Maryland, North Carolina, Tennessee, Louisiana, and Minnesota. The allegations against Coester in these states include: unlicensed AMC activity, false advertising, failure to pay appraisers on time, failure to pay customary and reasonable fees, failure to respond to requests within the time period specified, failure to submit biannual certification, as well as USPAP violations committed by Brian Coester himself.

Read lots more, and get links to the docouments at:

http://www.workingre.com/facing-license-denial-coester-sues-virginia-board/

For lots more info on Coester, just google Coester AMC or brian coester appraiser

My comment: Looks like various state appraisal boards are looking closer at AMCs. Coester recently got into a tiff with the Louisiana State Board, which was resolved. I am so glad California has never had an appraisal board!! (Gov. Schwartzenegger wanted to cut costs back then.) Too many possible conflicts of interest… The issues seems to be mostly about fees. I am also not comfortable about appraisal state boards regulating appraisal fees. They should focus on what is important – USPAP.

Posted in: AMCs, appraisal management company, lender appraisals

Tags: AMC, appraisal, appraisal fees, appraisal management company, Fannie, lenders

FHA new manual 9/15/15 – no changes or USPAP problems?

By Ann O'Rourke on August 12, 2015 / 4 Comments

FHA says no significant changes from previous requirements

My comment: I have heard from knowledgeable appraisers and instructors that there are few changes from the old handbook.

Recent posting by Coleen Morrison on a Facebook group

I heard back from my contact at HUD, and here is what she said: “Ms. Conde [the author of the article] (Ed note: see below) and I have had multiple conversations. FHA has not changed any of its requirements regarding the items that she discusses. If an FHA appraiser was compliant prior to September 14, the appraiser is going to be compliant after. The language has changed a bit, mostly for clarity and format, but the requirements are the same.”

I have written back and asked specifically about their thoughts regarding the Competency Rule. I have been saying the same thing … that nothing has really changed… but I never thought about the Competency Rule. It seems very contradictory when the HUD manual states the appraisal is not to be considered a home inspection;

…

The handbook states: “FHA appraisals are not a guarantee that the property is free from defects. The appraisal establishes the value of the property for mortgage insurance purposes only. Buyers need to secure their own home inspections through the services of a qualified inspector and satisfy themselves about the condition of the property.”

Adding the statement from the manual into your appraisals, and referencing Assumption and Limiting Condition #5 are 2 steps you can take to help protect yourself. I don’t know how much of a fight we can have against HUD, so if you choose to do FHA appraisals, and you were not doing the extent of inspection which is very clear in the 4001 now, you will need to step it up; add what the HUD manual states above in big bold letters to your report; or choose not to do FHA appraisals. The ultimate choice is yours.

My comment: I quit doing FHA appraisals in 1988, after 2 years on the roster. Too many requirements as compared with conventional. Plus… our local property values had skyrocketed way above the FHA limits… not much work.

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FHA vs USPAP – Appraisers Caught in Catch 22

By Joanne Conde

Excerpts:

The new FHA Handbook will become effective on September 14, 2015. There has been much discussion of the implications of changing “should” to “must” in thousands of examples in the Handbook. As a Board member of the Arizona Association of Real Estate Appraisers as well as being on the FHA Roster, I have taken a good hard look at these requirements and then, it hit me as I was teaching the Uniform Standards of Professional Appraisal Practice (USPAP) which is the basis of appraisal standards for every appraiser in the United States. The FHA assignment conditions, whether under “should” to “must” force appraisers into a Catch 22 or turn down the FHA appraisal assignments. FHA is essentially making it a condition of employment that appraisers violate the Competency Rule. Why did I not see this before? I guess because the two never converged in my mind at the same time and I expect that is what has also happened to other appraisers.

It is an FHA assignment condition that appraisers make the following statement within the report: “The utilities were on and functioning at the time of inspection and the home meets 4150.2 & 4905.1 HUD Requirements,” and “Other intended users[of the report] are HUD/FHA.”

Click here to read more and read appraisers’ comments

http://appraisersblogs.com/appraisal/fha-vs-uspap-appraisers-caught-in-catch-22/

Posted in: appraisal, FHA

Tags: appraisal, FHA

Are you or your firm planning on any hiring trainees within the next 5 years?

By Ann O'Rourke on August 5, 2015 / 3 Comments

Are you or your firm planning on any hiring trainees within the next 5 years?

My comment: I wonder what the response would be if lenders allowed trainees to sign on their own… remember the mortgage broker days? I sure wish there was a survey on trainee commercial appraisers as I see lots of them where I am. I am hearing that it is back to the “old days” when fee appraisers only hired relatives (because most appraisers were staff appraisers at lenders).

Posted in: AMCs, appraisal management company, lender appraisals

Tags: AMC, appraisal, appraisal fees, appraisal management company, Fannie, lenders

21 Reasons Why Corner Lots Are For Suckers

By Ann O'Rourke on August 5, 2015 / 7 Comments

To keep up on what is happening in appraisal businesses, mortgage lending, USPAP, etc. , Plus humor and strange homes, sign up for my FREE weekly appraisal email newsletter, sent since June 1994. Go to Home on the left side of the menu at the top of this page or go to www.appraisaltoday.com
Sign up in the Big Yellow Boxes

Excerpt:

1. Noise, noise, noise. Double street and sidewalk frontage means double the noise from pedestrian and car traffic. Pull up a chair and crack open a cold one; I’m just gettin’ started.

2. Unconventional configurations. For example, the front yard of a home on a corner lot is usually bigger than the back, and the garage may be located around the corner.

My comment: I have always wondered why there was a checkbox on the 1004 for corner lot… a mystery to me;> Maybe it was a factor in the 1960s/1970s, when the first forms were developed and used. Maybe it has been taken off some of the forms…

Click here to see the other 19 reasons!!

http://time.com/money/3980951/corner-lots-are-for-suckers

Posted in: appraisal

Tags: appraisal

Revised FHA Handbook 4000.1 effective 9/14/15. Are you ready for the changes? Get the facts!!

By Ann O'Rourke on July 29, 2015 / Leave a comment

What you need to know and which FHA documents you need to read!!
Available in my paid August Appraisal Today August newsletter!!

Many appraisers say they will quit doing FHA appraisals.
This means less competition for you!!

There is lots of confusion and mis-information about the changes. Some say there is too much required and others say there have not been many changes. What about attic, crawl space, and appliance inspections?

The author, Doug Smith, SRA, interviewed an FHA executive to find out what is really happening.

There are different FHA documents you need to read, not just Handbook 4000.1. It is very confusing, but Doug tells you what information you need and where to get it. He includes:

Which guide to use for what, and links to the reference material, including FAQs, Webinars, and SF Housing Appraisal Report and Data Delivery Guide
How to keep updated on changes
Attic, crawl space, and appliance inspections
Energy efficient items contributory value
Highest and best use – when all 4 criteria are required
FHA – UAD and Fannie guidelines

And lots more information.

Posted in: appraisal, Appraisal fees, FHA, lender appraisals

Tags: appraisal fees, FHA

FHA appraisal fees going up after 9/14/15?

By Ann O'Rourke on July 8, 2015 / 2 Comments

Another great survey from www.appraisalport.com !!

My comments: Whether or not there will be increased time (and possible liability issues) required is controversial. Some say there are more requirements, others say not much has changed. My favorite response to the poll is “What changes?” ;>

In the May 2015 paid Appraisal Today June newsletter, Doug Smith’s article discussed the changes: “What’s Up with FHA’s New Manual 4000.1? More Scope Creep? The pluses and minuses of the changes in the manual”. One of the hot topics is about inspecting attic and crawl spaces. For more info on the paid newsletter, click the banner ad below.

FHA Single Family Housing Policy
Handbook (HUD Handbook 4000.1
Information Page Link:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/handbook_4000-1

New FHA Appraisal Report and Delivery Guide
It goes step-by-step through the URAR and states what is expected in each section
http://portal.hud.gov/hudportal/documents/huddoc?id=SFH_POLI_APPR_RPT_FIN.PDf
Be sure that any FHA classes you take include this new Guide!!

Posted in: Appraisal fees, FHA, lender appraisals

Tags: appraisal fees, FHA

USPAP Nazi

By Ann O'Rourke on July 8, 2015 / Leave a comment

I was interviewed on the Appraiser Coach/Dustin Harris Podcast, published July 3.

The topics were: Trainees inspecting, C&R fees, and Celebrity homes.

We debated on a Facebook discussion of whether or not an appraiser can disclose the owner’s name when appraising celebrity homes. Unfortunately, I did not read the Facebook discussion since it seemed sorta lame (big mistake) and it was removed. The issue is USPAP confidentiality requirements. Dustin said you could not reveal the name and address and I said it was ok and referenced an appraiser’s web page that had the names of all the celebrities whose homes he had appraised in Southern CA.

While discussing it, I mentioned one of my favorite terms, “USPAP Nazi”. I’m sure you know what I mean. USPAP is very gray but some appraisers have very strict interpretations that they make. Do something they don’t agree with and lose your license and/or Go To Jail. No big deal, except when they are teaching USPAP classes and you disagree. But, Very, Very important when they are on state boards.

I taught USPAP for many years, until the Appraisal Foundation mandated what materials and topics had to be used. I loved teaching USPAP and related it to practical, day to day, issues that appraisers have. Not “Do what USPAP says (how I interpret it) or you will lose your license and/or go to jail!

I am sooo glad we have never had a state board in California!! When licensing started, Governor Schwarteneger did not want any additional expenses, including state appraisal boards. Licensed appraisers, that are employees of the state of California, are used for investigations in California. Appraising can be a very small world, particularly in smaller states. Who wants a competitor or personality conflicts affecting decisions on your appraisal license?

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Where to listen to the Podcast #27 – Trainees inspecting, C&R fees, Celebrity Homes with Ann O’Rourke

– Android – http://www.stitcher.com/podcast/the-appraiser-coach
– iTunes – Subscribe to the podcast so you don’t miss any! I am a subscriber.
https://itunes.apple.com/us/podcast/the-appraiser-coach-podcast/id966765322
– Website – http://theappraisercoach.libsyn.com/

Posted in: lender appraisals, USPAP

Tags: Celebrity homes, USPAP