State Appraisal Boards – What Do They Look For?

By on April 21, 2023   /   bias, Fannie, liability, non-lender appraisals, state appraiser regulators   /   Leave a comment
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The State Appraisal Board Wants to Throw Me Under the Bus, Right?

by Barry Phillips and Tim Andersen

Excerpts: So, what do the investigator and the state board look for as part of their investigation? Again, simply put, the investigator and board look to see if the appraisal meets the requirements of USPAP’s Standard 1, and if the report meets the requirements of USPAP’s Standard 2. Everything else in such an investigation is merely an elaboration of the answers to these two questions.

Nevertheless, there is a warning due here. Increased numbers of state appraisal boards are looking at complaints against appraisers from the standpoint of the consumer, rather than that of the client and/or the intended user(s).

This, to a great extent, is a function of the current political climate. As all appraisers are aware, the consumer has no standing with the appraiser (assuming the consumer is not the named client or intended user). Nevertheless, state boards tend to favor the consumer (the complainant) over the appraiser (the respondent).

To read more, click here

My comments: Good analysis of how state boards work and what they look for. Tim Andersen, MAI, is definitely “The” USPAP Expert.

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Appraising Fixer Uppers

By on April 14, 2023   /   adjustments, appraisal how to, Fannie, liability, non-lender appraisals   /   Leave a comment
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Appraising Fixer Uppers

Excerpts: We’re all familiar with the term “fixer-upper.” For many different reasons, properties can come on the market in less-than-par condition. The degree and cost to cure becomes an issue to buyers and sellers, and a challenge for appraisers. At some point it’s no longer “normal market value minus cost to cure equals as-is value.”

The terms “entrepreneurial incentive” and “entrepreneurial profit” are typically discussed in terms of investment property, but the principles involved can also be applied to the many fixer-uppers—whether the buyer is a “purely investor type” or an “owner occupied investor type.” Maybe a couple new terms should be discussed: “sweat equity incentive” and “sweat equity profit.”

The rest of the post is a very good case study

To read more, click here

My comments: I have appraised many fixer-uppers. My overall ratings are: Unlivable with holes in wall or ceiling, kitchen, and bath not functional, not lendable, etc. ) In my MLS “contractor special” is often used.  Liveable: needs work but functional kitchen and bath.

Most of my appraisals are for estates, and fixers are relatively common. There are few comps as almost all homes are fixed up for sale. There are some good ideas in this post. Even if you have comps, there is often a very wide range of conditions.

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Appraisers: How to Manage Your Emails

By on April 7, 2023   /   adjustments, appraisal business, lender appraisals, non-lender appraisals   /   Leave a comment
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The Mailbox is Full and Cannot Accept Any Messages at this Time. Goodbye. How to Manage Your Emails

By Paul Ryll

Excerpts: My mother told me today that she called last night and was greeted with, ‘The mailbox is full and cannot accept any messages at this time. Goodbye.’

I get a few telemarketers’ messages. Rarely is there a message from a friend or family member. I would say about 90% of the voicemails that I receive are from an irate homeowner worried about a rate lock or a stressed out realtor wondering if they are going to close on time.

AMCs

Assuring that the appraiser has the correct contact information for an inspection is very important. There have been numerous instances in which I have not been able to get ahold of a contact for an inspection only to find out weeks later that the AMC gave me the wrong contact information.

Communicating quickly with the lender is an issue with the appraisal process. I’ve requested guidance on assignments from the lender in which the answer came after the due date. Most recently, I had a detached condo that was ordered on a 1004 which needed to be switched to a 1073. The closing date came and went before I got the go-ahead from the lender.

Have one point of contact for an assignment. Nothing is more frustrating than 17 people calling me on one revision because the employees of the company don’t research to see if I have been contacted or read the notes in the assignment.

To read more, click here

My comments: Slow now? Work on organizing your emails. I have many email folders with automated inbox filtering, which helps a lot. Very good tips in the article. Written in 2-22 but is still very relevant today. I don’t see much written about appraisers and emails. I have always had a landline for business calls and a cell phone for personal calls. Having both on one cell phone is chaos, IMHO.

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The Power of Praise for Appraisers and Clients 3-24-23

By on April 1, 2023   /   appraisal, appraisal how to, Fannie, lender appraisals, liability, non-lender appraisals   /   Leave a comment
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The Power of Praise

By Rachel Massey, SRA, AI-RRS, CDEI

Excerpts: …I received a really nice compliment from a reviewer with the Farm Credit Bureau. I had completed a complex appraisal assignment and was expecting multiple revision requests, but instead, got a note saying how thorough my appraisal report was and thanking me for the work. A couple days later, I got a call from a relocation company reviewer on another mind-boggling relocation assignment. Again, I was expecting multiple questions about the report since it was complex and atypical for the area. Instead this reviewer proceeded to tell me that it was one of the most detailed and well-developed reports he had seen in all his years reviewing relocation work. Boy I wish I had that one in writing!

Granted, I tend to be a bit verbose because I like to write, and I believe that it is important that my work be understandable, and not just now but in the future. I tend to put a similar amount of effort into the communication side for all clients, and like to think that my work product is solid. This begs the question of why two reviewers went out of their way to compliment my work, when it seems that almost every mortgage assignment that I complete for a production group, comes back with stipulations.

Stipulations that I forgot to add a listing which was a requirement of the engagement agreement (yes, I missed that) or that I didn’t put a sketch of an unfinished basement in the report (yes, I missed that as well). No words of thank you for an otherwise job well done. I missed something, fix it.

To read more, click here

My comments: Rachel is one of my favorite appraisal authors. She has seen all sides of the residential appraisal profession. Rachel has shifted between lender staff appraiser and reviewer and fee appraisals. Currently, she is a reviewer for a large lender. You could send a link to this article to a Very Picky or Very Supportive reviewer.>

Why Appraisers Love Appraising!

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Appraiser Gets Subpoena – What to Do 3-17-23

By on April 1, 2023   /   appraisal, appraisal business, AVMS, non-lender appraisals, real estate market   /   Leave a comment
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Appraiser Gets Subpoena – What to Do

Excerpts: As an appraiser, you don’t have to be sued or be facing a lawsuit to find yourself on the receiving end of a subpoena—staring down a lawyer who is peppering you with questions.

Appraisers are often subpoenaed in legal disputes involving third parties, usually being tied to the dispute for no other reason than having appraised a property involved in the dispute. If the appraiser is not a party to the lawsuit, then typically they are being subpoenaed for documents and/or being called as an expert witness, sometimes without pay, to testify regarding a past appraisal.

First, subpoenas are court orders and you must not ignore the subpoena or you will find yourself in contempt of court. Tim Andersen, MAI, MSc, USPAP instructor and CEO of TheAppraisersAdvocate.com, says that if an appraiser doesn’t want to comply with a subpoena they can try to fight it, but that requires hiring a lawyer, which can be costly and has its own challenges. “One approach is to protest the subpoena to the judge indicating that your records are private, and requesting that your records be treated as confidential and not be made part of the public record. The judge, however, will do whatever s/he chooses to do,” reports Andersen.

To read more, click here

My comments: This is an excellent article on this topic. Read it to find out the issues. If you lost this link later, when you need help, Google “Dealing with a Subpoena Workingre”. This is specifically for appraisers. If you find other links online, they are not as useful.

I have never been served with a subpoena, but this is a regular topic among appraisers. I get calls occasionally from appraisers about this.

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Fannie Mae: No Appraisals Required? 3-10-23

By on March 31, 2023   /   AMCs, Fannie, non-lender appraisals, waivers   /   Leave a comment
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Fannie Mae: Appraisals are no longer the default option: Value Acceptance replaces Appraisal Waiver

Fannie Mae updated its Selling Guide on March 1 to include more options for property valuations, saying that they are “moving away from implying that an appraisal is a default requirement.”  Those options include value acceptance (formerly appraisal waivers), value acceptance plus property data and hybrid appraisals.

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Fannie Mae – No Appraisals Required – The End of Appraisers?

Hamp Thomas 12 minute video – my favorite commentary on this issue!

Fannie Mae took a direct shot at appraisers today with the announcement of changes in their Selling Guide. Two options for the future, both of which do great harm to the appraisal industry.

First, “third party” inspections. Appraisal trainees aren’t good enough, so now we will have unlicensed inspectors going through the homes of unsuspecting homeowners. And, with this inspection a traditional appraisal is no longer a requirement for the mortgage loan.

Secondly, the 3rd party inspection is sent to a licensed appraiser. FNMA wants an appraiser’s signature so the appraiser can be held responsible if there’s any problem in the future. Both options say they are good for consumers and both options are filled with fabrications and misinformation. At the end of it all, it’s about control and profits. Why trainees can’t provide the data is simply because big banking and AMC’s don’t make profit from the inspection part of the process.

If appraisers don’t stand up and say no, right now, the running joke of the appraisal industry could be gone in five years; well, it just very well may come true. Ok appraisers, it’s time to speak out and stand together.

The only reason for these changes are about a piece of the 11 TRILLION dollar mortgage market. And that’s the way it is – March 1, 2023.

To watch the video, click here

My comments: Worth watching the video. Call to Action. Hamp is an excellent speaker and teacher.

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Fannie Statement: “Value acceptance + property data has arrived”

“This new option reduces cycle times and may reduce borrower costs, promotes safety and soundness by obtaining a current observation of the subject property, and provides operational simplicity and certainty at time of loan application.“

To read what Fannie says, click here

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Link to Fannie SEL-2023-02: Selling Guide Updates PDF

To read more, click here

My comments: Lenders Are Happeeee! Those darn appraisers and appraisals have always taken too much time. Fannie sells their loans to investors. The more loans, the more money Fannie makes. I did not include links to what the happy lenders say. You already know.Clear the Tracks!

Fannie Wants Desktop Appraisals

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AMC Alleged Violations of Appraiser Independence Requirements

By on February 10, 2023   /   AMCs, appraisal business, Fannie, non-lender appraisals   /   Leave a comment
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Fastapp AMC Alleged Violations of AIR (Appraiser Independence Requirements)

Excerpts: The following court documents in the case Naftali Horowitz v. xxx, Fastapp AMC founder v. Fastapp AMC president, confirm what appraisers have been saying all along, that if you want high-volume AMC work, you have to lower your fees to 1980’s level, have 24 hour turn times, and, above all, be a number hitter.

Horowitz claimed that Andrews engaged in conduct constituting potential violations of the Appraiser Independence Requirements under the Dodd-Frank Act of 2010 (“Dodd-Frank Act”), including unlawfully seeking to influence an appraiser to encourage a targeted value to facilitate the making or pricing of the transaction in violation of 15 U.S.C. § 1639e(b)(3).

… it began to become apparent to Andrews that Horowitz was not complying with appraisal independence standards. Instead, Horowitz would personally select one of a small number of his preferred appraisers for any given appraisal request… It thus became apparent to Andrews that Horowitz was engaged in a widespread scheme in violation of federal law by assigning appraisals to appraisers who would appraise values at requested values in exchange for order flow.

To read more plus over 50 appraiser comments, click here

My comment: Copies of the emails tell the story of “cooperative” appraisers getting most of the assignments. Very similar to the old mortgage broker days. A primary reason for Dodd-Frank.

AMC Fined for Appraisal Order Blast Violation

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Appraisal Profession Dying?

By on February 3, 2023   /   appraisal business, future, humor, non-lender appraisals, zillow   /   Leave a comment
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Bringing More People Into a Dying Profession?

By Dave Towne, Jan. 23, 2023

My comment: This only applies to residential lending appraisals, of course. My non-lender appraisals have changed very little with few, if any new “requirements”. I determine the Scope of Work.

Excerpts: Some people want to bring more people (primarily of color, which is great) into a dying profession. But the profession is being killed off by (mostly white!) people who think technology is the golden spoon to accurate valuations.

PAREA is being touted as the savior and the best appropriate way to get new people into this profession, especially people of color. Really? Let’s see. The education providers currently writing the PAREA courses have been indicating that the course cost will be up to 5 figures, roughly $10,000 or possibly more. That’s an outlay of significant cash BEFORE actually connecting with an appraiser who will put the PAREA-educated appraiser to work.

To read more, plus over 60 appraiser comments, click here

My comments: This only applies to residential lending appraisals, of course. My non-lender appraisals have changed very little with few, if any new “requirements”. I determine the Scope of Work.

I definitely prefer “profession” to “business”. I have always been a professional appraiser. I quit doing residential lender appraisals in 2005. I had good clients but did not like the dramatic volume changes. It has gotten very bad since AMCs took over.

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FHA Handbook 4000.1 Appraisal Changes

By on January 27, 2023   /   AMCs, appraisal business, bias, FHA, non-lender appraisals   /   1 Comment
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FHA Handbook 4000.1 Appraisal Changes

By Dan Bradley

Excerpts: On January 18, 2023, HUD issued an announcement regarding revisions made to Handbook 4000.1. According to the announcement, the revisions included “enhancements and revisions to existing guidelines and various technical edits.”

The most significant of these revisions was the elimination of the requirement to include the 1004MC form as an attachment to the appraisal report.

Changes to the Handbook also include several other minor, but nevertheless meaningful, edits and clarifications to FHA appraisal requirements, including:

Under “Attic Observation Requirements,” a clarification was made regarding the appraiser’s obligation to “safely” access the attic. The language requiring a minimum “head and shoulders” access into the attic was deleted.

Under “Crawl Space Observation Requirements,” significant revisions were made, including removal of a bullet point list of MPR/MPS criteria for the crawl space. Also, language requiring a minimum “head and shoulders” access into the crawl space was deleted.

The changes outlined in the Handbook may be implemented immediately but must be implemented for FHA cases assigned on or after April 18, 2023.

To read more, click here

My comments: Many thanks to McKissock for telling us what we need to know. Includes a link to the “redline” version of 4000.1 so you can skip over most of it. Scroll down to “Updates, Revisions, Notifications” to get the redline versions.

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

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Appraiser Scam – Be Careful!

By on January 13, 2023   /   appraisal business, Fannie, non-lender appraisals, real estate market   /   1 Comment
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Appraiser Scam – Be Careful!

Posted Jan 5 on National Appraisers Forum. This was also posted in the 100% Appraisers group on FaceBook as happening to others.

“Last week, I received a text from “Master Chief Robert Roy” requesting an appraisal for a cash purchase. I thought it was odd that he was addressing himself by his rank as I do work for the VA and no service member has ever done that in my experience. Also my daughter’s boyfriend, a West Point graduate, was visiting at the time and he also thought it was odd too. I looked him up on line and saw that he was a Navy Seal and a public speaker. I addressed him as Sir in our texts out of respect.“

“He requested that I inspect the property 1/5/2023 as the inspector would be there at the same time. My fee was $775 however sent me a $1950 cashier’s check via Fed Ex the next day. He stated that his assistant mistakenly included the inspector’s fee and would I please pay the inspector the $1175 balance. (That seemed high for an inspector….) “

One of the responses:

“Sorry this happened to you. I posted about this about a month ago. Same guy. Because it seemed so odd, I didn’t respond to him and instead called the listing agent directly. He said I was the 4th female appraiser to call him about this in 24 hours. He had reported it all to the police. I never responded to the dude, as it is obviously a scam or worse. When I researched the name he was using, I found that person to be deceased. “

My comments: When appraisers are very slow, it is very hard to turn down an appraisal. Savvy scammers may know about this. Beware!!

1-12-17 Newz .New scam: owners pose as renters, 21 day turn times

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