Florida - Appraisal Legislation Update

About a month ago, Appraiser Active posted about two appraisal related bills filed just prior to the annual legislative session.  One was filed in the House, and one in the Senate. In the House, it's HB 667 - Real Estate Brokers and Appraisers. On the Senate side, it's SB 852 - Real Estate Brokers and Appraisers.  

Both included a section to amend Chapter 120, F.S. to require Summary Hearings by the Division of Administrative Hearings for cases involving real estate appraisers. The more we learned about this section, the worse it looked. The amendment would require any Administrative Complaint against an appraiser referred to the Division of Administrative Hearings (DOAH) to be handled under the Summary Hearing Procedure. Additionally, it required Final Orders to be rendered in within 90 days. A little notice provision of the procedure states that the Recommended Order made by the Administrative Law Judge becomes the Final Order without action by the Florida Real Estate Appraisal Board.

No other professional licensing and regulatory board in Florida regularly operates under that procedure. There were plenty of concerns with this section of the bill. With assistance from the Florida REALTORS®, the concerns were communicated to the Department of Business and Professional Regulation, the Florida Real Estate Appraisal Board, the bill sponsors, and the relevant House and Senate Committees. 

Yesterday, the Senate Regulated Industries Committee passed an amended version of the bill with the Chapter 120, F.S. language requiring Summary Hearings deleted. Thanks to everyone involved for their assistance!

Thinking of Jon

In honor of my nephew, Jon, this a repeat of a post from March 15, 2010. We think of you every day.

It's a sad day in the Appraiser Active family. My nephew, Jonathan Porto, a Marine, was killed yesterday in a non-combat accident in Afghanistan, near Marjah. My sister, Rachel, his mother, Jon's wife, Rachel Jewell Porto, and their two month old daughter, Ariana, could use your prayers. Jon was 26.




The Hillsborough County Sheriff's Office provided an escort for the motorcade from MacDill Air Force Base to St. Petersburg. The Tampa Bay Community showed their respect for Cpl Jonathan Porto.



Barbara Guzzon had produced the first segment of a tribute video.

Cpl. Jonathan D. Porto - "Bringing Him Home" from DiamondFilms on Vimeo.

Two New Appraisal Related Bills Filed in Florida

The Florida Legislative Session does not start until March 5, 2013, but State Representatives and Senators have been filing bills in advance. Two have been filed with implications for Florida Appraisers, and those expecting to file applications to become registered or certified appraisers in the Sunshine State.

One was filed in the House, and one in the Senate. In the House, it's HB 667 - Real Estate Brokers and Appraisers. On the Senate side, it's SB 852 - Real Estate Brokers and Appraisers.  The bills are identical and intended to amend Chapter 475, Part II to mesh with new requirements imposed by the Appraiser Qualifications Board of the Appraisal Foundation. One of the amendments requires a Supervisory Appraiser to be either a Certified Residential Real Estate Appraiser or a Certified General Real Estate Appraiser. If passed and signed into law, Licensed Appraisers will no longer be able to supervise Registered Trainee Appraisers.

An interesting provision in the bill amends Chapter 120, F.S. to require Summary Hearings by the Division of Administrative Hearings for cases involving real estate appraisers. I have a lot to learn about this process and am anxious to learn how this amendment was proposed. Watch this space for updates as details emerge.

AMC - Proposed FREAB Rules

The Florida Real Estate Appraisal Board met February 4th and 5th, 2013. Their agenda included a number of items of interest, including the docket of cases to be considered by the board, licensee counts, proposals for new rules and amendments to existing rules.

Two are extremely important to Florida appraisers:

61J1-4.010 - Supervision and Training of Registered Trainee Appraisers

61J1-9.002 - Standards of Professional Practice for Appraisal Management Companies; Development and Communications of Real Estate Appraisals

61J1 - 9.002 is a brand new rule, and is being proposed to implement amendments made to Chapter 475 Part II related to the regulation of Appraisal Management Companies. This rule is a work in progress and IS NOT final. The PRELIMINARY text is reproduced after the jump. Although changes were made to the document below during the meeting, it's important to take a look at what they're working on.

The photograph accompanying this post is of Michael J. Rogers, MAI, SRA. Mike is a past Chairman and current member of the Florida Real Estate Appraisal Board. He is a State-Certified General Appraiser, and the principal of Rogers Valuation and Acquisition, Inc. in Pensacola, Florida. Although Mike is not involved with appraisal management companies, he has taken the lead to develop and fine tune the Standards of Practice for Appraisal Management Companies. It's his goal to ensure appraiser independence is preserved and that appraisal management companies comply with clearly  defined standards of practice.

Although others on the board support these initiatives, Mike could use some support and suggestions to ensure the standards of practice are meaningful, and actually make it through the rules making process. 

See the proposal after the jump.

CLICK to Read More

Florida Appraisal Council and RPR

The Florida REALTORS® 2013 Mid-Winter Meetings are going on in Orlando, Florida from January 23 - 27. Governance meetings for all the Florida REALTORS® committees and councils are part of the meetings at the Renaissance Orlando at SeaWorld®. The resort is located at 6677 Sea Harbor Drive, Orlando, FL 32821.

Committee and Council meetings are open to all REALTORS® that register for the conference. There is no charge to register. All registration is handled onsite at the hotel. There is something for everyone during these meetings. Among the most interesting, IMHO, are the Public Policy related meetings one Thursday, Friday, and Saturday. Of course, the Florida Appraisal Council meeting on Friday, January 25th is a must. It will be in the Cobia Room from 1:00 until 2:30.

Part of the agenda for the Florida Appraisal Council is an update on the development of the Appraiser Tools for REALTORS Property Resource (RPR). Access to the database of every single parcel of real estate in the United States is already available to every REALTOR member in the country. RPR is working on a set of online tools, tailored to our profession, and focused on automating some of the more tedious form filling functions.

Here is what RPR CEO Dale Ross had to say in his Q4 2012 update to the RPR Board of Directors:

Appraiser Tools Development

The balance of the fourth quarter has been spent on building out the Appraiser Tools for beta testing in the early 2013. The Appraiser features leverage and extend the comparables analysis technology framework released prior to the Orlando meetings, additional functionality has been added in each area of the interface to support the more complex search and comparison needs of the Appraiser user.

As the team turned its attention to the development of these features, we reviewed our plan with RPR’s Appraiser Task Force and provided the group with a list of key questions. In return, we received some very specific, actionable, and incredibly thoughtful input from the group that became central to how we defined our approach. The core concept of RPR Appraiser Tools is to build upon our strengths as a database and analysis engine, by fulfilling an Appraiser’s need for fully-matched data that reconciles public and private sources (such as MLS) in a format which supports the user’s field and observational work, while reserving the derivation of conclusions to the unique skills, training, and experience of the Appraiser user. 

There's still time for Florida REALTOR Appraisers to make the trip, attend the meeting, and get the update on RPR, along with all the other information. It would be great to see you there.

A New Year - Pay Attention to Business

November, December, and the first part of January have been extremely busy. Although I was able to fire off a Christmas post, the New Year's post never made it. There has been plenty of appraisal related news, but it's been important for me to produce some appraisal related work, and generate some appraisal related income over the past few months. The checks finally started arriving in today's mail, and there is much to talk about. 

Back in 2009, when Taylor, Bean & Whitaker bit the dust, their affiliated appraisal management company, Security One Valuation Services, LLC stiffed thousands of appraisers. Later that year, Larry Holzer folded his latest disposable appraisal management company, Global Appraisal Solutions, leaving hundreds of thousands of dollars in unpaid appraisal fees. That did not stop him from creating another AMC to sucker in a new group of appraisers.

In mid 2012 appraisers took it on the chin with the failure of AppraiserlLoft. Who knows how many were left holding the bag in that case. 

In late 2012, appraisers from around country heard that ES Appraisal/Evaluation Solutions filed for bankruptcy. A website set up for creditor appraisers shows a tally of over $1.2 million in unpaid appraisal and BPO fees. Now, the word on the street is National Real Estate Information Services (NREIS) will be closing their doors next month.

Appraiser Active is on a quest to improve the profession, but we appraisers are also involved in running a BUSINESS. Please remember when you become part of a "vendor" panel for an AMC, you are extending them credit. Many AMCs are making a big deal of insisting on background checks of appraisers joining their panel. It might be time to do some background checking on the folks you extend credit to.

Just about a month ago I heard from Kim Drago. She was promoting an new site for appraisers, AppraisalAdvisor. The concept sounds interesting. For those of you involved with AMCs, it might be worth a look.  We are not in a position to endorse these folks, but their LinkedIN page has a bunch of great advice and New Years' Resolutions.

Merry Christmas

Wishing you all the best for this Holiday Season from the Sunshine City in the Sunshine State.

eAppraiseIT Settlement - Is it Over?

Over the past few days the wire services, appraisal blogs and real estate news sites have shared the headline:  

"WaMu apprasial company settles with New York"

Bullet points from the story include:

* eAppraiseIT accused of inflating home appraisals
* Agrees to pay $7.8 million to end lawsuit
* eAppraiseIT now part of CoreLogic Inc
* NY AG Schneiderman took case to trial
* Schneiderman to bring new mortgage-related action soon

According to the story:

The case, filed in New York state court in 2007, is one of the few related to the housing meltdown that the government has brought to trial. The trial was in recess when the settlement was reached.

Schneiderman is co-chair of the federal mortgage fraud task force formed in January to probe actions that led to the financial crisis. He has said he plans to take legal action against other targets soon.

Homes that were appraised above their value, allowing mortgage companies to issue bigger mortgages, are among the causes cited by experts for the housing bubble and subsequent financial crisis.

EAppraiseIT, a major appraisal management company during the housing boom, was accused of colluding with Washington Mutual, which had been of the largest U.S. mortgage lenders until the housing market collapsed.

Appraiser Active covered the story after the suit was filed by then New York Attorney General, Andrew Cuomo. As a result of the suit, we appraisers have endured the Home Valuation Code of Conduct, and are now struggling under the effects of appraiser independence provisions in the Dodd - Frank legislation.

Does the New York settlement with eAppraiseIT signal the end of the story? Not by a long shot. There are at least two high profile cases involving eAppraiseIT in the system.

FDIC v. CoreLogic 

In another sign that the Federal Government is turning its focus towards prosecuting the securitization players who may have contributed to the Mortgage Crisis, the FDIC filed separate lawsuits against LSI Appraisal (available here) and CoreLogic (available here) earlier this month.  In the suits, both filed in the Central District of California, the FDIC, as Receiver for Washington Mutual Bank (“WAMU”), accuses vendors with whom WAMU contracted to provide appraisal services with gross negligence, breach of reps and warranties, and other breaches of contract for providing defective and/or inflated appraisals.  The FDIC seeks at least $154 million from LSI (and its parent companies, including Lender Processing Services and Fidelity, based on alter ego liability) and at least $129 million from CoreLogic (and its parent companies, including First American Financial, based on alter ego liability).

Spears v. First American eAppraiseIT, LLC

The United States District Court for the Northern District of California granted class certification in a mortgage loan appraisal suit alleging defendants conspired to inflate appraisals to increase the sale of loans in the secondary market. 

The Court found that plaintiffs presented sufficient evidence to establish common questions of fact and law, holding that common questions and answers need not uniformly apply to all class members. The Court also found that the analysis of individual appraisal fees would not create individualized issues, but instead would provide additional support for plaintiffs’ claims that an inflated appraisal scheme existed. Finally, the Court also held that the Real Estate Settlement Procedures Act’s treble damages, attorney’s fees and government enforcement mechanisms did not make class action an inferior method of litigation.

The CASE FILE is available at this LINK. More information about the suit, and a means for parties to join the class at this LINK.

Maybe there are more in the pipeline. Let me know if you are aware of additional suits filed in other jurisdictions. It will be interesting to see how these all shake out.

Consumer Financial Protection Bureau: Two Appraisal Related Proposed Rules

This week, the Consumer Financial Protection Bureau (CFPB) issued notice of two proposed rules affecting appraisals and consumer access to appraisal reports. Follow the links for the full text and to submit a comment to the CFPB.

First:

The Bureau of Consumer Financial Protection (Bureau) is proposing to amend Regulation B, which implements the Equal Credit Opportunity Act (ECOA), and the official interpretation to the regulation, which interprets the requirements of Regulation B. The proposed revisions to Regulation B would implement an ECOA amendment concerning appraisals that was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). In general, the proposed revisions to Regulation B would require creditors to provide free copies of all written appraisals and valuations developed in connection with an application for a loan to be secured by a first lien on a dwelling. The proposal also would require creditors to notify applicants in writing of the right to receive a copy of each written appraisal or valuation at no additional cost. 

Click HERE for Proposed Rule

Submit a Comment on Proposed Rule

Second:

The Board, Bureau, FDIC, FHFA, NCUA, and OCC (collectively, the Agencies) are proposing to amend Regulation Z, which implements the Truth in Lending Act (TILA), and the official interpretation to the regulation. The proposed revisions to Regulation Z would implement a new TILA provision requiring appraisals for “higher-risk mortgages” that was added to TILA as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. For mortgages with an annual percentage rate that exceeds the average prime offer rate by a specified percentage, the proposed rule would require creditors to obtain an appraisal or appraisals meeting certain specified standards, provide applicants with a notification regarding the use of the appraisals, and give applicants a copy of the written appraisals used.

Click HERE for Proposed Rule

Submit a Comment on Proposed Rule

Appraisers and Regulators Give Congress an Earful

On June 28, 2012, two panels of witnesses appeared before the Insurance, Housing and Community Opportunity Subcommittee of the U.S. House Committee on Financial Services. The hearing, held in room 2128 of the Rayburn House Office Building, started at 10:00 A.M. and continued for two hours.

The topic of the hearing, "Appraisal Oversight: The Regulatory Impact on Consumers and Businesses" was addressed in written testimony, oral presentations, questions and answers. The panel members, and links to the written testimony, are listed below.

Panel I Mr. William B. Shear, Director, Financial Markets and Community Investment, Government Accountability Office Mr. Don Rodgers, President, Association of Appraiser Regulatory Officials Mr. James R. Park, Executive Director, Appraisal Subcommittee, Federal Financial Institutions Examination Council Panel II Mr. David Berenbaum, Chief Program Officer, National Community Reinvestment Coalition Mr. David Bunton, President, Appraisal Foundation Mr. Francois K. Gregoire, 2011 Chair, National Association of Realtors, Appraisal Committee Mr. Don Kelly, Executive Director, Real Estate Valuation Advocacy Association (REVAA), on behalf of REVAA and the Coalition to Facilitate Appraisal Integrity Reform  Ms. Karen J. Mann, President, Mann & Associates Appraisers, on behalf of the American Society of Appraisers Ms. Sara Stephens, President, Appraisal Institute   C-Span covered the hearing. The entire presentation is available below. Panel II starts about 50 minutes into the video.