Is There Money in Owning an Appraisal Management Company?

There is not much for me to add to this column (alternate link HERE) about Appraisal Management Companies by Ken Harney. Let's just say, if, in fact "there's a tremendous amount of value" his industry (AMCs) brings to the table, consumers should be aware of it before being forced to pay.

Should consumers be concerned? Here's what HousingWire had to say about one of the biggest AMC players:

"CoreLogic revenue explodes thanks to growing property valuation business"

"According to CoreLogic, the company’s revenue jumped 30% in the second quarter, rising to $500 million from $386 million in the same time period last year."

Looks like the "value" is in owning and running an AMC.

National Association of REALTORS Appraiser Survey

Back in January of this year, the National Association of REALTORS emailed their REALTOR - Appraiser members. The survey was developed by the National Association of REALTORS Research Department and conducted with the assistance of The Olinger Group. Assistance with wording and development of questions and answers was provided by the NAR Real Property Valuation Committee. 

Survey results were released yesterday. Please take a look at the publication, Appraiser Trends Study, and let us know what you think.

HousingWire has a synopsis of the findings they find interesting. The quote provided by Bill Brown, NAR President, is encouraging. “The work of an appraiser is indispensable to our industry. Appraisers provide the credible, outside opinion on a property value that agents, lenders, and ultimately the consumer depend on to guide them through a transaction.” 

Two New Florida Bills - Amendments to Chapter 475

Two nearly identical bills have been filed for the 2017 Session of the Florida Legislature. On the House side, HB 927 was filed by Rep. Bob Rommel on February 21, 2017. Senator Kathleen Passidomo filed SB 716 of February 16, 2017. The bills are nearly identical, and appear to be attempts to amend Chapter 475, Part II to conform with the Final Rule on Minimum Requirements for Appraisal Management Companies. 

The major difference in the bills appears to be:

• The Senate Bill requires AMC compliance with the Truth in Lending Act (customary and reasonable fees). The House Bill does not have the same language. (see lines 503 - 505 of SB 716).
• The House Bill tightens up the restrictions on registration of AMCs by removing the FREAB's discretion to grant registration "after a lapse of time and subsequent good conduct and reputation" for individuals (officers, directors, general partners, managing partners, owners, or persons with 10% or more ownership interests) associated with an AMC applicant. (see lines 297 - 300 of HB 927). The Senate Bill deals with applicants in Section 475.6245 - Discipline of appraisal management companies, and grants the FREAB discretion to deny an application or renewal in the event the above named individuals is guilty of or committed listed violations. (see lines 306 - 323 and 332 - 505 of SB 716).

The filed bills each limit the responsibility of AMCs to their activities related to "covered transactions" or appraisals for "secondary mortgage market participants". This is troubling as the "covered transaction" is means a consumer credit transaction secured by the consumer's principal dwelling. (See lines 154 -155 HB 927 and lines 157 - 158 SB 716).

Language repealing the Post License Education Requirement for Registered Trainee Appraisers is in both bills. As a result of the most recent Appraiser Qualifications Board Real Property Appraiser Qualification Criteria, the post license education requirement had outlived its usefulness. It was confusing to licensees, costly for course providers, and is an unnecessary barrier for trainee appraisers. 

We've got a starting point, and can expect some amendments. Give the bills a close look and let me know what you think. I'll try to keep up with them when they start going through the committee process.

Valuation Expo

Promotion of Appraisal Conferences and events is not a usual topic on Appraiser Active. Breaking a bit with tradition here because the upcoming Valuation Expo is in Florida, and your truly will be participating as a panelist. 

A number of interesting topics and speakers are on the schedule. On Monday, March 20, 2017, from 1:30 P.M until 5:00 P.M, along with  David Berenbaum and Bob Parson, I will be presenting Role of the Appraiser in the 21st Century.The Valuation Expo will be presented at the Caribe Royal in Orlando. Reserve your room here. 

Appraisal Buzz posted a brief preview of the presentation in their email blast today. Take a look. At the link, there is also information about registration, schedule of events, and even a 15% discount by using the code GREGOIRE with your registration. It will be nice to see folks in real life.

Season's Greetings

Appraiser Active to you

...and one more thing

Wishing you all the best in the New Year.

Donald K. Gregoire, IFA - January 14, 1930 - November 12, 2016

The name of the company is Gregoire & Gregoire, Inc. The first “Gregoire” in the company is my father, Donald K. Gregoire, IFA. Although retired from active appraisal work since 1995, he continued to offer business advice, counsel, mentoring, and fatherly advice. Donald K. Gregoire, also known as Big Daddy, BD, and Kem, passed from this life to the next on Saturday, November 12, 2016. His love and wisdom will be sorely missed. His dogged persistence, enthusiasm for life, and commitment to doing the right thing will continue serve as an example for all fortunate to have met and worked with him.

After his retirement from active appraisal work, his condominium association published a profile with a brief history of his life. Please take a look.

Don achieved, continuously during his time on earth. Among his earliest:

Rest in peace, Big Daddy.

Tips in the Mailbox

Over the weekend, along with a stack of the regular mix of bills, political advertisements, and solicitations for contributions, I found the Second Edition, Spring, 2016, APPRAISALBUZZ Magazine.

Quite a mix of articles, some written by folks I've met and know, as several by folks I know from other forums and events. It's different, and worth a read.

The purpose of this post is  to add one additional suggestion to the article authored by yours truly "Litigate This, Five Things to Think About Before Taking the Plunge". As noted in the piece, the list is not exhaustive, and many more points could be added, but I was on a work count limit.

Here's the addition. When working on the terms of your engagement, make sure to negotiate a records retention agreement. The closing orders for some cases require all parties to return or destroy their records related to the case. Of course, this will cause an appraiser trouble with the Uniform Standards of Professional Appraisal Practice, and in some instances, their state law. Make sure the terms of your engagement allow retention of records in such as way to permit you to comply with the Record Keeping Rule, and your state law.

Remembering Jon, Six Years Later

Note: 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.

Still Kicking

Believe it or not, I'm still kicking. There is much to come in the Appraisal World for the New Year. In the meantime......

Home Valuation Code of Conduct?

Since it has been so long since the last post, I should have been able to come up with something more more applicable to the current state of the appraisal profession, but this is in interesting piece. The Research Department of the Federal Reserve Bank of Philadelphia published this nifty little study of the impact on the Home Valuation Code of Conduct (HVCC) on Appraisal and Mortgage Outcomes.

According to the study, despite all the claims by Fannie and Freddie, touting the benefits, research of the effects since implementation is nearly non-existent. The authors claim this study is the first empirical examination of the impact of the first major appraisal rule, the now sunset, Home Valuation Code of Conduct. It measure the share of "low" appraisals (as compared to the purchase price) from the first quarter of 2006 through the third quarter of 2012. There is also a chart on page 23 of the study showing the distribution of high and low appraisals pre- and post-HVCC. The study defines Significantly High Appraisals as those 5% of more above the contract price, and Significantly Low Appraisals as one which is at least 5% below the contract price.

One aspect of appraisals NOT examined pre- and post-HVCC, is appraisal quality.

The Study is at THIS LINK on the Philadelphia Fed site, and just below. Here is one of the graphs.

The Impact of the Home Valuation Code of Conduct on Appraisals and Mortgage Outcomes