Storm Preparation - Document Condition and Features With Photographs

Shortly after Hurricanes Helene and Milton wreaked their damage in Pinellas County, Florida in the Fall of 2024, our phones started to ring. Property Owners with flood damaged houses needed building permits to make repairs. Municipal and county regulations required property owners to to demonstrate the cost of necessary repairs would not exceed 50% (in some cases 49%) of the value of the existing improvements. Local governments adopted these regulations to ensure property owners within their jurisdictions had access to Flood Insurance subsidized through the National Flood Insurance Program.

There are a couple of ways property owners can demonstrate compliance with what is known as the "FEMA 50% Rule". In Pinellas County, Florida, the first step is often to visit the Pinellas County Property Appraiser's website. Property owners will find many of their questions answered in the "After the Storm Answers" Frequently Asked Questions page. This will inform readers how to find a FEMA 50% (49%) Rule Letter. That might indicate the Actual Cash Value of the existing improvements is sufficient for the local government to issue a permit. Our phones were ringing because the Actual Cash Value from the Pinellas County Property Appraiser was short of what was needed.

When your house and yard look like this, you are concerned.

We completed many appraisals for the purpose of providing an opinion of the Actual Cash Value of the existing improvements to comply with Federal Emergency Management Agency and local government regulations. The Effective Date of the Appraisal was September 25, 2024, the day prior to damage as a result of Hurricane Helene. Our value opinion assumed there was no damage. This method complies with the applicable regulations.

At times, that was difficult because the interior of the residence looked like this.

In each and every instance, we asked the homeowner for photographs of the interior and exterior of the house PRIOR to damage. Not only did this allow us to visualize the features, finish, quality, and construction of the residence, we we able to document our findings for local government building officials and flood plain managers by including photographs in our appraisal report.

Here's a suggestion: Spend a little time taking photographs of the interior and exterior of your house prior to the next storm. Pay attention to documenting recent updates and remodeling of the kitchen and bathrooms. Document recent updates to heating and air conditioning, built in appliances, and electrical and plumbing systems. In addition to the receipts from contractors, make sure you have photographs of your new flooring, new windows, and new roof. 

Note: photograph EVERYTHING, even if it's not new. Save your photos to a device that cannot be lost, or to the cloud. 

A little preparation now could save a lot of time if you experience damage in the future. It may help you get a permit for the repairs you really need instead of facing the dread not meeting the 50% threshold. 

Keep in mind, we have been completing appraisals for Actual Cash Value for over 25 years, helping homeowners comply with FEMA Requirements to obtain building permits. The rules for obtaining a permit apply if your property is located in an identified Special Flood Hazard Area, even if there is no damage. Please give us a call if you have questions or if you need assistance.

NAR Comments on Proposed Changes to Appraisal Reconsideration Policy

 Back in November 2022, the National Association of REALTORS® Board of Directors adopted two public policy recommendations made by the Real Property Valuation Committee. One was to establish a policy to encourage the adoption of a consistent framework for the Reconsideration of Value process. The policy stresses a key component of the process is prioritization of appraiser competency over fee and turn time.

Below is a copy of the motion adopted by the Board of Directors.

Since then, the Department of Housing and Urban Development has published the draft of a proposed Mortgagee Letter, Borrower Request for Review of Appraisal Results. 

Using the new policy as a guide, NAR provided comment on the draft. HERE is the link to the announcement on the NAR site.

It's great to see NAR reference the new policy in their response to the U.S. Department of Housing and Urban Development draft a mortgagee letter to establish a process for Mortgagees when a Borrower requests a review of the appraisal results associated with their application for an FHA-insured mortgage.

Prepping for New Year 2023

 You all do what you want to do for New Year's Eve. Here at the Gregoire - Strayhorn Household, we spend the Eve prepping for New Year's Day. That means Hog Jowls and Black-Eyed Peas. Fran will pick some collards from the garden in the morning and we will ensure our good luck for 2023 with Pork, Peas, and Greens.

All the best to you and yours in the New Year. 

Governor Ron DeSantis Appoints Five to the Florida Real Estate Appraisal Board

 Here's some news of interest to Florida Appraisers.

Governor Ron DeSantis Appoints Five to the Florida Real Estate Appraisal Board

TALLAHASSEE, Fla. — Today, Governor Ron DeSantis announced the appointment of Kristin Creegan, Mark Kruse, Evalyn Oreto and the reappointment of Herbert Jourdan Jr. and Shawn Wilson to the Florida Real Estate Appraisal Board.

Kristin Creegan

Creegan is a Broker Associate and Sales Manager for the Creegan Group. She was previously a high school science teacher and currently serves on multiple breakout groups for the Florida and Orlando Regional Realtor Association. Creegan earned her bachelor’s degree in psychology and a minor in business from the University of Florida.

Mark Kruse

Kruse is the Senior Vice President and General Counsel for Florida First Capital Finance Corporation. He is a member of the National Association of Civil-Law Notaries and the Florida Bar. Kruse earned his bachelor’s degree in international affairs from American University and his juris doctor from Florida State University.

Evalyn Oreto

Oreto is the Staff Residential Appraiser – Pasco County for Present Amrock, LLC. She previously worked for LandSafe Appraisal Services/Core Logic as a Staff Residential Appraiser. Oreto serves on the Education Committee of West Pasco Board of Realtors and is a member of Woman in Networking Pasco County.

Herbert Jourdan

Jourdan is the President and an Appraiser of Spectrum Valuation. He currently serves on the Industry Advisory Council for the Appraisal Foundation. Jourdan earned his bachelor’s degree in real estate and finance from Indiana University.

Shawn Wilson

Wilson is the Owner of Compass Real Estate Consulting. She is a current member of the International Association of Assessing Officers and the International Right of Way Association. Wilson earned an associate degree from Valencia College.

These appointments are subject to confirmation by the Florida Senate.

------------------

Herb Jourdan and Shawn Wilson are current Certified General Members of the Florida Real Estate Appraisal Board. Evalyn "Fran" Oreto, a Certified Residential Appraiser, is the current AMC Member of the board. The Governor's Office has not yet clarified if Fran Oreto has been reappointed to the AMC position, or if she is filling the Certified Residential position now held by Armando del Valle.

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.

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.

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

Valuation Review - 2013 Voice of the Appraiser Survey

Just in case you missed it, use this LINK to download a pdf copy of the Valuation Review - 2013 Voice of the Appraiser Survey.

There is much to see, but this stands out:

"As an appraiser, how would you rate the typical appraisal fee you are paid?

• 8.6% - Unlivable
• 53.8% - Low
• 12.1% - Above Average
• 25.5% - Customary and Reasonable

Feel free to comment and let me and others know what you think.

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

Appraiser Active in Washington, D.C.

While browsing at Tampa International Airport, waiting to board my flight to Washington, D.C., I picked up a copy of the Tampa Bay Times. On the tarmac, waiting to take off, I noticed a familiar face looking at me from page 4B; the Business Section. 


The headline:


PINELLAS PROPERTY APPRAISER TO TESTIFY BEFORE HOUSE SUBCOMMITTEE


I'm pleased the writer, Elizabeth Behrman, decided to include these points:

"The bulk of my testimony has to do with ensuring appraiser independence, and the value and importance of appraiser independence," Gregoire said.

"Buyers don't expect the appraiser to just rubber stamp the sale price," he said. "They want a good, honest, objective appraisal by somebody that has the necessary qualifications to do a credible job."

As long as the appraiser can demonstrate that his data is supported and correct, the lender should just lay off," Gregoire said.

For those interested, the testimony I am offering on behalf of the National Association of REALTORS is at this LINK, along with that of the other panel members.


UPDATE: There is a link to the video of the entire hearing at the link above.

This is what the hearing room looked like, just prior to 10:00 A.M. That's subcommittee chair Biggert preparing to gavel the meeting to order.

Appraisal Industry Hearing - June 28, 2012 - UPDATE #1 6-22-2012 UPDATE #2 6-26-2012

In a release, Chairman Spencer Bachus of the U.S. House of Representatives Financial Services Committee, announced the committee and subcommittee schedule for the month of June, 2012.


There is one interesting among them:



Thursday, June 28:
The Insurance and Housing Community Opportunity Subcommittee will hold a hearing on the appraisal industry and regulations impacting the single-family mortgage market. The hearing will begin at 10 a.m. in room 2128 Rayburn.

As soon as more information is available, we will do our best to update this post.


UPDATE #1 - 6-22-2012: The hearing has been added to the calendar of The Committee on Financial Services and is posted online. The new title of the hearing is "Appraisal Oversight: The Regulatory Impact on Consumers and Businesses". We are waiting to see the makeup of the witness panel.


UPDATE #2 - 6-26-2012: The members of the hearing panels have been posted online. Two panels will be providing testimony. Yours truly is on Panel II, providing comments on behalf of the National Association of REALTORS®. The written testimony will be delivered to the committee today, and should be posted online.

LiveValuation Magazine: Maintaining Your Workfile

UPDATE! Since the demise of LiveValuation Magazine, the links to the article are dead. The article is now posted on my SCRIBD page, and available after the jump

This topic is also addressed in the Appraiser Active MAYHEM post.

The September issue of LiveValuation Magazine has an article written by yours truly on the subject of workfile maintenance and retention. Maintaining Your Workfile was written to remind appraisers your first line of defense in the event of a suit or complaint is your workfile.

UPDATE:  Over on the Appraiser Law Blog, there is a new post with information about the statute of limitations for suing appraisers. It's worth reading, if only for this quote:

Because this is so frequently misunderstood by appraisers, let me say this first: the relevant time period for suing an appraiser or AMC about an allegedly bad appraisal has nothing to do with USPAP's minimum 5-year record keeping requirement.  (Don't throw those workfiles away!) 

CLICK to Read More

Ken Harney Shines a Light on AMC Appraisal Fee Splits

Along with all the appraisal related mandates in the Dodd-Frank Act is the primary reason for the legislation; creation of the Consumer Financial Protection Bureau.


The CFPB and the individual recent appointed to head the agency have been in the news quite a bit recently. Without offering any opinion about the agency, the appointments, and the politics, it is important to be aware of the CFPB's massive rule making authority. 


This week, Ken Harney writes about the CFPB reviewing ways to bring more clarity and better disclosure to fees associated with Real Estate Transactions. The focus of the story is the failure to inform borrowers of the fact a significant part of the fee may be paid to an affiliate or subsidiary of the lender. The CFPB is considering rules to require disclosure of the portion of the appraisal fee retained by Appraisal Management Companies.

Ken writes:

One of the fees being scrutinized might surprise you: appraisal charges. Why do they need clarifying? Doesn’t just about everybody who applies for a mortgage, whether it’s to buy a house or refinance, have to pay $450 to $600 — sometimes more — to find out what the property is worth?

and

Say you’re charged $550. There is no hint that the appraiser may be getting $250, with the rest going to the management company and the lender. The CFPB is considering whether to shed light on this by mandating two disclosures: what the appraiser is paid and what the management company is taking.

Frank Gregoire, a past chairman of the Florida Real Estate Appraisal Board, which oversees and regulates the industry in that state, says that while appraiser independence is important, banks and their affiliated management firms are raising the costs of appraisals to consumers without improving services.

Defenders of management firms, such as Donald E. Kelly, executive director of the Real Estate Valuation Advocacy Association, strongly disagree. Kelly says management firms perform the “back office” functions — including reviews and quality control — “that in the past were done by lender staff and employees.” In other words, they earn the money they get. And there’s no pressing need for consumers to see additional disclosures. They just need to know the bottom line.

Read the article HERE.
On the floor, next to my desk, is a stack of appraisal reports. Borrowers, lenders, real estate agents, and other appraisers sent them my way as examples of shoddy work and lack of quality control by AMCs. How do appraisal reports pass through a quality control check when the appraiser cites ZILLOW or TRULIA as the source of his date of sale, time, or market conditions adjustment, and that it is based on data from a zip code, not a market area? >
Wondering.

Merry Christmas

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

Just in case you might believe all my time is spent at the beach, the clipboard has a list of 12 sales and listings in St. Pete Beach. After 5 minutes on the beach to take a few photos for my northern US friends, it was back to work.

Appraisals: What You Absolutely Need to Know

This morning, November 12, 2011, along with several other speakers, I will be participating in a panel discussion as part of the National Association of REALTORS Annual Conference and Expo. Given the number of headlines, news stories and blog posts about appraisals in today's market, the topic and title is appropriate: Appraisals: What You Absolutely Need to Know.

If you're here in Anaheim attending the Conference, please stop by. The program starts at 9:00 A.M and runs until 10:30. We'll be in the Anaheim Convention Center, Ballroom A.

They're bound to put a hook on me if I talk too long, but I plan to reference the Continuing Education Course I wrote for the Bert Rodgers School to help folks get a better understanding of the appraisal process. Follow the link to he free pdf of the Bert Rodgers book, and take a look at the course starting on page 79. For you non-appraisers, I hope it helps you understand why things are the way they are. If you have a Florida real estate license, you just might like to use this course for your continuing education.

Note: I do not get a royalty on the number of courses taken; I just believe it might be informative.

REALTOR®, Appraiser, or Both?

If I was paid a nickel for every time someone asks if they "can be frank with me", I would have a better computer. If a nickel was paid every time someone tells me, "you're not a REALTOR®, you're an appraiser", my house would be paid off.

Clearly, there is some confusion about the term "REALTOR®" and what it means. The common misconception is to equate the term REALTOR® with home seller, agent, or broker. The fact of the matter is the term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics.

Membership in the NATIONAL ASSOCIATION of  REALTORS® is available to individuals engaged in the "real estate business." "Real estate business" as defined in the bylaws of the NATIONAL ASSOCIATION of REALTORS® includes real estate brokerage, management, appraising, land development or building. An Official Interpretation of the bylaws of the NATIONAL ASSOCIATION of REALTORS® states:

"It is not an inequitable limitation on membership for a Board of REALTORS® to require that applicants for REALTOR® Membership who are principals in a real estate firm must maintain a real estate broker's or salesperson's license or must be licensed or certified by an appropriate state regulatory agency to engage in the appraisal of real property."

To be clear, the term REALTOR® may include individuals involved in real estate brokerage, but does not eliminate individuals involved in other specialties included in the definition of "real estate business."

As an appraiser, and member of the NATIONAL ASSOCIATION of REALTORS®, all the benefits of membership are available, including some of particular interest to my Appraisal specialty. These include:

• The NAR Appraisal Designation Program and Fast Track Program to Designation
• NAR involvement and participation in The Appraisal Foundation
• Representation on The Appraisal Foundation Board of Trustees (sponsor)
• Representation on The Appraisal Foundation Advisory Council (TAFAC)
• The NAR Library and Information Central
• Access to the Multiple Listing Service
• Networking opportunities with other real estate professionals
• Increased business (over half my assignments are referred to me by real estate brokers)
• Using brokerage contacts as source for market information, transaction specifics and confirmation
• Legislative and advocacy efforts

There are many reasons I belong to the NATIONAL ASSOCIATION of REALTORS®. Being confused with the good folks involved in real estate brokerage is not one of them.

LiveValuation Magazine: Neutral Valuation

The September issue of LiveValuation Magazine was released online yesterday. There are several articles, but the most worthwhile is a piece written by Jonathan Miller, author of the Matrix blog.

In his opinion piece, Neutral Valuation, Miller summarizes the ordeals we have all experienced as appraisers, and makes the case for appraiser neutrality. There is much to like in this article, but I have a couple of favorite sections:

Over the past decade the global credit boom ultimately forced most experienced appraisers to choose between feeding their families or changing their business models and even their careers. The refrain “always hit the number” would get you more work. After the credit crunch, the refrain was modified to “occasionally hit the number” and you get more work. The sheer critical mass of the moral flexibility of many in our profession during the go-go credit era nurtured a whole new class of appraiser: the form filler that dominates the profession to this day. They work well with the gum-chewing 19-year-old appraisal processors who call every day on the status of an assignment, having no idea what an appraiser actually does and only cares when the report will be delivered.

and...

Following the credit crunch, the valuation bias is now in the opposite direction. In fact many of the morally flexible appraisers that were biased toward higher valuations for mortgage brokers during the boom, are the same appraisers biased toward lower valuations for appraisal management companies the in post-boom world. These appraisers are rewarded for performing high-volume work at low fees and conservative values. And these values aren’t just low by a few percentage points. We have observed values from a nationally well-known appraisal management company as much as 50 percent below current market value for a property with multiple bidders, largely because the appraisers they use have no local market knowledge.

and....

Since the beginning of my career, I’ve always held out hope that most of my clients actually wanted me to provide “the number” that represented market value. Some clearly did.

I’ve found the concept of neutral valuation to be intoxicating and powerful in my business. As a result of shifting our practice toward clients that actually want to know “the number,” we have remained at our most profitable level in our 25-year history.

Fire your retail banking clients and stop burning calories for clients that don’t want your expertise and will only pay for a form filler. If you don’t they are going to fire you eventually and your practice will die a slow death.

It is better to serve and expand on clients that actually want to know what “the number” really is. You’ll be surprised at how your quality of life improves and how much more business you are able to get.

Great work, Jonathan!

Read the whole thing.

Indemnification Clauses - UPDATE

A few days ago Appraiser Active posted about a from NAR President, Ron Phipps, to federal agency heads encouraging the bar of indemnification clauses used by Appraisal Management Companies (AMCs). Brian Davis, from Appraisal Scoop, was kind enough to spread the word, and many others read the letter on the NAR Appraisal Insight blog.

Now, Peter Christensen, from the Appraiser Law blog, has a very informative new post: "What's Wrong with Most Indemnification Clauses in AMC Contractor Agreements?"

Peter echos several points that were expressed as concerns in the NAR letter. For example:

5. The clauses negatively affect the quality of an AMC's appraiser panel. All things being equal, a rational lender should have less interest in retaining an AMC that uses an unreasonable vendor agreement. I believe that unreasonable contract language results in an overall lowering of the quality of an AMC's appraiser panel because, on average, fewer appraisers who are better trained, economically stable, and careful about reading legal verbiage choose to work for AMCs with the worst agreements.

7.  The bottom line.  Perhaps the bottom line is that a $200-$400 appraisal can't and shouldn’t be relied on to guaranty repayment of a $1 million loan if someone later deems the appraisal “faulty.”  Every appraiser performing valuations will have appraisals that can be deemed "faulty."  Good appraisers should be selected and used because they are trusted as competent, reliable and honest and render opinions of value that are on average accurate and reliable and within a range of acceptable errors.  They should not be employed as financial guarantors of value -- unless AMCs or lenders are willing to pay for the price of shifting that risk.

 Head on over to the Appraiser Law blog to read the full post. Spread the word!

Appraisal Events - Florida Realtors® 2011 Convention

From August 24 - 28, 2011, Florida Realtors host their Annual Convention & Trade Expo in Orlando. The event will be held at the Rosen Shingle Creek, 9939 Universal Boulevard, Orlando, Florida.

In addition to the regular business meetings for committees and the Florida Realtors Board of Directors, a number of education sessions will be offered on a variety of topics. There are two specific offerings available for attendees:

On Friday, August 26, 2011, the Florida Appraisal Council will meet from 1:00 - 2:30 P.M. If you are an appraiser and belong to a local association of Realtors, you are welcome to attend. The new AMC Registration laws and rules will be discussed, along with the Fast Track Application for NAR Appraisal Designations. Educational opportunities to assist in completing 2012 Continuing Education will also be planned. Your thoughts, ideas and suggestions are welcomed.

On Saturday, August 27, 2011, Rick Baumgardner, Chairman of the Appraisal Foundation Appraiser Qualifications Board, will present "What's Happening With Appraiser Qualifications?" This will be a discussion of the 4th Exposure Draft of Proposed Revisions to the Real Property Appraiser Qualification Criteria. Among other things, Rick will discuss trainee and supervisor qualifications, background checks and education.

Take a ride over to Orlando and stop by!

New GAO Report Released - Residential Appraisals

The GAO has released their latest study of the Real Estate Appraisal Profession and the appraisal regulatory structure. This full title of the report is RESIDENTIAL APPRAISAL - Opportunities to Enhance Oversight of an Evolving Industry. It's just out, and I've not had a chance to read it all, or very closely, but it looks like the Evolving Industry referred to is Appraisal Management.

Here's a LINK to the GAO site for the document. The full document is also posted vai SCRIBD after the jump. Let me know what you think in the comments. Here are a couple of interesting excerpts:

In contrast with appraisals, BPOs do not have standard requirements and are generally not considered a credible valuation method for mortgage originations. According to some mortgage industry participants, a key disadvantage of BPOs is that real estate brokers and agents who perform them are not required to obtain training or professional credentials in property valuation, and the BPO industry lacks uniform standards. At least one industry group has developed standards of practice for BPOs, which are reportedly used by some BPO providers, but adherence to these standards is voluntary. Similarly, the industry has not adopted standardized BPO forms, resulting in differences in the content and quality of BPO reports, according to some mortgage industry participants. Additionally, BPOs provide somewhat different information than appraisals—a sales price or listing price rather than the property’s market value. The enterprises do not permit lenders to use BPOs for mortgage originations, and guidelines from federal banking regulators state that BPOs do not meet the standards for an evaluation and cannot be used as the primary basis for determining property values for mortgages originated by regulated institutions.

In the section with observations about AMCs, you'll find this:

• Selecting appraisers. Appraiser groups said that some AMCs select appraisers based on who will accept the lowest fee and complete the appraisal report the fastest rather than on who is the most qualified, has the appropriate experience, and is familiar with the relevant neighborhood. They said that, with many experienced appraisers departing from the industry, less experienced appraisers, who are often willing to accept lower fees, are left to perform most of the work.
• Reviewing appraisal reports. According to some appraisal industry groups, some AMCs’ appraisal reviews overemphasize how close the appraiser’s value conclusion is to an expected value generated by an AVM, at the expense of other important elements of the appraisal, such as the appropriateness of the comparable sales. One group noted instances in which AMCs told appraisers which comparable sales to use when the appraisers’ original value conclusions were not consistent with AVM-generated values.
• Establishing qualifications for appraisal reviewers. Representatives of an appraisal industry group told us that some AMC reviewers may lack the expertise necessary to identify problems with quality. They noted that in some states appraiser licensing and certification requirements do not address qualifications for appraisal reviewers.

Read and Comment!

CLICK to Read More