Appraisal Scoop

Webcast appraiser interview of a la mode, inc Chairman, Dave Biggers - Download Here

I met Florida appraiser Marco Ruiz in Chicago back in June at an a la mode regional conference.  This morning Marco dropped me a note to let me know that he'll be on a radio interview/talk show with Dave Biggers, a la mode, in Chairman, Thursday 7/31/2008 at 4:00pm at My Technology Lawyer.com (http://www.mytechnologylawyer.com/radio)

Download Dave_Biggers_Interview.mp3 (27528.9K)

"We are going to be talking about the appraisal business, changes in the industry, etc.  I set this thing up originally to talk about the HVCC.  I’m sure it will be a lively and interesting discussion. I’m confident you’ll want to hear what Mr. Biggers has to say.

Please try to tune in and listen to it live if you can.  That way you can participate by email or phone."

Marco A. Ruiz - www.ruizappraising.com

Video: Impact Of New Housing Bill (Wall Street Journal)

President Bush Signs the Housing and Economic Recovery Act of 2008 - Federal Housing Finance Agency (FHFA) Created

James B. Lockhart, Director of the OFHEO, said: "Today President Bush signed the ‘Housing and Economic Recovery Act of 2008.’  I thank President Bush and Secretary Paulson for their leadership in making government-sponsored enterprise (GSE) regulatory reform a reality."

The Act creates a world-class, empowered regulator, the Federal Housing Finance Agency (FHFA), with all the authorities necessary to oversee vital components of our country’s secondary mortgage markets -- Fannie Mae, Freddie Mac and the Federal Home Loan Banks -- at a very challenging time. 

"As Director of the new agency", Mr. Lockhart said, "I look forward to working with the combined Federal Housing Finance Board (FHFB), Office of Federal Housing Enterprise Oversight (OFHEO) and Housing and Urban Development (HUD) GSE Mission teams and with other regulators to ensure the safety and soundness of the 14 housing-related GSEs and the stability of the nation’s housing finance system."

For more than two years as Director of OFHEO I have worked to help create FHFA so that this new GSE regulator has far greater authorities than its predecessors.  As Director of FHFA, I commit that we will use these authorities to ensure that the housing GSEs provide stability and liquidity to the mortgage market, support affordable housing, and operate safely and soundly.”

Related Articles:

• Real Estate Outlook: Housing Bill Approved (with video)
• President Bush Signs Landmark Housing Bill into Law
• Bush Signs Housing-Relief Bill Into Law

Virginia REAB Holds "Special Meeting" on Appraisal Delivery Webportals: Part 1 of 3

To Convert or Not to Convert!  Is That a Real Question?

Appraisal Scoop reported previously (click here) on the May 22, 2008 Virginia State Board for Real Estate Appraiser's (VREAB) meeting to discuss among other things, a petition submitted by George Dodd, SRA.  Click Here to: Download Virginia_Appraisal_Board_Petition_052208.pdf

The petition was written to prevent online sites, or web-portals from changing or otherwise altering reports that appraisers prepare.  Web-portals would include such companies as: AppraisalPort, RELS, and other AI ready required companies. It also seeks to limit the illegal PDF stripping down, and programs that erroneously copy information from reports such as Lighthouse.

Woody Fincham has developed this series to chronicle his first hand account of the 7/23/2008 Virginia Real Estate Appraiser’s Board meeting.  These are the author's own opinions. They are not intended as an attack on FNC, INC or any one listed in the article. The article is intended to inform the general appraisal public of the landmark Virginia State Appraiser's Board policy process.

Virginia Real Estate Appraisers Board

July 23 2008

Special Meeting Regarding Web Portals

Today marked the second and final special committee meeting by the board.  The meeting was called in order to allow all the interested parties to make a case for their respective points of view.  George Dodd, the petitioner was there and gave a presentation.  Neil Olson from FNC, INC was also present to speak to the board and the gathered attendees.  Rob Fraiser, an appraiser from Core Logic gave a presentation regarding the data standard MISMO.  Strangely absent was anyone for ACI regarding their conversion software or and lenders who utilize conversion capable platforms. 

Mr. Dodd started off the meeting with a short presentation supporting his stance on why conversion software should not be allowed. (See below for downloads)  He had prepared a power point presentation that included some interesting information.  The highest ideal Mr. Dodd referred to was the Board’s job to protect the public trust, the very same being a part of the Commonwealth’s regulations.

He very clearly stated that the single most significant act an appraiser does is to place the appraiser’s signature on the report.  This is easy to concur with in that when one thinks about it, an appraiser states upon signing the report that all conclusions, statements and work are true and accurate.  It is the glue that makes the report stick. 

He also states that the appraiser has to have complete control to attach, control or affix the signature.  This is affirmed by the State Regulation that states “The signing of an appraisal report or the transmittal of a report electronically shall indicate that the licensee has exercised complete direction and control over the appraisal“in accordance with §54.1-2011 C of the Code of Virginia.

Click here to continue reading . . .

Download Appraisal_Board_Presentation.pdf

Download presentation_to_appraisal_board.ppt

The "Right Start" - Epilogue

AUTHOR:  Patrick Egger is a Certified General Appraiser located in Las Vegas, NV. He teaches continuing education classes on the housing market, appraisal issues for real estate agents and appraisers. Click on Outside The Boxes for a collection of Patrick's articles on Appraisal Scoop!

To some, "The Right Start" represented good ideas and to others, well, it was just Patrick on his soapbox again. Both have merit. I do not have all of the answers. Most of the time, "its just me thinking out loud" and you being polite enough to listen.

The Appraisal Scoop and various forums, serve as "quasi-mentors", providing news, commentary and direction to appraisers. With Web 2.0, we found a "missing link", one lost when the profession left the financial institutions to become a cottage industry of sorts.

While the quasi-mentors serve appraisers, there is still a "disconnect" and as a result, we still have "blind men describing the elephant differently".  We all have views and opinions. After all we are in the opinion business. The problem (one that generates the "but my other appraisers don’t do that") is that while we have a "uniform appraisal report" we lack a "uniform perspective and application". [Blind Men and an Elephant]

Where do we go from here?

I began with "what if" and it will end with the same thought. "What if" does not represent the questions; it represents the possibilities and the answers. "What if" is an exercise for the mind imagination and spirit, designed to recognize the problem, conceive a solution, while developing enthusiasm to energize thought into action.

I suggested "a la mode, inc." as an ally in our quest to shift direction and control (to some degree) our destiny. Some have written, suggesting that I am drinking "a la mode’s kool aide", far from it. Dave Biggers and a la mode "stepped up and took a swing", when the others we not even on the field.

Click here to continue reading . . .

The "Right Start" - Step 5 - Touchstones

AUTHOR:  Patrick Egger is a Certified General Appraiser located in Las Vegas, NV. He teaches continuing education classes on the housing market, appraisal issues for real estate agents and appraisers. Click on Outside The Boxes for a collection of Patrick's articles on Appraisal Scoop!

From Merriam-Webster, "Touchstone is a noun that can be a test or criterion for determining the quality or genuineness of a thing, a fundamental or quintessential part or feature.

From Wikipedia, "the metaphorical use of touchstone means any physical or intellectual measure by which the validity of a concept can be tested, akin to "acid test, litmus test, etc."

I like both of these because they embody "testing and fundamentals", something many appraisers never learned because their mentors never taught or stressed them. From my viewpoint, touchstones are benchmarks and "benchmarks are fundamental to appraising".

In my "grand scheme" of things, no plan would be perfect without a series benchmarks to measure where we have been, where we are and project, where we could be, in the market and our profession. Touchstones serve as "road signs", forming a map that all can read and understand. 

What "touchstones" should we have?

In part one, I referred to touchstones in the form of standards and I believe that would be a good place to start. Other areas would include providing "market measures" in a uniform format (the Housing Market Addendum) or what we did in the form of a "Clarification to the Scope of Work" addendum, that provides the client and readers with a reference, common to all appraisal reports.

What should we mandate for all residential appraisal reports (that would provide the "actions of our peers" and define "generally accepted appraisal practice"), to impart a new standard of care? Wachovia and RELS have "Housing Market Conditions" addendum's. Are they adequate, too much, too little? Could we improve them and in doing so, better communicate with clients?   

Click here to continue reading . . .

H.R. 3221 (Foreclosure Prevention Act of 2008 ) Passed By Senate - Awaits President's Signature

The GSE Regulatory Reform Bill (H.R. 3221: Forclosure Prevention Act of 2008) was previously passed by the House of Representatives on July 23, 2008 and sent to the Senate for their approval. (See prior Appraisal Scoop article).

Today, the Senate also voted to approve the bill:

U.S. Senate Roll Call Votes 110^th Congress - 2^nd Session as compiled through Senate LIS by the Senate Bill Clerk under the direction of the Secretary of the Senate

Vote Summary (source)

Question: On the Motion (Motion to Concur in the House Amendment to Senate Amendment to the House Amendments to the Senate Amendment to HR 3221 )
Vote Number:	186	Vote Date:	July 26, 2008, 11:00 AM
Required For Majority:	1/2	Vote Result:	Motion Agreed to
Measure Number:	H.R. 3221 (Foreclosure Prevention Act of 2008 )
Measure Title:	A bill to provide needed housing reform and for other purposes.

Vote Counts:	YEAs	72
	NAYs	13
	Not Voting	15

Homeowner rescue awaits President Bush's signature (BusinessWeek)
Congress approved mortgage relief for 400,000 struggling homeowners Saturday as part of an election-year housing plan that also aims to calm jittery financial markets and bolster the sagging economy. President Bush said he would sign it promptly, despite reservations.

Housing rescue bill heads to Bush for signature (BusinessWeek)
Congress passed a housing rescue bill Saturday aimed at sparing 400,000 struggling homeowners from foreclosure. President Bush is expected to sign the measure quickly.

Appraisal Standards Board's July Q&A incorporates new "Comp Check Assignment" terminology

T.J. McCarthy, of T.J. McCarthy & Associates, Tinley Park, IL has the following assessment of the ASB's most recent Q&A.  The following is being reprinted from an Illinois Coalition of Appraisal Professionals (ICAP) alert. 

The Appraisal Standards Board (ASB) has just issued their July 2008 USPAP Q&A - Download July_2008_QA.pdf with the following questions/topics:

• Electronic Report Delivery
• Can Appraisers Perform "Comp Check" Assignments?
• Can Appraisers Perform "Comp Check" Assignments for Free?
• Is Disclosure of a Free "Comp Check" Assignment Required?

This is the most controversial Q & A I have ever read. (click here)  You can be assured that ICAP, the Illinois Appraisal Board and DPR will be reviewing the wording in this Q & A carefully.

Of special concern is the ASB's incorporation of new terminology found no where in USPAP;

“Comp Check Assignment”

“Full and Traditional assignments”

The Illinois Appraisal Board has made its position on comp checks very clear at past ICAP seminars.  They MUST COMPLY with USPAP.  The word comparable means a thought process must be implemented by someone to determine what compares.  If it’s the appraiser, that's filtering folks! 

A comp check is not the same as providing raw market data.  An appraiser should be able to provide data to a client based on specific parameters provided by the client.  In that case the word comparable could even apply, but it must be clear that it is comparable based on the client's parameters, not the appraiser's.  If there is a value conclusion, whether it’s verbal or written, then you have just made an appraisal.

The second question in the July Q & A reads as follows:

I’m a residential appraiser and have been asked to perform a "comp check" (or "pre-comp") assignment, where a client wants to get an idea of the value of a home prior to proceeding with a mortgage financing transaction. Does USPAP allow me to perform this type of assignment?

How is the highlighted part of this question not a predetermined value issue?  I feel the correct answer to this question should have been, “No, that’s not a comp check, that’s an appraisal”.  I have no problem with the ASB providing direction to appraisers regarding services to clients, but the way this answer is worded will only add fuel to the COMP CHECK fire, not suppress it. 

I have spoken with Brian Weaver, Director of the Appraisal Division of DPR, Bob Gorman, MAI, Chair of the Illinois Appraisal Board and Mike Maglocci, MAI, President of ICAP regarding the July Q & A.  They also expressed their concerns regarding the wording in this document.

I would like to make it clear that the opinions in this alert are those of TJ McCarthy, SRA only and not ICAP, the Illinois Appraisal Board or the Department of Professional Regulation.  Call it editorial privilege as webmaster.

Click on the following link to read  the July Q & A - Download July_2008_QA.pdf 

ICAP would like to hear from our members regarding these questions.  You can send your opinions and comments to tj@tjmccarthy.com and they will be forwarded to the ICAP Board and the Illinois Appraisal Board.

TJ McCARTHY AND ASSOCIATES, LTD.
Real Estate Appraisers and Consultants
7903 West 159th Street, Suite B
Tinley Park, Illinois 60477

Email: appraisal@tjmccarthy.com
Phone:          (708) 614.7200      
Fax: (708) 614.7228

The "Right Start" - Step 4 - Reviews

AUTHOR:  Patrick Egger is a Certified General Appraiser located in Las Vegas, NV. He teaches continuing education classes on the housing market, appraisal issues for real estate agents and appraisers. Click on Outside The Boxes for a collection of Patrick's articles on Appraisal Scoop!

Most appraisals are for home loans that involve some form of Federal underwriting (purchase or sponsorship by Fannie, Freddie, HUD, VA, regulated lenders, etc.) and therefore, the taxpayers underwrite the risks. As such, it would only seem logical that taxpayers should get something in return.

The argument is the GSEs and others provide the taxpayers with “loan availability” and that is true, however when those same taxpayers continuously have to foot the bill for bailouts, I am not sure that this is such a good deal. In this morning’s news, “Fannie & Freddie bailout expected to be $100-Billion”. I do not think “America” had that in mind.

No one expected housing to lose money, including Congress, when the GSEs were authorized. That was then and this is now, so we need to look at this more as a taxpayer’s investment. We want “return on” and “return of” of our money, so what else should we be getting if not our money back?

Since County Assessors are “government sponsored” as well, why not give them “some help” in the form of a copy of each appraisal completed? I have heard the arguments that appraising for assessment purposes is “way different than for loan purposes”, but we share basic value principles and techniques. Essentially, the elements of valuation are the same, the applications slightly different. Even if we stock county assessor offices with “reviewers”, it would be a step in the right direction.

Click here to continue reading . . .

GSE Regulatory Reform Bill Approved By House - H.R. 3221: Foreclosure Prevention Act of 2008

The Wall Street Journal reports: "The House of Representatives overwhelmingly passed the package Wednesday by a 272-152 vote. That morning, the White House dropped a longstanding veto threat."

"The Senate is expected to take up the bill later this week and appears almost certain to pass it. President George W. Bush is expected to sign the bill quickly, with little fanfare and no signing ceremony."

"We think this is the most important piece of housing legislation to come along in a generation," said Francis Creighton, vice president of legislative affairs for the Mortgage Bankers Association, an industry group."

GovTrack.us has the tracking information on this bill : Concur in Senate Amendment with House Amendment: H.R. 3221 Foreclosure Prevention Act of 2008 - Passed 272-152, 11 not voting. 98% of Democrats supporting, 77% of Republicans opposing.

Click here for a summary of major provisions in the bill . . .