Appraisal Scoop

NAR Survey Shows HVCC Impacting Housing Markets

"An analysis by the National Association of REALTORS® (NAR) indicates that the implementation of the Home Valuation Code of Conduct (HVCC) appears to be having adverse impacts on the housing markets. Recently, NAR Research sent a survey on this topic to a random sample of approximately 40,000 NAR members which generated 3,600 responses. An analysis of REALTOR® responses follows."

• Approximately 76% of REALTORS® representing buyers or sellers indicated that the time to obtain a completed appraisal increased after May 1.
• The number of Appraiser members reporting they obtain over 50% of assignments from Appraisal Management Companies (AMCs) increased from 13% to 40% after May 1st.
• Similarly, 71% of REALTORS® noted an increase in the use of out of area appraisers.
• Approximately half of NAR Appraiser members reported a reduction in fees received by them.
• More than 70% of NAR Appraiser members reported that consumers were paying higher fees.

NAR UPDATE: FHFA and GSEs Act on HVCC Concerns

To: All REALTORS®

From: Charles McMillan, 2009 NAR President

Re: UPDATE: FHFA and GSEs Act on HVCC Concerns

Dear Fellow REALTOR®,

I am writing to you with an important update on NAR’s efforts to address ongoing problems with recent changes to appraisal rules. As a direct result of my recent meetings with the New York Attorney General’s office, the Federal Housing Finance Agency, and Fannie Mae, both Freddie Mac and Fannie Mae this week issued new guidance to all lenders on the Home Valuation Code of Conduct.

The alert clarifies two very important points that we raised in our meetings with officials. First, it states that lenders should use appraisers who have clear experience in the geographic area. Second, it clarifies that appraisers are not prohibited from talking to real estate agents.

 http://www.fhfa.gov/webfiles/14611/hvcc_NOTICE_7_22_09F.pdf

In addition to this guidance, both Fannie Mae and Freddie Mac recently posted extensive Qs and As on their respective web sites, based on information that NAR provided when the code was first adopted in May.

https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/pdf/hvccfaqs.pdf  http://www.freddiemac.com/singlefamily/hvcc_faq.html

We have posted links to all of this information at: www.Realtor.org/HVCC .

Although this is certainly a step in the right direction, more still needs to be done to address problems with the HVCC. NAR will continue to push for a moratorium on the Code, and I will continue to meet with industry partners and officials to convey our concerns.

Thanks to all REALTORS® who have shared experiences and concerns with us. Once again, you have proven that we are the “Voice for Real Estate,” and I am proud to serve as your 2009 President. Sincerely,

Charles McMillan, CIPS, GRI
2009 NAR President

NAR Calls for 1-Year Delay on HVCC - Letters to Fannie Mae & Freddie Mac

 

Download Williams Fannie Mae HVCC Delay 04202009

Download Koskinen Freddie Mac HVCC Delay 04202009

This is a Call to Action! Please contact your Senators and Representatives TODAY and urge them to STOP or DELAY (for at least 12 months) the implementation of the Home Valuation Code of Conduct ("HVCC") which is de facto regulation, forced on Freddie Mac and Fannie Mae by New York Attorney General Cuomo.  The file below contains a list of key talking points to bring to the attention of your legislators.

Please contact your legislators today at their in-district offices, as Congress is currently in recess. You can access the contact information for your legislator here. We encourage you to keep trying to contact them if you are not initially successful. It is vital to the overall effectiveness of this call.

Please forward the Call To Action pdf below to your mortgage broker and appraiser contacts.

Download CAMB Call To Action

 

Freddie Mac says NO to BPO's - Bulletin 2009-7 - March 31, 2009

Freddie Mac (Bulletin 2009-7)  is updating their Single-Family Seller/Servicer Guide ("Guide") to reflect the requirements announced in Bulletin 2009-1, including revisions that require any third party specifically authorized to perform certain actions on behalf of the Seller be in compliance with the HVCC Code ("Code") requirements.

Of particular note was the change to section 44.7:

44.7: Overview of appraisal and inspection reports and the Property Inspection Alternative (PIA) (03/31/09)

To evidence that the Mortgaged Premises is acceptable for the transaction, each Mortgage file must contain one of the following reports:

• A written appraisal report • A written inspection report
• A print-out of the Last Feedback Certificate with the Minimum Assessment Feedback of Form 2070 or PIA Whether the Seller should use an appraisal, an inspection or PIA depends on:
• The characteristics of the transaction
• The type of property securing the Mortgage, and
• Whether the Mortgage is a Loan Prospector® Mortgage or a Non-Loan Prospector Mortgage

The Seller may not use tax-assessed valuations or Broker Price Opinions (BPOs) to determine value.

Source: AllRegs Seller/Servicer Guide

State Law Regarding the Use of BPO's

The Appraisal Institute has released a document listing the applicable laws regarding Broker Price Opinions. The list covers every state and breaks the states into three general categories: Unlimited Authority, Limited Authority and Broad Authority.

Here is a link to the list: Download BPO_State_Laws

Downturn in Market Leads to Upturn in BPOs - May not be legal!

According to the Appraisal Institute's newsletter article: "Inside the Beltway: Downturn in Market Leads to Upturn in BPOs" -

Over the last year, there has been a tremendous increase in the use of broker's price opinions (a.k.a. comparative market analysis, broker's estimate of value, etc.) that are being performed by real estate brokers and salespeople, in lieu of appraisals. While BPOs were previously used for very limited purposes, they are now being used as valuation products in the finance arena, primarily for the review of distressed properties prior to short sales or foreclosure. They are also being used in areas previously unimagined several years ago, including segments of the commercial market. However, the BPO work being done by brokers and salespeople may not be legal...

Click here for the FULL AI STORY

NAR Recognizes "The Appraiser's Water Cooler" as a Facebook for Appraisers

Thanks to NAR's Appraisal Insight blog for a "shout-out" on The Appraiser's Water Cooler!

Facebook for Appraisers

For those of you who want the social interaction of Facebook without all the poking, status updates, and lame pictures of high-school friends, Appraisal Scoop has the answer. It's called:

The Appraiser's Water Cooler

This is a social networking forum for appraisers. It appears useful, and anything that increases appraiser interaction and communication is a plus in my book. So sign up.

Source link: click here

While you're visiting NAR's Appraisal Insight blog check out these hot topics:

• Appraisal Foundation President expects Announcement on the HVCC Soon
• Congresswoman Biggert promotes Appraisal Independence
• Will Conservator Repudiate HVCC Agreements?
• Are Lenders Abandoning AMC's?

An Appraiser Bites Back!

Mike Lefebvre, a licensed real estate agent and certified residential real estate appraiser recently reviewed a very controversial Real Estate Radio USA interview with Realtor Jennifer Allan. 

I've listened to the entire interview (click here) and overall the investor-interviewers were very pro-appraiser as the interview turned from "How do you justify your listing commission?" to "How do you price a home to sell?"   Kudos to Mike for trying to set the record straight!

Here's a small portion of Mike's article:

The conversation eventually turned to pricing properties and appraisers and then the fangs came out. To be honest, I wasn’t prepared at all for what I was about to hear. It was appraiser hate-speak! I’m sure Jennifer would tell us that “some of her very best friends are appraisers” but I certainly wasn’t feeling the love yesterday afternoon.

• Jennifer claims that appraisers can or do not factor in things like “appeal, smells and the ugly house next door.”
• She also said, “The appraised price is irrelevant to the market value of a home.”
• Jennifer went on to say, “An appraisal is a justification of the sales price.”
• “I don’t think appraisers have any business pricing homes for market.”

You'll want to read Mike Lefebvre's full blog post (click here) as he Bites Back!

Mike Lefebvre, The "Uncommon Agent", is a Massachusetts licensed real estate agent with Century 21 Commonwealth, New England's largest C21 firm. In addition, he is also a certified residential real estate appraiser and the owner/chief appraiser at MeetingHouse Appraisals. Mike wields a double-edged sword, combining his appraisal expertise with his sales and marketing prowess to maximize benefits and profits for both his buyer and seller clients.

Appraisal Institute's Relationship with NAR Questioned By Past Presidents of AI

In early 2007, the National Association of Realtors (NAR) approached the Appraisal Institute (AI) regarding possible affiliation. Following an initial meeting with AI Executive Committee members, a project team was appointed and a second meeting with the NAR was held.

The project team briefed the Board on this meeting and the Board directed that the project team continue to meet with NAR representatives in 2008 to further explore possible affiliation. Please note that those discussions with the NAR are independent of unification efforts with the ASA and ASFMRA.

The Appraisal Institutes memo "Update on Possible AI-NAR Affiliation" ( Download AI_NAR_Affiliation_Update.pdf ) dated 2/25/2008 says:

Several key points were acknowledged during these meetings.  Because this would be an affiliation, rather than a merger, it was acknowledged that the AI would retain certain autonomy within the NAR structure under the terms of this new relationship.

Another key acknowledgment pertained to ownership of appraisal designations. As an affiliate, the AI would retain ownership of its designations and exercise sole authority to confer the MAI and SRA designations.

The memo indicates that the AI will solicit the membership’s views through extensive surveys, meetings and dialog with all 92 chapters through the AI’s 10 regions. Once this information is gathered, the project team is to report its findings to the Board of Directors for its consideration and review at its next meeting in Austin, TX, June 24-25, 2008.

In response to this and many other issues, ten AI members (including past presidents) have issued a scathing letter questioning many of the policies of the current AI leadership.

Click here for more . . .

[Humor] Stigmatized Properties - Oh Yes! The "Thing" Lives Down There . . .

I think you'll enjoy this sales agent's honesty in dealing with the "shapeless mass of malevolent energy" that lives in the basement and guards the gateway to another dimension.  Thanks to the BlueRoof blog for finding this great video!