Appraisal Scoop

NAR Adopts Broader Valuation Policy

From Appraisal Insight Blog author Jerome Nagy on Feb. 16, 2012:

The National Associaiton of REALTORS^® (NAR) continues its holistic approach to valuing real property with the adoption of its Responsible Valuation Policy. The document is the culmination of NAR’s efforts to consider all methods of valuing real property. NAR previously hosted two valuation summits and two working groups were convened. Members from across NAR’s policy structure had input in the document and included representation from the Professional Standards, Real Property Valuation/Appraisal, Federal Housing Policy, Conventional Finance and Lending, Commercial, and Business Issues Committees. Input was also provided by RPR.

The document will serve as the foundation for NAR’s policy position on the various methods of valuing and pricing real property – including appraisals, broker price opinions (BPO), and automated valuation models (AVM). The policy document also includes language from NAR’s Code of Ethics as a reminder to members that REALTORS

SOURCE: Appraisal Insight

 

Pennsylvania Gov. Tom Corbett signs AMC legislation

Originally posted by Kim Shindle On February 3, 2012 @ 6:00 am In Association News,Government Affairs- http://www.PARJustListed.com

Appraisal management companies will now be regulated in Pennsylvania, thanks to legislation signed by Gov. Tom Corbett on Thursday.

House Bill 398 [1] (Stevenson) requires appraisal management companies to be registered with the State Board of Certified Real Estate Appraisers. Pennsylvania is the 30th state to pass such legislation.

More appraisal management companies appeared throughout the country, as a result of the Home Valuation Code of Conduct [2] (HVCC). The Home Valuation Code of Conduct originated from a settlement among New York Attorney General Andrew Cuomo, the Federal Housing Finance Agency, Fannie Mae and Freddie Mac. While the HVCC was sunset, the issue of unregulated appraisal management companies remained.

“We believe this legislation is important to protect homebuyers in the Commonwealth,” said PAR President Frank Jacovini. “Research initially showed after the Home Valuation Code of Conduct was enacted, consumers were paying higher fees for appraisals that were frequently inaccurate and misrepresented the value of the property. We also saw closings being delayed as a result.”

The new law will create a level playing field for AMCs and appraisers. Appraisal management companies will now be required to work within the nationally sanctioned Uniform Standards of Professional Appraisal Practice (USPAP) [3] .

“Thanks to a collaborative group of all stakeholders providing input into this bill, this new legislation provides protection for consumers and industry participants alike,” according to Michelle Bradley, chair of PAR’s Appraisal Management Company Task Force. “Those who own or operate AMCs will be accountable to industry standards and state regulation.”

The new legislation also:

• Implements a registration and renewal fee of $1,000
• Implements a $20,000 bond or letter of credit to secure the faithful performance
• Requires all appraisal reviews to be conducted by a certified or licensed appraiser
• Requires AMCs to adopt Uniform Standards of Professional Appraisal Practice (USPAP) recordkeeping rules.

About Kim Shindle: Kim Shindle is the Manager of Media Relations at the Pennsylvania Association of Realtors®.

SPECIAL THANKS to Paul Faeder of Keystone Realty and Appraisal Service Inc. of Bushkill, PA for sending this to Appraisal Scoop!

NAR Seeks to Bar AMC Indemnification Clauses

NAR President Ron Phipps sent the attached letter to heads of government agencies today.

Here’s an excerpt :

Appraisers provide an independent and impartial analysis of the market, and a credible opinion of the value of real property. This analysis is a critical component of the mortgage transaction and, in recent months, has become the subject of unnecessary pressure. The mounting use of indemnification clauses by AMCs may be interfering with the appraiser’s independence and objectivity. In many cases, appraisers are asked to sign contracts that include language to indemnify and hold harmless the AMC against any suit, threat, or claim on any work product or service provided as part of the contract agreement. In some instances, the appraiser is even required to indemnify the lender and the AMC for amounts equal to their costs in repurchasing a mortgage loan, regardless of any proof of culpability on the part of the appraiser. 

Download Letter to Regulators on Appraiser Indemnification FINAL 08112011

If you are not comfortable downloading the attached pdf, there is an online version at this link: http://appraiseractive.blogspot.com/2011/08/nar-encourages-bar-of-amc.html

Thanks to Frank Gregoire for providing the link -

Francois (Frank) K. Gregoire IFA RAA
Gregoire & Gregoire, Inc.
Realtor - Appraiser
Office 727-344-3393
Mobile 727-420-3804
Fax 727-344-3395
francois@tampabay.rr.com
http://fl.living.net/Realtor/gregoire
http://appraiseractive.blogspot.com

NAR Releases Statement Regarding Appraiser Independence

Today, the National Association of Realtors (NAR) released a statement regarding appraisers and appraiser independence on their appraisal web page. In the statement, NAR expresses concerns about recent attempts to interfere with the appraisal process and the independence of the appraiser.

Over the last 18-36 months a host of rules, regulations, and laws have been announced to further protect appraiser independence yet appraisers continue to be pressured. NAR believes this pressure unnecessarily adds risk to the mortgage transaction for lenders and consumers. You can read the full statement here.

Source: Appraisal Insight Blog

NAR Defends Broker Price Opinions for HAFA Valuations « HousingWire

The National Association of Realtors (NAR) is contesting claims, made by the Appraisal Institute last week, against the use of broker price opinions (BPOs) in the upcoming Make Home Affordable Foreclosure Alternatives (HAFA) short sale program. NAR asserts that when it comes to short sale valuations, BPOs are the best option out there.

via www.housingwire.com

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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