Appraisal Scoop

'Shotgunning:' Latest Mortgage Fraud Ploy

I've got a NEW mortgage fraud term to add to the ever growing list of mortgage fraud scams . . .Applying for multiple loans at the same time -- a process known by the authorities as "shotgunning" -- is the fraud d'jour.

"In a scam the authorities have labeled "shotgunning," property owners apply for home equity loans with multiple lenders at the same time. In one case, a would-be borrower applied with three different lenders over a 48-hour period. Because the lenders did not all report into the same credit bureau, none were aware the same owner had simultaneously applied elsewhere as well."

Lew Sichelman of Realty Times has the details  - Click here for the full story:

E&O: Appraisal "Red Flags"

According to AppraisalBuzz blog's interview with Elaine Matternas, who oversees Intercorp’s Real Estate Appraisers Errors & Omissions Program: "If you take a snapshot look at 100 claims filed against appraisers, you would find":

• Almost half of the claims relate to overvaluation of properties.
• About 10% relate to disciplinary actions at the state level.
• Five percent each to the following:
  • Fraud.
  • Flipping schemes.
  • Identity theft, misuse of signature, forgery.
  • Mismeasurement, inaccurate acreage, etc.
  • Construction or property defects.
  • Undervaluation of property.

The rest would include a range of allegations: nondisclosure that a structure was a manufactured house; misinformation on septic issues, or connection to public sewage; appraising the wrong property; zoning issues; use of unsuitable or inappropriate comps; misunderstanding of assignment (appraised one apartment instead of a four-unit building), and so on.

Click here for the complete article.

Intercorp - E&O quotations, confirmation of coverage, answers to your questions. Go to www.intercorpinc.net for an application. Or call at 800-640-7601..

U.S. Census Bureau Gives Stats for Super Bowl XLI - Bears vs. Colts

Super Bowl XLI will be played Feb. 4 at Dolphin Stadium in Miami. It marks the 40th anniversary of the first AFL-NFL championship game, in which the Green Bay Packers defeated the Kansas City Chiefs in Los Angeles.

To celebrate the nation's most celebrated sporting event, the Census Bureau has compiled a collection of facts examining how life in the United States has changed in 40 years since Super Bowl I, plus demographics of Chicago , Indianapolis and the host city of Miami.

This fact sheet also examines the demographics of the host city, as well as the cities represented by the contenders. Unless otherwise indicated, the data come from the 2005 American Community Survey.

Click here for the report.

The Perfect Appraisal Camera? - Ricoh Releases New GPS-Ready Digital Camera

Could this be the NEXT Perfect "Appraiser's Camera"?  Ricoh Corporation has joined the high-tech real estate market this month by releasing its 500SE GPS-ready digital camera with integrated Bluetooth connectivity, Wi-Fi, and a 28mm wide-angle lens.

Price: $899 + GPS Unit: $130 +Wifi: $50 = Total: $1,079

Developed for outdoor location-based photography, the 500SE boasts extreme ruggedization and high resolution to meet the image quality and all-weather usability demanded by the mobile appraiser, interested in incorporating GPS photography.

The camera's integrated precision GPS module provides for an all-in-one, easy- to-use device for geo-coding images and video at the time of capture. For applications that require even greater precision, the camera is capable of receiving NMEA data streams from external GPS devices via its on-board Bluetooth(R) radio.

Click below for more details . .

Appraisals Not Meeting Last Year's Numbers In Appreciating Market

According to Kansas City real estate appraiser Thomas Linsin, real estate values are appreciating modestly across the area and are up from last year's values. Then why are some homeowners finding they can't take out equity loans?

Read the full Article: Appraisals Not Meeting Last Year's Numbers In Appreciating Market

Runt's Rants - Growing An Appraisal Business Series - Part 1 - What Do You Earn Per Hour?

Recently an appraiser friend contacted me and explained that he and his wife were considering growing their appraisal business into something larger with more revenue stability.  They sought a plan to move toward managing the growing business, and ultimately to create a business structure that would allow them free time to enjoy life beyond the business, while still ensuring that quality and service remained the key principles of the enterprise. 

They asked me to share some thoughts that might help them toward their objective as they knew that we had embarked on a similar path several years ago.  That lead to a series of email exchanges attempting to answer several direct questions that they posed.

Correspondence with others has convinced me that many are seeking to accomplish the same general objectives as my friends.  They felt the discussion was helpful to their planning process, so we've decided that the points shared with them might be useful if presented here.  We'll try to do that in a series of posts so that the material doesn't get lost in overwhelming detail.  This is the first installment.

We adopted a business model years ago of working to make the appraiser more efficient by using technology and support staff to do everything possible for the appraiser thereby freeing them concentrate on seeing properties, completing analysis, and writing reports: the very things that they are trained to do.  I believe that philosophy accounts for much of the productivity we have been able to achieve and is the principal reason we are able to compete in this tough, very tough, market.

We determined early on that we don't set fees in the appraisal business. The market does. We may start with a fee we would like and feel is fair, but if we don't get the business we haven't set fees; we've just taken ourselves out of the market. In a competitive market place when trying to grow a business, we simply can't do that.

Instead, we ask what fee is acceptable and then we look at the product requested and determine if we can produce it for a profit. If our current methods and procedures can't produce it for a profit, we try to figure out a way to make the process more efficient and able to produce at a profit. If we think we can become more efficient we will accept that assignment and use it to make the changes to our operation, confirm the changes work, and then be ready to accept the next assignment of that type.

We can do that because we have reached a certain volume level that supports transferring a lot of the clerical work in the appraisal business to administrative folks. We also have a good handle on our costs and we understand the important distinction between fixed costs and variable cost.

A sole practitioner (SP), which I have been also, or a husband and wife operation such as my friends may not have administrative staff, but they can and should look at the business in the same way.  They can divide their time spent on an assignment into administrative tasks and appraisal tasks, estimate their fixed and variable costs, and estimate the time and cost each type of appraisal product represents in their operation. 

Armed with that information, they can make instant decisions about accepting new business and at what fee.  In short, they can compete and be reasonably assured that the fee accepted is one that will produce a profit for their company. 

It's not hard to do, and it is the key to reacting quickly and correctly when one is trying to grow a business in an environment where they don't, where they can't set fees.

Click below to continue reading . . .

Ask Henry Harrison! - Get Your Appraisal Questions Answered

Henry Harrison's blog is published by nationally recognized appraisal author and educator Henry S. Harrison based on the "Ask Henry" section of Real Estate Valuation Magazine Online.

"Over the past 30+ years, we've received and answered literally hundreds of 'Ask Henry' letters on a wide range of topics.  The answers we've written are often interesting and informative, and useful for new and established appraisers alike.  We hope you will enjoy this posting board and recommend it to your appraisal friends."   

Click here to visit Mr. Harrison's Q&A Blog.

Mortgage Fraud Scams: Chunking, Skimming, Flipping, Phantom - Are you an unwitting participant?

According to the Fraud Problem blog: "Agents, appraisers, mortgage brokers and loan originators are going to prison in record numbers so the term "We've always done it this way" is just fine if jail is your desired destination, otherwise it's time to learn and stop the fraud problem."

The Fraud Problem blog lists common mortgage fraud scams, who you should complain to and provides education that may prevent you or your town from becoming victims of bad mortgage practices.

The most common responses/defenses they hear are:

• "How can that be, everybody in my office does it?"
• "We've always done it this way"
• "Well as long as we disclose, it can't be wrong"
• "It's just a bank application"
• "Nobody's harmed. The borrower got the cash, so who was hurt?"
• "That rule doesn't apply to us, it's an appraisal problem"
• "I asked the banker and he said they do it all the time, so it must be OK...."

Click below to read a couple of highlights from the Information & Updates section . . .

Appraisal Institute, ASA, ASFMRA and NAIFIA Join Forces on Government Relations

RISMEDIA, Jan. 23, 2007- Legislators and government officials will hear a unified voice from the real estate appraisal profession during 2007, thanks to an agreement signed by the four largest appraisal organizations in the United States.

The Appraisal Institute, the American Society of Appraisers (ASA), the American Society of Farm Managers and Rural Appraisers (ASFMRA), and the National Association of Independent Fee Appraisers (NAIFA) have signed an agreement that will enable the organizations to work cooperatively in the area of government relations.

Under the agreement, the Washington, D.C. Office of the Appraisal Institute will be responsible for monitoring proposed real estate legislation and will keep members of all four organizations informed of relevant federal and state regulatory real estate issues.

Click here for the complete article.

MIT Center for Real Estate announces new commercial property index

Real Capital Analytics (RCA) and the MIT Center for Real Estate are launching a set of pioneering indexes for tracking commercial investment property prices in the United States, the center director and RCA president said in a joint announcement today. Source: MIT News Office

The Center for Real Estate (MIT/CRE) developed the new suite of 29 indexes to support derivatives trading such as index return swaps. The indexes are based on comprehensive data on commercial property transactions prices from the New York-based RCA.

In making the announcement, MIT/CRE director David Geltner said, "The development of an active futures market, which does not currently exist for commercial property, would greatly increase the efficiency of the real estate industry. It will address such long-standing problems with real estate investment as high transactions costs, lack of liquidity, inability to sell 'short' and difficulty comparing investment returns with securities such as stocks and bonds."

The new indexes will be published on the web sites of MIT/CRE and RCA and will be available free of charge as an information service to the academic and industry research communities.