Appraisal Scoop

Appraisers Continue to Speak out against AMC Loopholes in the HVCC

From the Appraisal Institute's eNewsletter:

"In the continuing saga of appraisal regulation, a new development has appraisers worried: the rise of appraisal management companies."

"In an article appearing in the Feb. 5 edition of Business Week, several appraisers, including the Appraisal Institute’s Director of Government and External Relations, Bill Garber, weighs in on how the soon-to-be-implemented Home Valuation Code of Conduct may actually prove counter-productive to the goals of appraiser independence and improved appraisal quality."

As Garber warns in the article about improper influence on appraisers, “[The new industry-wide rules] have transferred the problem to these appraisal management companies, which are not regulated by anybody."

James B. Lochard, Director of the FHFA says that federal housing officials will hold AMCs accountable:

The Business Week article also discusses:

• LSI Fax to appraiser "Please correct the following issues (value) and resend the appraisal in two hours"
• Former loan processors forming AMCs to maintain ties with Mortgage Brokers
• Former appraiser (licensed surrendered) forms AMC

Click here for the full article

The Appraisal Foundation Offers Online USPAP Course

The Appraisal Foundation Offers Online Property Appraisal Course Online Platform Tailors Education to the Individual Skills of Appraisal Students Nationwide

WASHINGTON, Jan. 21 /PRNewswire/ -- The Appraisal Foundation and CompuTaught, a leading developer of computer-based real estate education and part of Cengage Learning, have partnered to develop online versions of The Appraisal Foundation's 15-Hour National USPAP Course, 7-Hour National USPAP Update Course and Instructor Recertification Course for individuals who are AQB Certified USPAP Instructors.

All real property appraisers are required to take the 15-Hour National USPAP Course, or its equivalent, as part of their education to earn a state credential. All state-licensed or certified real property appraisers must take the 7-Hour National USPAP Update Course, or its equivalent, every two years.

The online versions of these courses will be offered through the CompuTaught learning system and will begin with the 2010 edition of the Uniform Standards of Professional Appraisal Practice (USPAP). Both the 7-hour and 15-hour courses will be available in the Fall of 2009. They will be made available and marketed to all education providers through CompuTaught.

As is the case with the classroom version of the National USPAP Courses, The Appraisal Foundation will not be offering the online course to students directly. The Instructor Recertification Course will also be offered in the Fall of 2009 through The Appraisal Foundation to more than 600 AQB Certified USPAP Instructors.

The CompuTaught learning system is a dynamic online learning system that enables students to maximize their educational potential. The system will automatically tailor property appraiser instruction to fit the needs of each individual student to ensure mastery of and fluency in the subject matter.

"The Appraisal Foundation's goal was to effectively translate our in-class expertise into a successful distance-learning course format," said David Bunton, President of The Appraisal Foundation. "After reviewing CompuTaught's online platform, we knew that it offered us the best online vehicle to help real property appraisers across the country master and become fluent in this essential appraiser content."

"We applaud the Foundation for raising the bar and expanding its program access to students from across the country," said Bud Hunsucker, Vice President CompuTaught Business Development & School Programs. "We're happy to support their efforts and make their courses conveniently available to more existing and aspiring property appraisers who may not be able to attend their courses in person."

For more information, visit: http://www.computaught.com .

First Impressions of the 1004MC: Part 5 - "Closing Thoughts"

Having completed several "1004MC Workshops", read numerous forum posts and talked to many appraisers, one thing is clear, confusion reigns! Most do not see the merits of the 1004MC. They see the problems, including opposing opinions, various interpretations, and few immediate solutions given the limitations of their MLS data services.

At question is not the concept, but rather the execution. While many believe this to be a step in the right direction of mandating a standard for measuring trends, the format is a "time-consuming problem" versus a "problem solving solution". The unintended consequences over-shadow any potential benefit.

The 1004MC is not about medians, totals, percentages, and ratios, no more than it is about the neighborhood. The form is about "the collateral" and "the trends related to the collateral". While market conditions and neighborhood trends are important, the trends of properties similar to the subject are critical.

Lenders are not making a loan to the market area or the neighborhood; they are making a loan on the subject property, the collateral. As goes the trend for properties similar to the subject, as goes the value of the collateral securing their loan.

Highs and lows

The 1004MC gets an "A" for effort and the focus on the subject verses the neighborhood, "C" for layout and "F" for format and function. I understand the need to "standardize trend analysis", however, the format is such that the numbers may mislead more than "make transparent".

It does get a high mark for two factors, first for attempting to replace opinion with statistical fact, limiting subjectivity and secondly, it requires the analysis to focus on "competitive to the subject from the buyer's perspective", removing the influence of lesser or better properties in the neighborhood that do not compete with the subject.

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