Heck No BPOs!
Heavy on the minds of appraisers this year is losing work to broker price opinions (BPOs), despite that BPOs for anything other than a real estate listing is illegal in at least 24 states, according to a recent article in the Appraisal Institute’s (AI) weekly newsletter Appraiser News Online. According to the story, “This means that a real estate broker or salesperson performing a BPO as part of a loan modification program could be violating the law and putting their real estate license in jeopardy.” Scott Dibiasio, Appraisal Institute Manager of State and Industry Affairs is quoted in the story as saying that federally insured lenders must obtain appraisals prepared by state licensed or certified appraisers only some of the time. In other circumstances, they can obtain market value opinions (evaluations) that are not required to be prepared by appraisers. In still other cases they are not required by law to obtain either an appraisal or an evaluation. According to Dibiasio, this latter scenario has become more common recently due to the increase in the number of troubled mortgages, and the number of loan modifications and workouts being performed by lenders and mortgage servicers. In most instances, the lender or servicer will attempt to determine the current value of the property as part of loan modification process. Instead of ordering appraisals, many lenders are ordering BPOs, comparative market analyses or are using automated valuation models, largely because of cost constraints. For instance, the Federal Deposit Insurance Corporation’s proposed Loan Modification Program would allow lenders to use appraisals, BPOs, and AVMs to establish value. BPOs, lenders, servicers and now government agencies argue that BPOs are cheaper and faster alternatives to appraisals. In comments to federal regulators, AI has repeatedly sought to dispel this notion according to the story: while BPOs may be cheaper than appraisals, many BPO providers routinely advertise turn-around times similar to appraisals. Bill Garber, Appraisal Institute Director of Government Affairs and External Relations, said that the AI is continuing to remind loan servicers and government agencies of the laws against non-licensed appraisal performance by brokers and agents and that these efforts will continue into 2009.
Appraisal Foundation & Copyright Confidentiality
The Appraisal Foundation (TAF), in a recent Q&A (November 2008), weighed in on the implications of the Confidentiality Requirement visa vie copyrighting appraisal reports. The Question: Does registration of a copyright on an appraisal report with the U.S. Copyright Office violate the confidentiality provisions of USPAP? Response: The ASB is taking no position as to whether an appraisal report is copyrightable, nor does this response constitute a legal opinion of the ASB. If, however, an appraisal were copyrightable, and if the process of registration with the U.S. Copyright Office includes public disclosure of the appraisal report, such registration would disclose assignment results and would therefore result in a breach of the Confidentiality section of the ETHICS RULE of USPAP, unless the appraiser/registrant had the prior approval of the client for such registration. You can find the complete Q&A at WorkingRE.com, Sidebar Info, TAF Q&A, Copyrighting an Appraisal Report, including a question pertaining to the allocation of non-real property as a portion of the defined value opinion.
HVCC 2.0 – Appraiser Talkback Blog & Survey
Share your HVCC experiences and read how others are faring. The new version of HVCC is released with an implementation date of May 1, 2009. You can read analysis of the Code in HVCC/AMCs – Change Equals Opportunity and find a revised version of the HVCC at (WorkingRE.com, Sidebar Info: Home Valuation Code of Conduct, December 2008). The Code will turn the world upside down for many appraisers, who will say goodbye to long-time mortgage broker clients and look to appraisal management companies (AMCs) for business. Lots of opinions are circulating but only appraisers will know the net effect on the profession and on business. Visit the new HVCC Appraiser Talkback blog at OREP.org and WorkingRE.com and share your firsthand experiences. Also find survey questions that will be posted all year.
FHA: Automatic Roster Renewal Instructions
FHA and the Appraisal Subcommittee are working together to create a seamless renewal process for appraisers on the FHA Roster, according to Donna Tomposki, Director of the Home Valuation Policy Division within FHA’s Office of Single Family Program Development. If an appraiser’s license/cert. number is an exact match to the National Registry at the ASC.gov (Appraisal Subcommittee), the renewal will be reflected automatically on the FHA Appraiser Roster within 24 to 48 hours of when it is updated on the National Registry. Many appraisers have expressed confusion on how to ensure their information conforms. For step by step guidance directly from FHA on how to ensure that your Roster information matches the ASC, visit FHA Seamless Renewal Process, WorkingRE.com.
NEW: Directory of Appraisal Management Companies
This new Directory will save you time when searching for AMC work. This PDF report is an updated listing of 140 Appraisal Management Companies (AMCs). The directory is compiled and updated by a fellow appraiser and marketed through OREP/Working RE. It is designed to save you the search time of finding the companies that use appraisers nationwide. There is no guarantee of work and you will have to apply to each AMC, just like with any lender. The price is $49 and can be purchased at WorkingRE.com or OREP.org via a secure website (click AMC Resource Guide). OREP members will find a link to purchase at a group discounted rate ($40). A PDF list will be emailed to you by the author shortly after purchase. Please remember to include a current email.
Bank Appraisers Needed
Valuation Opportunities for Bank REO Properties
Amid the current housing market crisis, the nation’s banks and financial institutions need qualified real estate valuation experts for third-party services on their foreclosed and troubled real estate properties, both residential and commercial. This is one intermediary source that matches work with appraisers and other vendors. There is a one-time registration fee. Orders are awarded on a bidding system, so there is no guarantee of work. Appraisers/vendors keep 100 percent of their negotiated fees. Through an affinity relationship, those who purchase their E&O insurance from OREP qualify for a significant group discount at sign up. Working RE readers also qualify for a (smaller) discount under the same agreement. To learn more and to obtain the group discount code(s), please visit OREP.org or WorkingRE.com. (No Longer Available)
Solution: Protecting Appraisals and Identity
A new technology solution allows appraisers to accurately associate their identity and credentials to an unalterable “true copy” appraisal report using fingerprint technology. Appraisers now are able to track all those who view their “true copy” appraisal reports. The system provides guaranteed assurance of the authentication, security and accountability of appraisal reports without impeding existing technology. Clients can limit their liability and have certainty that the appraisals they receive are secure and authenticated and were created by an accurately-identified and properly credentialed appraiser. The integrity of an appraiser’s identity and credentials serve as the basis for their livelihood. This new technology offers that protection. For more see page **. Through an affinity relationship established through OREP, those who purchase their E&O insurance from OREP qualify for a group discount at sign up. Working RE readers also qualify for a discount. To learn more and to obtain the group discount code(s), please visit OREP.org or WorkingRE.com, Appraisals and Identity Security Solution. You will find links for more product information as well.
Why Canceling E&O Insurance to Save Money Can Cost You
This may be the most important information for your business that you learn today: As business slows, some of you are thinking about cutting expenses by either letting your errors and omissions insurance policy lapse (not renewing) or by canceling mid-term. If you do this, you risk losing coverage for all the appraisals/inspections you completed in previous years. Most every E&O insurance policy is Claims Made and works the same way: if you let your policy lapse, you may be left unprotected should a claim arise from a past report. Switching companies is no problem as most provide prior acts to new clients for free, as long as you make the switch on or before your policy expires. As most (appraiser) claims take several years to surface, letting your insurance lapse or not renewing could be very costly indeed. Imagine a problem surfacing from an appraisal or inspection completed several years ago and now finding yourself with no coverage, even though you were covered at the time you did the appraisal/report! If you are leaving the profession, “tail coverage” is available (call your agent). If you are continuing to work, it pays to keep your E&O in place. To understand E&O insurance more fully, including a list of “Dos and Don’ts,” see Cutting Expenses as Business Slows: Why Canceling Your E&O Can Really Cost You. Contact OREP; (888) 347-5273, info@OREP.org. If your premium has shot up, don’t give up until you call OREP – now in its eight year.
Go Green with Working RE Magazine!
Working RE allows you the opportunity to reduce your carbon footprint and not miss a thing! You now have the option of opting out of the print version of WRE in favor of reading it online, saving trees, energy and the other natural resources required to manufacture and deliver the magazine. Next time you’re online, peruse the current issue (the one in your hands) at WorkingRE.com. Just click the cover image and register once with an email and password. You will be notified via email when each new edition publishes. If you like the new format, simply include your name and mailing address in the login form to be removed from the print mailing. Each current edition of WRE will be posted free online from now on in PDF format. Tell your friends and colleagues!
WorkingRE.com Information Destination!
WorkingRE.com is an information destination for tens of thousands of appraisers and inspectors every month who peruse the special features, sidebars and 200-plus story library. On average in 2008, 62,000 unique visitors perused the online magazine, sidebars, premium content and story library every month, as measured by Urchin analytics (Google product). Come see what you’re missing! WRE is published by OREP, E&O insurance experts for real estate professionals. Complete access to WorkingRE.com premium content and story library requires a paid subscription and/or is a free benefit with the purchase of E&O through OREP.
Working RE’s (free) Email Edition
If you don’t receive WRE’s Online Edition, you’re only getting half the story. WRE Online reaches 40,000-45,000 appraisers twice a month and 16,000-18,000 home inspectors once a month via email. You can opt in to either edition at WorkingRE.com or email firstname.lastname@example.org with “appraiser” or “inspector” email in the subject. It’s free and your information is never sold or traded. It’s what the other half knows.
Feds: Proposed Interagency Appraisal and Evaluation Guidelines
The federal bank, thrift and credit union regulatory agencies last year jointly issued for comment the Proposed Interagency Appraisal and Evaluation Guidelines that “emphasize the importance of the independence of an institution’s appraisal and evaluation program from influence by the loan production process or borrower.” There has been a mixed reaction from the appraisal community. Also discussed are Minimum Appraisal Standards, Appraisal Development and Reporting and Evaluation Alternatives, such as AVMs (automated valuation models). According to the document, “An institution should demonstrate that an evaluation alternative, such as an automated valuation model or tax assessment valuation, provides a reliable estimate of the collateral’s market value as of a stated effective date prior to the decision to enter into a transaction. Further, the institution should establish criteria for determining the extent to which an inspection of the collateral is necessary to determine that the property is in acceptable condition for its current or projected use. An institution should not select a method or tool solely on the basis that it provides the highest value.” You can find the document at WorkingRE.com, Sidebar Info;