Industry News
News Online - Read the Stories that didn't fit in print
(Access to certain stories requires a paid
subscription to Working RE Magazine or OREP membership. Subscribe
here.)
*
Relocation Appraising - Once, long ago, in an
age before the interest rate hikes of the early 1980s, a scholarly group of
appraisers who specialized in relocation dealt with all relocation appraising
matters. Now, a market similar to those days has reappeared, but appraisers
specializing in relocation seem to be sparse. Taking a look back to prepare for
the days ahead, Headrick lays out the tough questions that need to be asked when
finding the best “right” appraiser for a relocation.
* Taking a Break - This summertime article offers advice for enhancing your business and family life by taking a break - great advice all year long!
* State of the Industry - Here is a quick snapshot of the industry as per our visit to a la mode’s recent annual convention in Las Vegas.
*
Copyright Appraiser Takes on AVMs;
- The
appraiser who made national news by filing the first appraisal copyright
infringement lawsuit- and collecting, is challenging the legitimacy of AMVs to
do valuations in his home state of Washington, where qualification standards are
required for those who perform real estate valuations.
*
When the Worst Happens: Responding to Fraud
-
Appraiser Ken Verrett takes you step by step on how to get to the other side
of your worse nightmare.
*
Appraisal
Industry Think Tank: Half Full?
- Learn what’s on the minds of chief appraisers
at Appraisal Management Companies.
Inspectors:
*
Inspecting is Easy: Writing is Hard!
- Find tips on how to write a better report
*
Risk Management: Loss Prevention Checklist
- Learn ways to avoid receiving complaints from your clients.
States Fighting Back
Ohio Attorney General Marc Dann has filed a lawsuit against 10 mortgage firms under the state’s new predatory lending law. The firms are being accused of influencing appraisers to “puff up” their property appraisals above market value. This has resulted in buyers owing more than the property’s worth and making it difficult or impossible to refinance, frequently resulting in foreclosures. Dann says he won’t allow this unethical exertion of power over appraisers who face the decision to do the right thing over losing business to continue. In each case, Dann is seeking a court judgment that the firms violated the state's Consumer Sales Practices Act and a permanent injunction barring them from the same activity in the future. He is also seeking a $25,000 civil penalty against each firm and seeking a court order requiring the firms to reimburse consumers who were damaged by the activities. For more details, read Dann's press release: http://www.ag.state.oh.us/press/07/06/pr070607.asp.
Rocky Mountain High
June 2007, Colorado Gov. Bill Ritter signed a package of mortgage- related bills aimed at protecting consumers and stemming the state's ongoing wave of home foreclosures. The bills will help prevent future foreclosures by reining in questionable mortgage brokers who have contributed to the state’s foreclosure epidemic. Under these new bills, brokers must act on the behalf of the borrower in good faith and fair dealing, are prohibited from trying to influence the judgment of a real estate appraiser, and must now be licensed by the Division of Real Estate while getting adequate training, testing, and continued professional education. Visit the Governor's web site to learn more: http://www.colorado.gov/governor/press/june07/48-bills-signed.html
Truth in Lending
There is a bill moving through Congress that would create a national system
for registering the residential mortgage loan
industry. As a proposed amendment to the Truth in Lending Act,
“The Fair Mortgage
Practices Act of 2007,” sponsored by Rep. Spencer Bachus (R. Ala), will help to
enhance consumer protections and support anti-fraud measures. The bill will
require each lender to complete a one-page form during the mortgage loan process
which will disclose the amount of the loan, appraised value of the property and
the percentage of the value that is being borrowed. It will clearly spell out
the number of years on the loan, the interest rate, the borrower’s monthly
income and what would happen if rates increased. To read the complete text and
the latest status of the Fair Mortgage Practices Act of 2007, visit
www.thomas.gov
and type in HR 3012 at the Search Bill Text field.
Security, Fraud and Liability
Security is on the minds of appraisers as stories of identity theft grow and circulate. It’s not just signature fraud anymore. Several appraisers at the a la mode convention in June witnessed to how their work was stolen, altered or completely fabricated without their knowledge and to what it took to set the record straight. Many learn there is a problem only after they realize they are blacklisted by a bank.
One speaker, appraiser Kirk Pruitt (www.appraisalmatrix.net), shared how any PDF file can be cracked and altered with minimal effort and that PDF “file security” is a myth. Any file can be reverse engineered, he says. The solution is third party verification of appraisals through some kind of a “registration” system. Most of the leading software vendors are working on some form of third-party verification for their clients. You should be hearing more about this shortly.
Pruitt offers five things you can do today to protect your identity: 1) Third party appraisal verification, which should be available soon. 2) Appraise your clients. Know your clients and asses their potential to commit fraud. 3) Digital signatures. Be extremely protective of your digital signature and never share your password. 4) Stop attaching your credentials (E&O declarations page and license) to websites and/or your appraisals. “You’re basically expediting a fraud package,” Pruitt says. Always keep track of who you send work samples to as well in case they are not legitimate. 5) Keeping reliable records is imperative. Store the original PDFs on a CD-Rom in case you have to some day prove your case. Pruitt suggests this related reading regarding PDF security:
http://appraisalnewsonline.typepad.com/appraisal_news_for_real_e/2007/03/document_securi.html.
Finding Foreclosure Work
We
received many inquires about where to find foreclosure work, in response
to a
recent story we ran in our Online Edition in which long-time
Texas appraiser Clark Gimple, IFAS shares (with a grin) that the best thing
about all the bad lending over the last few years is the flood of foreclosure
work he’s enjoying today. He says the appraisals are full fee and usually free
of pressure; lenders want to know the value.
Gimple offers the following three companies as sources
for foreclosure work nationally. Ocwen Realty Advisors- Ruba Latif (latifru@ocwen.com);
Reobank.com, Sarah Selfman (sarah5@appraisalbank.com).
Gimple says, “I've done work for
all of these companies in the past. Of interest is the fact that all three have
recently (June 2007) contacted me to update my data with them to prepare for an
increase in appraisal orders due to a foreclosure backlog.”
Gimple, appraising 30 years adds, “Typically an appraiser deals with four
parties when performing a real estate appraisal; the lender, real estate broker,
buyer and seller. Often, one out of the four is less than satisfied with the
appraisal. In foreclosure work you deal with only one party (lender or
management company) and all they want is a supportable market value. They do not
question an appraiser’s professional work product.”
From Past Issues
* Sales Concessions: Read one(s) “For the books!”
*
Collateral Replacement Cost Risk: What Every Lender and Investor Needs to Know
(PDF) - by Henry
C. Entreken, Jr., MAI, SRA and Harry C. Bright III.
*
Cost
Approach - a Different View:
Perpetuating the Myths - by George K.
Cox, MAI, SRPA, SRA.
*
Appraising in a Changing Market: Multi-Tiered
Market Data Approach
- by Steven R.
Smith, MAI, SRA
*
Everything You Don’t Know about Measuring
Part Two
- by
Pat Butler (back by popular demand): Characteristics of a house that can cause
measuring problems; ANSI standards and more.
*
Using ANSI Standards: Reducing Liability
- by Carlton H. Segars, Jr., GRI, DREI.
* NCRC Files FTC Complaint against Zillow.com