Low-Cost E&O Insurance from OREP Working RE Home Library/Previous Editions
Industry News
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,
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:
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,
Current Issue.
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 Purchase AMC Directory). 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 and click
Bank Appraisers Needed. You will find
links for more product information as well.
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 and click
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 at OREP.org, “Related Stories from Working RE Magazine,”
or 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
subscription@workingre.com 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;
Proposed
Interagency Appraisal and Evaluation
Guidelines.