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Industry News

HVCC Update- Seeing Light
Regulators, lenders and the public are finally getting the message that all is not well with HVCC. Consider FHA’s recent mandate that appraiser fees be customary and reasonable and that there be a clear separation of appraiser and AMC fees (Page **). These requirements speak directly to appraisers’ complaints. Legislation to regulate AMCs, with provisions to fix many problems articulated by appraisers, has passed or is being considered in many states (see below). On the federal level, H.R. 1728 (Mortgage Reform and Anti-Predatory Lending Act), which passed the House of Representatives in May 2009, requires the registration of AMCs as well as a clear separation of appraiser and AMC fees. H.R. 3044, still in Committee, proposes an 18-month moratorium on HVCC. In October 2009, an amendment was added to House Bill 3126, the Consumer Financial Protection Act of 2009, which would give the HVCC no effect or force, would allow mortgage brokers to order appraisals again and would make a new Negotiated Rulemaking Committee responsible for creating one set of appraisal independence requirements. All this is progress. Just last May, the Federal Housing Financing Agency (FHFA), the agency that oversees HVCC, issued the following statement in response to appraiser complaints: “The Code (HVCC) does not alter the fundamental business models that exist in the appraisal industry, nor does it alter the fees or charges of any participants in the valuation system.”  (, Sidebar Info: FHFA Letter Regarding HVCC.)  Apparently, FHA, numerous states and the U.S. Congress disagree and seem to understand that HVCC has changed the playing field, and that while well intentioned, it could have been better conceived. You can find and contact your Representatives in Congress here: Senators here:

Petition to Reconsider HVCC: (, Sidebar: HVCC Petitions). 

Home Valuation Code of Conduct Interim Complaint Form is finally released. You can find it at, Sidebar: HVCC Interim Complaint Form.

WRE/OREP HVCC Appraiser Talkback Blog and Survey: Grassroots appraiser feedback, including results from the HVCC Appraiser Talkback Survey, is making a difference. The Survey was quoted in a highly influential New York Times story on HVCC over the summer, saying: “Moreover, if the goal of the code is to lessen pressure on appraisers, it is not clear that is happening…half the respondents (to the Talkback Survey) said they sometimes felt that management companies were ordering them to come up with a value that would make the deal work.”  Read the Times story at, Sidebar Info, In Appraisal Shift, Lenders Gain Power and Critics. Get connected with other appraisers nationwide and make your voice heard at the OREP/Working RE HVCC Appraiser Talkack Survey and Blog!

Appraiser (AMC) Rater: Get the low-down on AMCs from the appraisers who work with them at the Appraiser Rater section of the OREP/Working RE Appraiser Talkback Blog. Visit and click Appraiser Talkback Blog.

AMC Regulation has been enacted in six states as of this writing: Arkansas, California, Louisiana, Nevada, New Mexico and Utah and is being considered in 15 to 20 additional states, according to the Appraisal Institute.

Geographical Competency- Useful Boilerplate/b>
Geographical Competency is in the spotlight with appraiser management companies (AMCs) blamed for using out of area appraisers (i.e. the lowest bidder). Others say geographical competency was an issue long before HVCC.  Either way, appraisal reviewers are paying closer attention. According to appraiser John Huston, REA, geographical competency is not about distance but about understanding the market. “Your office can be 50 miles from your subject and you can still be geographically competent,” he says. Huston says underwriters these days are more likely to question a report if they feel it is not located on the appraiser’s “home turf.” He uses the following explanation to address the issue in advance: “The subject Property is located 24.17 miles from the offices of Las Palmas Appraisal, Inc.  Each assignment executed by this appraiser requires an intimate knowledge of the area in which the Subject Property is located, known in our profession as ‘geographical competency.’ This appraiser has spent sufficient time in this market and understands its nuances, including the supply and demand factors relevant to the Subject Property. Such understanding is not solely based upon database information such as demographics, costs, sales, and rentals. Geographical competency requires this appraiser’s understanding of local market conditions based upon years of on site knowledge, providing the link between a sale and legitimate comparable sales or a rental and comparable rentals.”  Huston says, “I’ve found that since I’ve been incorporating this note in each report, my conversations with reviewers have become nonexistent in regard to this issue. The mileage comes directly from the map info in my a la mode software. I prefer to go to the tenth of a mile as it seems to enhance the credibility of my report.” Huston, based in St. Petersburg, FL, appraises in the Tampa Bay market. He can be reached at:

2010-2011 USPAP Released
The 2010-2011 edition of the Uniform Standards of Professional Appraisal Practice (USPAP) was released by The Appraisal Foundation (TAF) on October 1, 2009. The 2010-2011 edition will be valid for two years, January 1, 2010 through December 31, 2011.  As with the prior edition, the new edition will include guidance from the ASB in the form of the USPAP Advisory Opinions and the USPAP Frequently Asked Questions (FAQs). According to a TAF press release most of the revisions involve improving the clarity, understandability and enforceability of the ETHICS RULE, the COMPETENCY RULE and STANDARD 3: Appraisal Review, Development and Reporting. Significant changes in the document include:

  • A requirement added to the Conduct section of the ETHICS RULE, stating that, prior to accepting an assignment (and if discovered at any time during the assignment), an appraiser must disclose to the client and in the report certification any services regarding the subject property performed by the appraiser within the prior three years, as an appraiser or in any other capacity.
  • Clarification in the JURISDICTIONAL EXCEPTION RULE that a jurisdictional exception may only exist if it precludes an appraiser from complying with USPAP.  There are also related revisions that apply to the citation and disclosure of the source of the jurisdictional exception.

“Although it may not appear obvious at first glance, the ASB made several revisions that we believe improve the clarity, understandability and enforceability of USPAP,” stated Sandra Guilfoil, 2009 Chair of the Appraisal Standards Board in the release. “The change to the Conduct section of the ETHICS RULE reflects the ASB’s mission to enhance public trust in the appraisal profession.  In this climate of greater scrutiny and the need for improved transparency in financial transactions, this new requirement allows the client to determine whether there may be any real or perceived conflicts of interest prior to engaging the appraiser in the assignment.”

You can find the entire press release at, Sidebar Info: TAF 2010-2011 USPAP Press Release.

Marshall & Swift Repair Estimation Program Helps Lenders Control REO Challenges
Marshall & Swift has created the Repair Cost Express (RCX), a Web-based repair cost program specifically for use by Realtors, appraisers, lenders, and others in the mortgage servicing industry. It responds to the need to estimate repairs on the growing number of residential properties now in, or entering, the real estate foreclosure market. RCX gives the lending industry reliable and trusted industry-standard tools for understanding and validating repair costs at a time when troubled assets in disrepair are driving billions of dollars of expenses. The program is also useful for establishing repair costs to increase the speed of marketing time for all real estate transactions. To learn more about RCX, please visit, Sidebar Info: Marshall & Swift RCX Press Release.

FHA Automatic Roster Renewal Instructions
FHA appraisals are not effected by HVCC and business is good. The 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 (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,, Premium Content (unlocked).

Upgrade to Certified Licensing Level/FHA Coursework
If you want to upgrade your license to the required Certified level, now’s the time. OREP is offering discounted approved continuing education through the OREP Education Network/McKissock. You do not have to be an OREP member to enjoy this current opportunity. Bundled coursework of up to 49 hours is available for licensing upgrades and continuing education through a link at, click OREP Benefits then OREP Education Network.

Directory of Appraisal Management Companies
This directory will save you time searching for Appraisal Management Company (AMC) work. This PDF report is an updated listing of 140 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 or via a secure website (click AMC Guide). OREP insureds 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 address.

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% of their negotiated fees. Through an affinity relationship, OREP insureds qualify for a $115 discount at sign up. Working RE readers also qualify for a $75 discount under the same agreement. To learn more and to obtain the group discount code(s), please visit or and click Bank Appraisers Needed. You will find links for more product information as well. (No Longer Available)

Working RE Email Edition: You Don’t Know what you Don’t Know
One thing you may not know is that the online version of Working RE publishes many stories you can’t find in print. If you don’t receive WRE’s Online Edition, you’re missing lots of valuable information. Designed to keep you informed in between print issues, WRE Online reaches 40,000-45,000 appraisers twice a month and 16,000-18,000 home inspectors once a month via email. Stay competitive and informed with this free offering. You can opt in to either edition at or email 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.

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