26th July 2017

AQB Update on Proposed Changes to the Real Property Appraiser Qualification Criteria

For the last two years, the Appraiser Qualifications Board (AQB) has been examining potential changes to the Real Property Appraiser Qualification Criteria (Criteria).

To solicit feedback from its stakeholders, the AQB issued a Concept Paper, Discussion Draft, three Exposure Drafts, held a public hearing, an online briefing, and several public meetings over the last two years. The number of responses for each publication has far exceeded comments received on past drafts issued by the AQB. The AQB had hoped that consensus would start to build among the proposed requirements, which include: changes to the college degree requirement, revisions to Guide Note 4 (GN-4) and the development of modules in lieu of field experience, and revisions to experience requirements.

The only consensus at this time seems to be a lack of consensus. Comments from the Third Exposure Draft, which can be downloaded here, ranged widely:

  • 43% of respondents did not address Section 1 (Licensed Residential and Certified Residential College-Level Education Requirements) of the draft. Of those that did respond, 58% were opposed to the proposals.
  • 53% of respondents did not address Section 2 (Practical Applications of Real Estate Appraisal). Of those who responded, 55% were opposed to the proposals.
  • 65% of respondents did not address Section 3 (Experience Requirements), and of those that did, 58% were opposed to the proposals.

Common feedback the Board has received includes:

  • The current requirements should remain in place
  • There is a shortage of appraisers because of the current AQB requirements
  • There is no shortage of appraisers – it’s a matter of economics
  • Not enough Trainees are entering the profession
  • Trainees are having difficulty finding a supervisor
  • Licensed Residential appraisers are unable to find work and are unable to move up to Certified Residential because of the requirement to have a bachelor’s degree

The AQB’s primary responsibility when setting qualifications is to protect the public trust. With this in mind, and based on the feedback received, the AQB has decided on the following course of action:

  • Appoint a Focus Group to solicit input as to whether any Criteria change is needed, and if so, in what areas and to what extent is appropriate
  • Survey state regulators regarding potential reciprocity issues if the Criteria is revised

The Board next meets publicly in Minneapolis, Minnesota on September 8. You can register by clicking here.

About The Appraisal Foundation
The Appraisal Foundation is the nation’s foremost authority on the valuation profession. The organization sets the Congressionally authorized standards and qualifications for real estate appraisers, and provides voluntary guidance on recognized valuation methods and techniques for all valuation professionals. This work advances the profession by ensuring appraisals are independent, consistent, and objective. More information on The Appraisal Foundation is available at www.appraisalfoundation.org.

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25th July 2017

Fraud Alert: Appraiser Identity Theft

The inspector general has issued a Fraud Alert regarding Appraiser Identity Theft

The Office of Inspector General (OIG) at the U.S. Department of Housing and Urban Development (HUD) uncovered a series of cases of appraiser identity theft. The schemes varied but resulted from someone using the State certification number of a Federal Housing Administration (FHA) roster appraiser. The FHA roster appraiser was unaware of the misuse until it came to light, usually by accident.

Most of the schemes happened when an FHA roster appraiser provided his or her personal identification number (PIN) for the desktop appraisal software to a colleague or supervisor. Providing the PIN was often rationalized because:

…continue reading the rest of this post: Fraud Alert: Appraiser Identity Theft

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22nd May 2017

Home Prices Surge to Their Highest Point in 10 Years

IRVINE, Calif. – April 27, 2017 — ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, today released its Q1 2017 U.S. Home Sales Report, which shows that homeowners who sold in the first quarter realized an average price gain of $44,000 since purchase, representing an average 24 percent return on the purchase price — the highest average price gain for home sellers in terms of both dollars and percent returns since Q3 2007.

Meanwhile the report also shows that homeowners who sold in the first quarter had owned an average of 7.97 years, down slightly from a record-high average homeownership tenure of 8.00 years in Q4 2016 but still up from 7.68 years in Q1 2016. Homeownership tenure averaged 4.26 years nationwide between Q1 2000 and Q3 2007, prior to the Great Recession. …continue reading the rest of this post: Home Prices Surge to Their Highest Point in 10 Years

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14th May 2017

Mortgage Fraud Risk Increases Nationwide

Mortgage fraud risk is up across the country, according to the CoreLogic National Mortgage Application Fraud Risk Index (FRI) for Q1 2017. The FRI is a measure of loan-application level fraud risk in the mortgage industry, based on residential mortgage loan applications processed by CoreLogic Loan Safe Fraud Manager.

The index jumped 8 percent in Q1, up to 132 from 113 a year ago and 122 last quarter. CoreLogic notes that although this is the highest level for the Index since Q3 2010, at that time post-crisis controls against mortgage application fraud were tight. The CoreLogic Mortgage Fraud Consortium grew from 50 percent to 60 percent of application s between Q4 2016 and Q1 2017. …continue reading the rest of this post: Mortgage Fraud Risk Increases Nationwide

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10th May 2017

Tennessee Governor Signs Law Protecting Appraisers

Tennessee Governor Signs Law Protecting Appraisers

On April 28, Tennessee Gov. Bill Haslam signed into law HB 376 that will establish a new statute of limitations regarding civil lawsuits and disciplinary actions against real estate appraisers.

As enacted, any action to recover damages against a real estate appraiser must be brought within one year from the discovery of the act of omission giving rise to the action. However, in no event can an action be brought more than five years after the date the appraisal was performed.

Additionally, the Tennessee Real Estate Appraiser Commission cannot consider a complaint for a disciplinary acting that relates to an appraisal that was completed more than three years before the complaint was submitted. The new law will take effect July 1, and will apply to appraisals performed after that date. …continue reading the rest of this post: Tennessee Governor Signs Law Protecting Appraisers

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3rd May 2017

AI Lobbies to Modernize Appraisal Regulatory Process

AI Lobbies to Modernize Appraisal Regulatory Process

More than 100 Appraisal Institute professionals will go to Capitol Hill May 4 to urge congressional support for the modernization of the appraisal regulatory process.

Attendees of AI’s annual Leadership Development and Advisory Council conference, held May 3-5 in Washington, will lobby lawmakers to take legislative action to address appraisal modernization and the regulatory burdens that appraisers face. A hearing on the issue was held in November 2016, but so far no legislation has been introduced.

The Appraisal Institute believes that legislation is vital because the ranks of real estate appraisers have significantly declined in recent years, and AI research projects a further decline in the appraiser population over the next five to 10 years.

Key issues the Appraisal Institute wants to see addressed: …continue reading the rest of this post: AI Lobbies to Modernize Appraisal Regulatory Process

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19th April 2017

HUD Issues Fraud Alert for Appraiser Identity Theft

The U.S. Department of Housing and Urban Development’s Office of Inspector General issued a Fraud Alert on Feb. 22 after uncovering a series of appraiser identity theft cases.

The schemes varied but resulted from someone using a state certification number of a Federal Housing Administration roster appraiser, HUD’s alert said, noting that the FHA roster appraiser was unaware of the misuse until it came to light, usually by accident. HUD said that most of the schemes happened when an FHA roster appraiser provided his or her personal identification number for the desktop appraisal software to a colleague or supervisor.

“We applaud the HUD Office of Inspector General for raising awareness about appraisal related identity theft,” Appraisal Institute President Jim Amorin, MAI, SRA, AI-GRS, said. “Given the range of interests in appraisal results, and the advent of electronic documentation and signatures, identity theft presents a significant risk to lenders and consumers, and it’s an issue that the Appraisal Institute has provided education and guidance to the industry for many years.”

The Fraud Alert said that over the last couple of years, HUD has received more than a dozen reports of identity theft by colleagues or supervisors. Examples were cited in Washington, Illinois and California.

HUD’s two-page Fraud Alert, which includes do’s and don’ts for appraisers, can be found on the HUD website.

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17th January 2017

Hearing entitled “Modernizing Appraisals: A Regulatory Review and the Future of the Industry”

Witness List

Archived Webcast


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6th October 2016

HUD Grants Appraisers a Reprieve

HUD Grants Appraisers a Reprieve

Home appraisers received a reprieve in the form of a clarification of a requirement issued earlier this year in HUD’s recentupdates to FHA’s Single-Family Housing Policy Handbook.

When published earlier this year, the handbook contained a new requirement for appraisers to physically observe and operate appliances in a home while an appraisal was being conducted. Subsequently, realtors and appraisers expressed concerns that this requirement effectively turned appraisers into inspectors and exceeded the previously understood appraiser duties—and that it would ultimately hurt the consumer, resulting in longer and more costly appraisals.

The new guidelines clarify the requirement; appraisers are now only required to make sure that certain appliances that contribute to a property’s market value are physically present, and appraisers are not required to operate those appliances.

“Appraisers have a lot on their plate, and their work is important to ensuring buyers, sellers, lenders and everyone else involved in a transaction has a credible source to turn to when determining the value of a property,” National Association of Realtors President Tom Salomone said. “Requiring appraisers to perform duties that are better left to a home inspector only slows the process while potentially adding unnecessary costs. FHA did appraisers and consumers a big favor by clarifying appraiser duties and specifically listing the appliances to which this new guidance applies. While there are still improvements to be made, FHA’s announcement provides our realtor members with additional certainty as they continue playing a critical role in the home buying and selling process.”

The update to the requirements alleviates other problems as well. In some cases, appraisers were being blamed when homeowners reported after the appraisals that appliances were either broken or malfunctioning.

“The greatest impact of the revision to the HUD Protocol requirements relating to operational verification of appliances and fixtures is the relief for FHA panel appraisers from concerns of testing a malfunctioning appliance or fixture or being blamed for having broken an appliance or fixture as a result of testing during the inspection of the property,” said Greg Stephens, Chief Appraiser/Compliance with Metro-West Appraisal Co. “To ensure compliance with the previous guideline, some lenders were actually requiring the FHA panel appraisers to provide photographs of the actual operation of each fixture and appliance within the property being appraised.”

…continue reading the rest of this post: HUD Grants Appraisers a Reprieve

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23rd June 2016

Sam Heskel: Appraisers Are Badly In Need Of A Raise

PERSON OF THE WEEK: Sam Heskel is CEO of Nadlan Valuation, a Brooklyn, N.Y.-based appraisal management company (AMC). MortgageOrb recently interviewed Heskel to discuss the most pressing issues and challenges facing the appraisal industry today.

Q: There’s been a lot written about an appraiser shortage. Does it really exist, and how serious is it?

Heskel: It’s definitely real. The vast majority of appraisers are nearing retirement age, and there aren’t enough new people coming into the industry to replace them. According to the Appraisal Institute, nearly two-thirds of appraisers are age 51 or older, 24% are between 36 and 50, and only 13% are 35 or younger. In addition, a lot of those who are working are simply getting burned out. Increased regulations are part of the problem.

Then there’s the problem of compensation. Regulations and guidelines enacted since the mortgage meltdown have added many additional requirements for appraisers, yet their fees have not gone up accordingly. So some experienced appraisers are fed up with the situation – they’re getting out or retiring. For the same reasons, it’s not an attractive field to get into for younger people. Becoming an appraiser today is a lot harder than it used to be. There’s more education and licensing required. As more appraisers retire or leave the business, not enough new people are coming in to replace them. Also, nowadays lenders won’t accept work from appraisal apprentices. If you want to become an appraiser, you need to put in two years as an apprentice. It has become more difficult to find a company willing to take on and train an apprentice for 24 months, especially when the appraisal reports cannot be submitted to a lender.

Q: What places are impacted most by the shortage?

Heskel: Rural areas seem to be affected more than the big cities. We’re already seeing a shortage in some areas. There are just not enough appraisers to go around, and they have a big area to cover. This will have a real impact on the mortgage and home buying industries. Closings will be delayed, maybe by several weeks, depending on the area. This problem is exacerbated during the spring and summer months because housing sales go up, so appraisers are busier.

Q: Why are appraisal fees increasing?

Heskel: Part of the reason is the appraiser shortage. Already, we’re seeing appraisers in some rural areas charging $800 for an appraisal, which is about double what lenders are usually willing to pay.

Secondly, appraisers are badly in need of a raise. It’s long overdue – and fully justified. Many haven’t gotten a raise in about 15 years, even though their workload, responsibilities and liabilities have grown. There’s a lot more regulation, too, and its resultant liability. The Dodd-Frank law and the Consumer Financial Protection Bureau are certainly beneficial, but ensuring compliance with them adds to appraisers’ costs because it takes longer to complete a compliant, quality report.

Let’s not forget that another party has been added to the process – namely AMCs – to manage the entire appraisal process. Appraisers do the actual, on-site property inspection and valuation, while AMCs, such as Nadlan, protect all parties to the deal – the lender, the buyer and the seller – by vetting each appraiser to ensure the appraisal is performed by the best-equipped professional for the particular property. We then review the quality and accuracy of the appraiser’s work, track and manage the data on the properties they appraise, and make sure they’re in compliance with all national and state regulations.

Because of our work, appraisal reports can be turned around faster and with more accuracy, which benefits both home buyers and lenders. We recognize the hard work that appraisers do, so we are considering a new payment policy for our appraisers. Appraisers who complete their appraisal reports within the agreed-upon time will be paid by Nadlan within seven to 10 days, following revisions and reviews.

Q: What are the biggest challenges you face with the mortgage lenders that hire you, and how do you resolve them?

Heskel: Lenders and borrowers hate surprises. The consumer is willing to pay $300,000 to buy a home, but the appraisal comes in at only $280,000. The buyer is naturally upset because he thinks it will cost him the deal, and of course the lender, our client, is also upset. This is where our approach makes a difference. If the property appraises short of the contract price, we communicate with all of the parties involved.

The same goes for refinances, which can often have even a bigger disconnect between home owner estimates and the actual appraised value because there isn’t a real estate agent involved. The borrower estimates his home is worth $700,000, and the appraisal comes in at $450,000. Borrowers can be unrealistic when it comes to estimating their homes’ value. They blame it on the appraiser and the lender.

I advise people to do some research to make sure they’re realistic. We try to educate lender clients on the rules of appraisals and the things we look for so the lender better understands them. We provide a checklist to lenders and mortgage brokers to share with their sales teams, real estate agents and borrowers. Ultimately, it results in less disappointment and aggravation on everyone’s part.

Q: What sets Nadlan apart from other AMCs and appraiser companies?

Heskel: It’s the simple human touch and our superior service. Clients can reach me at almost any time of the day.

Nadlan started out mainly working with small- to medium-size banks so we would be able to deliver personalized service. Today, we’ve expanded, and we’ve carried over with that same approach to the larger lenders. We provide the same personalized service, no matter what size the lender is.

Our appraisal reports are accurate. Everything starts with getting the right appraiser to look at the property, and we feel that we have the best appraisers in the industry. Each of our appraisers is pre-screened and certified in his or her region. Reports are then sent through the most up-to-date software to ensure they are compliant with all national and regional regulations. We then go one step farther and review the final report manually to make sure everything is completely accurate. Underwriters appreciate the time they save, knowing that an expert has already reviewed the report for accuracy and validity.

Lenders also appreciate that we turn around appraisal reports faster and with more scrutiny than most other AMCs. They like anything that will help expedite the transaction for their borrowers, and Nadlan does that. Ultimately, with our approach, our lender clients know that we care.

Q: What is your forecast for the housing market, especially in the New York tri-state area where you are located?

Heskel: In New York City, the housing market is strong. There’s only so much available real estate, and that keeps prices high. In Manhattan and the other four boroughs, real estate will continue to be strong. The high-end luxury condo market in Manhattan has flattened slightly, but that market overall still remains very strong.

There’s an interesting story unfolding in the borough of Brooklyn, where some of the northern neighborhoods, including Williamsburg and Bushwick, have become very hot with rising rents and home prices. But that could change. The Metropolitan Transit Authority announced a few months ago that it is planning an 18-month to 24-month renovation on the L Train, the subway that transports Bushwick and Williamsburg residents into Manhattan and back home again. It may have a big impact on rental prices and, ultimately, home prices in that area.

Although work isn’t expected to begin until late 2018 or 2019, some real estate experts are even now bracing for the impact such a move would have on commercial, multifamily and residential housing, especially in hot spots such as Williamsburg and Bushwick. We’ll be watching the developments carefully.


repost from: http://www.mortgageorb.com/sam-heskel-appraisers-are-badly-in-need-of-a-raise

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