20th April 2016

Appraisers Win $36 Million Class Action

by Isaac Peck, Editor
On January 19, a federal judge in Orange County, CA approved a $36 million settlement between Landsafe Appraisal Services, Inc., a subsidiary of Bank of America (BoA), and 369 current and former appraiser employees. The award amounts to roughly $100,000 per appraiser, before attorney’s fees of 33 percent.

The lawsuit, originally filed in 2013 (See Appraisers Entitled to Overtime, Court Holds), alleges that BoA erroneously applied the “administrative” and “professional” exemptions to in-house staff appraisers and failed to pay them overtime.

A press release issued by employment and civil rights attorney Bryan Swartz, counsel for the plaintiffs, states that “In approving the settlement, at the hearing, the court noted that as a result of the lawsuit, the new owner of Landsafe – CoreLogic – has begun paying all appraisers overtime.”

Ethel Joann Parks of Manteca, California, one of four the named plaintiffs that is to receive an additional $25,000 for her time and effort in pursuing this litigation, says she frequently worked from 6 a.m. to 10 p.m. and decided to step forward because she felt that the bank failed to treat her and other appraisers “as human beings” with “family and personal needs that should be acknowledged.”

Parks says she feels vindicated by this lawsuit and the exceptional relief obtained on behalf of the class. “I hope it will force banks and appraisal management companies throughout the country to reconsider pressuring their staff appraisers to work long hours without paying overtime,” says Parks.

Swartz, lead counsel for the 369 appraiser class members, says the judgement not only provides meaningful compensation to hundreds of people, but he hopes it will lead to industry change for many thousands more.

One of the keys to success in this case, according to Swartz, was that the lead appraiser plaintiffs in the suit refused to quit. “First and foremost, our clients had the courage to step forward with their claims, and to stick with them for years. Next, we were able to avoid arbitration and stay in court with a thoughtful and fair-minded judge who had both the inclination and the ability to weigh the evidence carefully and make the right decision,” says Swartz.

In terms of the effect that the settlement will have on the appraisal industry, Swartz says he believes that AMCs with staff appraisers have significant exposure if they are not paying their appraisers and reviewers overtime and other required wages of non-exempt employees. “My firm hopes to find appraisers who – despite companies now clearly knowing the risk of liability – are denied appropriate overtime and other premiums, and ensure that they get paid what they are owed,” says Swartz.

“Employers take grave risks by cutting corners, and not fairly compensating their employees in tune with state and federal law. My firm and many others, including my co-counsel, are working to end wage theft in the economy…quickly,” says Schwartz. Click here for the Settlement Order.

The case is Terry P. Boyd et al. v. Bank of America Corp. et al., case number8:13-cv-00561, in the U.S. District Court for the Central District of California.

Bryan Schwartz Law is co-counsel with Schonbrun Desimone, of Los Angeles, in the case. He can be reached at bryan@bryanschwartzlaw.com.

repost from http://WorkingRE.com

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15th April 2016

Interest Rate Hikes Could be Closer Than You Think

Federal Reserve Bank of Boston President Eric Rosengren said on Monday said that investors that believe the central bank would only raise rates one time or not at all this year could be wrong.

As the Federal Open Market Committee (FOMC) heads into its third meeting of the year without having fulfilled one of the expected federal funds rate increases, many in the industry are beginning to question if, when, and how many times they will make their move.

Rosengren stated in remarks prepared for a Fed economic and cybersecurity conference in Boston, “financial market expectations of only a very slow removal of monetary policy accommodation could… prove unduly pessimistic” …continue reading the rest of this post: Interest Rate Hikes Could be Closer Than You Think

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8th April 2016

Credit Suisse to pay $29 million in U.S. regulator’s mortgage case

Credit Suisse Group AG (CSGN.S) has agreed to pay more than $29 million to resolve a U.S. regulator’s claims that it sold toxic mortgage-backed securities to credit unions that later failed, according to court papers filed on Thursday.

The deal, disclosed in a filing in federal court in Manhattan, resolves one of several lawsuits by the National Credit Union Administration against banks over their sale of mortgage-backed securities before the 2008 financial crisis.

The deal boosts to more than $2.5 billion the amount the NCUA has recovered from banks through lawsuits it began filing in 2011, the U.S. regulator said. …continue reading the rest of this post: Credit Suisse to pay $29 million in U.S. regulator’s mortgage case

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6th April 2016

AI Recognizes Robert L. Mesner, MAI, AI-GRS, Region X (South Florida Chapter) and Edward Molinari, SRA, Region VI (Southern New Jersey Chapter) as ‘Volunteer of Distinction’ in April

The Appraisal Institute announced April 6 the recognition of two individuals as a “Volunteer of Distinction” for the month.

The individuals honored are Robert L. Mesner, MAI, AI-GRS, Region X (South Florida Chapter) and Edward Molinari, SRA, Region VI (Southern New Jersey Chapter).

Mesner serves the South Florida Chapter as chair of the Candidate Guidance Committee and as regional representative. He was a participant in the Leadership Development and Advisory Council conference in 2015 and will be again this year. He also served on the national Demonstration Appraisal Report Grading Panel; Experience Screening Panel, and as a facilitator for the Capstone Demonstration Appraisal Program. He is an advisor to four AI Candidates for Designation. Mesner joined a predecessor organization of the Appraisal Institute in 1975, and received his MAI and AI-GRS designations in 2014. …continue reading the rest of this post: AI Recognizes Robert L. Mesner, MAI, AI-GRS, Region X (South Florida Chapter) and Edward Molinari, SRA, Region VI (Southern New Jersey Chapter) as ‘Volunteer of Distinction’ in April

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6th April 2016

Lender Capital Is Pouring into Affordable Housing

Affordable housing developers often run a daunting gauntlet when it comes to cobbling together different financing sources to move projects forward. But the job of accessing capitalhas gotten a lot easier lately as lenders and agencies alike step up their focus on the sector. It is an “absolutely awesome” time to be a borrower on the affordable housing side, says Frank Lutz, a senior vice president at Berkadia Commercial Mortgage. Banks are incredibly aggressive and both Fannie Mae and Freddie Mac have increased their lending to affordable housing projects, he adds. …continue reading the rest of this post: Lender Capital Is Pouring into Affordable Housing

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20th March 2016

CFPB Director: Mortgage Credit is “Still Too Tight, In My View”

CFPB Director: Mortgage Credit is “Still Too Tight, In My View”

frozen-credit

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray called attention to the mortgage industry, particularly lenders, in a speech on Wednesday, where he highlighted some of the progress and pitfalls that the housing market faces.

An Urban Institute report recently confirmed Cordray’s remarks by finding that between 2009 and 2014, 5.2 million borrowers with less-than-pristine credit were unable to get a mortgage loan due to tight lending.

The data showed that between 2009 and 2013, 4 million loans could have been originated if credit standards were like 2001’s levels. On top of this total, an additional 1.2 million borrowers were unable to get a mortgage loan.

“A tight credit box means that fewer families will become homeowners at an opportune point in the housing market cycle, depriving them of a critical wealth-building opportunity,” Urban Institute said. “It slows the housing market recovery by limiting the pool of potential borrowers. Ultimately, excessively tight credit hinders the economy, as it slows all the associated economic activity that comes with home buying, such as furniture purchases, landscaping, and renovations.”

In his speech, Cordray stated that the millennial generation is beginning to welcome homeownership despite the stereotype surrounding this generation, but as they are facing with the issue of tightening credit.

“Credit is still too tight, at least in my view, but we can now look in the rear-view mirror and see that some of the undue fears people had about legal liability under the QM rule, or market paralysis due to streamlining the mortgage disclosure forms, can be put in healthier perspective,” Cordray explained. “There is ample opportunity in the mortgage market as it continues to heal, and you should be doing what you do best: serving your customers through great deals and great customer service. Homeownership still remains the most effective engine of wealth accumulation for the American middle class, and you are the ones who are making that happen and rebuilding a key marketplace that failed this country so brutally less than a decade ago.”

Despite the bleak credit picture, mortgage lending practices have improved since the financial crisis, Cordray said in his speech.

“The market crash itself led to many changes, with bad actors and bad practices no longer feasible in a marketplace that had all-too-belatedly exposed the risks inherent in irresponsible and often predatory lending. Indeed, if anything, the market meltdown produced an overreaction, marked by very tight credit and historically low levels of consumer demand and available supply,” he said. “For those of us engaged in the important work of protecting consumers, these developments posed a very tricky task in implementing reforms. We were well aware of the concerns many had raised that the cost of protecting consumers would constrict the availability of credit and even drive many financial service providers out of business altogether.”

About Author: Xhevrije West

Vri 2
Xhevrije West is a talented writer and editor based in Dallas, Texas. She has worked for a number of publications including The Syracuse New Times, Dallas Flow Magazine, and Bellwethr Magazine. She completed her Bachelors at Alcorn State University and went on to complete her Masters at Syracuse University.

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16th March 2016

Wash. AMC Fails, Leaving Appraisers Unpaid

Wash. AMC Fails, Leaving Appraisers Unpaid

by Isaac Peck, Editor, WorkingRE.com

When an Appraisal Management Company (AMC) fails it is usually appraisers who are left holding the bag. Many appraisers are now reporting that the William Craig Company, Inc. (WCCI), based in Washington (Wash.), is closing its doors with up to $250,000 in unpaid fees owed to appraisers.

In early February, Jenna Bell, a Business Relations Specialist at WCCI, sent out an email to many appraisers on its panel indicating that “2015 has been one of the toughest years” for the company and that in order for WCCI to continue operations it “would have to clear out all appraiser vendors to be paid.” The email goes on to propose that, in lieu of payment for unpaid appraiser fees, WCCI would “transfer a portion of WCCI company stock to each appraiser in exchange for the balance WCCI shows you have invoiced as of 2/8/15.” …continue reading the rest of this post: Wash. AMC Fails, Leaving Appraisers Unpaid

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11th March 2016

Is the Appraisal Industry Suffering from Barriers of Entry?

Author: Xhevrije West

appraisalThere a seismic change happening in the appraisal industry. Appraisers are diminishing in the housing market and the trend is showing no sign of reversal anytime soonunless something changes.

Scott Pickell, VP and Chief Appraiser atLRES explains to MReport what is happening to appraisers in the mortgage industry, challenges they face, and how the problem can be solved.

MReport: The appraisal industry has seen some dwindling numbers according to recent reports for a number of reasons. Why do you think this industry is struggling to bring in new hires? What challenges do appraisers face in today’s market?

Pickell: This has been an ongoing issue for a couple of years; it’s something that the industry is aware of. The appraisal industry has created significant barriers to entry for new appraisers coming into the industry. It’s a double-edged sword. The industry wanted to become more professionally related. For example, one of the requirements to become an appraiser is a degree, whereas before, appraisers did not need a degree to be licensed and certified as an appraiser. Instead, they needed experience, take a few classes, and take the test to become an appraiser. This is one barrier to entry. Individuals graduating college are looking at potential jobs they can do.  They have to take many units in appraisals, have their degree, and then they must find someone who will train them. This is another barrier to entry. Typically, if these new graduates do not have someone in their family that will train them, they need to find someone who will for almost two years. You can imagine how difficult that can be.

In this industry volumes are very fiscal so if you are lucky to find an individual to train you, when they are busy, they may not want to take the time to do it. When they are really slow, they may not have enough business to actually train you.

Appraising is considered a “family business.” It’s very difficult for someone without those family ties to find someone who will train them. The training period is about 2500 hours. This is after they have gotten their degree and taken the state test. That’s a pretty significant time frame for anybody in any industry. The industry is aging. The average age of appraisers is approaching 60 years, according to one of our studies. This means that there are a lot of appraisers that are well-above 60-years-old.

These are the issues that the appraisal industry is facing. Frankly, it needs to be seriously considered on what can be done to attract new appraisers to the industry.

MReport: How can the industry bolster up their appraiser numbers?

Pickell: I don’t have a crystal ball, but as more and more appraisers retire and get out of the industry, there will be a shortage of appraisers. We are already seeing that right now in the last couple years. We were getting to a point where appraisers were quoting four to six weeks of turnaround time to get one report done for us in certain markets. What will happen is that as the number of appraisers reduces, the ones that remain in business will begin to charge more money, so all of sudden appraising will become a very lucrative profession in the future. That will probably attract new individuals. So money will be a big factor in attracting new appraisers into the industry.

Some clients say that we will not accept an appraisal from a trainee signing the report. Because of that rule, we typically don’t recruit trainee appraisers. Even though the supervisor may sign the report stating that they did inspect the property with the trainee, many lenders will still not accept those reports. Somehow, there needs to be some legislation that requires lenders to accept reports done by trainee appraisers. That’s part of the double-edged sword. If the industry does attract more appraisers, they can’t do appraisals because no one will accept their work. I am not an advocate of more legislation, but because we do have these levels in the industry, there needs to be some rules and regs surrounding trainee’s appraisals with supervisory guidance and approval.

MReport:  Let’s talk about the homeowner vs appraiser opinion gap that Quicken Loans reports on every month. This gap, while it has gotten smaller over 2015, still persists. Homeowners are valuing their homes more than appraisers. Why is this? Will there ever be a point where the gap closes completely? Should the paradigm ever change to where appraisers’ opinions are higher?

Pickell: We think we have had the internet forever but we really haven’t. In the last 10 or 15 years, the internet has probably had the largest impact on a lot of people. With that, companies like Zillow and some others that provide valuations on homes. This is not an appraisal; this is number crunching and regression analysis. There is a big difference between appraised value and that value or price that these websites and companies are giving these homeowners. It creates a false sense of confidence from the homeowner who says, “Zillow says my house is worth $850,000.” Meanwhile, the appraiser says, “No, based on the comps and adjustments I made, your home is worth $825,000.” You have to use the information wisely. Valuation has always been and will probably always be a subjective value because it’s not a science. It’s an art. You have a difference of definitions going on. Appraisers have a specific, defined market value (Fannie Mae Form 1004). These websites are not concerned about that, while for an appraiser, that is what they are analyzing, so therefore, they will exclude comparables in an area where these other websites will include them in their analysis. This can skew the numbers.

MReport: With slow growth expected in the housing market in 2016, how can the appraisal industry prepare, prosper, and increase business?

Pickell: Companies and individuals that have been in this industry for a long time expect this slow growth period. If you are doing origination loans, you are a victim to the interest rates. When interest rates are low, you are very busy, but when interest rates are tweaking up, business can be slow. Appraisers that understand that model, they are diversifying themselves and preparing for this slow period when it’s really busy.  They are preparing by always providing excellent customer service. When it’s busy and appraisers are doing everything they can to keep their heads above water, they still have to provide exceptional customer service to clients. Knowing that the industry will slow down soon, these clients will know who to turn to. This comes by turning around files quickly, providing the highest quality appraisal, and accuracy is always important. The companies that are just now realizing that 2016 will slow, will struggle this year and beyond.

Since 2008, with the advent of HVCC, Dodd-Frank, and other regulations, that’s when the AMC really started to explode. It’s been on an explosion pace since then; there has not been much of a slowdown. If 2016 brings a slowdown, there may be some consolidation in the AMC market, where there will be mergers and acquisitions taking place.

MReport:  What is your outlook for the appraisal sector in 2016 and beyond?

Pickell: This industry is very interest rate sensitive. The appraisal industry is very niche oriented and there are a lot of opportunities for appraisers and AMCs. Diversity is key. It’s all about diversifying your client base, not just focusing on originations. There is still a lot of business among defaults, short sales, and REOs. Finding that business and niches will help companies do very well. I have been in this business for 30 years now and nothing surprises me. When you’re in the middle of a slowdown and all of sudden the work stops coming in, appraisers will start to leave the business and pursue other opportunities. With the aging appraisal industry and the slowdown, it will accelerate people leaving the industry.

From an AMC perspective, compliance is such an important part of this industry. That is something that will probably cause other AMCs to close their doors or consolidate and merge with other companies. The cost of compliance is a barrier of entry for AMCs entering the industry.

Original Article

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19th January 2016

Fannie Mae’s Collateral Underwriter Version (CU) 3.1 is here

This webinar was very good and provided the best explanation of the Q & C ratings that I have seen so far. – Jason Fischman, ASA, IFA

Fannie Mae’s Collateral Underwriter Version (CU) 3.1 is here, promising new red flags and warning messages appraisers need to be prepared for. Come see firsthand the warning letters some appraisers are receiving and learn how to avoid trouble in 2016!

Persistent Appraisal Failures – CU 3.1
Date: Jan. 22nd, 10 – 11:30 a.m. PST (This Friday!)
Presenter: Richard Hagar, SRA

In this webinar, Richard Hagar, SRA and national authority on lending and appraisal guidelines, takes appraisers step-by-step through the new warning letters that appraisers have been receiving due to the new changes to CU, and offers solutions and advice. …continue reading the rest of this post: Fannie Mae’s Collateral Underwriter Version (CU) 3.1 is here

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4th December 2015

The Appraisal Foundation Brings Standards and Guidance to Appraisal Software Programs

 The Appraisal Foundation partners with technology providers to create software programs for appraisers
that feature the Uniform Standards of Professional Appraisal Practice (USPAP)

             
Washington DC – The Appraisal Foundation, the nation’s foremost authority on the valuation profession, announced today that USPAP guidance will be accessible in appraisal software programs in the near future.  ACI, Bradford Technologies and Centric Technology Solutions will release new programs that offer USPAP and accompanying guidance as an added resource for real property appraisers.

David S. Bunton, Foundation President said of the new initiative, “This announcement ushers in a new day for the Foundation and appraisal technology.  Appraisal professionals will now have USPAP and the Foundation’s related guidance at their fingertips for reference during every step of the process.  Digitizing USPAP and including it in the appraiser’s toolset is the best way to ensure compliance and ultimately build public trust in the work of appraisers.”

The Appraisal Foundation selected three companies for the initial launch, each committed to providing appraisers with the tools to perform quality appraisals through their respective software programs. These new software programs will assist in saving appraisers time and will equip them with the resources to help ensure compliance with USPAP, ultimately benefiting both lenders and consumers.

ACI will incorporate USPAP and related guidance into ACI Sky™, a new web-based appraisal platform. ACI Sky empowers the valuation professional to create full reports on the web with tools for sketching, data collection, review, MISMO® XML delivery, location and flood mapping. For Bradford Technologies, the partnership with the Foundation offers an opportunity to further the company’s focus on helping move the appraisal profession, and in particular residential appraisers, away from tedious form-filling and towards computer-aided appraising Redstone technology. Centric plans to fully integrate USPAP and related guidance into its dialogue-based solution for report creation and quality review by the end of 2015.  Centric’s end-to-end, web-based platform integrates the functionality and communication needs of appraisers, AMCs, and lenders.


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.

About ACI
Headquartered in Palm Coast, Florida, ACI is a member of the First American family of companies. The ACI client base is comprised of thousands of real estate appraisers, many of North America’s premier lenders and national appraisal companies. ACI and its representatives have been friends of The Appraisal Foundation for years, serving as trusted advisors on the Industry Advisory Council. Read more about ACIhere.

About Bradford Technologies
Bradford Technologies has been serving the appraisal industry for the last 28 years providing services and products to assist appraisers in producing appraisal reports quickly and efficiently. During the last six years, the company has focused on assisting appraisers in producing better valuations and eliminating the tedious form-filling aspect of appraisals. Bradford is currently on its fifth iteration of Computer-Aided Appraising technology with a new product called Redstone. Read more about Bradford Technologies here.

About Centric Technology Solutions
Centric has been in the valuation technology business for over 20 years, as a provider of collateral valuation solutions.  The CentricCVP™ (Collateral Valuation Platform) is the first and only software platform and set of tools that allows visibility and control throughout the entire appraisal process, for lenders, AMCs, and appraisers. Embedded guidance, validation, and review features support the highest and best output quality from report development to data collection and analysis, to quality review. Read more about Centric here.

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