1st September 2015

Facing License Denial, Coester Sues Virginia Board

The suit calls the licensing process a “sham” and makes repeated references to the Board’s “bias,” accusing it of “conspiring” and “plotting” to harm Coester.

Facing License Denial, Coester Sues Virginia Board

by Isaac Peck, Editor
Facing denial of its license to operate an appraisal management company (AMC) in the state of Virginia, the AMC Coester VMS has filed a lawsuit against the Virginia Real Estate Appraiser Board alleging that the Board is engaged in “a conspiracy to restrain and monopolize trade” and is operating in violation of federal antitrust laws.

The suit follows Virginia’s recently passed AMC licensing laws, which set an August 18 deadline for applicants to obtain AMC licensure or cease operations in the state. The Board has issued dozens of AMC licenses but selected Coester for closer examination. On July 15, Coester attended an informal fact-finding conference and addressed several of the Board’s concerns, including Coester’s history of consent orders and settlement agreements in five other states, for alleged violations of state laws: Maryland, North Carolina, Tennessee, Louisiana, and Minnesota. The allegations against Coester in these states include: unlicensed AMC activity, false advertising, failure to pay appraisers on time, failure to pay customary and reasonable fees, failure to respond to requests within the time period specified, failure to submit biannual certification, as well as USPAP violations committed by Brian Coester himself. (Click here to read the consent orders and settlement agreements in their entirety.)

Coester defended its actions by saying it has taken “remedial efforts” to address the issues raised in the consent orders and that it has recently implemented a new compliance management system that is designed by “expert business consultants,” many of whom are CPAs.

However, on July 28 the reviewing officer of the informal fact finding conference issued a recommendation to deny Coester’s AMC license in Virginia, citing “serious oversights in the planned compliance management system.”

Background
There seems to be little doubt that the Board is within its rights to refuse licensing to Coester. According to Virginia’s AMC Regulations, effective in February 1, 2015, the Virginia Appraiser Board is empowered to use its judgement to decide whether to issue a license to an AMC that has been subject to any form of adverse disciplinary action:
“The board, in its discretion, may deny licensure to any applicant who has been subject to, or whose controlling person or responsible person has been subject to, or any person who owns 10% or more of the firm has been subject to, any form of adverse disciplinary action, including but not limited to (i) reprimand; revocation, suspension, or denial of license; imposition of a monetary penalty; requirement to complete remedial education, or any other corrective action in any jurisdiction or by any board or administrative body or (ii) surrender of a license, a certificate, or registration in connection with any disciplinary action in any jurisdiction prior to obtaining licensure in Virginia.”

Rather than arguing the Board’s power to deny it a license, the core of Coester’s suit alleges that the Board is engaged in anti-competitive behavior- by trying to restrict Coester from conducting business in the state. Coester alleges that the denial of its license constitutes an “unreasonable restraint of trade because it prevents a large AMC entity from entering the marketplace.”

Coester states that Virginia accounted for 10 percent of its national business and that it has completed 10,113 appraisal assignments in the state since 2013, making Virginia its second largest state by volume. If denied a license, Coester says it will “permanently lose its customer base in Virginia if the Board’s anticompetitive and pre-textual denial of CVMS’s license occurs on August 18, 2015.”

The suit calls the licensing process a “sham” and makes repeated references to the Board’s “bias,” accusing it of “conspiring” and “plotting” to harm Coester.

Coester claims that the very structure of the Board is anticompetitive because, by statute, six of the 10 Board Members are required to be fee appraisers. The statute allows for one AMC representative to sit on the Board, but Coester alleges the individual serving as the AMC representative is actually an appraiser, not an AMC, and, consequently, seven of the 10 Board Members are fee appraisers. Coester alleges that this gives fee appraisers a “super-majority” on the Board and refers to them as “direct competitors” who ensure that all decisions made by the Board are in the interests of fee appraisers.

Coester further claims that several of the Board Members are also officers in the Virginia Coalition of Appraiser Professionals (VCAP), a trade association of independent fee appraisers that Coester says has “conducted an active campaign against AMCs” and whose members have repeatedly complained about the low fees paid by AMCs. The suit cites many internal emails between Board Members to support its claim that the Board is biased against Coester.

While each of the Board’s ten individual members is named in the suit, it is unlikely that they can be held liable as individuals for the particular actions of the Board.

AMCs Save Consumers Money- What?
In the suit, Coester makes an argument that will certainly raise some eyebrows among appraisers. Coester says that because AMCs pay appraisers less than non-AMCs, the removal of Coester from the marketplace will harm the public. Coester states that it is a “lower cost competitor” of the Virginia Appraiser Board members, and other appraisers throughout the state, asserting that the denial of Coester’s application will “drive up the price of single family residential appraisals” and will increase costs that “will be passed on to homebuyers.”

Coester cites a 2014 Customary and Reasonable Fee report by Virginia Tech which states that the average fee for an appraisal ordered directly through a non-AMC client is $401, while the average fee for an appraisal ordered through an AMC is $328. Coester uses the Virginia Tech study to suggest that it helps keep fees low for the borrower because the appraiser is paid less when working through an AMC. Coester says if it is banned from doing business in the state, the result will be “raising the transaction costs of residential sales for purchasers and borrowers,” and will “substantially effect interstate commerce.”

Most appraisers understand the disingenuous nature of this argument because the lower fees paid to AMC appraisers, cited in the study, are not the fees actually paid by borrowers. As most appraisers know, AMCs frequently take 30-50% of the “appraisal fee,” so the amount paid to an AMC appraiser is actually much less than what the borrower often pays. Most appraisers will tell you that the fees borrowers pay have actually gone up since AMCs have been shoehorned into the process. As the Network of State Appraiser Organizations (NSAO) put it in its letter to the Consumer Financial Protection Bureau (CFPB): “a consumer might see an appraisal fee for $600 or more with no awareness that the appraiser they met at their home, and who completed their report, is only being paid $300 or less” by the AMC.

Coester also cites the Virginia Tech report as evidence that, by excluding Coester, the Virginia Appraiser Board members are enriching themselves and other Virginia appraisers because the fees actually paid to appraisers in the state may go up because non-AMC clients appear to pay more than AMCs.

Coester Extension
Wthin days of the suit being filed on August 3, 2015, a consent motion was signed between Coester’s attorney and a Virginia Assistant Attorney General (AG). The consent motion specifies that the Counsel and staff to the Board will recommend that the Board defer ruling on CVMS’s application, and that the Board extend the August 18 AMC application deadline to December 2015. This would allow Coester to continue to doing business in Virginia until then. However, the Board has final decision making authority and is not required to follow the Assistant AG’s recommendation. A special meeting of the Board has been called for August 12 to consider and vote on the recommended actions of the Attorney General’s office.

Who is Behind the Lawsuit
The law firm representing Coester in this case is Weiner, Brodsky, Sidman, Kider PC (Brodsky firm). This is the same law firm used by the veteran AMC advocacy group the Real Estate Valuation Advocacy Alliance (REVAA), in past legal filings throughout several states, and the one also picked to represent a new AMC coalition, the National Home Valuation Alliance (NHVA). NHVA appears to be led by former REVAA Executive Director Don Kelly.

In a possible sign of things to come, the very first goal and agenda item NHVA listson its website is, “to leverage collective resources to affect helpful (rather than harmful) change through multiple targeted initiatives, including litigation.”

Information on NHVA’s website echoes certain of Coester’s arguments, including the concern that state appraisal boards are violating antitrust laws. NHVA’s stated goal is to “vigorously represent the interests of its Members in the home valuation arena before the federal government and state agencies.”

In the PowerPoint presentation from NHVA’s Initial Meeting, found on the group’s website, one slide lists “Key Issues/Opportunities” for the organization, which include:
1. State Appraiser Fee Survey Policies and Requirements
2. Customary and Reasonable Appraiser Fee Requirements
3. Timely Payment of Appraiser Fee Requirements
4. State Appraisal Board Antitrust Concerns
5. AMC Representation on State Boards
6. Required AMC Minimum Quality Control Requirements
7. Appraisal Subcommittee AMC Fee Structures

Note that four of the seven items seem to relate to fees, suggesting that the NHVA is deeply concerned about appraiser fees. It looks like appraisers will have a fight on their hands going forward.

NHVA is representing itself as the advocacy organization for smaller to mid-size AMCs. REVAA charges $75,000 annually for membership and representation. NHVA dues are a more modest $995 a month. NHVA’s stated goal is 30 charter members and says that it sees the over 350 AMCs operating nationwide as potential prospects.

Bigger Picture
Coester’s suit against the Virginia Appraiser Board raises interesting questions for the appraisal industry and for the future of AMC regulation as a whole. In an article published in Mortgage Banking magazine (State of the Appraisal Industry, Volume 27, Number 9), Brian Coester, Chief Executive Officer of Coester VMS, sees a future where appraiser boards will no longer regulate AMCs. Coester argues that “competitors cannot regulate competitors” and makes a bold prediction that this “leaves the appraisal boards…to be completely disassembled and have even less control of the process.” Federal regulators, however, seem to believe that the public is well served by having AMCs regulated by the state’s appraisal board. In fact, the recent “Final Rule” on the Minimum Requirements for AMCs seems to settle the issue.

While the Dodd-Frank Act tasked state appraisal boards with passing AMC regulations, the Final Rule removes any doubt that state appraisal boards have the authority to directly enforce the law and discipline AMCs for violations of the law. Specifically, the Final Rule requires that states have a program in place “within the State appraiser certifying and licensing agency that has the authority to… conduct investigations of AMCs…and discipline, suspend, terminate, and refuse to renew the registration of an AMC that violates applicable appraisal-related laws, regulations, or orders.”

While Coester’s suit may usher in a new wave of AMC-led litigation against appraiser boards, the clear language of the AMC Final Rule leaves little question that the Fed’s intention is for appraiser boards to regulate AMCs.

Working RE is following this story closely and will issue a timely report on the outcome of the special meeting.

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1st September 2015

9 out of 10 appraisers eat Tuna

You might be entitled to a cash award!

https://www.tunalawsuit.com/Home.aspx

 

If you purchased one or more of the StarKist Products from February 19, 2009 through October 31, 2014, this website informs you of a proposed Class-Action Settlement that you may benefit from.

NATURE OF THE SETTLEMENT

The Lawsuit claims that StarKist Co. (“StarKist”) under-filled certain 5 oz. canned tuna products in violation of state and federal law. StarKist denies that it underfilled its products and denies that it did anything wrong. The Court did not rule in favor of Plaintiff or StarKist. Instead, the parties agreed to a Proposed Settlement to avoid the expense and risks of continuing the lawsuit.

THE SETTLEMENT CLASS

You are a Class Member if you are a resident of the United States of America who purchased from February 19, 2009 through October 31, 2014:

  1. one or more 5 oz. can of Chunk Light Tuna in Water,
  2. one or more 5 oz. can of Chunk Light Tuna in Oil,
  3. one or more 5 oz. can of Solid White Tuna in Water, or
  4. one or more 5 oz. can of Solid White Tuna in Oil (collectively, the “StarKist Products”)

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1st July 2015

2015 AMC Directory – get it here

Hey Fellow Appraisers! The newly updated 2015 AMC Directory is now available! After spending months editing the last update from July 2014, I have added over 30 new AMCs, removed some of the bad ones or the companies that have gone out of business and reformatted the top of the list to include the top 40 AMCs that are currently my best clients.

2015 Appraisal Management Company DirectoryI also updated and added a new chapter on how to use the AMC Directory to sign up only to companies listed in your state. That should save you a bunch of time when applying to the appraisal management companies.

And finally, this list not only includes the top companies that I recommend all appraisers to sign up to due to pay, turn around time or other factors, but for more than 99% of the companies listed, I have already done the research and found the direct link to their online applications. You won’t believe how much time that is going to save you in the registration process.

This isn’t just a list of appraisal management companies with phone numbers and maybe a website listing. I spend the time to get the contact information for each of the companies, find their online applications and more. If they don’t have an online application, they don’t get on my list. If they appear to be another appraiser looking to sign up other appraisers for a fee split, I don’t add them to my list either. If they are known not to pay their appraisers or have had problems paying appraisers in the past, they definitely don’t make it on my list. I have even tried to note as much as possible which companies state they have commercial work as well. I have registered with most of the companies in my directory except for some of the latest entries and when they have good work, they get moved up to the top of the list.

With interest rates still at an all time low and talks of softening lending practices, 2015 could possibly be your best year ever working with the appraisal management companies. But you won’t get ANY work from them if you don’t sign up to them.

Buy the new 2015 AMC Directory and start signing up today. I have been completely swamped with AMC work for years now, giving me the ability to cherry pick the best work available from a variety of companies and never get paid less than my customary and reasonable fees. I average over $450 per order, the lowest fee I have accepted in the past year was $325 and the highest $2000. Get your copy today.

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1st July 2015

APPRAISING WITH REGRESSION

Editor’s Note: In life after Collateral Underwriter (CU), appraisers are eager to understand how they can create statistical support for their adjustments and value results. In this story, author James Swartz provides a good primer for understanding regression and appraising.

Appraising with Regression
By James A Swartz, PhD.

As a real estate appraiser, you are interested in determining how a set of characteristics such as the number of baths and bedrooms, total s As a real estate appraiser, you are interested in determining how a set of characteristics such as the number of baths and bedrooms, total square feet, and others, affects the value of a property.

Property characteristics that affect value are called independent or predictor variables because they help predict what the property is worth. An estimated sales price is called the dependent variable because it depends on the predictor variables.

One statistical tool used to estimate value is called regression analysis. Regression techniques have long been central to the field of economic statistics (“econometrics”). Increasingly, they have become important tools for appraisers as well.

In an appraisal regression model, the dependent variable or sales price is “regressed” on a set of property characteristics to determine how much of the variation in the sales prices, of geographically comparable properties, are due to the variation in the set of property characteristics. The higher the percentage of variation in the sales prices of like properties that can be “explained” by the included set of property characteristics, the more accurate the prediction of the property value. A thorough regression analysis will therefore improve your ability to accurately appraise property values beyond what can be done by “guestimating” or looking at only one or a few property characteristics and comparing only a few similar properties.

The best way to begin to understand how regression modeling works in the context of property appraisal is to explain the approaches used and then walk through an example.

Regression Modeling Approaches
Let’s begin by analyzing a few different methods of regression analysis. Simple linear regression, also calledBivariate regression, assesses the relationship or association between a single dependent variable, such as a sales price, and a single independent or predictor variable, such as square footage.

Multiple linear regression assesses the relationship or association between a single dependent variable, such as sales price, and multiple independent or predictor variables, such as square footage, lot size and age of the property.

 

Hedonic regression is an even higher level of analysis because it can be used to estimate the contributory value of each property characteristic on an estimated property value. There are four steps in the process:

First, a group of properties in geographic proximity to the subject is selected from the MLS database. The number of properties selected for analysis should be large enough (no fewer than 200 properties) to allow for the examination of the variation in property characteristics as well as in sales prices. Greater variation in the characteristics studied is desired, rather than a narrow comp selection based on strict comparability, because greater variation improves the accuracy of the estimated effects on sales price for each characteristic across a broader range of possible values for that characteristic.

Then, a set of simple regression models is run using the selected properties. A separate simple or Bivariate regression (i.e., two-variable) is run for each property characteristic. Each simple regression is run on the full data set containing information on the 200+ properties. The purpose of this step is to screen for those property characteristics that can be reliably associated with variations in the sales prices of the properties in the data set.

In the third step of the process, those property characteristics that are found to be reliably associated (i.e., statistically significant) with the sales prices of properties, are included in a multivariable regression model (i.e., many variables). Using the full data set, the multivariable regression assesses the association between sales price, the single dependent variable, and a set of multiple predictors such as square footage, lot size, and age of the property.

This model determines how well the remaining property characteristics individually and as a set predict variation in sales prices. Importantly, the model examines the associations among the property characteristics themselves. Only those characteristics that uniquely predict sales price are retained in the model. Characteristics are dropped that overlap substantially with other characteristics already in the model. Only the best predictor set is retained.

In the fourth and final step, the appraiser selects a small subset (3) of properties comparable to the subject property. A map displaying properties by their proximity to the subject assists in this step. Using the predicted sales prices for these properties and the valuation for each property characteristic in the final multivariable model, a final value is obtained for the appraised property.

Overcoming Math Anxiety
People new to regression modeling often have questions about the technique and concerns about their ability to use and interpret the more complex but more accurate multivariable models. However, once a level of familiarity is developed and “math anxiety” is overcome, multivariable regression models become an indispensible tool for developing appraisals.

 

Although simple or Bivariate linear regression models are appealing because of their simplicity, they will not produce as accurate a result as a multivariable regression analysis for a number of reasons. First, the selection of which variable(s) to use might leave out potentially important factors. Second, Bivariate regression does not control for the associations among the predictor variables themselves. For instance, the number of bedrooms and square footage might both have a very strong association with sale price when considered independently in separate Bivariate models. When considered simultaneously in a multivariable model, the association of the number of bedrooms with sales price might not be as substantial relative to the association with square footage.

Multivariable models will automatically adjust for the interdependency of these two (or more) predictors while Bivariate models will not. As a consequence, if you use two Bivariate models to develop your estimate, you would overestimate the sale price because you would be giving too much weight to the number of bedrooms within the context of the property’s square footage. The degree of error introduced by adding together the results of Bivariate models increases as you consider more and more predictors. In the end, it is much easier to use a multivariable model to make the correct adjustments and estimate a value without having to do all of the tedious mental and mathematical work of combining separate estimates.

Remember, regression analysis is not a substitute for traditional appraisal practices as much as it is a complement to your experience and judgment. It will help you identify the most salient features for estimating the value for a given property, possibly including some you might not have thought were important but which turn out to be, based on sales of other properties in the same area.

About the Author
James Swartz, Ph.D. is an Associate Professor in the Jane Adams College of Social Work at the University of Illinois at Chicago. He obtained his Doctorate in clinical psychology from the Northwestern University Feinberg School of Medicine (1990) and also has a Masters degree in research methods and statistics from Loyola University of Chicago (1982). He has authored over 50 publications in peer-reviewed journals, the majority of which use advanced statistical analytic techniques.

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29th June 2015

OREP/Working RE Upcoming Webinar Series

“I sat in on your webinar and found it truly informative.
I wanted to thank you for the service.” – Nick Honiotes, Allstate Appraisal

“Thanks for all of the tips. I found this very valuable.” – Patrick Jones

Working Well with AMCs
(Higher Fees / Fewer Headaches)

Does your typical day at the office look like this– low fees, multiple call backs, endless revision requests and stipulations and unreasonable turn times?

If so, we feel your pain and have an “appraiser aspirin” for you.

This webinar shares techniques to improve your experience working with AMCs, showing you how to earn higher fees and minimize the time-wasting, aggravating back and forth that kills your day. If you’re still struggling to create successful and lucrative relationships with AMCs, this webinar can help.

See how to negotiate from a position of strength, establish yourself as an expert to get the highest paying work, and take back control of your business!  

Part 1: Getting What You’re Worth (Working with AMCs)
You can successfully negotiate fees and terms with AMCs. Bryan Knowlton, author of the 2015 AMC Guide, shows you how to quickly locate and sign up with the best AMCs, negotiate fees and terms, get higher-paying assignments and pick and choose your work for a better quality of life.

There is no magic wand when working with AMCs but Knowlton’s valuable insights, gained from years of working with AMCs on his terms—in the very competitive San Diego market, will help you save time and effort and move toward working with only the best AMCs (and firing the rest).

Working with the best AMCs and negotiating your own fees gives you more power and more choice.

This Course Will Show You:
• How to Save Valuable Time
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• How to Create a Fast, Efficient Application Process
• How to Follow Up to Get Results
• How to Get Paid
• How to Land Better Assignments
• How to Update Documents Efficiently
• How to Turn Review Requests in to a Win/Win
Plus: Q&A from a Successful AMC Appraiser

 


Bryan Knowlton
Author of the 2015 AMC Guide
Part 2: How to Work Profitably with AMCs
Working with AMCs doesn’t have to make you want to pull what’s left of your hair out. There are proven techniques for saving time, minimizing call backs, getting the choicest assignments, and commanding higher fees from someone who has sat on both sides of the desk; an independent fee appraiser and an AMC executive.

Seasoned appraiser, course developer and instructor James Baumberger, President of AMC Synergy Appraisal Services, shares his advice on how to work efficiently with AMCs, minimize or avoid the frustrating back and forth and enjoy a smoother, friendlier, more profitable AMC process.


James Baumberger
President of Synergy Appraisal Services

In this webinar, Baumberger shares the keys to successful relationship management, shows you the most common mistakes to avoid, and helps you create a streamlined process for Underwriting Conditions.

Working Well with AMCs: Two-Part Series
Part 1: July 9th, 10 – 11:15 a.m. PST
-Bryan Knowlton, Busy fee appraiser and author of the 2015 AMC Guide

Part 2: July 16th, 10 – 11:15 a.m. PST
-James Baumberger, President of Synergy Appraisal Services

Sign Up Now!
OREP Members/ WRE Subscribers: Click here for a Discount
Save with a Season Ticket: Enjoy the entire summer webinar series at your leisure (live and recorded) and save: June, July, and August Webinars for a single price!
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Summer Series – Buy Now
June:
Parts 1 & 2: How to Support and Prove Your Adjustments (available now on demand)
July:
How to Get What You’re Worth (Working with AMCs)
July:
How to Work Profitably with AMCs
August:
Running an Effective Appraisal Business
August:
Efficiency through Technology: Mobile Tools and Paperless Appraising

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25th June 2015

Coester Appraisal Management Fined for not paying Customary and Reasonable Fees

Louisiana Fines Appraisal Firm for Not Paying ‘Reasonable’ Fees

JUN 5, 2015 5:16pm ET

Editor’s Note: Following this article’s publication, the Louisiana Real Estate Appraisers Board issued a new statement regarding the stipulation and order it entered into with Coester Appraisal Management Group.

The Louisiana Real Estate Appraisers Board has fined an appraisal management company $5,000 for failing to pay “customary and reasonable” fees to appraisers.

It marks the first time a state has taken action against an AMC under a provision of the Dodd-Frank Act.

Coester Appraisal Management of Rockville, Md., was ordered Thursday by the Louisiana appraisal board to use a third-party appraisal fee schedule compiled by the Southeastern Louisiana University Business Center in Hammond, La.

The company also must submit detailed quarterly activity reports to the state appraisal board for a year and forfeit all rights of appeal, said Bruce Unangst, the board’s executive director.

Coester, which has a network of roughly 3,000 appraisers in 50 states, did not admit wrongdoing. The company’s lawyer, Robert Rieger, with Adams and Reese LLP, declined to comment.

A provision of Dodd-Frank requires that mortgage lenders pay appraisers “customary and reasonable” fees.

But appraisers have long complained that AMCs take a cut of their appraisal fees, in violation of the law.

Unangst said the Louisiana board intends “to continue to move aggressively in providing a level playing field for all industry participants.”

The Dodd-Frank appraisal standards were created to address the fee compression that is said to have resulted from the Home Valuation Code of Conduct, which took effect in 2009 and barred loan officers and brokers from selecting appraisers. Many blame the HVCC — which sought to prevent commissioned sales representatives from bullying appraisers into inflating valuations — for driving business to appraisal management companies that act as middlemen. Traditionally, AMCs took a cut of the fees for the appraisals they arranged.

http://www.nationalmortgagenews.com/news/compliance/louisiana-fines-appraisal-firm-for-not-paying-reasonable-fees-1052745-1.html

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19th June 2015

Habitat for Humanity seeks Dodd-Frank Customary and Reasonable relief

The regulation was aimed at boosting housing market protection by making sure mortgage companies and banks wouldn’t receive faulty financial advice from cheap appraisers.

But Habitat for Humanity — which relies on appraisers who volunteer their services for free — says it’s created a regulatory headache for their more than 1,400 U.S. affiliates who fear they’re bucking Dodd-Frank in accepting free appraisal services.

“Dodd-Frank reforms were passed with the good intentions of protecting consumers and taxpayers and of stopping predatory lending that targeted lower-income families and contributed to the foreclosure crisis,” said Christopher Ptomey, Habitat for Humanity International’s director of government relations.

“However, provisions in the law … created unintended consequences for Habitat for Humanity.”

The Consumer Financial Protection Bureau (CFPB) officials signaled to Habitat that they’re exempt from the regulation, but the group isn’t taking any chances.

Senate Banking Committee Chairman Richard Shelby (R-Ala.) included a provision in his financial overhaul bill that would exempt Habitat from the regulation. Sen. Rob Portman (R-Ohio) reintroduced legislation earlier this month aimed at addressing the same issue.

“Common sense,” was how Shelby put it. “[It’s] one of the many ways that this legislation helps consumers and rightly addresses the unintended consequences of Dodd-Frank.”

Even Sen. Sherrod Brown (D-Ohio) said the issue “merits further discussion.”

But Brown criticized Shelby for including such a provision in his overhaul, which progressives like Brown oppose for other reasons.

“It shouldn’t be included in a sweeping package of Wall Street reform rollbacks that would threaten safety, soundness and consumer protection,” Brown said. “Opening the door to risky, high-cost mortgages seems to counter Habitat’s mission.”

Habitat’s Ptomey, however, said the group “greatly appreciates Sen. Shelby’s efforts to include protection for donated appraisals.”

CFPB officials declined comment for this story but provided a 2014 letter that CFPB assistant director for regulations Kelly Thompson Cochran sent to Habitat officials.

The letter seemingly indicates that appraisers who volunteer their services are not in violation of Dodd-Frank regulations.

“When a state-licensed or certified appraiser voluntarily chooses to donate appraisal services for a consumer credit transaction and to perform an appraisal without receiving a fee,” Chochran wrote in the 2014 letter, “we do not believe the appraiser is acting [in the same intent as the regulation].”

Still, the regulatory confusion has drawn criticism from the housing industry.

“The fact that the Consumer Financial Protection Bureau has been unwilling to clarify issues such as this is troubling,” the Appraisal Institute, which represents real estate appraisers, wrote in a comment letter to Shelby and Brown on the issue.

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16th June 2015

Free Appraisal Marketing Webinar

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Register Now For The Next Webinar – we’ll see you there!

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13th June 2015

Appraiser Shortage Could Gum Up the Works at Mortgage Lenders

Mortgage lenders are facing a potential threat to their business that has nothing to do with new regulations or the uneven economic recovery: a persistent shortage of home appraisers.

Since the height of the housing boom in 2007, the number of individuals certified or licensed to do home appraisals has declined by 23,000, or 28%, according to the Appraisal Institute.

It’s not a crisis — at least not yet — but with older appraisers retiring and fewer and fewer college graduates entering the profession, some industry observers say that, in five to 10 years, there won’t be enough appraisers to handle the volume of home sales. For lenders, that could mean higher appraisal fees and long delays in closing loans — at a time when technology could be speeding up the process.

“In five years the banking industry will not have many appraisers left to do their mortgages,” said Rick Hiton, the owner of the Chicago appraisal firm Rick Hiton & Associates.

Age is perhaps the biggest reason why the industry is facing a talent shortage; many existing appraisers are between 50 and 55 and looking to retire within the next decade. But many younger appraisers are being driven from the industry by a combination of lower pay and heavier workloads and more stringent certification requirements that took effect in January have raised the bar for becoming an appraiser, experts say.

It used to be that an appraiser could enter the profession with just an Associate’s degree, but now a Bachelor’s degree is mandatory. New appraisers must also serve at least 2,500 hours as an apprentice and starting in 2017 appraisers will be required to undergo mandatory background checks.

“Now it can take seven years before someone can do an appraisal on their own,” said Greg Schroeder, the president of Comergence, a Mission Viejo, Calif., company that vets appraisers and mortgage originators. “Regulation has created very onerous time and educational requirements for appraisers and it’s killing an industry that is already dying because of age.”

Mortgage lenders, servicers, and real estate investors rely on appraisers to justify the value of a home and the size of a home loan. Appraisals are required by law for nearly all real estate salesabove $250,000 and they must be performed by a state certified or licensed appraiser.

At this point, the appraiser shortage isn’t affecting home sales much because overall volume is low. The turnaround time on most appraisals these days is about a week — compared to 10 days during the refinancing booms of recent years — though appraisals can are taking longer in rural areas, where there are fewer appraisers.

“Appraisers are busy, some are declining the work and lenders are asking for more capacity and staff,” said Brandon Boudreau, the chief operating officer at Metro-West Appraisals, a national appraisal firm based in Detroit.

Industry experts suggest that these bottlenecks will only get worse as mortgage volume picks up and the number of appraisers continues to shrink. Schroeder estimates that as many as 30% of the roughly 61,000 nation’s certified and licensed residential appraisers are no longer in the business but just haven’t surrendered their licenses. Another 20% to 30% are “grumbling about retiring, so the actual number of working appraisers could be cut in half,” he said.

Many appraisers blame the Home Valuation Code of Conduct, which took effect in 2009, for thinning their ranks. The HVCC, which came about as a result of negotiations between then New York State Attorney General Andrew Cuomo, the Federal Housing Finance Agency, Freddie Mac and Fannie Mae, sought to prevent commissioned loan officers and mortgage brokers from bullying appraisers into inflating valuations.

Banks responded by eliminating their costly in-house appraisal departments and instead hiring third-party appraisal management companies. Because these firms get a cut of the appraisal fee, individual appraisers that may have once collected $400 to $500 per appraisal have seen their fees slashed to anywhere from $225 to $350.

“The banks saved millions of dollars a year but appraisal fees never went up,” said Bill King, a senior vice president of valuation solutions at Platinum Data Solutions, an Aliso Viejo, Calif.-based firm that provides collateral valuation technology. “No one thought through these actions.”

A provision of the Dodd-Frank Act requires that lenders pay appraisers “customary and reasonable” fees, but many states are still studying the issue. In the meantime, employers like Hiton say they need to accept work from appraisal management companies even if the fees are low because their employees need the work.

“I have to make sure in a bad month that the appraiser can earn a living and have grocery money, while the company basically does not earn anything,” said Hiton, who employs 12 appraisers.

Advances in technology could further reduce the need for appraisers, some observers say.

In January, Fannie Mae released Collateral Underwriter, an analytical software tool that performs an automated risk assessment of appraisals. Mortgage lenders are encouraged to use the software to double-check the accuracy of property values and reduce mortgage buybacks.

For now, though, appraisers are not allowed to use the software because they are the “boots on the ground updating property” updating property data, a Fannie spokesman said.

Tim McCarthy, the chief appraiser at his own Chicago appraisal firm, TJ McCarthy & Associates, agrees that technology can’t replace appraisers — though he does believe that it can help them do their jobs better. It’s puzzling to him that Fannie has made its tool available to lenders, but not appraisers out in the field.

“Can you think of any other industry that withholds the best tools available for the professional, and only uses the tool after the job was completed to see if they did it correctly?” he said.

http://www.nationalmortgagenews.com/news/origination/appraiser-shortage-could-gum-up-the-works-at-mortgage-lenders-1051403-1.html

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10th June 2015

No More Middlemen – Full Fee Directory

No More Middlemen

Have you noticed a significant decline of lender work over the past few months? Do you want to learn how to get more appraisal orders and finally get off the Appraisal Management Company roller coaster ride for good?

Like many appraisers I have seen a very significant decline in AMC orders over the past few months. I have been kicking myself in the butt for not getting started on my marketing to Attorneys, bail bond companies and credit unions prior to the interest rates going up.

Luckily I have a steady stream of attorney work that keeps me busy due to having a good contact management system in place and a steady client base of bail bond companies that refer their customers to me.

In this book I have detailed the steps that I take to create an inexpensive mailer to get more work from credit unions, attorneys and bail bond companies as well as the systems I use to continually get more referral work from all my past clients.

This is an incredible resource to those appraisers that are really looking to learn how do market your appraisal company and build up your client base so you don’t have to deal with seasonal and economic slow downs. This kind of work never goes away!

Possibly one of the most valuable aspects of this book is the spreadsheets that include:


2500+ Credit Unions
550+ Bail Bond Companies
300+ Direct Lenders
 

 

Chapters Include:

  • How To Use the Spreadsheets Included With This Book
  • Will Rising Interest Rates Affect Your Appraisal Business?
  • Getting Off The Appraisal Management Company Roller Coaster Ride for Good
  • How to Market to Attorneys, Bail Bond Companies, Direct Lenders and Credit Unions
  • Step-by-Step Instructions to Make a Postcard Mailer From Card Design to Mailing
  • How To Get Low Cost Mailing Lists Made Targeting Local Divorce and Bankruptcy Attorneys
  • Tested Methods on How To Get More Referral Work From Past and Existing Clients
  • How to get a FREE Local Listing in Google and Optimize it for Best Results

You are going to especially love the Bail Bond marketing information. These orders are amazing and I have been focusing a lot of my efforts to getting more of their referrals. Why?

When I am referred a customer, I quote 3 fees. I base my first fee off of complexity of the appraisal. Lets say it is a standard tract home in San Diego. I quote them $400 and will inspect within 2 working days and have the appraisal report back to them within 2 days. The second fee is to inspect within 24 hours and have back within 24 hours for $800, and finally a same day inspection and deliver of the appraisal is $1200.

Which one do you think the client wants when they are trying to get a loved one out of jail? 75% of the time it is the $1200 fee for a simple tract home appraisal.

But you do have to follow up to keep these clients, and I have listed all the techniques I use to stay in contact with these clients so the work doesn’t go away.

This resource is jammed packed with information and the spreadsheets are 100% sortable by state to make it easy to create your postcard and do your mailing as noted in Chapter 5: Step-by-Step Instructions to Make a Postcard Mailer From Card Design to Mailing

The next chapter lays out the steps I use to get a massive list of Attorneys in my market area by an inexpensive virtual assistant.

Take the time today to order my New Book & Directory – No More Middlemen – Full Fee & Appraisal Managment Free : 2014 Appraiser Marketing Guide and List of 3400+ Direct Lenders, Credit Unions and Bail Bond Companies and finally get off the crappy appraisal management company roller coaster ride for good!

Click Here To Order

Bryan Knowlton
Appraiser Income
http://www.appraiserincome.com

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