30th January 2013

Evaluation Solutions / ES Appraisal Services Stiffs Appraisers of $9,349,612.79

Who will be the next record setting AMC to totally rip off appraisers? When will litigation be put in place by state licensing agencies so this can’t happen?

This is the total amount of money owed to appraisers by ES Appraisals from Peter Christensen general counsel with LIA.

That is a HUGE jump from what Appraisers Loft took from hard working appraisers. 3 Million sounded big back then…

Who will be the next Appraisal Management Company to collect fees exceeding $27 Million and never pay the appraisers a dime!

Get all the details and read the entire story at:

Peter Christensen is an attorney who advises professionals and businesses about legal and regulatory issues concerning valuation and insurance. He serves as general counsel to LIA Administrators & Insurance Services. He can be reached at peter@liability.com.

Sorry to all the appraisers out there that were taken for a ride. Hopefully something will be done about this in the near future so this doesn’t keep happening every year or so.

Bryan Knowlton

posted in Appraiser News | 7 Comments

23rd January 2013

CFPB Issues New Appraisal Rule – Summary of the final mortgage servicing rules

Summary of the final mortgage servicing rules

January 17, 2013

The Consumer Financial Protection Bureau (Bureau) is releasing final rules to implement laws to protect consumers from detrimental actions by mortgage servicers and to provide consumers with better tools and information when dealing with mortgage servicers. The rules will take effect on January 10, 2014. The servicing rules are set forth in two notices, one to amend Regulation Z, which implements the Truth in Lending Act, and one to amend Regulation X, which implements the Real Estate Settlement Procedures Act. The rules cover nine major topics and implement certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) that relate to mortgage servicing.

BACKGROUND …continue reading the rest of this post: CFPB Issues New Appraisal Rule – Summary of the final mortgage servicing rules

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22nd January 2013

2013 State of the Industry Report

We may have a temporary “fix” for the fiscal cliff, but the real estate industry has its own unique set of factors that will determine the 2013 landscape, including improving home prices, shrinking REO inventory, stubbornly persistent unemployment numbers, and the tenuous global economy.

October Research and presenting sponsor Windward have teamed up to produce the 2013 State of the Industry Report, an in-depth report that takes a look at how the economic and regulatory landscape will impact Realtors, lenders, homebuilders, title agents, appraisers, escrow officers and more.

Download the report today to discover what top economists and industry leaders have to say about 2013, and what you need to do to prepare for the growing market amidst vast regulatory changes.


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17th January 2013

The Coming Crash In Mortgage Originations – More Bad News for Appraisers

The Coming Crash In Mortgage Originations

We are finally heading toward the end of the Great Credit Crisis that began in 2007 as mortgage delinquency and default rates continue to drop. But another big event is coming, and it is inevitable. You can call this one the Great Origination Crash.

When mortgage interest rates rise again substantially, loan production will plummet as refinances dry up. And this time, total loan production is going to remain depressed for many years to come.

The new crash won’t happen this year, and it may not happen in 2013. However, it becomes far more likely for 2014, and it looks very likely to happen before the end of 2015.

Everyone knows that rising rates reduce refinancing. We’re in the middle of a refinancing boom period, and they always come to an end.

But this time, there are two new twists. The coming crash will be more severe than normal, and the post-crash total mortgage production is near-certain to remain subdued for a very long time – maybe even for a decade.

It’s the length of the coming dry spell that really will make the new crash different. To understand how this could happen, let’s take a look at how the mortgage industry has evolved in the past two decades.

The first big refi boom was in 1993. That year, there were two refis produced for every purchase loan. Interest rates rose in 1994, and the total U.S. mortgage production in 1995 (refinances plus purchase loans) sank 46% below the 1993 level.

In 1999, we also saw the end of a refi boom that had peaked in 1998. By year 2000, total mortgage production dipped 33% below the 1998 totals. It would have been worse, but the purchase market was stronger.

Today, we’ve been through a much more extended refi boom period, stimulated in part by the Home Affordable Refinance Program. Refinances outnumbered purchase loans by about two-to-one in 2009, 2010 and 2011. In 2012, refinances have outnumbered purchase loans by an unprecedented three-to-one ratio.

Moreover, when prior refi booms ended, lenders had more options to deal with the problem. In 1994, lenders opened up the subprime purchase loan business. In 1999, they could offer subprime refinances as well as purchase loans.

After the refi boom of 2003, history’s largest, lenders rolled out interest-only loans and pay-option adjustable-rate mortgages. These loans kept the refi market going to some extent because they lowered monthly payments even as interest rates were rising.

But all of these options increased credit risk. Now, they are gone – so when refis crash again, there won’t be much volume left.

A gradually improving market for purchase loans can’t possibly make up the difference. We believe total annual mortgage volume will drop by 50% or more in the coming crash. And that’s just the start of the story.

Super-low mortgage rates hit the scene in 2009. We’ve now been through four straight years of incredibly low rates, thanks to the Federal Reserve.

By July of 2012, SMR’s property records database showed more than 33% of all existing mortgage borrowers had loans with rates below 5%, and 53% had loans with rates below 6%. By the end of 2013, these numbers will be higher. Thus, all of the folks with super-low-rate loans may never refinance again.

At the same time, today’s low-rate loans pay off principal faster than the norm. And record numbers of people have been refinancing into 15-year or other short-term mortgages, which also pay off principal fast. This means fewer borrowers owe large sums. Yet, it’s the borrowers who do owe a lot that are most incented to refinance.

In fact, our July study found that in total, 74% of all existing borrowers either had low-rate existing loans, short-term mortgages or loans with balances below $100,000. All would be unlikely future refinancers.

By the end of 2013, the universe of unlikely future refinancers will only increase, perhaps to 80% or 90% of the borrower universe. So when the new crash begins, we’ll be left mainly with the purchase mortgage market for a long time to come.

The purchase market was only $480.7 billion in 2011; it is increasing some this year and may increase a little more in 2013. But it stretches credulity to think that purchase loans will come even remotely close to making up for the loss of refinances, which will probably be around $1.5 trillion for 2012.

What the Fed gives today, it takes back later. The extremely long period of super-low rates has removed most borrowers from the refi market of the future.

However, the next crash also will have some positive effects. Prepayment problems with serviced loans will largely disappear for an extended time. And home equity lending will surely increase. Homeowners are again building equity against which to lend, thanks to faster principal payoffs from low-rate mortgages and 15-year mortgages, plus rising home values.

The next crash and its aftermath will be the worst for mortgage bankers that depend on origination volume for most of their income. It will be a lesser issue for big servicers, and a positive for home equity lenders.

via Mortgageorb

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17th January 2013

When asked not to disclose if property has CO detectors

Some appraisal management companies are asking those in California NOT TO disclose if there are or aren’t Carbon Monoxide Detectors located inside a home.

Laws were recently passed in some states requiring inspection for home inspectors.

(1) For all existing single-family dwelling units intended for
human occupancy on or before July 1, 2011.

(2) For all other existing dwelling units intended for human
occupancy on or before January 1, 2013.

(b) With respect to the number and placement of carbon monoxide
devices, an owner shall install the devices in a manner consistent
with building standards applicable to new construction for the
relevant type of occupancy or with the manufacturer’s instructions,
if it is technically feasible to do so.

(c) (1) Notwithstanding Section 17995, and except as provided in
paragraph (2), a violation of this section is an infraction
punishable by a maximum fine of two hundred dollars ($200) for each

(2) Notwithstanding paragraph (1), a property owner shall receive
a 30-day notice to correct. If an owner receiving notice fails to
correct within that time period, the owner may be assessed the fine
pursuant to paragraph (2).

(d) No transfer of title shall be invalidated on the basis of a
failure to comply with this section, and the exclusive remedy for the
failure to comply with this section is an award of actual damages
not to exceed one hundred dollars ($100), exclusive of any court
costs and attorney’s fees. This subdivision is not intended to affect
any duties, rights, or remedies otherwise available at law.

If you are asked not to report the use of CO detectors in an appraisal report, you can disclose the fact that you are not required to perform this inspection.

You can state the actual law, or bill #’s (Per WA State RCW 19.27.530 / CA State: Per CA Senate Bill – SB183: CO Alarm(s)) and disclose that the appraisal inspection does not require CO detectors to be installed. Proper CO detection unknown; testing not done.

Bryan Knowlton

posted in Appraisal Management Companies | 1 Comment

16th January 2013

OREA information for California Appraisers

Hold Times, Application Status, and Renewal Letters

Due to a high volume of renewal applications, The Office of Real Estate Appraisers’ (OREA) phone system has exceeded capacity on several occasions, which has resulted in callers experiencing a busy signal. When a caller is able to get through to the office, the caller will experience longer than normal hold times. This excessive call volume has resulted in delays in application processing time.

To avoid longer than average hold times, you may check the status of your application from the OREA website by selecting the “Appraisers” tab, then select “Check Your Application”, or you may click on the image below and go directly to the “Search Applications” page.

Once on the “Search Applications” page enter the required information. The results will give you: The date the Application was Received, the date a Request For Information was sent (if any), the date the Admission to Exam Letter was sent, the date the Admission to Exam Letter Expires, and the date Additional Information was Received.

Identify the date your Application was received, as illustrated in the example below. Our current processing time is 90 days* from receipt of complete application package. If you are sent a request for additional information, our processing time will reset to 90 days upon receipt of your most recent correspondence. The information provided on the Check Your Application link is the same information you will be given over the phone.

OREA is now sending out renewal letter reminders, however, NO renewal letters were sent to Licensee’s with license expiration dates from January 1, 2013 through June 30, 2013. All Licensees are expected to be aware of their license expiration date and the renewal cycle associated with the expiration date. There are two different renewal cycles for your license. Licensees can identify the specific licensing period by clicking on the Search for an Appraiser button below.

Once the Licensee has searched their license number or name, the renewal type will be identified as either:

USPAP (requires a 7 hour USPAP certificate)
Full CE (requires the remaining 49 hours of continuing educations certificates, which must include the NEW 4 hour CA and Fed Law certificate)

Please allow for 90 days for processing time.

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