Appraiser Income

Edward DeMarco, acting director of the Federal Housing Finance Agency, told the Senate Banking Committee April 18 that Congress must act in order to bring private capital back into the housing market, a move he has been urging for years, National Mortgage News reported.

Fannie Mae and Freddie Mac cannot complete the transitions needed to encourage more private investment in the mortgage market until Congress makes a concrete plan, DeMarco told lawmakers.

“I think that with a $10 trillion single-family mortgage market, the government doesn’t belong at zero or at 10. It belongs somewhere in between,” DeMarco told lawmakers, National Mortgage News reported. He further said he believed that the government could and should play a role in setting standards, rules and transparency guidelines, which would go a long way toward facilitating an effective role for private capital in funding and bearing the credit risk in the mortgage market.

DeMarco also thanked lawmakers for stopping the use of agency guarantee fees to offset government spending in unrelated areas. “By indicating that the Congress of the United States has agreed it does not want to use Fannie and Freddie to be funding part of the government, it then removes that as an issue or a barrier to actually doing something to bring these conservatorships to an end and rebuild the housing finance system. I think the markets would take that very seriously,” he said, National Mortgage News reported.

He also advised against having the U.S. Department of the Treasury sell off preferred shares of the government-sponsored enterprises. “I think it would certainly generate confusion and questions in the mortgage market about the role that private capital would have in the future if there was a thought that there was some sort of reconstituting Fannie and Freddie as they have been, with the charters they had,” he said, National Mortgage News reported.

In response to committee questions about the role that community banks would play in the mortgage market with the FHFA’s new single securitization platform, DeMarco said the agency is working to get data standards and electronic reporting standards in place that would work with the whole market. He said an industry standard would make it easier for a community bank to acquire technology from a vendor and be able to put it in their institution — even a very small institution.

Even as DeMarco testified, rumors have surfaced that he likely will be replaced as acting director, a role he has held since 2009. DeMarco repeatedly has resisted Obama administration efforts to institute principal reduction programs at the GSEs, National Mortgage News reported. Top candidates for replacing DeMarco are said to be Rep. Mel Watt, D-N.C., and economist Mark Zandi.

Reposted from Appraiser News Online.

Real estate appraisers’ ranks thinning
Study: Nearly 6 in 10 appraisers are more than 50 years old
By Inman News, Tuesday, April 9, 2013.

The number of people working as appraisers has dropped 15 percent since 2007 and could decrease another 25 to 35 percent during the next 10 years due to retirements and fewer new entrants into the profession, according to an analysis released today by the Appraisal Institute.

At the same time, the share of appraisers with a state certification, which requires more education than a license, is at a record high, indicating that the appraiser population is more qualified overall, the Appraisal Institute said. At the end of 2012, 87 percent of appraisers were certified, up from 72 percent at the end of 2006.

The Appraisal Institute analyzed data from the national registry of the Appraisal Subcommittee (ASC), which the U.S. Congress created in 1989 to oversee the real estate appraisal process in federally-related transactions, from 2006 through 2012.

During that time period, the number of appraisers decreased about 3 percent per year, to 83,400, driven largely by a decline of nearly 16,000 licensed appraisers, the Institute said. Meanwhile, the number of certified general and residential appraisers rose by nearly 6,000.

About a third of the decline in licensed appraisers was due to appraisers achieving certification. The vast majority of appraisers who left the profession during that time were appraisers who had only achieved licensed status and were either relatively new to the profession or did not get certified, the Appraisal Institute said.

The Appraisal Institute — an association of nearly 23,000 real estate appraisers in close to 60 countries — anticipates attrition due to age and a “sharp and long-term decline” in new entrants to the field may result in a 25 to 35 percent decrease in the total number of appraisers in the next decade.

Michael Saad, 49, an Iowa resident, was sentenced to six months’ imprisonment, followed by six months’ home confinement, for willfully overvaluing property for the purpose of influencing a federally insured credit union.

Saad was sentenced on On April 1, 2013. United States District Judge Stephanie M. Rose also sentenced Saad to two years’ supervised release and ordered him to pay $131,575.06 in restitution to Deere Harvester Credit Union.

Beginning in April 2007 and continuing until December 2007, Saad knowingly inflated the values of properties that he appraised in an effort to justify higher mortgage loans for borrowers. Saad misrepresented the square footage, age, number of bedrooms, number of bathrooms, and other information associated with the subject properties and the comparable properties listed in his appraisals.

United States Attorney Nicholas A. Klinefeldt announced the sentence.

This case was investigated by the Federal Bureau of Investigation and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.

The Federal Housing Administration may require a taxpayer bailout after all, possibly needing as much as $943 million, HousingWire reported April 10. If an FHA bailout occurs, it would be the first one in the agency’s history.

FHA Commissioner Carol Galante cautioned that a bailout is not a certainty, but one nonetheless was included in the White House’s proposed 2014 fiscal year budget.

The FHA’s mortgage insurance is reported to be negative $13.5 billion, but despite that significant deficit, the agency likely would not make a decision on whether or not to take taxpayer aid until at least September.

“The President’s budget projects that FHA may need a $943 million credit from the U.S. Treasury in October to make certain sufficient reserves are on hand today to cover projected losses over the next 30 years,” Galante said, HousingWire reported. However, she also noted that the FHA was taking action to reduce the likelihood that such assistance would be required.

Galante noted that were it not for the FHA’s reverse mortgage portfolio, the agency would have a positive surplus of more than $4 billion by the close of 2013.

Shaun Donovan, U.S. Department of Housing and Urban Development secretary, said that the FHA’s projected negative $13.6 billion in capital reserves has shrunk to $943 million due to the agency taking steps to improve the health of its mortgage insurance fund. Those steps have included recovering older loans, establishing new premiums and addressing faults in the reverse mortgage program, HousingWire reported.

FHA-backed mortgages are wrapped exclusively into Ginnie Mae mortgage-backed securities, which are guaranteed by the federal government.

Reprinted from Appraiser News Online

Job Opening: Executive Management Position

Metro-West Appraisal has an excellent opportunity for a Chief Real Estate Appraiser. Responsibilities and objectives include upholding high quality standards and staff appraiser development, and protecting the company by ensuring compliance with regulatory and legal requirements as they relate to real estate valuations.

Appraisal certifications/designations, previous management experience specific to real estate, industry knowledge and professional demeanor will be distinguishing aspects for consideration.

Primary job functions include, but are not limited to, the following:

Provide guidance to appraisers on staff on specific appraisal issues and state, federal and
client regulations
Provide training to Appraisers on recurring problems
Review escalated complex appraisal reports
Maintain monthly scorecards on Appraisers and clients
Act as client liaison on Appraiser quality issues
Direct QC team members on how to handle client/lender specific issues
Maintain knowledge of guidelines for GSEs, secondary market participants, client/lenders, FHA/HUD, state legal requirements
Point of contact for problem files where realtors/clients/homeowners are involved
Responsible to lead, coach and motivate employees through encouragement and reinforcement, to create a work environment that fosters teamwork, high morale and retention of workforce
Attend industry events and seminars
Host company webinars on procedural and educational topics

Position Requirements:

Position currently located in Northville, Michigan, with future plans of relocation to our
Detroit headquarters
Salary position, 40+ hours a week
Travel less than 10% annually
Appraisal certification

For consideration, please contact careers@metrowestappr.com.

Kentucky Passes Legislation Helping Appraisers Harmed by AMCs

On March 21, Kentucky Governor Steve Beshear signed into law House Bill 120, which created a new appraisal management company recovery fund to replace its current surety bond requirement.

The Kentucky Real Estate Appraisers Board will establish procedures for making claims against the fund and will administer the funds in order to provide restitution to licensed or certified real property appraisers who have suffered pecuniary harm by an AMC. Appraisers will be able to seek reimbursement for “reasonable and appropriate court costs.”

The legislation also extends the Kentucky AMC registration requirements to “portals” that “fulfill requests for appraisal management services on behalf of clients, whether directly or through the use of software products or online.”

The recovery fund is supported by an annual surcharge of up to $800 on each AMC registered in the state. The fund has a cap of $300,000, at which point the surcharge will be suspended until the fund needs to once again be replenished.

View details of the bill.

Republished from the Appraisal Institute

Hey Everyone, Fans, Appraisers and Haters.

My April 1st, 2013 (Aprils Fools Day) blog post that was a parody interview with fictitious AMC owners / CEO’s was not liked by all.

Although all the emails I received from appraisers stating they realized this was a joke, there was one AMC that threatened legal damage if the post remained up to readers.

Furthermore, I do believe in freedom of speech, but I do not have the time or money to fight this issue so I have decided to take the post down.

Next year I will produce a better ‘joke’ for us appraisers! I hope they don’t take me off their appraisal panel (new joke). 🙂

Take care,

Bryan Knowlton
http://www.appraiserincome.com