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Publisher’s Note Valuation professionals are standing at the doors of additional licensing, regulation, transparency, and reform. Behind these doors of change are both opportunity, and unintended consequences. The authors featured in LiveValuation this month knock on these doors and consider what lies behind them for appraisers, appraisal management companies, and lenders. Mark Chapin addresses reform in his feature article, “Appraising in the 21st Century.” But instead of reform imposed from external sources, Mark encourages appraisers to implement reform from within. Recently, he has observed that lenders are once again proclaiming “collateral as king.” Mark regards this shift in perspective as a good thing for appraisers, but they need to respond with confidence and assure lenders that they are “up to the task.” We need to change the way we do business and look beyond three comps on a grid. Joseph Palumbo delves into the licensing of Appraisal Management Companies (AMCs); are these new state laws all they’re cracked up to be? Coming from the relocation world and managing a large panel of relocation appraisers, Joe has found himself caught in the net of AMC regulation. Joe contends that licensing is not the panacea that some view it as. He calls for unity within the profession and, like Mark Chapin, states that we need change from within. Palumbo pulls no punches in “The Fool’s Gold of AMC Licensing.” Returning author Vladimir Bien-Aime opens the door of technology in his article “Enhancing Transparency in Collateral Valuations.” Vlad points out that much of the information passed back and forth in the valuation process is underutilized. This plethora of information needs to be made transparent and harvested for better collateral risk decisions. Since the GSEs are moving to collect more information by XML, Vlad asks, “Doesn’t it make sense for lenders and other parties, like appraisers and AMCs to do the same?” Technology and transparency can only enhance quality. Jordan Petkovski writes a very timely article on financial regulation and the recent bill that was signed into law. In “Financial Regulatory Reform, AMCs, and the Residential Appraisal Industry,” Jordan analyzes past regulation and the current legislative reform. He introduces questions about AMC regulation, “customary and reasonable” fees, and appraiser independence. In concert with Joe and Mark, Jordan calls on the appraisal industry to “police itself” and regain consumer confidence. Jordan states, “The legislation isn’t going to make the industry any safer if we don’t do our part to aid those charged with enforcing the guidelines.” In addition to these weighty topics and on the lighter side, don’t forget to glance at our section Things Appraisers See. Appraisers always have a camera with them and it’s amazing what they observe while out on appraisal inspections. Jeff Dickstein closes our magazine with his contribution to For What it’s Worth. In his commentary, Jeff enlightens us regarding the lifespan of the average appraisal. If you think your appraisal is only used to close a loan, think again! Read this article to learn how many times your appraisal might be read by different individuals. This combined issue for July and August is intended to give the staff a little break from our monthly schedule. With all that transpiring in the valuation space, it’s not going to be a lazy August. Remember to check our website www.LiveValMag.com for recent news. See you in September, Ernie Durbin
Ernie Durbin, SRA Publisher ernie@livevalmag.com
Stats
{ Highlights as of April 2010 } -4.1%
-3.1%
MICHIGAN
washington
-5.6% NEVADA
-3.4%
-3.4%
arizona
FLORIDA
[
]
Excluding distressed sales, the worst five states for year-over-year price declines changes slightly.
+6.0%
N.DAKOTA
+3.7%
new york
+3.6% VIRGINIA
+8.4%
CALIFORNIA
+10.6%
{ Forecast Highlights as of April 2010 }
hawaii
[
]
The five best states for year-over-year price appreciation excluding distressed sales.
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to April 2010) is -29.5 percent. Excluding distressed properties, the peak-to-current change in the HPI is -21.1 percent.
• Including distressed sales, 60 of the top 100 Core Based Statistical Areas (CBSAs) increased on a year-over-year basis in April. The number of CBSAs with increasing HPI has been improving steadily since April 2009, when all of the top 100 CBSAs had a falling year-over-year HPI.
[
[]
Stats
{ CoreLogic* Data }
April HPI for the Country’s Largest Core Based Statistical Areas (CBSAs):
“The monthly increase
April 2010 12-Month HPI
in the Home Price Index
(HPI) shows the lingering effects of the home buyer
CBSA
Change by CBSA
tax credit,” said Mark
Single Family Combined
Fleming, chief economist
for CoreLogic. “We expect
that we will see home prices remain strong through
early summer, but in the second half of the year
we expect price growth to
soften and possibly decline moderately.”
Chicago-Joliet-Naperville, IL Philadelphia, PA New York-White Plains-Wayne, NY-NJ Phoenix-Mesa-Glendale, AZ Atlanta-Sandy Springs-Marietta, GA Dallas-Plano-Irving, TX Los Angeles-Long Beach-Glendale, CA Riverside-San Bernardino-Ontario, CA Houston-Sugar Land-Baytown, TX Washington-Arlington-Alexandria, DC-VA-MD-WV
Single Family Combined Excluding Distressed
-6.0% -5.3% 0.0% 1.0% 1.1% 2.0% 4.2% 4.7% 5.4% 6.5%
-1.5% -4.9% 1.3% -1.6% -0.4% 3.0% 6.4% 6.1% 2.1% 5.9%
* Source: CoreLogic HPI as of April, 2010.
-7.2% idaho
-5.8%
-3.7%
illinois
washington
-4.3%
maryland
On a month-over-month basis, the national
-4.6%
average home price index increased by
NEVADA
0.8 percent in April 2010 compared to March 2010, which was stronger than the previous one-month
[
Including distressed sales five states with highest annual price depreciation.
]
increase of 0.1 percent from February 2010 to March 2010.
Contributors { The Voice Powered By }
{ Jordan Petkovski }
{ Mark Chapin }
Vladimir Bien-Aime is
Jordan Petkovski
Officer for Interthinx,
CEO and
has worked in and
Mark Chapin oversees
of Valuation at Weichert
Co-Founder of Global
around the residential
all value related
Relocation Resources.
Data Management
appraisal industry for
activities, including file
He spent seven years
System, LLC, a
most of his career. He
review services, new
at Washington Mutual
respected pioneer
has held numerous
and existing product
Bank where he was a
in appraisal process
leadership roles for
development initiatives,
First Vice President. Mr.
management since
appraisal and settlement
and government and
Palumbo holds an SRA
its inception in 1999.
services providers
regulatory compliance
designation, is AQB
Throughout the past
nationwide. Currently,
efforts. His diversified
certified and he is a State
10 years, thousands of
he is the Director of Staff
background includes
Certified residential
prominent appraisal
Appraisal Operations
federal government and
firms, appraisal
at TSI Appraisal
conventional lending
management
Services®, a wholly
experience, independent
companies and lenders
owned subsidiary of
specialty valuation
have employed the
Title Source®. His
experience, and decades
company’s web-
primary focus is the
of marketing, solution
based software
successful development
development and sales
solutions for appraisal
of operational processes
experience in the US and
management and
based upon a greater
Canada.
workflow automation.
understanding of the
Global DMS solutions
industry as a whole. His
include the OASISOne
responsibilities include
Management Platform,
the development
eTrac WebForms and
and management of
the MISMO Appraisal
staff level appraisers
Review System (MARS)
operating throughout
PDF to XML data
the country.
{ Joseph Palumbo }
{ Vladimir Bien-Aime }
Joseph Palumbo is currently the Director
appraiser licensed in NJ.
extractor.
As Chief Valuation
Contributors { The Voice Powered By }
{ Jeff Dickstein } Jeff Dickstein, Pro Teck’s Chief Appraiser, is responsible for the people, processes and detail oriented culture that is at the core of our work. Jeff has been in the mortgage industry for twenty-nine years, twenty of which were spent as an appraiser. His diverse background and problem-solver mentality give him a unique perspective on asset valuation, risk mitigation and the future of the industry.
H V C C
The
Unity from within will make much needed change in the industry possible Joseph Palumbo
Fool’s Gold of
AMC
Licensing Since I landed in the world of relocation about three and a half years ago, I really did not pay much attention to what was happening in the trenches of the lending world. That changed when the concept of licensing appraisal management companies came about and I began to take interest in them. My interest soon became more of an occupational study since these laws are so “broad-brush” and vague. (“Broad brush” meaning just about anyone involved in the process that retains appraisal services for a third party would be classified as a “management company”.) >>
{ For the record, let me say that I am not anti-AMC. }
As the manager of an in-house appraisal arm of a Relocation
enforced by the state boards that are short on cash and time,
Management Company, I was shocked and disappointed
then what makes them different from any laws already on the
that these laws cast a net on just about anyone who manages,
books? Currently, 18 states have such laws on their books, and
selects, and retains appraisers for third party use. Clearly this
on top of the AMC laws, many states are requiring AMCs to
type of legislation was created out of a knee-jerk reaction to
be “registered,” which can be costly and requires plenty of
one of the many “crisis-type” issues that came at the appraisal
paperwork. Kudos to Governor Bob McDonnell for signing the
community in 2008 and 2009, such as a heightened
Virginia state law, which makes it illegal to engage in the
sense of scrutiny of the final appraisal product, the
same “appraisal nonsense” described above (coercing
means by which the analysis should be conducted,
appraisers, not paying, etc.), but does not require a
A
and the national denial that the real estate world had tanked. I am specifically referring to the attention brought upon the “appraisal process” by the ill-informed New York State Attorney General,
registration process (and, in turn, no fee). Also noted as being proactive is the Arizona legal system, which requires licensing and registration for AMCs, but has a single line exemption for the relocation industry, simply
Andrew Cuomo, and the infamous HVCC.
because “we are not the problem” (the law reads, “the
This attention was brought on by the Attorney
exemption for appraisals prepared for the purpose of
General’s investigation into appraisal practices between Washington Mutual Bank and their AMC, E-Appraiseit, owned by First American. While I
M
employee relocation”). For the record, let me say that I am not anti-AMC.
agree with the basic tenets of the HVCC and the AMC laws, I just do not think there will be a net
Recently, a state board attorney whose state passed
tangible positive affect, or that the “real issues” are
AMC legislation in 2009 contacted me. She contacted me
being conquered. AMC laws and HVCC are not the panecea. In fact, I wish there were a panecea, because some calm is needed. Being a realist and
C
institutionally tenured manager of the appraisal process, I know the reality of what happens, versus what is supposed to happen.
based on my inquiry to the state board, and stated that “this law was not intended for your business model in the relocation industry…because you use the appraisal with the client, whereas lenders do not use it…they get it…QC it, and pass it on.” It is great to see some realistic thinking for a change. The AMC-appraiser relationship is much like the HMO-doctor relationship; mutual need
For starters, let me say that the relocation world has no direct
mandated by external forces, peppered with some mistrust.
OTS-like government oversight or appraisal requirements for
Don’t get me wrong, there is a lot of merit to the underlying
the appraisals that are not intended for lending. The relocation
premise of HVCC, but I just do not think it is going to result
industry is self-policing and we rely on what is set up by state
in a changed world for the appraisal community. What the
licensing and our own quality control. Let me also say that
appraisers do not like about the AMCs are the requests for
while my department may perform some of the same functions
fast appraisals, some at a lower fee than they have seen in
that an AMC does, we do not take any of the appraiser’s fee.
years; requests coming with numerous assignment conditions,
We do select, maintain, review, and use appraisers, as well as
many of which are not realistic and unacceptable (3 comps
arbitrate valuation disputes.
within 3 months and 1 mile); and the occasional “can you hit the number?” request before the analysis gets done (comps
Here is the issue: As pointed out by the OTS last year, the
checks), among many others. These requests changed the
FIRREA laws of 1989 already contain much of the language
previous business model that existed for appraisal services
that the AMC laws cite. States have also set up Appraisal
(some as a result of the business cycle and some because they
Boards who are supposed to monitor fraud, egregious issues,
were mandated by the HVCC). But, sometimes even good
and such. The problem with FIRREA and the State Boards is
change is hard to swallow. When you are forced to change, that
simple: lack of money, resources and time. So, along come
is when it difficult to acclimate. Many of the pressures placed
these new AMC laws that deem it unlawful to coerce an
on AMCs are a result of what has transpired in the world, such
appraiser, not pay them, tell them which appraiser to use,
as increased competition, web-based valuation tools, quick
have people who select and review who are not “trained in
internet real estate research, fraud, secondary market issues,
real estate,” and so on. These new laws are just restating the
and misunderstanding of the appraisal process in general. I
ones that we already have; we still lack an efficient mechanism
wonder what planet the “investors” live on—the one that
to enforce them. If the new AMC laws are governed and
has guidelines so they will not purchase loans in declining>>
markets? I believe that a lender that asks an appraiser to
was stated twenty years ago? “State licensing will change
“remove a negative time adjustment” should be reported
everything.” Maybe it didn’t actually change everything
to the HVCC hotline. Oh, that’s right, there isn’t an HVCC
because we didn’t make it matter; we didn’t make it change
hotline! Then call your department of banking, they say. Good
everything.
luck—the Department of Banking is not designed or staffed for those types of issues. I recently spoke with an appraiser
What we already have included in FIRREA and state law is
who did not read or adhere to the engagement letter I sent,
part of the mechanism to get us to the next level. The missing
which outlines many of our administrative requirements as
ingredient is unity. But, that does not mean we need to abolish
well as some assignment conditions. He told me, “We have an
the AMCs or AMC laws. Let’s look within and stop trying to
AMC law here and you have to pay me, regardless, or you are
reinvent the wheel with both the products and the process. We
breaking the law.” I stated, “Great, I will take my chances since
are miners of fool’s gold until we make real change happen
you signed the engagement letter, yet failed to meet the simple
from within, which, while it is not easy, is the only way for true
requirements stated in the letter—which is why I have called
meaningful change.
you three times.” In this situation, we are not talking about value; we are talking about basic development and reporting
F
issues that were not clear to me as both a user and a client. Is this what the AMC laws are for? Does anyone really think that requiring the AMCs to fill out applications, pay a fee, and requiring staff members to take a 15-hour USPAP will stop the madness? Actually, if the fees are an issue, it could increase the cost of operating for the very folks that are presumably not paying a “fair rate.” Since the big 3 lenders (all using profitable AMCs) have 60% of the market now, via servicing or closing every US loan, I don’t see things changing until we see a unified industry—an industry that will unilaterally agree to push back on any conditions that are deemed to be unreasonable. It is very difficult to push back on three financial giants, but without a push, positive changes for the appraisal community will not happen. The other day, a friend told me of a lender (his client) who is seeking to create a special list outside the AMC they use; the client’s claim is poor service and product…I’d bet that licensing that AMC would fix that! I also heard about a request coming from an AMC in a state that requires they be licensed and registered. The “caller” asked the appraiser if he could “hit the number.” The appraiser asked “Isn’t that a violation of the HVCC and the AMC laws?” The caller, who is in loan production, laughed, “Who is enforcing this stuff anyway?—We do it all the time and we just send a text message to our appraisers telling them what they need.” There are approximately 97,000 appraisers in the US handling over 1 trillion dollars in mortgage money. Over 75% of the states require licensed appraisers for federally
{ While I agree with the basic tenets of the HVCC and the AMC laws, I just do not think there will be a net tangible positive effect, or that the “real issues” are being conquered. }
I R R E
related transactions and 45% require licenses for all appraisals. Imagine if ALL 97,000 appraisers decided to make a change by just saying “no” to unreasonable compensation or assignment conditions. If we did not have state licensing, there would be a clamor to get it because, in principle, it brings so much of what the appraisal community needs now. Remember what
A
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Appraising in the 21st Century Collateral is king again and appraisers are expected to work harder and smarter
This is a time of great opportunity. It’s also a time of incredible
Things changed at the end of the last century and during the
change. I’ve found that these often travel together. The other
first few years of this one. In my opinion, things got out of
thing that comes with change, of course, is discomfort. Change
hand. The government is still trying to figure out where things
hurts, but if we as appraisers recognize the new environment
went wrong and who is to blame and I’m happy to leave that
for what it is and dedicate ourselves to giving clients the value
work to them. I’d rather focus on where we go from here.
they need, we will all thrive in the years ahead. In the last days of spring 2010, I was in southern California Let’s talk about the new environment we find ourselves in, as
for the Predictive Methods Conference. This forum typically
appraisers in the 21st century. As a professional appraiser with
focuses on risk mitigation, data analytics and forecasting.
nearly 30 years of industry experience who now works as a
I left the conference feeling very encouraged by what I
chief valuation officer who hires fee appraisers to aid the risk
learned there. It seems clear (at least to those who attended
mitigation work our company does for lenders, I see today’s
the conference) that collateral is king again. Speakers and
appraisers facing new challenges and opportunities.
attendees both addressed the need to ensure accuracy in
Lenders Return Their Focus to Collateral Valuation
collateral valuations. Lenders now seem to be fully aware that property valuation is a critical component of their risk mitigation strategy.
When I started appraising homes back in the early 80s, the value of the collateral was a critical part of the lending
As I see it, this shift in perception comes not a moment too
equation. If the property didn’t have sufficient value to fully
soon. Fannie Mae recently issued new guidelines on how it
collateralize the mortgage note, the deal didn’t get done. It was
will view appraisals, accept valuation data, and review loan
as simple as that.
files. Freddie Mac is also engaged in evaluating current and
{ It means that we can get back to the business of appraising rather than the job of appeasing. }
past collateral valuation practices of the lenders it works with. This is all very encouraging to me. A return to well thought out
When lenders approach appraisers today, they may be asking
practices in this area is critical for our industry’s recovery. And
about a property that sold for $250,000 in the past, but might
yet, I also realize that this focus on the appraiser’s business
not be worth anywhere close to that number in the current
brings with it other challenges.
market. The lender needs to know if the neighborhood will
What Lenders Want Today As a professional appraiser, I fully understand the frustration
support whatever today’s value is and, just as importantly, whether or not that value can be expected to hold into the short-term future.
and anger that many felt when lenders seemed to care more about the price a seller wanted than the realistic value of the
This change can be really great news for our industry. It means
property. Many appraisers felt pressured to hit these higher
that we can get back to the business of appraising rather than
numbers and knew their livelihood was threatened if they did
the job of appeasing. We can spend our time doing the work
not.
we were trained to do. But first we have to convince lenders that we’re up to the task.
Today, lenders need something different. Now it’s not about the number required to make the deal work, it’s about having
Some of the comments I heard at PMC—both from the
reliable numbers that will convince investors that the deals
speakers and from the audience—questioned the competency
are solid and will remain so into the future. Going forward,
of today’s appraisers, both on the origination side of the
it’s the only way lenders can protect themselves from buyback
business and on the review appraisal side. Initially, my reaction
requests that threaten their businesses.
was one of anger, but after thinking about it, I was forced to admit that many appraisers are new to the business,>>
have never appraised properties during a downturn of this magnitude, and some, I’m sorry to say, don’t seem to understand that in today’s market everyone is working twice as hard for half as much. To be fair, I didn’t hear anyone blaming appraisers for anything at PMC or elsewhere. Most folks seem to understand that there were many parties to blame for our current financial mess and very few who can claim to be blameless. But as a professional appraiser, I’m troubled by the fact that most appraisers haven’t changed the way they do business in the last 40 years and that many appraisers are not willing to spend the money or take the time to provide reports that are up to date and in sync with current market conditions. Those are some of the comments I have heard at recent conferences. If we really want to ensure that the values we’re returning to our lender clients are as accurate as possible, then we’re going to have to make certain that we factor in enough of the right kinds of data to make that happen. Unfortunately, many of today’s appraisers are not making enough use of quality data to adequately value and risk-rate collateral. In addition, they lack the ability to share information with other appraisers and to cooperate for mutual benefit. As a result, many lender-based risk managers do not generally view appraisers favorably.
Getting Back to Basics Appraising real estate is a local function. It always has been and I think that to do the job right, it will always require local expertise. Over the years, we have finally learned that there really is no such thing as an “average house” in an “average neighborhood.” So many elements go into the socio-economic makeup of a community that it cannot accurately be compared to others around the country, except on a macro scale. Recent strides in data collection technology have enabled savvy modelers to combine groups of data with advanced analytics that provide good tools and a 360-degree view of neighborhoods and properties within them. Unfortunately, much of it has remained difficult for appraisers and modelers to access until recently. By taking into account a larger pool of “comp” data, the odds that a valuation will be dangerously skewed by one bad comp out of thirty are far less than they would have been under the old standard of one out of three.
Succeeding in a Swiftly Changing Market We’re currently working within a market on the move. Sometimes, the situation in a given geography can change within a 30 day period, so why are many appraisers still treating this like a market of the past and looking solely at history to derive a value? I worry that too many appraisers are just filling out forms without accessing the critical data sources now available. I realize that this isn’t the way most appraisers worked in the past. I was one of those appraisers working in the field 20 years ago. In those days, the value of real estate always appreciated, it was just a question of how fast. Those days are now officially over and like everyone else in the real estate market today, appraisers are being asked to work not only harder, but smarter. Appraisers today are being asked to look beyond what the property was worth yesterday and even further than what it is probably worth today, looking into the future. No one is suggesting that appraisers start buying crystal balls, but rather that they make every effort to compare and contrast the subject property, neighborhood and general market area to the same location in the past, as well as to comparable properties. Lenders need to know if a subject property is in a healthy neighborhood and if it is likely to sell in a reasonable amount of time. Homes in healthy areas sell very differently from those in struggling neighborhoods plagued by anemic sales, multiple REO properties and overpriced homes. Around the country, we’re seeing markets right now where properties are on the market for well over a year, at times. That’s driving down property values in those neighborhoods, but many sellers aren’t reducing prices to keep the properties moving. Lenders need appraisers to tell them where this is happening. That kind of detailed information goes beyond filling out a form. It requires the appraiser to really know the neighborhood and tell the lender what is happening on a local level. Now, I will grant you that this means more work at a time when lenders are as interested in turnaround times as ever. So, of course, that’s a serious challenge. I’ve visited with plenty of appraisers who feel that additional work isn’t what they signed up for. I can appreciate that and each professional must set his own standards, but for those willing to meet a higher standard, the opportunity this market offers is very exciting.
Getting Better at What We Do Appraisers working in the field today must realize that in order to be the respected counselors of the marketplace that they want
to be, they must have a complete understanding of both the
questions, completes those steps and provides an accurate value
sales side of the marketplace as well as the forecasting side. A
for the collateral. Appraisers content with just filling out basic
critical component of that is a thorough understanding of the
forms are not likely delivering this level of service.
effects of competition on the subject property over and above what has happened in the past.
Preparing for the Future As long as lenders continue to rely on property valuation to
To lenders, a good understanding of the dynamics of the
make lending decisions, it will be important to have access to
neighborhood is more important than it has ever been.
the data required to reach meaningful and unclouded collateral
They need to know the general health of the market in that
valuation decisions.
geography. According to a published report covering data collected during Buyers of appraisal services want to know that the person
the fourth quarter of 2009, the property valuation fraud risk
delivering the report has a personal and professional
index is up 40 percent over last year and up more than 100
understanding of the market that will allow them to provide a
percent from two years ago. Despite the fact that lower loan
report that will provide real, actionable advice and counsel on
volumes contributed to a slight quarter-over-quarter drop at
whether or not this investor should put their money into this
the end of 2009, the risk of valuation fraud is extremely high for
neighborhood. Is this investment strategy sound?
lenders right now. That makes it more important than ever for appraisers to be in a position to provide lenders with reliable
As I see it, the solution lies in combining the past, present, and –
numbers.
if you will – future by utilizing a combination of sales within the real estate Multiple-Listing Service (MLS), current offerings and
Lenders today are looking very, very carefully at where they
predictive models that examine transfer times, REO activity,
get their collateral valuation information. In our work, helping
and other pertinent factors. Instead of three comparable sales,
lenders create solid strategies for effective risk mitigation, we
why not look at 30 sales that are detailed with the MLS notes
encourage them to do just this. The lender must know that the
stored in the database by professionals such as real estate agents
services he or she receives can deliver the quality that his or her
and brokers who worked with the properties during the sale?
risk mitigation strategy requires to be effective.
Making sure that we are using the best tools for the job is no
As counsel lenders, we remind them that low prices for
different than what professionals in any industry do.
valuation services do not have anything to do with the quality they require, but the same can be said of high prices. In the end,
For example, if I am going to be a master sports car mechanic
appraisers will set a fair price for their services and those that
and I am going to repair and maintain a client’s Ferrari, I
deliver the quality that lenders must have will get that fee every
need to have not only all the necessary knowledge through
time.
classroom, self-study, practice and technique development, I also need to have all the necessary tools to fix that high
We also remind lenders that the quality they need may not
performance automobile. If that means I need special tools, I
come from one of the industry’s largest players. Today, it’s just
must invest in them because that’s an investment in my future.
as likely to come from a professional fee appraiser working independently of any appraisal management company. When
If I approach a client’s Ferrari with an adjustable wrench, a
I hire appraisers for the risk mitigation work we do for our
ball-peen hammer, and a pair of pliers, chances are excellent
clients, I’m looking at the quality of the product I get back,
that I won’t be able to keep that customer long term. He will
first and foremost. It’s good for appraisers to know that there
ultimately go around me to find another source of maintenance
actually are companies out there who care about their expertise
expertise.
and the quality of their products, not just the lowest rate in the shortest period of time.
Unfortunately, in our industry, the tool of choice has become form-filling software. In the past, completing the form meant
For the first time in 5 to 7 years, we are in a market where
delivering a fairly accurate appraisal of current value. As good
collateral is king once again. This is a stellar opportunity for
as these tools may be, they simply are not enough today.
the competent, prepared, and technologically astute appraiser to become the local expert in his particular marketplace and
When an appraiser is presented with a very well-defined scope
achieve great success. That is how we, as an industry, will meet
of work and step-by-step instructions along with specific
the challenge of appraising in the 21st century.
questions, the lender needs to return a report that answers those
lize r
g, so uti n i g n a h c is rapidly y g o l o n h Tec success n i a t n i a om in order t
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ations
ng Valu Enhanci
y c n e r a p s n a r T g n i c s n o i t Enhan a u l a V l a r e t a l l o in C esources
industry seems to be looking for more and better ways of
Another highly under utilized information-providing
getting tasks completed, the question isn’t how to get better
tool is the automated review feature of some appraisal
technologies, but how to maximize technology’s current
management software. Lenders are required to review
capabilities to transact higher quality loans.
only one in ten appraisals, yet even so, many lenders aren’t completing appraisal reviews at all. Of those that do, many
As far as the appraisal process is concerned, the first
complete only the 10 percent bare minimum. A competent
and probably most obvious way that technology can
appraisal management technology can perform an
help enhance quality is by providing insight into how
automated review loan on every single loan, which in turn
appraisals are being handled, from beginning to end. A
can provide a level of information that can pay dividends in
good technology is going to be a big help by providing a
the way of safer, quality loans.
transparent process. But remember, there’s a lot of room for compliance violations and a lot of room for oversights
Obviously there are certain parameters that are good
throughout the entire appraisal process, not to mention
indicators of potential hazards. Armed with this
the rest of the mortgage cycle. A good technology provides
information, lenders can set up a scoring process that will
access to an audit trail that tracks details all the way back
“red flag” an appraisal whose components fall below – or
to the original appraisal request. There are a lot of lenders
exceed – certain tolerances. For example, automated review
that don’t take advantage of this information. If you’re
technologies can flag appraisals that have less than a
concerned about loan quality, and you want to prevent
certain amount of comparables, or that use comps outside a
buybacks and compliance violations, take the time to use
certain radius. This way, rather than scrutinizing a random
that visibility; monitor your processes. If you know who is
10 percent of appraisals, a company can focus on the 10
placing the request or assigning an appraisal order, you’ll
percent of their appraisals that have been determined to
have a much greater chance at staying compliant with many
have the highest risk. Of course, this deliberate targeting
of the industry’s new guidelines and regulations. Appraisal
enables higher quality loans and helps to increase investor
process management technologies are equipped with
confidence as well.
firewalls that keep unauthorized individuals from having noncompliant interaction with an appraiser, but even so, it’s
There’s a new program called UMDP, or uniformed
a good idea to gain knowledge of your processes. Once you
mortgage data program, and it will be enforced by the
have that knowledge, you can turn it into power by taking
GSEs in April 2011. According to the UMDP, the GSEs will
action should any areas of weakness arise.
be requiring that all appraisals be submitted in a MISMO XML format. This is a huge step forward in leveraging
Lately, we’re seeing a new tactic being used to certify
information. Getting appraisal information in XML will
inaccurate values. Some unscrupulous originators
help aggregate information in a more digestible and easily
are sending appraiser- or AMC-provided certificates
managed format, so that it may be analyzed and evaluated.
(documents indicating that the appraisal is authentic
Instead of getting information in a PDF file, where details
and was completed according to certain guidelines) to
are much less accessible, Fannie Mae and Freddie Mac
authenticate inaccurate values. Instead of sending an
will now be able to harness information on every single
updated lower value appraisal with its certificate, the
appraisal sent to them, analyze that information, learn from
original, higher value appraisal is being provided with that
it and utilize it to help ensure higher quality loans.
certificate. In order to protect yourself from this scenario, rather than taking the certificate at face value, make sure
If the GSEs are moving to leverage appraisal information,
that the certificate matches the appraisal in question. Ask
doesn’t it make sense for lenders and other parties, like
appraisers or AMCs to put the value of the appraisal on the
appraisers and AMCs, to do the same? If lenders, AMCs,
certificate. All of the information needed to determine the
and appraisers import appraisal information in an easily
discrepancy is easily available with today’s systems – the
readable, easily accessible format, they’ll be able to
appraiser that completed the appraisal, the appraisal, and
determine trends and areas of vulnerability, while also
the certificate – but it will do no good if the information isn’t
storing information for future cross-checking and reference.
cross checked and evaluated. Certificates should always be
Looking at the opportunities available to lenders, the new
linked to the appraisal, not to the appraiser or AMC.
UMDP requirements don’t have to be a necessary evil. Rather than concentrating on meeting the GSEs’ guidelines, companies can concentrate on raising their own quality.
The industry isn’t perfect, not by a long shot, and there is certainly a lot of room for improvement. The mortgage industry will continue to evolve, technology will keep advancing and new fraud tactics will arise. As the appraisal segment gathers more information, it will undoubtedly enforce more guidelines in the effort to enhance quality. Through the ups and the downs, predictable corrections and sudden changes, the companies that stay consistently successful will be the ones that maximize the tools and information available to them.
{ If the GSEs are moving to leverage appraisal information, doesn’t it make sense for lenders and other parties, like appraisers and AMCs, to do the same? }
Financial Regulatory Reform, AMCs, and the Residential Appraisal Industry New legislation can be a positive change, but those within the industry must aid guideline enforcement
Determining how the newest round of legislative changes
nose while taking your prescribed (dictated) medicine.
will affect the independent fee appraiser, the AMC and the
Some change is much easier to accept, like the use of digital
lending community will be decided over time. What can be
cameras versus your trusty 35mm, or the development of
said with certainty is change is upon us.
practicable sketching programs versus graph paper, pencil and protractor. These technological advancements made
I have to acknowledge that writing this article was my idea,
what we do as appraisers easier; we were quick to embrace
so there is no one to blame but myself. Hindsight being
these process changes. Other changes have been less
20/20, I might have postponed this venture into the unknown
palatable, most notably the implementation of the often
until August to see how the agreed-upon reconciled bill
maligned Home Valuation Code of Conduct (HVCC). We’ll
actually ends up impacting the industry; but I’ve decided to
cover the affects the HVCC had on the industry a bit later.
forge ahead earnestly with my most recent copy of the
Let’s first continue our focus on the concept of change.
Dodd-Frank Wall Street Reform and Consumer Protection Act and a steadfast belief in the capabilities of our policy
It’s not just appraisers that are adverse to change. Mankind
makers.
enjoys the warm embrace of familiarity. We tend to be creatures of habit, changing only when prodded along
The Financial Regulatory Reform and its corresponding
by necessity. “I’ve always done it that way” is a common
impact on the residential appraisal industry is near and dear
response when asking an appraiser (or anyone for that
to my heart, so I’m hoping you – the reader and more than
matter) why they do something the way they do. I’ll recount
likely an industry participant – feel as strongly about the
a conversation I had with an appraiser not too long ago. The
subject matter as I do.
appraiser was involved in the industry for the better part of a decade, so they couldn’t be categorized as a greenhorn or
I’m certain this article will not be well received by all
newbie. At one point in their career, they were employed
readers, and I understand why. This is a very sensitive
as a staff appraiser for a national lender (names withheld
topic that impacts the livelihood of so many. It may be
for obvious reasons). I happened to be engaged to review
surprising to hear, but I hope to see commentary countering
a file completed by the appraiser in question. Doing so
my position. My interest is in facilitating the debate. Not
led me to question some of the methodology employed
everyone will see the effect of pending legislation in
when concluding the subject’s value, so I initiated a call
the same way I do, but we all have an opinion, and we
with the appraiser for clarification. I asked the appraiser
must open up the discussion if we’re ever going to find
to explain to me how the value conclusion was reconciled.
commonality of cause. This is a pivotal point in our industry;
The response I got was puzzling; apparently the appraiser
I ask that all affected parties take time out of their schedules
was instructed - during their time as a trainee – to add up
to get involved in the process so they understand how this
the post-adjusted sales prices of the comparables and divide
bill will affect them. If you don’t like what is happening,
by the total number of comparables used within the report.
speak up and be heard. This is particularly applicable today,
I couldn’t help asking if the appraiser had ever heard of
since the specific standards governing appraisers will be
this being a recognized technique for concluding the most
developed over the coming months, with all interim final
probable value of a property. The appraiser responded with
regulations due within 90 days after the bill is enacted.
the following (and I’m paraphrasing), “I’ve heard of other
Change
methods, but this is the way I’ve always done it.” Ouch! Not exactly the response I was looking for, but it has turned out
Having been in and around the appraisal industry for
to be useful in illustrating my point here. People don’t like
the better part of my adult life, I’ve become relatively
change, even when what they are currently doing makes no
desensitized to what some might characterize as the pains
sense whatsoever. >>
associated with change. If you’ve been in this industry for any significant length of time, you too have pinched your
Histrionics Legislative efforts meant to promulgate appraisal and lending standards have been around for a long time. We can reflect on the development and adoption of the Truth in Lending Act of 1968 (TILA); the Real Estate Settlement Procedures Act of 1974 (RESPA); Uniform Standards of Professional Appraisal Practice (USPAP) in 1987; and the Financial Institute Reform and Recovery Act of 1989 (FIRREA) as groundbreaking regulatory measures. These legislative efforts ultimately form the foundation that the most recent Financial Regulatory Reform
Pending Financial Regulatory Reform, known as the Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173), made its way through reconciliation last week. During the course of this article, we’ll examine how this latest legislation will affect AMCs and the residential appraisal industry as a whole.
Current Legislative Reform Appraiser Independence I remember vividly the first time I saw the base text of H.R.
Bill will build upon.
4173, specifically the Appraiser Independence Requirements
In more recent years, the adoption of a Market Conditions
(pertaining to lenders and the GSEs) would have eliminated
Addendum seemed to be regarded as a tidal-shift of sorts. Many appraisers felt the information requested in the MC Addendum was already being provided, and had been for many years. “Why should this information be summarized in predetermined data fields now?” we asked (especially data fields that don’t analyze year over year trends and fail to account for seasonal fluctuations in the market). We dealt with it in the best way possible: by attending countless webinars, seminars and lectures on how best to fill out the form. In the
outlined in Section 4312. This specific portion of the House Bill the prohibition on using an appraisal report that was completed by an appraiser “selected, retained, or compensated in any manner by a loan originator licensed or registered in accordance with the SAFE Act.” This commentary gave me plenty of reasons to be concerned; primarily, the potential for re-entrenching the broker/banker in what is meant to be an arms-length collateral valuation process. All of the appraisers reading this article can think back to a time when broker/ banker influence had a stranglehold on our profession. Many
end, we made do.
appraisers would be selected for service based on whether
Around the same time, we were hit with the cataclysmic
practice finally came to an end in May 2009 with the HVCC’s
regulatory change so many had been dreading: the HVCC. Before appraisers actually understood the impact it would have on their business model, it had already been adopted - industry wide - as standard operating procedure. Most independent fee appraisers likened it to an extinction-levelevent for their way of life. These appraisers relied upon the relationships they’d fostered with individual brokers for their entire careers. Now the regulators would undo everything they worked so hard to achieve over the years. This was in fact a metamorphic change that would not be widely embraced. Many believe the HVCC was unnecessary. I’ve heard commentary on the subject from every corner of the appraisalsphere, with the respondent’s tone depending greatly on the respondent’s position (i.e. Independent Fee Appraiser, Staff Appraiser, AMC Manager, etc.). I happen to fall into the category of those that feel the HVCC did what USPAP failed to do over the previous 11 years: securitize appraiser
or not they were considered conservative or aggressive. This adoption. It was during this time that I decided to reach out to colleagues across the industry in an effort to procure their opinion of the HVCC and its impact on appraiser independence. “Are my contemporaries interested in revisiting the days of old?” I think to myself. The answer to this question was clearly “No!” Unanimously, the industry leadership applauded the positive effects the HVCC had on appraiser independence. Most agreed the HVCC finally did what USPAP could not. That is to ensure a borrower, broker, banker, or realtor did not unduly influence the individual appraiser at any point during the valuation process. Understanding the HVCC took some time. Notable fallout was the misconception of what the HVCC was and how it impacted the boots on the ground appraiser. The HVCC was
independence.
invoked inappropriately countless times, as if it were the
Now, with new legislation afoot, the regulatory codes look to
however, seemed to revolve around fees, turn-times and
be in flux. The HVCC was written to sunset in 2010, and the pending legislation will do away with it once and for all, so what next?
5th Amendment to the Constitution. The biggest concerns, requirements. The independent fee made appraisers feel that they were being paid less to do more in a shorter period of time. It’s not hard to see why the agreement between Cuomo and the GSEs was met with such resistance. >>
You may have read a position paper written by my colleague,
taking shape. While attending the 2009 Valuation Expo in New
Kristine Hughes, and I that was circulated by the Collateral
Orleans, it became very apparent that the phrase “customary
Risk Network (CRN). It was titled “In Response to Proposed
and reasonable” might be less than definitive. It was around
Property Appraisal Requirements; Amending the Truth
this time that HUD decided to send out Mortgagee Letter
in Lending Act (TILA), the Financial Institution Reform,
09-28. This Mortgagee Letter, with Appraiser Independence
Recovery, and Enforcement Act of 1989 (FIRREA) and the
in the subject line, required FHA-approved lenders to ensure
Real Estate Settlement Procedures Act of 1974 (RESPA).”
appraisers are compensated in a “customary and reasonable”
You’ve got to love that title! Well, I reference it here because
manner “for appraisal services performed in the market area of
that paper asked for thoughtful consideration to be made
the property being appraised.” Doesn’t get much clearer than
by the legislators participating in the reconciliation process,
that, right? Apparently it wasn’t as clear as HUD had hoped,
and I believe they did on some issues. In that paper, I use the
as evidenced by the protracted sidebar that became a very
analogy of letting the proverbial fox back into the henhouse
spirited debate between the fee appraisers and the industry
when describing what may have occurred if the original
leaders in attendance. Either way you slice it, the appraisers
House Bill language prevailed (allowing brokers/bankers the
had a reasonable gripe. They were used to getting paid a
opportunity to become involved in the ordering of appraisal
certain amount for a service they’d provided for years, and
assignments). This commentary shouldn’t be interpreted as an
now the fees were being squashed. Nothing conclusive came
indictment of the broker/banker community, it is simply an
of the discussion, but it became apparent the terminology used
observation made by someone who’s been doing this for a long
did not clearly identify what the appraiser could expect to be
time.
compensated.
Having my experiences as an appraiser to draw from, it was
Is the disclosure of fees associated with the management of
easily conceivable that an undoing of the safeguards that had
appraisal products going to negatively impact the industry?
so recently been adopted would lead us down a very familiar
My answer is no, it isn’t going to create a gravitational pull
road. One in which the relationships between broker and
for better or for worse. What should be given a second look
appraiser could once again stray off into very gray areas of
is the way in which this type of regulatory change can be
practice.
circumvented. Just because the adoption of this new level of transparency appears to be a done deal doesn’t mean we can
The legislation, as it is being submitted to the President’s
solely rely on regulators to foster a mindset of fundamental
office for approval, does appear to have retained the most
change. We must continue to police ourselves in hopes
important appraiser independence clauses. Strong language
of regaining as much of the consumer confidence - in the
meant to dissuade the practice of biasing appraisers has been
appraisal industry - that was likely lost as a result of our most
built in to the bill, including the establishment of a federal
recent economic crisis.
appraiser independence standard – which is long overdue. For the fee appraiser and AMC, it looks like the probability of
During a recent conversation with a colleague whom I hold
experiencing undue influence has been mitigated.
in the highest regard, we discussed the topic of transparency.
Fees and Transparency
His commentary was insightful and inspirational. He noted the need for transparency across the board, including a
Much of the legalese used in the bill appears to be there
disclosure of fees and their corresponding beneficiary. Being
for ambiguity’s sake. I’ve heard more than one legislator
in the AMC world, it may be hard to believe, but I agree with
comment on the regulator’s responsibility for interpreting the
his assessment. Why shouldn’t we disclose who is being paid
legislation. It’s akin to a very passive form of pass the buck.
what and why? I’ll reflect on a scenario that was presented to
That being said, the idea of really knowing how this aspect of
me recently in hopes of illustrating one of the many potential
the reconciled bill is going to impact the industry will require
pitfalls associated with non-transparent transactions. A large
the participation of a psychic. Since I’m out of mentalists, I’ll
AMC engaged an appraiser to complete a residential appraisal
have to rely on a rudimentary interpretation of the level of
assignment for a large national lender. When the appraiser
transparency the new legislation will require.
was onsite, the borrowers commented on the $700 appraisal fee (feeling it was a bit excessive). The appraiser was taken
AMCs and other lender/clients will be required to pay
aback, since the appraiser accepted the assignment at a fee
fees that are considered “reasonable and customary” to the
of $250. Not saying anything of an incendiary nature, the
appraiser, for services rendered. I can already see the debate
appraiser left the residence with a well-earned distaste for
AMCs. I ask of my peers, “Is this acceptable behavior?” “Is it endearing the appraisal professional to the consumer?” In this case, the borrower ends up believing they were overcharged by an appraiser that undervalued their home. Not the ideal way to boost consumer confidence. I can continue to opine on the benefits of transparency, but I will defer to the reader’s judgment while anxiously awaiting some constructive criticism or praise.
Competency Should an appraiser concluding an opinion of value on a property be required to maintain state licensure or certification in the subject properties’ state? Is it an unrealistic expectation? Does USPAP’s Competency Rule prohibit the review/ reconciliation of appraisals completed on properties outside the appraiser’s state of practice or even their immediate market area when a value determination is made? These questions don’t appear to have been answered with the proposed legislative changes. H.R. 4173 does impose a requirement for anyone conducting a review to be licensed or certified in a state, but it doesn’t really address the question of whether or not his or her lack of local market knowledge could be construed as a competency concern. From the AMC perspective, the guidance provided to us by USPAP and this new round of legislative changes still leaves room for interpretation. I think this is a topic that requires further scrutiny. I’ve heard from both sides of the aisle on these questions, but the verdict is still out. This might be one of the few rocks best left unturned for the time being…
AMC Registration The legislation calls for the state-to-state registration of AMCs. This is an aspect of the bill that should have been retooled. Initially, most AMCs were excited about the idea of federal registration since it would provide for a standardization of process, requiring realistic registration fees. While registering AMCs makes reasonable sense, the process in which they will now be required to comply couldn’t be any more fragmented. Unless the AMC is owned in whole or in part by a company that is subject to federal regulation (think OTS and OCC), the AMC must register at the state level. This makes for a very unlevel playing field, with the advantage going to bank owned AMCs. Leaving the registration fee-structure up to the individual states could very well price some industry participants out of the marketplace. Others may instead decide to pass those fees off to the consumer, even if it’s done surreptitiously. You’ll be hard pressed to find lenders and AMCs that want to shoulder this added expense.
Oversight The new legislation provides for the financial resources necessary to fund supervision efforts. Does anyone remember the Independent Valuation Protection Institute (IVPI) promised by the HVCC? I hate to say it, but isn’t it about time we orchestrated a supervisory body at the federal level that can accept complaints and respond to actionable claims? This may finally provide for some bite to go along with all the bark we’ve seen at the legislative level. I’ll feel a sense of relief once this committee or oversight panel is up and running. For too long, we’ve relied on the states to manage complaints. This may have been a viable option before the financial crisis we’re in, but now the states lack the funding necessary to enforce the law of the land. Many are backlogged with investigations they just can’t get to in a timely fashion because they lack the manpower and resources necessary to conduct comprehensive investigations.
Takeaway We must be accountable to our industry. This might be as good a time as any to run through a goodness of fit test to finally conclude if these legislated guidelines will do for the consumer and our industry what they are supposed to. How often are we presented with circumstances that are less than ideal? If you’re an appraiser or work on the collateral valuation side of the industry, chances are you see this happen more often than you might care to admit. I was once told, “If you’re not managing the process, then the process is managing you.” These are words to live by (in my humble opinion). The legislation isn’t going to make the industry any safer if we don’t do our part to aid those charged with enforcing the guidelines. Some of the points that have been focused on in the legislation are likely to be more impactful than others. Clearly defining federal standards for appraiser independence is a must-have. Allowing the states to regulate AMC registration as opposed to federally regulating them falls into the “should’ve thought this through” category. These new rules of engagement aren’t all that dissimilar from the ones we’ve been operating under for some time now. So, in conclusion, I say to everybody, “It’s time to pinch your nose and swallow fast.”
Things Appraisers See Here are some funny, interesting, and unique pictures of things appraisers saw over the last month.
Taken By
Leroy Thomas Taken By
Gerald Randall
Taken By
Judee Neuchter
Taken By
Tom Armstrong video available online at livevalmag.com
Taken By
Douglas Wold
Think you can top them? Go to www.livevalmag.com and upload your photo(s) to be considered for our next issue.
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{ The Life of Your Appraisal }
Most field appraisers I speak with seem to believe that when an appraisal is completed for loan origination
purposes it gets reviewed by an underwriter and review appraiser, then post-funding is locked away in a file folder never to be used again. In fact, nothing could be further from the truth. The funding appraisal is one of the documents that stays through the life of a loan. Investing Once loans are funded, the majority are packaged and sold as a Mortgage Backed Security (MBS) or securitized by a warehouse line. Either way, the appraisal is getting looked at again and again. If a loan is sold as a MBS, not only the purchaser of a loan pool reviews it, but possibly a separate due diligence firm as well. The sellers and buyers of loan pools will each hire separate diligence firms to represent them in the sale, and both will have appraisers as part of the review and negotiation team. If a loan is pulled from a pool for any reason, it will be placed in another pool and the process takes place again with a new purchaser.
Jeff Dickstein
If the loan is securitized, the holder of the warehouse line will do audits on the portfolio again, either using in-house appraiser/valuation staff or by hiring outside diligence firms to perform reviews. If there are appraisal deficiencies noted, the loan could be set aside for further review and possible repurchase. Aside from the sale of the loan, lenders also conduct post-closing quality assurance. HVCC requires lenders to perform a quality control test by using retroactive or additional appraisal reports on a randomly selected 10 percent (statistically significant) sample. Lenders not selling to GSEs might not sample 10 percent, but do conduct some type of post close QA using a statistically significant sample on a monthly basis. Some perform this in-house, using staff appraisers, some outsource to diligence firms. Either way, the appraisal report is being looked at again for any abnormalities or omissions. Servicing There are a number of situations that occur during servicing that might warrant another review of your appraisal report: • First Payment Default (FPD) — Most loans that miss the first loan payment are again reviewed, not only for credit and compliance, but collateral as well. • Early Payment Default (EPD) — This is the same as first payment default: the entire loan package is reviewed. • Bankruptcy — When a home loan includes bankruptcy, the appraisal is reviewed in order to review the underlying collateral and assess loss severity to the lien holder. • Loss Mitigation — Once the loan goes into default, the servicer/investor/lender needs to make a decision on how to proceed on the property. Do they try a loan modification? Do they negotiate with the borrower? Do they foreclose? Regardless of the avenue taken, there is going to be a review of the appraisal completed at origination as well as current valuations to assess loss severity. • Foreclosure — Once the property is foreclosed, there will be a review of the appraisal as well as current valuations to assess loss severity and anticipated sale price. If the lender/servicer or investor determines there was any type of overstated value, misrepresentation or errors and/or omissions on the origination, it could result in a repurchase request to the loan originator, an E&O claim against the appraiser’s insurance, or in the worst case, criminal charges filed and notification to state appraisal boards. • Fraud — If a lender/servicer or investor feels there is possible fraud anywhere within a loan file, most times the entire file is audited, including the appraisal. If there are trends noted that the loan was submitted by a specific broker, realtor or account executive, an audit of all loans connected to that firm or individual could be audited. That being stated, if you have completed an appraisal for an individual or firm that is being investigated for possible fraud, an audit of all appraisals connected to that person(s) under investigation could be audited, even if the loans are performing. • Repurchase/Buyback — Recently, we have seen a large increase in repurchase/buyback requests initiated by lenders, servicers, GSEs and mortgage insurers. These parties with vested interest in the collateral of a loan are going back and performing retroactive appraisal, and retroactive reviews. Again, if there is evidence of overstated values, misrepresentation or errors/omissions on the origination appraisal report, this could result in a repurchase request, E&O claims, and legal action against the appraiser. So the next time you are submitting an appraisal for a home purchase, refinance or appraisal for mortgage finance purposes, remember that the initial review is only the beginning of your appraisal’s life. Your work will be reviewed dozens of times by well qualified people whose job function is to find fault with your work. Guard yourself against any future issues by submitting the most accurate, comprehensive and complete appraisal possible.
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