Capital Update

HVCC, FHA, VA Changes Highlight D.C. Chapter's Residential Policy Seminar

For those who missed AIDC's Residential Appraisal Policy Update on February 23, here's a re-cap from AI.

New data initiatives under development by Fannie Mae and Freddie Mac – along with updates from Federal Housing Administration and the Department of Veterans Affairs – were among the highlights at a Feb. 23 appraisal policies seminar sponsored by the Washington, D.C., Metro Area Chapter of the Appraisal Institute.

Appraisal policy managers from the two government-sponsored enterprises, the FHA and VA spoke at the event. The GSEs presented the latest information on their proposed collateral data delivery, which would enable the agencies to receive full copies of appraisals prior to delivering the loan for purchase. Today, Fannie Mae and Freddie Mac only see limited fields within the appraisal unless the loan is in default.


L-R: Gerald Kifer, Robert Murphy, Peter Gillispie and Jacqueline Doty

Robert Murphy, senior business manager of credit policies & control with Fannie Mae, explained that the program would not initially impact the work of appraisers, but that it would likely lead to changes with appraisal forms in the future. Specifically, the potential development of “smart forms” – similar to online tax completion software programs like TurboTax – may de-emphasize the forms and garner more market analysis from appraisers in the field.

Jacqueline Doty, director of collateral policy of Freddie Mac, outlined her agency’s recent initiatives relating to appraisal, including the Home Valuation Code of Conduct and best practices. Doty confirmed that the underlying cooperation agreement establishing the HVCC was scheduled to expire in October 2010 but that neither Fannie nor Freddie had made any decisions relative to any potential changes to their seller/servicing guides. Doty also explained that the results of the HVCC from an agency risk standpoint had been positive, particularly in the wholesale loan channel, which has been particularly vexing for many years.

In terms of best practices, Doty said Freddie Mac continues to encourage lenders to look to affiliations with professional designations when hiring appraisers.

Peter Gillispie, senior appraiser with the FHA, outlined numerous policy changes advanced by the agency in the past year, including the appraisal independence rules, appraisal portability and upgrading minimum appraiser certification requirements. Gillispie confirmed that FHA’s market share has increased to 40 percent, up from a 2.5 percent share three years ago.

Gerald Kifer, the VA’s supervisory appraiser, outlined his agency’s success with administering appraisal programs. He described the VA as a government-sponsored appraisal management company with more than 5,000 appraisers on the agency’s designated fee panel. The rotating system has been an important component of a program that historically has had far fewer losses than the conventional mortgage market, he said. Based on that track record, he said, the agency was receiving inquiries from Congress and federal mortgage fraud investigators as the latter entities attempt to develop solutions to prevent mortgage fraud and promote safe and sound lending.

The panel fielded several questions relating to the HVCC, AMCs and prospects for the appraisal profession. The panelists nearly all agreed that a burgeoning area of business possibly well suited for appraisers is conducting “energy audits” of houses, which was advanced as a potential supplemental service that could be provided by qualified appraisers.

Special thanks to AI's Director of Government and External Relations, Bill Garber, who hosted and MC'd the event. Additional thanks to AIDC member Steve Rochkind, SRA, who provided the photos.

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Appraising Distressed Commercial Real Estate: Here We Go Again!
 

In keeping with its cyclical nature, the real estate market has once again moved toward a state of dissolution. In the current economic downturn, this timely new seminar provides critical insights on how appraisers, lenders, and investors will value distressed real estate.

In Appraising Distressed Commercial Real Estate: Here We Go Again, our top-rated instructor and course author, William T. Anglyn, MAI, will share how to:

  • Aanalyze distressed development properties and improve commercial real estate under the present market conditions.
  • Examine, in detail, specific steps to enhance distressed properties.
  • Develop methods for arriving at a market-supported “as-is” value forecast and in doing so, acquire techniques for enticing entrepreneurs, among other buyers.
  • Discuss adaptive and alternative use on distressed properties that no longer support their current use by reviewing three examples that demonstrate the conversion process.
  • Also, learn to accurately evaluate land values with limited direct comparables while you explore three unique case studies involving property in times of distress.

At the end of this seminar participants will be able to

  • Define key concepts associated with distressed real estate
  • Analyze current trends affecting real estate values
  • Explore the six basic steps involved in conducting a market analysis
  • Review market consideration on distressed real estate
  • Explore how capital markets (debt and equity) affect commercial real estate from a cost availability perspective
  • Review basic physical and functional issues that cause real estate to become distressed
  • Explore “as-is” value concepts to more accurately analyze distressed real estate properties
  • Distinguish between entrepreneurial profit and cost of capital
  • Explore the concept of reflecting entrepreneurial profit as a dollar amount deduction
  • Review adaptive-use potential on distressed properties
  • Analyze and critique valuation methods on a failed subdivision

When: Friday, March 19, 2010
Where: Universities at Shady Grove, Rockville, MD

Click here for details and registration.

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Appraisers Really Can Make a Difference!

Fellow AIDC Members:

Just wanted to show that appraisers really can make a difference – in this case, stopping a ridiculous law being passed within a state legislature. I just sent the attached email to Scott Dibiasio of the Appraisal institute; Scott asked a number of us to assist in stopping Maryland from passing a law that would make an appraiser’s knowledge of a sales contract on a property while performing an appraisal of that property a criminal offense. The potential Maryland law would have forced appraisers to knowingly violate FIRREA. In short, this is strong proof that we can make a difference, and the contributions that the various chapters of the Appraisal Institute made to the Appraisal Institute’s PAC was money very well spent. Please read the email trail for further details.

Regards,

Stephen M. Santora, MAI

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From: Rudolph, David Delegate [mailto:David.Rudolph@house.state.md.us]
Sent: Wednesday, February 03, 2010 5:25 PM
To: Santora, Stephen M.
Subject: RE: House Bill 42

Mr. Santora,

Thank you for your email in opposition to HB 42, Real Estate Appraisers - Knowledge of Value of Real Estate – Prohibited. I appreciate hearing from citizens on legislative issues being considered by the General Assembly - and I especially value hearing from those who would be impacted by a specific bill.

While HB 42 was withdrawn by the sponsor (Delegate Conaway) before being heard by the Economic Matters Committee, after all the comments shared by licensed real estate appraisers throughout state expressing their opposition to HB 42, I would have voted against the bill.

Again, thank you for taking the time to contact me and letting me know your views on this bill.

Sincerely,

Delegate David Rudolph
231 House Office Building
Annapolis, MD 21401
410-841-3444

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From: Steven M. Santora, MAI
Sent: Tuesday, February 02, 2010 2:27 PM
To: Rudolph, David Delegate
Subject: House Bill 42

As a Maryland licensed real estate appraiser, I am writing to urge that you do not support House Bill 42 when it is considered by the House Economic Matters Committee on February 3, 2010. As introduced, HB 42 would prohibit licensed or certified real estate appraisers from appraising property if the appraiser knows the asking or selling price of the real estate.

If HB 42 were to become law, real estate appraisers in Maryland would be required to violate the Uniform Standards of Professional Appraisal Practice (USPAP). USPAP requires that appraisers to attempt to obtain all information regarding the terms and conditions of a sale, and to utilize all available information when developing a value opinion of real property. Federal law requires that appraisers adhere to USPAP as a fundamental condition of their licensure in most mortgage finance transactions. Passage of HB 42 would create serious doubt that Maryland’s entire appraiser licensing system is in compliance with federal law.

The premise behind the introduction of HB 42 is that knowledge of the asking or selling price of a property will bias the conclusions of the appraiser. That premise is false, and indicates a fundamental lack of understanding of the generally recognized methodologies and techniques employed by appraisers in reaching their conclusions of fair market value. Appraisers are required to consider all of the terms and conditions of a sale, including any seller concessions, personal property that is included in the sale, unusual terms, etc. in developing an opinion of the value of the real property under consideration.

Passage of HB 42 would fundamentally alter the real estate appraisal system in Maryland and could scuttle many real estate transactions.

I urge you to not support HB 42 when it is considered by the House Economic Matters Committee.

Thank you in advance for your consideration.

Best regards,

Stephen M. Santora, MAI

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HUD HQ in Washington DC is looking for a staff appraiser

The announcements for the below position are posted to USAJobs today, closing 3/8/10.

F10-DE-321125-1MB Open to all sources.
http://jobview.usajobs.gov/GetJob.aspx?JobID=86389904

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Mark Your Calendar for Upcoming Education & Events

  • Appraising Distressed Real Estate - Here We Go Again - 3/19

  • Appraising High Value & Historic Homes - 4/16

  • Analyzing Operating Expenses - 5/24

  • Commercial Costing Workshop - 6/9
  • Real Estate Market Update - Fall

  • Residential & General Curriculum Update - 9/23-24

  • Uniform Appraisal Standards for Federal Land Acquisition - 10/14-15

  • 7-Hour USPAP - 12/9

  • Business Practices & Ethics - 12/10

Check our website for details.

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Online Education: Learn at your own pace anytime, anywhere.
Top-notch Appraisal Institute courses and seminars come straight to your desktop with online education! Learn from any computer anywhere, whenever you have time. It’s easy, convenient and a great way to get the education you want. Check out the current course listing now!

 

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info@appraisalinstitutedc.org * 301-924-1020