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Appraisal Institute SANCTIONED by Appraisal Foundation

August 2nd, 2010 by Bill Collins Leave a reply »

In This Issue:

  • Board of Trustees of The Appraisal Foundation Passes Resolutions Sanctioning the Appraisal Institute
  • Appraisers Leaving the Profession En Masse? Or Not?
  • Mortgage Brokers Could Be Criminals?
  • Damned if They Do, Doomed if They Don’t. What is The Fed to Do With Their Inventory of Mortgage-Backed Securities?
  • Some Community Bankers Support the Financial Reform Bill
  • What do Alan Greenspan and Robert Shiller Think About Our Current Economic Situation?
  • Underwater in Manhattan: The Big Ciy Learns About Short Sales
  • Fannie Mae Prepares Defenses Against Strategic Defaults
  • Rates and Dates
  • Ask Angie
  • Tell us what you think!
  • Closing Remarks
  • TUESDAY, august 3rd, 2010

    Board of Trustees of The Appraisal Foundation Passes Resolutions Sanctioning the Appraisal Institute

    On July 12th, the Board of Trustees of the Appraisal Foundation adopted three resolutions related to “…allegations that the Appraisal Institute had engaged in conduct detrimental to the interests of The Appraisal Foundation.”  The Board released a “Statement to the Sponsoring Organizations of the Appraisal Foundation” in which they “…concluded that the Appraisal Institute engaged in conduct materially and seriously prejudicial to the purposes and interests of the Foundation” and determined that the Appraisal Institute would be sanctioned in two ways:

    “1) The Appraisal Institute shall be suspended as an Appraisal Sponsor effective September 15, 2010 and ending on April 15, 2011;

    2) Permission by The Appraisal Foundation to the Appraisal Institute to reproduce the Uniform Standards of Professional Appraisal Practice (USPAP) without charge and (b) its discount on the purchase price of USPAP shall be revoked for a period commencing September 15, 2010 and ending on July 1, 2012.

    It is understood that the Appraisal Institute is preparing a response to these allegations and will have a formal statement in the near future.  The Appraisal Foundation has set a September 1st date for a hearing, if one is requested by the Appraisal Institute.  Their resolution stated that only the suspension, not the USPAP reproduction limitation, would be appealable.

    A link to the full text of the statement can be found here: Statement to the Sponsoring Organization fo the Appraisal Foundation

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    Appraisers Leaving the Profession En Masse? Or Not?

    On July 30th at 5:00 A.M. the Appraisal Subcommittee (ASC) released the names of 4,593 appraisers who were no longer on the National Registry.  Shortly after noon on the same day an amended list of 1,642 appraisers was released.  We were left wondering if 2,951 appraisers had somehow changed their minds (perhaps anticipating improvements in the profession in coming months?) and become re-instated until just before 7:00 P.M. when the ASC released a statement that “Due to an error in an external system that delivers license expiration and disciplinary notices to subscribers for the ASC, some license renewals were not reflected in the emails generated on this date, and therefore the listserv notice contained inaccuracies.”

    It appears as though even the ASC can have a bad day.

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    Mortgage Brokers Could Be Criminals?

    Also on July 21st, Bloomberg.com discussed the additional scrutiny that mortgage brokers were now subject to after the many disclosures of fraudulent activities noted in recent years.  As an example, Bloomberg.com described the case of Sean McConville, who operated a mortgage brokerage known as ALG Capital Inc. in Mission Hills, California, from 2006 to 2008. Mr. McConville, who was a convicted armed robber without a broker’s license, was charged in June 2010 with “…61 criminal counts of grand theft, forgery and elder abuse for conspiring to lure borrowers into refinancing their homes on false promises of low interest rates and minimal fees.”

    The article noted that the Bureau of Labor Statistics reported in May of this year that the number of mortgage brokers had declined to 246,900, a figure that was less than 50% from the peak of 504,400 reported in February of 2006.  The article did not report on how many of these mortgage brokers were in jail in relation to the number selling used cars, working for AMCs or making loud, annoying videos.  A link to this article is found here:

    US Mortgage Brokers Get Criminal Check, Tests Under New Rules

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    Not just for FHA Appraisers – Connect with over150 AMCs with updated information.

    Damned if They Do, Doomed if They Don’t. What is The Fed to Do With Their Inventory of Mortgage-Backed Securities?

    On July 22nd, the New York Times discussed the challenges facing the Federal Reserve in managing its large supply of mortgage-backed securities, which increased by more than $1 trillion last year as it effectively provided most of the money for new mortgages in support of the weak housing market and economic climate.  The article noted that: “While officials and economists generally regard the program as successful in supporting the housing market, it has left the Fed holding a vast pile of mortgage securities — basically i.o.u.’s from homeowners — that it does not want and cannot sell.”

    This article can be read in its entirety by clicking on the following link:  Mortgage Securities It Holds Pose Sticky Problem for Fed

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    Appraiser News is always a FREE publication. Please support our sponsors by clicking here.

    Not just for FHA Appraisers – Connect with over150 AMCs with updated information.

    Some Community Bankers Support the Financial Reform Bill

    CNBC.com released a video on July 21st in which Camden Fine of the Independent Community Bankers of America spoke favorably of the Dodd-Frank bill which was signed into law later that day and a link to this interview is found here: Community Banker on FinReg

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    What do Alan Greenspan and Robert Shiller Think About Our Current Economic Situation?

    On NBC’s “Meet the Press” August 1st, Alan Greenspan discussed his concerns of another economic contraction if home prices decline.  He discussed his concerns that we have a “distorted economy” and Bloomberg.com quoted him as saying on the show that:

    “Any recovery has mostly been limited to large banks, large businesses and “high-income individuals who have just had $800 billion added to their 401(k)s, and are spending it and are carrying what consumption there is… The rest of the economy, small business, small banks, and a very significant amount of the labor force, which is in tragic unemployment, long term unemployment — that is pulling the economy apart”.

    The New York Times reported on Robert Shiller’s most recent thoughts on July 31st .   While he notes that stimulating the economy and encouraging business expansion is an important goal, he also notes the apparent disconnect with job creation and reducing unemployment and suggests: “Why not use government policy to directly create jobs — labor-intensive service jobs in fields like education, public health and safety, urban infrastructure maintenance, youth programs, elder care, conservation, arts and letters, and scientific research?” Mr. Shiller compares the current attempts at economic stimulus with efforts of Franklin D. Roosevelt during the New Deal which focused directly on job creation.

    Links to these articles in their entirety are found here: Greenspan Says Drop in Home Prices Might Bring Back Recession

    What Would Roosevelt Do?

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    Underwater in Manhattan: The Big Ciy Learns About Short Sales

    On July 23rd, the New York Times reported on the state of the real estate market which they described as generally being approximately 30% down from the market peak.  Anecdotal evidence along with lis pendens filings, which doubled in 2009, suggested that the growing number of short sales was not likely to end soon.  A link to this article is found here: The Roller-Coaster Ride Called a Short Sale

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    Fannie Mae Prepares Defenses Against Strategic Defaults

    Also on July 23rd, the New York Times described the efforts that Fannie Mae was taking to prevent borrowers from simply walking away from their mortgages even when they were still affordable, so called “strategic defaults”. Citing an Experian study, the article noted that “…in the Northeast, strategic defaults in 2009 reached 11 times their 2005 levels. In California, by comparison, strategic defaults last year were 80 times their 2005 levels.”  A link to this article follows: Seeking to Close Off an Exit

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    Rates & Dates

    Historically low interest rates are still reportedly available even if the conditions attached to them and ability to obtain them are tougher.  Freddie Mac reported that rates for 30-year fixed-rate mortgages declined slightly to 4.54% for the week ending July 29th from the 4.56% of the prior week.

    The Mortgage Bankers Association (MBA) in its most recent Weekly Mortgage Applications Survey for the week ending July 23rd reported a decline to 4.59% from the previous week’s average of 4.69%.

    Additional information from Freddie Mac can be found by going to: Primary Mortgage Market Survey PMMS – Freddie Mac

    Additional information from the Mortgage Bankers Association can be found by going to their site at: Research and Forecasts – Mortgage Bankers Association

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    Ask Angie

    We want to congratulate our most recent winner: Richard T. Kimball Jr.,, a Certified Residential Appraiser with G.N.O. Appraisal Services, in Jefferson, Louisiana.

    Today’s question:

    Who said: “Experience is simply the name we give our mistakes.”

    1. Oscar Wilde

    2. Mark Twain

    3. Sarah Palin

    4. Tony Hayward

    5. None of the above

    The first person to respond with the correct answer wins a choice of either:

    One Free Trade Show Pass or $199 off a Full Conference Pass to Valuation 2010 or

    A Free Copy of the Directory of Appraisal Management Companies for FHA Appraisers

    Angie’s Hall of Fame: Those who have been crowned winners more than once during the past two years and who have been retired from competition for the rest of 2010:

    Suzanne Fahien

    Pat Reass

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    Tell us what you think!

    We invite your responses to any of the issues raised in this newsletter. Please e-mail us at: bill@appraiserhelp.com with your thoughts!

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    We really hope you find our newsletter to be informative!  If you have any input on future topics for discussion, please email me your questions and I will do my best to address them in the next issue.  If you want to look back at past issues you can see our archive at www.appraisernews.com

    Regards,

    Bill Collins, Appraiser Help Inc.

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