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AMCs Plead Hardship; Appraisal Institute QUITS Appraisal Foundation

September 14th, 2010 by Bill Collins Leave a reply »

In this issue


Appraisal Institute Withdraws from The Appraisal Foundation

On September 7th, the Appraisal Institute released a statement announcing its decision to withdraw from the Appraisal Foundation.  This statement said that:
“The Appraisal Foundation’s decision to sanction the Appraisal Institute for conduct said to have violated the Foundation’s Bylaws is simply wrong, and the penalty imposed was unjust and unwarranted. Independence from the Foundation strengthens our position to advocate without constraint on behalf of our members, the profession and the public interest.”

On September 10th, The Appraisal Foundation responded to the Appraisal Institute’s resignation.  The Foundation stated that:

“…The Appraisal Foundation expects its Sponsoring Organizations to communicate with it first regarding any matters that have a direct or indirect impact on our organization. The Appraisal Institute failed to comply with this expectation.” The Appraisal Foundation noted that this was not the first time that communications with the Appraisal Institute were a problem for the Foundation and noted that the most recent issue involved discussions initiated by the Institute with three other organizations which involved proposed provisions to FIRREA.  The Appraisal Foundation concluded their response by saying that “…under the right circumstances, there will always be a door open for the Appraisal Institute to return to The Appraisal Foundation.”

Links to both of these statements follow:
Statement from the Appraisal Institute on its Withdrawal from The Appraisal Foundation

The Appraisal Foundation – Foundation News

I’m not sure what may have occurred (or may be occurring) behind the scenes but I don’t think it is time to stage a USPAP burning or quit working on your MAI/SRA candidacy. In particular, a USPAP burning: What is so sacred about this printed text that has caused it to become part of the disagreement between these two organizations? Why is a PDF of USPAP not readily available at no cost for any appraiser or any individual directly from The Appraisal Foundation’s website or any appraisal organization’s website?

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Letting the Housing Market Crash- Is Being a Slumlord the New American Dream?

In our most recent newsletter (“Paralysis in the Housing Market”, August 31st), we discussed the impact that the huge oversupply of housing and the record levels of foreclosure we are observing.  Since then, there have been a number of reports that have bluntly stated that homeownership is just not appropriate for everyone and that the government should let the market crash. 

CNBC.com offered several reports and videos last week with different perspectives on these problems and links to these are found here:
The Housing Fix – A CNBC Special Report
What’s Hindering Housing – CNBC

In an interview on Bloomberg Television’s “Political Capital” on September 5th, FHA Secretary Donovan even stated that “We do need to rebalance our priorities…Part of that, frankly, is that we have a president who talks about rental housing and is focused on rental housing as an important part of the equation.”

In other portions of the interview, Secretary Donovan discusses the importance of the federal government’s backstopping of the housing market but in a weaker manner than might be expected of someone in his position with his depth of understanding of the frailty of the market.  Football fans are all too familiar with the “prevent defense” which frequently prevents the team from winning, the opposite of what it is designed to do.  Perhaps in this political season we need to counter some of the shrill calls from those who say “just let the market fall” with a more reasoned discussion of what this could lead to.  The following link to an article in the Huffington Post last week suggests some of the dire consequences: The Foreclosure Crisis That Will Not Go Away

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Extend and Pretend – How Banks are Dealing with Underwater Commercial Loans

There is plenty of anecdotal evidence to show that this is occurring.  We would appreciate any documentation or other information that readers might like to provide us with for our next newsletter.  Maybe “extend & pretend” will be the new catch phrase for the near future, we’ve also heard it used in regard to the Obama Administration’s mortgage modification programs.

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Valuation 2010-Luxor Las Vegas, NV – November 8-10 – www.valuationexpo.com
All early registrants will get an amazing early-early bird rate and the “I am a real estate appraiser and it’s not my fault” t-shirt. In order to qualify email us your name and phone number to yes@valuationexpo.com.

AMC Organization Objects to "Customary and Reasonable Fee" Deadline

On August 25th, TAVMA, a professional association representing more than 80 companies in the real estate settlement services industry, including 58 appraisal management companies, wrote to Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System, in regard to their objection to the “customary and reasonable” appraisal fee provision of the Dodd-Frank Act. 

In a letter to Chairman Bernanke, a link to which is found below, Jeff Schurman, TAVMA’s Executive Director, states that:
“The final implementing regulation must consider these complex issues before establishing a workable and accurate set of ‘customary and reasonable fees.’ Unfortunately, a credible source of ‘objective third-party’ fee information simply does not exist at this time. The premature adoption of the fee provision will cause unanticipated harm to AMCs, lenders, and consumers, and likely will adversely affect competition among appraisers. For these reasons, TAVMA requests that the FRB delay the ‘customary and reasonable’ fee provision of the proposed interim final rule. More time is needed for surveys and accurate studies to be completed.”

Gary Crabtree, an SRA designated appraiser with Affiliated Appraisers in Bakersfield, California who participated in the 2010 Washington Appraisal Summit hosted by the Appraisal Institute, had predicted this would be forthcoming in our last newsletter and recently e-mailed me “Don’t say I didn’t warn you this was coming.”

Would it be a surprise if implementation was delayed until the end of the year? No.  TAVMA and the AMCs are fighting a losing battle on this, however, as the Congressional mandate is quite specific and it is ludicrous to say that accurate information on “customary and reasonable fees” is hard to obtain.

Here is the link to the TAVMA letter to Chairman Bernanke: Letter to Ben Bernanke RE: Interim Final Regulations Implementing Section 129E of the Truth in Lending Act

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

Rates and Dates

Freddie Mac reported that rates for 30-year fixed-rate mortgages increased slightly to 4.35% for the week ending September 9th from the 4.32% of the prior week.

The Mortgage Bankers Association (MBA) in its most recent Weekly Mortgage Applications Survey for the week ending September 3rd reported a decrease to 4.43% from the previous week’s average of 4.50%.

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

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

Appraiser Help is happy to announce it has renewed its partnership with McKissock 100% Education to provide generous discounts on Continuing Education courses for Appraisers. Go to www.McKissockDiscounts.com to start saving today and to learn more!

Ask Angie

We want to congratulate our most recent winner: Barry Brown, a Certified Residential Appraiser with Brown Appraisal Associates in Greenwood, South Carolina.  Barry was the first person who responded correctly that the authors of the statements “I find the great thing in this world is, not so much where we stand, as in what direction we are moving” and "Even if you’re on the right track, you’ll get run over if you just sit there” were None of the Above (Oliver Wendell Holmes was the correct answer) and Will Rogers, respectively.

Today’s questions:
Who said:

“You don’t need a weatherman to know which way the wind blows."

a) Michael Kelly
b) Bill Ayers
c) Bob Dylan
d) Frank Field
e) 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

One Free Regular Listing on AppraiserHelp.com

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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