Appraisal Articles

This coming weekend is Memorial Day weekend. I plan on having family and friends over to enjoy a little jet skiing, which I have not been able to do for the last two years. Let’s just say I have been a little busy...

Can you believe it?

Now that I am not pregnant for the first summer in two years, I plan on enjoying the holiday. But it is Memorial Day that we are celebrating, so I can’t help but think of all the service men and women still in Iraq that won’t be able to spend time with their families, much less jet ski. Don’t get me wrong, this is not a column about war or gas, it is just a reflection on how lucky we should all feel to be protected, safe, and able to spend time with those we love.

It will cost us $4 per gallon to fill up those jet skis but we will do it, because it is for family, friends, and fun. And if not for that, we should still do it because those soldiers can’t. Their sacrifice and commitment would not mean much if we did not appreciate it to the fullest extent.

So on Monday I plan to raise my Coca-Cola, eat my Johnsonville Brat, all while still soaking wet from riding my jet ski because that is what it is all about.

They can raise gas as high as they can; I will just have to do one more appraisal to make ends meet. But I am not going to not celebrate, it would not be fair to those who fight to protect our rights.

Speaking of protecting our rights, good job to those of you who jumped on board to fight the HVCC! Last count there were like 31,000 responses from appraisers, lenders, and others. Some of you even drafted your own solutions to help solve the problems we face. But overall it is nice to know that when we send out the call, there are still those willing to stand up for what they believe in.

Comments? Email me.

If anyone has been wondering where this edition of the Scope was, let’s just say I have been a little busy...

Can you believe it?

Again I would like to thank those of you who sent me emails and well wishes. We are very lucky to announce that Ms. Megan made her arrival March 15th (which was a Saturday thank goodness) at 2:47 pm. She weighed in at 7.4 lbs and is as beautiful as can be!

I can’t say I have been resting much, but thankfully while she is still in the EAT-SLEEP-POOP phase, I have been working some. And it is a good thing, because it really has not slowed down much on our end. We are as busy as always!

Thankfully we have 6 appraisers on staff, so I have been punting off work left and right. But I am sure that once I get a routine that I will be right back in it! I did do three appraisals this week, and I consider that ‘slacking off’.

But all is well for now, thanks for asking. Ms Megan is a gem, and her brother is doing great too. Josh is now 18 months old, and he attends a daycare that he really enjoys!

For those of you who keep up with the appraisal forefront, this is a very challenging time. NCPAC is diligently working on putting together an answer in response to the Home Valuation Code of Conduct. If you are able to attend the April 18th meeting held by NCPAC, either online or in person, please do so! All of our futures depend upon how these issues are handled and how we as appraisers take a stand.

It is not enough to stand on the sidelines and hope that everything will work out. If you have an opinion or would like a copy of the document in question, email me and I will forward a copy to you.

Amanda

Valentine's Day 02/14/2008

I have not been as involved in NCPAC this year as I would like to be. This year’s focus on NCPAC committees and getting more involved was a great plan by Doug, current NCPAC president. He has been encouraging all members to get involved, not only at the state level, but on a local level as well. And I have made very few meetings, but then again, I am still holding on at eight months pregnant and counting...

Can you believe it?

I would like to thank those of you who have offered your help while I am supposed to be on bed rest. Obviously I am typing some, or you wouldn’t have this to read. But your letters of support and articles for the Scope are much appreciated!

And things are picking up in the Appraisal Biz. The winter of 2007 was a lean one, but a good time to reflect, relax, recuperate, and hopefully and get your CE out of the way before the June deadline.

If you have been an appraiser for any length of time, you know this business is up and down. We never know if the phone is going to ring tomorrow. So it is best to make hay while the sun shines, so get out there and work!

And if you are a trainee and do not have a supervisor, now is the time to hit the bricks. Most of us who have been around for awhile, are now getting inundated by requests for refinances and finally some new purchases. All in all, it looks like the market may be picking back up, so if you ever wanted to get busy being an appraiser, now is the time to start looking. The work is out there, you just have to find someone who needs help…

I plan on working right up until D-day, but with breaks like right now where I am going to go lay back down. If you need to contact me, email me, until then, I wish you a Happy Valentine’s Day and a great 2008!

Amanda

The purpose of this communication is not to alarm you but to alert you to drastic and irreversible changes currently taking place in the mortgage market. If you or anyone else you know will need mortgage financing in the next 18 months, you need to read this!

Just last week, American Home Mortgage and its wholesale counterpart, American Brokers Conduit, became the latest casualties of the credit crisis. Last year, this company closed over $58 billion in home loans. Despite being, by all accounts, a well-run business, market conditions forced them to file for bankruptcy, leaving billions of dollars in loans in their pipeline unable to close. Tens of thousands of borrowers have now been left without financing as a result of companies like this going under.

Clearly, with over 100 national lenders having now closed shop in the last eight months, this is no longer simply a sub-prime lending issue. The credit market is experiencing unprecedented turmoil. According to Federal Reserve Chairman, Ben Bernanke, "Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing."

What does this mean to consumers? Potential borrowers cannot wait any longer. For those who are considering buying a home, be aware that the volatile credit market can change overnight, leaving fewer options available to borrowers attempting to qualify for a mortgage. This is even more true for those looking to refinance. With decreases in home values and fewer available mortgage instruments, delaying any longer could get significantly more expensive.

Borrowers with applications in process must not delay. Applicants should work with their mortgage professional to complete all paperwork quickly, especially on non-conforming, stated-income, and stated-asset loans. Even minor delays can result in funds being yanked at the closing table!

Sellers can no longer be reluctant to accept offers or reduce prices. Tightening credit and diminishing mortgage products will continue to reduce the pool of qualified buyers. This, along with the increase in national housing inventories, means now is not the time to hold out for the "best" price possible.

Buyers with credit issues or who have difficulty providing required documentation can no longer sit on the fence. If market conditions change, buyers who qualify for a loan today may not qualify a few weeks from now for the same exact loan. Just this week, many lenders have stopped offering No-Doc loans, and some lenders have even pulled back on all forms of stated loans. As market conditions continue to change, a buyer's pre-approval status can disappear even more quickly, delaying or spoiling the deal.

by Oscar Davis www.davisappraisals.org

This year the Annual NCPAC conference was held September 13th –15th, 2007 in downtown Asheville, NC. Before the conference started, members were able to take advantage of a 7 hour continuing education class featuring “Scope of Work”. Also at this year’s conference was guest speaker Charles Fields, Jr., Director of Mortgage Division, for the North Carolina Commissioner of Banks.

Mr. Fields informed us that effective January 1, 2008, House Bill 1817 (NC GS 53-243-11(11), the Residential Mortgage Fraud Act, will be revised by removing the words “coercion, extortion, bribery” and is being replaced with the words “improperly influence”.

Revised Residential Mortgaged Fraud Act to read along the lines of:

“it is a prohibited activity to improperly influence the development, reporting, result, or review of a real estate appraisal sought in connection with a mortgage loan”.

In addition to informing us of rule changes, Mr. Fields took questions from the conference attendees. He even took under consideration Amanda Rivera’s suggestion that when appraisers were disciplined by the NCAB, that often education was part of the solution to correcting the issues. And that the Banking Commission should look into requiring brokers who have been found to not be in compliance with NCCOB regulations, that they be required to take continuing education concerning those issues.

Mr. Fields was also asked by another NCPAC member attending the conference if he considered it a form of influencing the appraiser when a mortgage broker includes an “estimated value” on the appraiser request form.

NCPAC President Doug Winner informed Mr. Fields that a real estate broker was looking into becoming an appraiser because she had done approximately 100 BPOs (Broker Price Opinions / CMAs) at $50 a report and was told that she could charge $100 per BPO if she were an appraiser. Doug reminded Charles that a real estate broker could only charge for a BPO in anticipation of a listing or for relocation and it was unlikely that this broker had 100 listings in a single month.

A solution to the above problem might be for the Banking Commission to have a meeting with the North Carolina Association of Realtors and the North Carolina Professional Appraiser’s Coalition to discuss these concerns and propose resolutions on how the three agencies can work together to protect the public’s best interest through better compliance via education.

Doug Winner also challenged Mr. Fields to take a serious look at the behind the scenes appraiser black lists which are routinely shared with other banks & lending institutions on which appraisers are not to be used for whatever reason. Doug stated that the problem this creates is that then the appraisers have no defense or due process whatsoever on bringing to fruition to solve issues or problems between appraisers & brokers/lenders.

Amanda Rivera started a discussion with Mr. Fields about banks selecting appraisers based on their fee only and no consideration or regard given to qualifications, such as being a member of NCPAC, an instructor, or holding a professional appraisal designation beyond being certified.

Another question was raised by Doug Winner regarding NCPAC’s position on some appraisers giving undisclosed discounts as the “procurement” of the assignment. One helpful suggestion was made that NCPAC help come up with an advisory opinion, since USPAP states in the Management section of the Ethics Rule, “competency, rather than financial incentives, should be the primary basis for awarding an assignment”.

Mel Black discussed that his position was that appraisers don’t have to have a base fee for their appraisal products. They can charge all their clients different fees without requiring any statements in the appraisal reports, but that the information might need to be in a client file.

Baldy Williams’ added that his position has been that the appraisers who discount their appraisal fee in exchange for business are required to disclose in the appraisal report that the procurement of the assignment was the result of the appraiser giving the client a discount (or something along those lines).

Regardless, the undercurrent in this discussion was that appraisers undercutting one another and being rewarded with appraisal assignments from clients is a common problem.

It is time for trick or treat. Here’s another Halloween horror story for you.

We did an appraisal in town, not rural by any means, but a 13 year old home on 2.06 acres. The loan officer, then the underwriter contacted us about the report and wanted more comps added. Mind you we had 4 on it already, 10, 13, 21 years old, and a new one for proximity.

The underwriter insisted that their “AVM” came back and said that they could not accept the report without two additional comps from the new s/d. We informed them that this was not within the original Scope of Work, but for argument’s sake we would comply.

The underwriter then called us back to let us know that “perhaps we did not understand,” she wanted us to take out comps 1-3 and leave in only the new comps. We let her know that was not ethical, it would make the report misleading, and not to mention was against USPAP. So she told us in no uncertain terms if we did not comply, that she would personally have us removed from their “approved appraiser” list.

Can you believe it?

So we turned them into to the NCCOB for coercion.

The good news, or treat, is that the underwriter in question was “let go”. Hopefully it was due to our insistence that she was not qualified to be reviewing appraisals.

The only trick is that the bank has recently declared bankruptcy, surrendered their NC license, and would not be held liable for fines or any disciplinary action by the NCCOB. It is too bad they no longer have any loan officers here in NC; we were really looking forward to the NCCOB letting them know we don’t put up with that here in NC.

Comments? Email me.

First, my thanks to all of you who turned in the early nominations. The NCPAC ballots are still open until the conference so you can continue to send them in, but those of you who did turn them in early, it allows us to get a bio or information posted in advance in the Scope about some of the individuals who will be running for the officer/ board positions.

Secondly, I would like to thank those of you who nominated me for various board / officer positions with NCPAC. It is a testament to the strength and success of the Scope newsletter, that a small town girl such as myself, has made an impact on other appraisers’ lives. I really do appreciate being nominated.

But, and here’s the new news, I have decided not to run.

Can you believe it?

I have a new project I am working on that requires my full attention. Some of you may remember that last year I worked all through my pregnancy, right up until the conference. Then at the conference I acted like superwoman and tried to do too much. Well, I can’t do that again.

So you might have guessed it, yep, working on number two. And I will attend this year’s conference, but I am going to try and delegate as much as I can, rather than trying to move tables and such myself. If you would like to volunteer for this next month’s conference, please contact Sandy or myself and we will be happy to let you know what you can do to participate!

So thanks again for nominating me and I will consider running again in the future, but if I learned anything from last time it is when to say enough is enough. I am not one to readily admit that I can’t do something; but I did learn a very valuable lesson, and that it is okay to do less and others will not think less of you for it.

I also hope that you sign up and attend this year’s conference. Dale Smathers has done a fantastic job of putting together a “grass roots” involvement conference. Highlights should focus on what is going on in the various areas of NC locally and regionally, to organize the appraisers of NC. Also if you come on Thursday, a 7 hour CE class will be offered. So you can have fun and get a CE credit also! Plan on signing up to attend early, and I hope to see you there!

Comments? Email me.

Amanda Rivera

Specializing in complex appraisals is one way to diversify in this period of slow down. Another way is to expand your base with education or other skills. A successful appraiser is one who remembers that clients are the ones that keep us busy, so it is important to stay in contact with their changing needs and expectations.

I encourage appraisers to take continuing education, or go get a designation, or even get a real estate license. The more you know about your profession and the other professions that impact your profession, the more you will be prepared to handle the ups and downs of the business. A class in FHA appraising for example, may help shed light on a segment of appraisals that you currently don’t offer. Adding an FHA certification to your existing talents will not only get you more business, but will add to your perceived knowledge and experience; lenders looking at your qualifications may choose you over less experienced appraisers. By making yourself an expert in your field you not only separate yourself from the ‘rest of the pack’, but you also get the added benefit of knowledge and respect from peers/clients.

In the ten years I have been appraising, I have seen it go from boom to bust. Only the strong survive; those who saved money instead of spending every dime, those who didn't rest on their laurels, but went out and marketed their companies on a regular basis by putting a face in front of the clients rather than just an email, those who furthered their education so they could do other things when it got slow, and those who never forget that even though the ringing phone is annoying, it is much worse when the phone is not ringing.

Bringing a positive attitude to every task is tantamount to success. If you snarl and sneer on the phone, the listener hears it in your voice. I realize this is hard in light of the “Can you do a pre-comp?” phone calls that we get on a daily basis. It is difficult to walk the line between the rules of USPAP and the rules of maintaining a successful business, and not lose your mind doing it. You are completely normal when you have days that you say, “I can’t do this anymore…” We all have had those days.

But when I wake up and go to my computer in my pajamas and I am “at work”, when I can peek in on my sleeping 9 month old whenever I want, and when I can take that much needed vacation with the money I have saved; I know that it is all worth it. Being a successful appraiser is harder in times when it is slow and business is slacking off, but using this time wisely will not only help your business grow, but may improve your mental health as well. Take time for you. Take a course. Reconnect with clients. You never know how long the lulls will last; but it is better to be prepared and have a good attitude. Learning to enjoy the “downtime” as much as when it is busy will make you a much better appraiser.