Industry News

Financial Reform
Financial Reform legislation (Dodd Frank) signed into law in July is the most important to the profession since FIRREA (Financial Institutions Reform Recovery and Enforcement Act of 1989), the landmark legislation passed in the wake of the Savings and Loan Crisis which created licensing for appraisers. Find the appraisal related text of the Bill at WorkingRE.com, Sidebar Info: Appraisal-Related Base Text of the Financial Reform Bill. Find a summary from TAF at WorkingRE.com, Sidebar: Appraisal Foundation’s Summary of the Restoring American Financial Stability Act of 2010.

Appraiser (AMC) Rater: Get the low-down on AMCs from the appraisers who work with them at the Appraiser Rater section of the OREP/Working RE Appraiser Talkback Blog. Visit WorkingRE.com and click under the Blogs tab to find this section plus many more comments and insight from fellow appraisers nationwide.

Appraisal Abuse Red Flags
The following “appraisal abuse red flags” is from the Office of Thrift Supervision May 2010 Examination Handbook 360.13: no appraisal or property evaluation in file; mortgage broker or borrowers who always use the same appraiser; appraiser bills association for more than one appraisal when there is only one in the file; unusual appraisal fees (high or low); no history of property or prior sales records; market data located away from subject property; unsupported or unrealistic assumptions relating to capitalization rates, zoning change, utility availability, absorption, or rent level; valued for highest and best use, which is different from current use; appraisal method using retail value of one unit in condo complex multiplied by the number of units equals collateral value; use of superlatives in appraisals; appraisal made for borrower; appraisals performed or dated after loan; close relationship between builder, broker, appraiser, lender and/or borrower; overvalued (inflated) or high property value. Find complete report at WorkingRE.com, Sidebar: Office of Thrift Supervision – Fraud and Insider Abuse.

Federal Agencies Issue Final Rules to Implement S.A.F.E. Act Requirements for Registration of Mortgage Loan Originators
Federal agencies issued final rules requiring residential mortgage loan originators who are employees of national and state banks, savings associations and others to meet the registration requirements of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E. Act). The S.A.F.E. Act requires residential mortgage loan originators to be registered with the Nationwide Mortgage Licensing System and Registry (registry). As part of this registration process, residential mortgage loan originators must furnish to the registry information and fingerprints for background checks. The S.A.F.E. Act generally prohibits employees of agency-regulated institutions from originating residential mortgage loans unless they register with the registry. It is also requires that each residential mortgage loan originator obtain a unique identifier through the registry that will remain with that residential mortgage loan originator, regardless of changes in employment. This will enable consumers to easily access employment and other background information about registered mortgage loan originators from the registry. Under the final rules, registered mortgage loan originators and agency-regulated institutions must provide these unique identifiers to consumers. The final rules take effect on October 1, 2010. The agencies anticipate that the registry could begin accepting federal registrations as early as January 28, 2011. Find the link to the press release, regulations, and Federal Register notice at WorkingRE.com, Sidebar: SAFE Act Final Rules for Registration.

Free Veterans Administration Webinars
These webinars from the BA are free. You may RSVP to reserve your place. Did you miss an FHA Philadelphia Homeowner Center webinar? Catch up by visiting WorkingRE.com, Sidebar: Free Veterans Administration Webinars for the link. (No Longer Available)

NAR “Beyond HVCC” Marketing Tips
Lots of ideas in this 38-page document on how to expand your practice. Find a link to it at WorkingRE.com; Sidebar: NAR “Beyond HVCC” Tips.

Industry Announcements
While you’re visiting WorkingRE.com, check out the new section Industry Announcements for the latest press releases and announcements from industry leaders. Send submissions to: subscription@workingre.com.

Marketing, Appraisal Tips that Didn’t Fit (More Online)
Find these and other stories online under Didn’t Make it to Print. Most were originally published in Working RE’s Online News Edition. (Opt in by emailing subscription@workingre.com). Back to School: Marketing to Agents & Brokers; Customary and Reasonable Fees: Making Your Case;  Using Distressed Sales; How Builders Think (in a down market); 2010 Appraiser Survival Kit: FHA; FHA Readers’ Question & Answer; Better Appraising from the Inside Out.

Change Happens:Working RE/OREP HVCC Talkback Surveys 9,000 and Counting
Over 9,000 appraisers (combined) have responded to two Working RE/OREP HVCC Appraiser Talkback Surveys. Thousands more have left comments giving us insight into the current market conditions. Your feedback, published here and elsewhere, made a difference in getting vital reform legislation passed. If you had not spoken up and spoken out, those who pronounced the Home Valuation Code of Conduct (HVCC) an unqualified success for consumers, lenders and, yes, for appraisers, would have been the only voices heard. What you told Working RE and others- appraiser associations, software vendors and Congress, about your experiences working with AMCs made a difference (see State of Industry). But there’s work to do to see that these new requirements are enforced. Your participation continues to matter. We encourage you to make your voice heard in the surveys if you have not already. To take the surveys, please visit WorkingRE.com: Take our HVCC Surveys (Survey Now Closed).

FHA Automatic Roster Renewal Instructions
FHA and the Appraisal Subcommittee are working together to create a seamless renewal process for appraisers on the FHA Roster, according to Donna Tomposki, Director of the Home Valuation Policy Division within FHA’s Office of Single Family Program Development. If an appraiser’s license/cert. number is an exact match to the National Registry at the ASC.gov (Appraisal Subcommittee), the renewal will be reflected automatically on the FHA Appraiser Roster within 24 to 48 hours of when it is updated on the National Registry. Many appraisers have expressed confusion on how to ensure their information conforms. For step-by-step guidance directly from FHA on how to ensure that your Roster information matches the ASC, visit FHA Seamless Renewal Process, WorkingRE.com, Premium Content (unlocked).

FHA Appraising Made Easier, More Efficient
FHA work is booming. If you’re Certified and want a leg up on learning how to appraise for FHA more efficiently, here is a great opportunity. The FHA Appraiser Inspection Course, Checklist and eManual is designed to get you up to speed and more efficient at FHA appraising. The course explains how to complete the two-page checklist line by line. The Checklist serves as a field guide for completing your reports. The eManual saves you time and money by summarizing and organizing the material you need to know. Author/appraiser Lore DeAstra says, “We reviewed more than 450 pages of HUD materials and spoke with several HUD officials to compile the FHA Appraiser Inspection Form, course materials, and eManual. It will save you time and money.” The guide is recently updated with 23 new pages of material. Updates are provided free for one year after purchase.

Upgrade to Certified Licensing Level/FHA Coursework
FHA is providing up to 50 percent of loan activity this year according to published reports. If you want to upgrade your license to the required Certified level, now’s the time. OREP is offering discounted approved continuing education through the OREP Education Network/McKissock. You do not have to be an OREP member to enjoy this current opportunity. Bundled coursework of up to 49 hours is available for licensing upgrades and continuing education at a discount through a link at OREP.org, click OREP Benefits then OREP Education Network.

New Business Opportunity: Energy Auditing 
Here is one way appraisers and home inspectors are diversifying their incomes: energy auditing. It’s a service people want.  Real estate professionals are diversifying their incomes by adding energy auditing to their list of services. Billions in tax credits, lower interest loans and grants are flowing into this growing sector of the economy. Jeff Patterson, an appraiser in Maine and the author of Real Estate Appraisers and Building Inspector’s Guide to the Energy Auditing Business ($30), has been doing energy auditing for some time and finds that appraisers are “naturals” at the work. “The service involves a thorough survey or audit of a home or property and assisting owners in lowering energy costs,” said Patterson. “Once a home is audited the ‘energy efficient’ improvements are eligible for many financial rewards such as tax deductions, grants and low interest loans. The process requires accurate measurement of the property, calculating the return on investment, coupled with an appraiser’s expertise and knowledge of real estate markets- specifically how these improvements will effect operating cost and value. Who better than an appraiser?”  Patterson continues, “Last year I took a two week training course through the Maine State Housing Authority (MSHA). The cost of the training program was $575. A few months later I learned that MSHA offers a coupon to new home buyers who have bought a house with them in the past three years. The coupon is good for two energy audits. One coupon pays the energy auditor $350 and if improvements are done, a follow up audit for $150. Pulling sales from the MLS in my area, I found 108 properties that sold through MSHA in the past 24 months. By contacting these homeowners I believe it is reasonable to get 50 inspections. Even if I charge only $350 it will generate $17,500 in additional revenue this winter. Then when the second audit is done, and let’s say on only half of the audits I have already done, I would bring in an additional $3,750, increasing my revenue this winter by $21,000.”

Find out if this service is for you. Save time and money getting up to speed on the basics of Energy Auditing with the new Energy Guide from an appraiser who is doing it. What’s involved? Is it for you? What’s the demand? Who are the key players? How much does it cost? How much can I make? How do I make it work? You can find out with this 41-page guide.

Editor’s Note: If you’re a home inspector already doing energy audits, errors & omissions insurance for energy auditing is included with OREP’s home inspector program. Others can obtain E&O and general liability ($1 million) from OREP for under $1,000 (plus taxes and fees). Visit or call OREP.org for more; (888) 347-5273.

Going Green: Read WRE Online Instead of Print
You can opt out of the print version of Working RE in favor of reading it online, saving trees, energy and the other natural resources required to manufacture and deliver the magazine. Next time you’re online, peruse the current issue (the one in your hands) at WorkingRE.com. Just click the cover image and register once with an email and password. If you like the new format, simply include your name and mailing address in the login form to be removed from the print mailing. Each current edition of WRE will be posted free online from now on in PDF format. Tell your friends and colleagues!

Note: This quarterly print version of WRE is mailed to about 80,000 real estate appraisers (out of about 125,000 licensed and active appraisers nationally). You are guaranteed delivery of a print magazine if your purchase E&O insurance from OREP/David Brauner Insurance Services or subscribe ($50/2 years). If you don’t receive a print version of the magazine, you can always find it online (PDF) for free at WorkingRE.com. To be notified when each new print edition is published, please opt in to Working RE Online News Edition (see below).

Working RE Email Edition: Appraisers and Home Inspectors Versions
One thing you may not know is that Working RE Online News Edition publishes many stories you won’t find in print due to space limitations. Important news is breaking nearly every week: if you don’t receive WRE’s free Online News Edition you are missing valuable news and analysis specific to appraising. Working RE Online News Edition keeps you informed and competitive. Designed to keep you up to speed between print issues, WRE Online reaches 45,000 appraisers twice a month and 16,000 home inspectors once a month. If you’re not reading it, you’re only getting half the story. You can opt in to either edition at WorkingRE.com or email subscription@workingre.com with “appraiser” or “inspector” in the subject. Special Offer Editions: In addition to timely information, in the past few months, you could have learned how to expand your business with energy auditing, how to be a better FHA appraiser and received important announcements, discounts and industry initiatives from the leading technology providers in the business. Save money, stay informed, opt in to Working RE Online today and see what the other half knows.

Canceling E&O Insurance to Save Money Can Cost You
If your business is slow and you are considering letting your errors and omissions (E&O) insurance policy lapse (not renewing) or canceling mid-term to cut expenses or retiring, consider this: if you do so, you risk losing coverage for all the appraisals/inspections you completed in previous years. Most every E&O insurance policy is Claims Made and works the same way: if you let your policy lapse, you may be left unprotected should a claim arise from a past report. Switching companies is typically not a problem as most provide prior acts to new clients for free, as long as you make the switch on or before your policy expires (ask your agent). As most (appraiser) claims take several years to surface, letting your insurance lapse or not renewing could be very costly indeed should a claim arise from the past and you’ve let your policy lapse. If you are leaving the profession or retiring, “tail coverage” is available (call your agent). If you are continuing to work, it pays to keep your E&O in place. OREP offers premium financing. To understand E&O insurance more fully, including a list of “Dos and Don’ts,” see Cutting Expenses as Business Slows: Why Canceling Your E&O Can Really Cost You. It’s worth your time to give it a read. If your premium has shot up, don’t give up until you call OREP – now in its ninth year: (888) 347-5273.

AMC Regulation
The following states have enacted regulation for Appraisal Management Companies (AMCs) as of this writing: Arizona, Arkansas, California, Connecticut, Florida, Georgia, Indiana, Louisiana, Minnesota, Missouri, Nevada, New Mexico, Oklahoma, Oregon, Tennessee, Utah, Vermont, Virginia, and Washington. Legislation is also pending or has been proposed in: Alabama, Colorado, Hawaii, Illinois, Kentucky, Mississippi, Nebraska, New Mexico, North Carolina, Ohio, and Pennsylvania. Most AMC regulations, passed and pending, require a company or person performing business as an appraisal management company to register with the state’s finance agency, appraiser board or in Oregon’s case, the Department of Consumer and Business Services. Each AMC will be required to have a system in place to verify any appraiser being added to their panel holds a license in good standing with the state. To view PDFs of the passed bills, please visit WorkingRE.com, Sidebar: AMC State Regulations. For model legislation, see AMC Regulation: Good for What Ails You (WorkingRE.com, Library, Issue 23).

OREP Members- Get Answers Fast
In addition to calling David Brauner Insurance Services/OREP anytime, policy holders can now access our new Policy Servicing Service by emailing their request to info@orep.org. Requests are usually handled the same business day. Or find a new Frequently Asked Questions section at OREP.org/OREP-FAQ.htm. (888) 347-5273.

Save Money with Corporate Pricing
Save money from Office Depot, Staples, Dell, FedEx, UPS, Sprint, Travel and many more with Corporate Pricing from OREP. This is from an OREP insured: “Thanks (Clark) for sending us the benefits link. Just enrolled with Verizon and will save 19% per month! Thanks again! – Amy” Other savings from OREP included valuable discounts on online continuing education in 50 states and Group Medical Insurance. Visit OREP.org and click Benefits for more.

Customary and Reasonable Fees: Making Your Case
New financial reform legislation provides support for customary and reasonable fees for appraisers. Many see the standardized fees set by the Veteran’s Administration (VA) as a logical benchmark as their fees are certainly more reasonable than what AMCs had been paying. See Customary and Reasonable Fees: Making Your Case, at WorkingRE.com.