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Be sure to check your state’s requirements, as they vary widely among the states.
This is the first one I know of. Maybe they have been reading my free emails where I suggest this is the only solution to the appraiser shortage, now and in the future, that can start immediately. FYI, Red Sky is owned/affilated with U.S. Bank
Excerpts from an email (Appraiser Partner News) sent to appraisers on its panel June 11, 2015
Supervisory Appraiser Change
Upon review, Red Sky Risk Services, LLC has refined its expectations regarding the involvement of appraiser trainees. Important to note, the following change DOES NOT override specific state statute(s) or appraiser training requirements.
Effective immediately, Red Sky is no longer requiring supervisory appraisers to be physically present with trainee appraisers at all subject property inspections and driving comparable sales.
My comment: There is a short additional list of specific requirements. But, they are nothing new – Supervisor to review report, responsible for report, etc.
by Richard Hagar, SRA
Nordstrom or Walmart? Mercedes or Yugo? Are you a Tier 1 or Tier 2 appraiser? Appraisers have two different business models to choose from.
I have seen that many lenders classify appraisers into two or three different tiers based on their perception of the quality of your product. Which tier are you? The amount of business you have and the amount you are paid is very likely based on how lenders classify you.
There is a lot of appraisal business right now and lenders are begging for high-quality appraisals. Many firms are buried in business, quoting three-plus weeks out in turn time, with high fees; here in the Northwest we are earning $550 for a standard home. If your company is not busy or you are making far less than this, here are some tips.
My comment: Appraiser tiers have been around for a long time. They were used when I started my appraisal business in 1986. In the past, they were referred to as “preferred” or “private banking”, etc. Prior to HVCC they were often used for high dollar properties. After HVCC, lenders placed the appraisal orders directly, not through AMCs they used.
Read the full article. Worth reading!!
Issued June, 2015
Section VI(C) of the Criteria states:
An applicant shall not be eligible for a real property appraiser credential if, during at least the five(5) year period preceding the date of the application for licensing or certification, the applicant has been convicted of, or plead guilty or nolocontender to a crime that would call into question the applicant’s fitness for licensure.
It is impractical, and likely impossible, to compile a list of every specific circumstance where an applicant must be denied a credential. Section VI(C) is intended to provide states with the ability to deny a credential based on “public trust.” States have latitude to determine, based on their own guidelines, whether or not an applicant falls into this category and should be denied a credential.
My comment: California required background checks on all applicants when licensing first started around 20 years ago. There was a lot of discussion on what disqualified you. I didn’t hear about many license denials for experienced appraisers. I suspect this is because appraisers don’t do much criminal activity (except a few being involved in mortgage fraud). But, some had felonies in the past. For example, a felony for sale of marijuana in the 1960s – many years before the 1990s. For states which have never done background checks it is easier today. They can ask the other states what they did regarding background checks. Every state is different. Check with your state if it will be implementing background checks for the first time.
Link to Q&As
Exposure Draft, Guide Note 9
https://appraisalfoundation.sharefile.com/download.aspx?id=s79a4e964ae3446db Issued January 17, 2015
Appraiser shortage – for AMCs, not other clients
There is a significant shortage of appraisers willing to work for AMCs with low fees and escalating Scope Creep.
AMCs whose business model is based on low fees to appraisers are having difficulty finding anyone willing to accept their appraisals. They keep calling and calling trying to find someone to work for their low fees.
Direct lenders or the few “good” AMCs are not experiencing an appraiser shortage. Appraisers who work for them turn down AMC work.
Appraisalport polls on comp photos
By Steve Costello, http://www.appraisalport.com
This month I want to discuss three recent polls dealing with comp photos. In the first poll, we asked “With the availability of MLS photos, do you still feel it is necessary to drive by and photograph every comp?” We had a total of 3819 responses and the top two answers were very close. The winner, with 40 percent of the vote, was “Sometimes, it depends on the complexity of the specific assignment.” Coming in a close second was “Yes, I always want to see any property I use in a report” with 38 percent of the vote. The final answer of “No, I would rather just use MLS photos” only scored about half the votes as the first two answers, finishing with 22 percent. This makes sense because I think most appraisers want to look at a comp before they include it in a report, especially if they aren’t already familiar with the property. I can also see where some appraisers are very familiar with the properties in their area, use many of the same comps over and over again, and don’t feel a need to drive by and photograph them every time they use them.
In the next poll, we asked “In your opinion, with MLS, Google, and other photo sources available to clients, the main reason original comp photos are required from the appraiser is:” This poll had 3986 responses and had a pretty clear winner. A full 63 percent of the appraisers chose the answer “To make sure the appraiser actually drives by the comps.” So it looks like most appraisers don’t think their clients care as much about the actual photo compared to just making sure the appraiser actually visited the comp. The answer we expected to be very popular, “To provide the client with up-to-date photos of the comps – ensuring they exist in the stated condition,” only received 22 percent of the vote. A third response of “So the clients won’t have to take the time to look up the photos from one of the sources noted above” didn’t do well, only pulling in 3 percent of the vote. Not a surprise — we didn’t really expect many appraisers to choose that answer. Finally, 13 percent of appraisers went with “Other reason” as the best choice for this question. We really don’t know if there were one or many “other reasons” or what they are.
Finally, we asked “Would you be in favor of eliminating the requirement to include an original photo of every comp as long as a recent MLS photo of the property could be included with your report?” This question was very popular with 4770 total votes. It also produced a landslide vote with 79 percent of the appraisers selecting the answer “Yes.” Only 15 percent answered “No” and would not want to use an MLS photo instead of an original if it were available. A final 6 percent were “Not sure” how they felt about this issue. So, from this poll it is clear that appraisers feel that an original photo is not a necessity to produce a quality appraisal as long as a good representative photo is available from another source like an MLS.
My comment: As we all know, a photo taken at the time of listing from the MLS is often better than one taken later and USPAP does not require comp photos. Fannie Mae certifications require that the appraiser inspect the exterior of the comp, not take a photo. What about re-using a comp photo? Why the requirement of an “original” photo? To be sure appraisers drive by the comps.
Some Very Interesting comments from Jonathan Miller’s Housing Notes
May 8, 2015
Earlier this week I came across a brilliant tweet – that when applied in the context of housing, spoke for a lot of the gimmicky click-bait research that comprises a large swath of housing market news coverage.
The present is a lagging indicator.
— Pedro da Costa (@pdacosta) May 3, 2015
While I plan to use that quote extensively, my favorite remains one by Mark Twain (supposedly). It is especially useful when making comparisons to the the boom, bubble, bust cycle of the prior decade.
History doesn’t repeat itself, but it does rhyme.
I prefer my adapted version:
History doesn’t repeat itself, but sometimes it rhymes.
So much of what we read or think about housing is backward looking or a provides a current view based on a prior event that had a completely different set of circumstance and worst of all, a lack of context. Sound bites relied on by market participants and media often have limited applicability to specific situations and perspectives.
Link to the full Housing Notes issue:
My comment: I love Jonathan Millers writing, speaking etc. The only appraiser I know who is widely quoted, and interviewed, in the media!!
Handbook Implementation Date Extended 90-days to Give Lenders More Time to Operationalize
On April 30, 2015, the Federal Housing Administration (FHA) announced that it has extended the effective date for the policies contained within its new Single Family Housing Policy Handbook (SF Handbook; HUD Handbook 4000.1) from June 15, 2015 to September 14, 2015.
FHA recognizes that there currently are a number of competing initiatives occurring simultaneously in the mortgage industry that may be challenging mortgagee and other industry partner resources. For this reason, FHA is extending the SF Handbook effective date by 90 days with the expectation that this additional time will enable mortgagees and others to be fully compliant with the new effective date.
Link to new handbook 4000.1http://portal.hud.gov/hudportal/documents/huddoc?id=40001HSGH.pdf
The bulk of the appraisal section starts on pdf page 441 and runs through pdf page 507.
My comment: We love to procrastinate ;> For appraisers, this means there will be opportunities for webinars and seminars. Also, written explanations. The June issue of the paid Appraisal Today newsletter will have an article on the changes written by Doug Smith, SRA, Montana appraiser. Doug has been writing for the paid newsletter for many years. To subscribe, click on the ad below.
Yes, you can start using the new criteria now. Some people like to get ready ahead of time ;>
On average, how long does it take you to complete a 1004 interior inspection appraisal report including inspection time (excluding driving time)?
Another Very Interesting poll from www.appraisalport.com
My comment: I have been hearing about scope creep causing increased appraisal report writeup times but now there is some data. Significantly increased, and still increasing from pre-AMC days. My non-lender report writing time has not changed from since before HVCC. Appraisalport is a lender portal, so I guess there are some appraisers that write fast and others that write slow. Or, maybe it depends on your clients. AMCs tend to combine requirements of multiple lenders into very long lists of requirements.
On average, how many “interior inspection” appraisals reported on a 1004 do you normally produce in a week?
My comments: Starting with a conforming tract home close to your office, the time increases, depending on driving time, use of an assistant and client requirements.