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Manufactured Housing and Co-op Housing

May 14, 2008

9:00 a.m. to 10:30 a.m. (Pacific Time)

10:00 a.m. to 11:30 a.m. (Mountain Time)

This live broadcast will cover VA Rules for manufactured housing and how to distinguish between co-ops, fee simple and leasehold ownership, and how to accurately prepare and review appraisal reports for co-ops under VA requirements. It is intended for lenders, SARs (Staff Appraiser Reviewers), fee appraisers, real estate professionals, and VA staff.

If you have a fast Internet connection and no firewall problems, this broadcast is available in “streaming video” format over the Internet. Details regarding this viewing option are available on Loan Guaranty’s website http://www.homeloans.va.gov/broadcast.htm.

For broadcast locations; to make reservations in Arizona, California, Nevada, or New Mexico; or if you need any other assistance, please contact the Phoenix Regional Loan Center at:

TOLL FREE

1-888-869-0194 x 3048

WEBSITE E-MAIL ADDRESS FOR RESERVATIONS
http://www.vba.va.gov/ro/phoenixlgy/index.htm mailto:Reservations.vbapho@va.gov

April 2008: Our monthly online newsletter, In The Loop, features single-family mortgage news and business information to help you expand your markets and assist your operations.

COMMITTING & DELIVERY

Jumbo-Conforming Mortgages Updates
On April 1, Fannie Mae began accepting delivery of some Jumbo-Conforming Mortgages. As we prepare to accept additional products (5/1 ARMs) beginning May 1, we have announced implementation details and other updates. Learn about the implementation details and resources available to assist you. Read more …

TRAINING & EDUCATION

Loss Mitigation in Today’s Market Web Seminar
Learn how Fannie Mae loan servicers can help financially distressed borrowers avoid foreclosure in today’s challenging market by taking advantage of this new recorded and instructor-led Web seminar. The presentation describes loan workout options, our requirements, and the incentives we offer for preventing costly foreclosures. Learn about HomeSaver Advance™, a new workout loan alternative, along with other options available to help servicers prevent and manage delinquencies. Read more …

Condo Project Review Training Available

Do you need to know more about Fannie Mae’s project review guidelines for condos, co-ops, and PUDs? Learn more about recent changes and how to apply them with our recorded Webinar, FAQs, and other resources. Make your work easier by taking advantage of these tools today. Read more …

IN BRIEF

Comment Period Remains Open on New Appraisal Code

Fannie Mae is continuing to accept comments on implementation of the Home Valuation Protection Code to enhance the integrity of the appraisal process in the mortgage finance industry. The comment period is open through April 30. Read more …

Recent Lender Announcements
Review Fannie Mae’s latest Lender Announcements and Letters to stay current on our policies and guidelines.

Announcement 08-09: Jumbo-Conforming Mortgage Loans – ARM Plans, MBS Pooling, and Other Information (issued April 4, 2008)
Announcement 08-08: Mortgage Eligibility and Pricing Updates for Desktop Underwriter® and Manually Underwritten Loans (issued March 31, 2008; reposted 4/21/08 to correct a typographical error)
Announcement 08-07: Expansion of Forbearance Team (issued March 28, 2008)
Announcement 08-06: Updates and Clarifications to Maximum Financing in Declining Markets Policy (issued March 24, 2008)
View Recent Announcements …

HOT TOPICS
New DU Version, Eligibility and Pricing Changes Announced
Fannie Mae continues to make changes to ensure that we can continue to fulfill our mission to provide liquidity, stability, and affordability to the mortgage finance system in a variety of market conditions. The dramatic shifts in the market over the past few months have prompted us to review our eligibility requirements, automated underwriting risk assessment, and pricing.
Read more …

New Adobe Enhancements Make Interactive Forms Easier to Use
Until recently, you needed the full version of Adobe Acrobat® Standard or Professional software to save an interactive PDF form. But now, with the correct version of Adobe Reader, you can save your own copy of the form to your computer – a real time-saver when completing long forms or if you have to submit the same form again in the future.
Read more …

UPCOMING EVENTS

Let HFI Help You Chart a Course for Professional Development
Today’s market can be challenging for even the most seasoned mortgage professional. If you are interested in honing your skills and expanding your expertise, attend our Housing Finance Institute™. Courses are being offered on a variety of relevant topics. Register now to join us at our next session in Atlanta, GA May 6-8, or check out other upcoming dates and locations. Take advantage of this great opportunity!

More event info …

Working with You to Help You Succeed in Today’s Market
Fannie Mae is proud to be a sponsor of the MBA’s National Secondary Market Conference & Expo, May 4 – 7, in Boston, MA. Fannie Mae representatives will be present throughout the conference. We look forward to seeing you there.

More event info …

eFannieMae.com | Privacy Policy

This electronic message has been sent to you by Fannie Mae and may contain an advertisement or solicitation.
To subscribe, unsubscribe, or update an e-mail address, go to: http://www.efanniemae.com/lc/newsletters/index.jsp

Fannie Mae, 3900 Wisconsin Avenue NW, Washington DC 20016

© 2007 Fannie Mae. All rights reserved.

While Fannie Mae has made reasonable efforts to ensure the accuracy of the above information,it is possible that, despite
these efforts, this information could contain errors. If necessary, users should contact applicable third-party service
providers directly to confirm these changes. Fannie Mae shall not be liable for any errors contained herein or for any
damages arising out of or related to the use of information contained in this notification, including, without limitation, direct,
indirect, incidental, special, consequential or punitive damages, whether under a contract, tort or any other theory of liability.

All-

Message for FHA Appraisers and Lenders:

For applicants to the FHA Appraiser Roster:

On May 5, 2008 FHA will launch an online appraiser application process that will replace the existing paper applications. In preparation for the transition, the cut off date for submitting paper applications is April 22, 2008. Applications that are postmarked or time dated later than April 22, 2008 will not be accepted nor returned. Appraisers are encouraged to wait until May 5, 2008 to make application rather than rush to submit a paper application. Appraisers who have already submitted paper applications do not need to reapply online. In the coming weeks, be on the look out for updates that will be posted to http://www.hud.gov/offices/hsg/sfh/appr/apr_rost.cfm regarding the online application process.

For FHA Roster appraisers renewing licenses/certifications:

Due to a recent audit by HUD’s Office of the Inspector General (OIG), FHA must ensure that the license or certification number listed on the FHA Appraiser Roster matches exactly with the number posted on the National Registry of the Appraisal Subcommittee (ASC). Appraisers may visit ASC’s web page at http://www.asc.gov/ to compare their state issued license or certification number with that posted on the National Registry. Although FHA has not yet implemented this policy of exactly matching the appraiser’s state issued license or certification number, as renewals come in our processors have begun to match the numbers exactly with that posted on the National Registry to assure timely renewals in the future.

For FHA lenders unable to locate appraisers in FHA Connection:

If FHA lenders are unable to locate an appraiser listed on the FHA Appraiser Roster by using the number shown on the state issued license or certification, lenders should use the FHA Connection Appraiser List screen and search by name and state. The license or certification number displayed on the Appraiser List page for the selected appraiser should be used when ordering a Case Number on the Case Number Assignment screen.

AND

April 15, 2008

MORTGAGEE LETTER 2008-10

TO: ALL APPROVED MORTGAGEES

SUBJECT: Update to Mortgagee Letter 2004-40, Single Family Real Estate Owned (Property Disposition), National Management and Marketing Contractors

The purpose of this Mortgagee Letter is to provide updated information to Mortgagee Letter 2004-40 issued September 30, 2004. With the exception of the updated information in this Mortgagee Letter, all other information identified in Mortgagee Letters 2004-45, 2005-04, 2005-07, 2005-12, 2005-25, 2005-29, 2005-35, 2006-02 and 2006-19 remains in effect…

To read this mortgagee letter(s) in its entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2008 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

AND

Housing Counseling Agencies:

It has been brought to HUD’s attention that there is some confusion in the industry regarding how to report and complete the form HUD-9902 on a quarterly basis.

When accessing the HCS database to submit a quarterly form HUD-9902, please be certain to click on the tab for the appropriate time period - currently “Quarter 2”. Some agencies have overwritten their first quarter submission because they did not select “Quarter 2” for the second reporting period. If you made this mistake, please access the HCS database and re-enter your total activity for the first quarter.

Then select “Quarter 2” and pull up your second quarter form HUD-9902 activity report and enter the total cumulative activity for both the first and second quarters. The data you are reporting for your second quarter submission should be cumulative.

Similarly, for the third quarter form HUD-9902 activity report, the total activity you should report will be for the first, second and third quarters activity. For the fourth quarter form HUD-9902 activity report, the total activity you will be reporting will for the first, second, third and fourth quarters activity. If you did not provide cumulative data for your second quarter submission, please access the HCS database and re-enter your total cumulative activity for the two quarters. If you have any questions regarding this matter, please contact your local FHA Homeownership Center Program Support representative.

AND

FHA Training around the nation:

May 5-8, 2008 - Hato Rey, PR. 2008 HUD/FHA Education Session at the HUD Field Office at Parque Las Americas I, 235 Federico Costa Street, Room #200, Hato Rey, Puerto Rico 00918. For more information contact Olga Lopez at (787) 766-5400 x2069. Registration required, no fee. More info at: http://www.hud.gov/offices/hsg/sfh/events/apr050508.pdf

May 5-9, 2008 - Cincinnati, OH. NeighborWorks® Training Institute foreclosure counseling training. Registration required, scholarship available on a limited basis to qualified non-profit agencies. For more info: http://www.nw5.org/training/index.php?sid=58a593f3f1243c6740c90dec488c3856

May 6, 2008 - Orlando, FL. FHASecure Training & Basic FHA Update for FHA Mortgage Professionals at the Orlando World Center Marriott Resort & Convention Center. Registration required, no fee. For more info: http://www.hud.gov/offices/hsg/sfh/events/afl050608.pdf

May 6, 2008 - Atlanta, GA. FHA Training for industry partners at the Atlanta Homeownership Center, Montalvo Room - 11th Floor, 40 Marietta Street, Atlanta, Georgia 30303. Registration required, no fee. For more info: http://www.hud.gov/offices/hsg/sfh/events/aga050608.pdf

May 7, 2008 - Portland, ME. FHA Loss Mitigation Training sponsored by HUD. Registration required, no fee. For more info: http://www.hud.gov/offices/hsg/sfh/events/pme050708.pdf

May 7-9, 2008 - Phoenix, AZ. FHA Direct Endorsement Underwriting Training. FHA Underwriting 101, case studies covering mortgage calculation, underwriters’ responsibilities, Automated Underwriting, Underwriting the FHA Appraisal & more. Registration required, fee. More information at: http://www.hud.gov/offices/hsg/sfh/events/saz050708.pdf

May 8, 2008 - Chicago, IL. FHASecure Training & Basic FHA Update for FHA Mortgage Professionals at the Hilton Chicago. Registration required, no fee. For more info: http://www.hud.gov/offices/hsg/sfh/events/ail050808.pdf

May 13, 2008 - Arlington, TX. FHA Secure Training & Basic FHA Update. What have you heard about FHA Secure? FREE, one day seminar for FHA-approved lenders, originators, and real estate sales professionals. Get the facts directly from FHA representatives about FHASecure, the Economic Stimulus Package, FHA Lender Approval, & more. Registration required. For more info: http://www.hud.gov/event_registration/index_2.cfm?eventID=940

May 13, 2008 – Denver, CO. Basic Direct Endorsement Underwriting. FREE, one-day class covers basic FHA underwriting procedures and updates. The class is geared toward all beginner underwriters, loan officers and processors and will provide a thorough understanding of underwriting FHA-insured loans. Registration required. For more info: http://www.hud.gov/event_registration/index_2.cfm?eventID=948

May 14, 2008 - Arlington, TX. Learn about FHASecure. Get the basics about FHASecure, the innovative refinance product created to assist homeowners struggling with a high interest rate mortgage. FREE, half-day seminar for housing counselors, non-profits & faith-based organizations, Community Housing Development Organizations, & local government officials. Learn the facts directly from FHA representatives. Registration required. For more info: http://www.hud.gov/event_registration/index_2.cfm?eventID=942

May 14, 2008 – Denver, CO. The FHA Appraisal. FREE one-day class for appraisers & lenders will discuss FHA appraisal requirements including FHA Appraisal Protocol and the review of FHA property appraisals. Approved for seven (7) hours of Continuing Education Credit from the State of Colorado. Registration required. For more info: http://www.hud.gov/event_registration/index_2.cfm?eventID=946

May 14, 2008 - Flint, MI. Loss Mitigation Training & Single Family FHA Update at the HUD Office, Phoenix Building, 4th Floor, 801 S. Saginaw Street, Flint, MI. 9:00am. To register, contact Margaret Baumgart at: (810) 766-5112 x5110 or by email at margaret.j.baumgart@hud.gov Registration required, no fee. Seating is limited.

May 14-15, 2008 - San Francisco, CA. Foreclosure Basics for Housing Counselors. Sponsored by NeighborWorks® Center for Homeownership Education & Counseling & HUD. Scholarships available for qualified staff of HUD approved housing counseling agencies. Registration required, fee. Don’t miss out on this great training opportunity, register today! For more info: http://www.nw.org/network/training/HUDTraining.asp

May 15, 2008 – Denver, CO. Advanced Direct Endorsement Underwriting. FREE, one-day class covers advanced FHA underwriting procedures and updates. The class is geared toward all experienced underwriters, loan officers and processors and will provide a thorough understanding of more complex situations regarding underwriting FHA-insured loans. Recommended for those with at least 1 year experience of DE underwriting. Registration required. For more info: http://www.hud.gov/event_registration/index_2.cfm?eventID=947

May 15, 2008 - Santa Ana, CA. FHASecure Community Meeting. FHA information for Housing counselors, local government & HUD partners. Registration required, no fee. To Register call Leatrice Shelton at: 208-334-1087 Ext.3013, email, or register on-line. For more info: http://www.hud.gov/apps/calendar/event.cfm?state=ca&record=8400&scheduleID=8163&calendarID=8

May 16, 2008 - Newport Beach, CA. FHASecure Training & Basic FHA Update for FHA Mortgage Professionals. Registration required, no fee. For more info: http://www.hud.gov/offices/hsg/sfh/events/sca051608.pdf

May 22, 2008 - Phoenix AZ. Highlights of Completing Today’s FHA Appraisal. Learn about FHA Resources, FHA Roster, the Appraisal Package with an emphasis on the URAR & Property Requirements directly from FHA. Registration required, fee. For more info: http://www.hud.gov/offices/hsg/sfh/events/saz052208.pdf

May 28, 2008 - San Antonio, TX. Training seminar on how to apply & become a HUD-Approved Housing Counseling Agency. Presented by HUD. Registration required, no fee. More info at: http://www.hud.gov/offices/hsg/sfh/events/dtx052808.pdf

August 20-21, 2008 - Oklahoma City, OK. Early delinquency servicing activities and HUD’s Loss Mitigation program training for HUD-approved mortgagees, HUD-approved Housing Counselors, and Nonprofit Housing Counselors. Registration required, no fee. More info at: http://www.hud.gov/offices/hsg/sfh/nsc/training.cfm

Online FHA Processing Training Class for Mortgage Processors, Underwriters & Originators. Sponsored by the IRC. Live, instructor led online FHA training classes to students nationwide. Registration required, fee. More info at: http://www.fha-training.org/

FHA Training Classes sponsored by the RSS. Instructor led & online FHA training classes to mortgage industry students nationwide. Registration required, fee. More info at: http://www.rsminc.org/MISSIONS/LAKESHOREMISSISSIPPI/tabid/69/Default.aspx

NeighborWorks® Training Institute conducts frequent training workshops around the nation for non-profit housing professionals. Scholarships are available on a limited basis for qualified non-profit agencies. More info at: http://nw.org/network/training/training.asp

The Illinois Mortgage Bankers Association (IMBA) conducts frequent training workshops for mortgage professionals on FHA subjects. Visit their website for a calendar of upcoming training opportunities. More info at: http://www.imba.org/i4a/pages/index.cfm?pageid=1

For more information on, and to register for these training opportunities please visit: http://www.hud.gov/offices/hsg/sfh/events/events

How to Win a Tax Appeal

As published by Real Estate New Jersey, July/August 2002, By John Garippa

The April filing deadline has long passed, of course. For some, however, it may now be necessary to prepare for a successful tax appeal. There is one truly crucial issue to remember about winning a tax appeal: Put yourself in a position to settle the case with the taxing authority. A look at the record over many years demonstrates that the Tax Court makes many inexplicable rulings. Therefore, any time a taxpayer can get an acceptable settlement, that settlement should be carefully considered.

At the same time, remember this: Sophisticated taxing jurisdictions will not settle cases unless they believe there is a risk of reduction. Here, we will focus on how best to emphasize that risk

All of the benefits and liabilities of the property are best understood by competent ownership and management. It’s the responsibility of management to communicate those liabilities so that the professional appraiser can take them into consideration for valuation purposes. Many times, there are significant operating defects relevant to property that are not properly communicated to the appraiser. So often, these are the kinds of defects that an appraiser might not necessarily notice without interfacing with management.

The proper preparation of the case during its discovery phase is critically important to its chances for success. In most significant tax appeals, interrogatories are routinely exchanged. The purpose of this process is to put all parties on notice as to the relevant issues affecting the property. It’s important that all interrogatories propounded by the taxing jurisdiction be properly answered. It is of equal significance that your answers be given to your appraiser as well. To often, a property owner’s appraiser is surprised and embarrassed by information that management has provided to the taxing jurisdiction, but has not provided to his or her own appraiser.

Management must meet with the appraiser to review the appraisal before it is exchanged for trial. The appraisal should be examined for factual errors as well as appraisal errors. Also, involving an experienced tax attorney in this process is vital to determine whether there are legal issues impacting the appraisal process.

Forensic appraisals are very different from other types of appraisals. A forensic appraisal must have backup for every significant position. It is inappropriate for an appraiser to maintain an opinion based on “my experience.” If there is a market analysis, the comparables must be truly comparable from the standpoint of size, use and locale.

The same is true of an income approach: Any use of comparable income must be based on true comparability. Also, the appraiser must be fully versed on all details of comparable property. In many ways, it is as consequential for the forensic appraiser to know as much about the comparables as they know about the subject property.

If all of these steps have been taken carefully, there will probably be an opportunity for settlement. However, if the appeal has to be tried, it is critical that the appraiser be prepared for cross-0examination. Every conceivable question should be posed so the appraiser has a chance to think clearly about the issues involved, in advance of the trial.

Also, preparation for direct testimony should also take place. Many taxpayers make the mistake of thinking all that’s necessary in direct is for the appraisal report to be placed in evidence. Rather, a strong direct presentation should take place where the “story” of the case unfolds in a clear and precise fashion, making reference to the appraisal.

The other half of a successful tax appeal involves undermining the credibility of the opposing appraiser. This involves the artful preparation of questions. The focus should be on the key aspects of the opposing appraisal: Narrow the inquiry to really significant areas in dispute.

Also, if there are factual errors in that report, focus immediately on those areas. An expert unable to get facts straight never impresses the court. Additionally, the use of corroborative evidence, either by way of photographs or documentation, is very helpful in undermining an expert’s opinion.

In the final analysis, a winning tax appeal is like choreography, with all the pieces telling the same story.

John Garippa is the senior partner of the law firm of Garippa, Lotz & Giannuario, with offices in Montclair, New Jersey and Philadelphia. He is also the president of American Property Tax Counsel, the national affiliation of property tax attorneys. He can be reached at john@taxappeal.com.

Bush Selects SBA Chief Steve Preston To Take Over HUD
in News > Residential Mortgage
By MortgageOrb.com on Friday 18 April 2008

Small Business Administrator Steve Preston has been chosen by President Bush to serve as the replacement for Alphonso Jackson, outgoing secretary of the Department of Housing and Urban Development (HUD), according to an AP report.

The next step is for Preston’s appointment to be confirmed by the Senate. Meanwhile, “Jackson leaves behind the wreckage of a national housing crisis and a trail of unanswered questions about whether he tilted the Housing and Urban Development Department toward Republican contractors and cronies,” the article notes.

Preston brings to the position 25 years of experience in financial and operational leadership positions, including executive vice president of The ServiceMaster Co., where he also served as chief financial officer. He has worked as a senior vice president and treasurer of First Data Corp. and as an investment banker at Lehman Brothers. Preston was sworn in as head of the Small Business Administration in July 2006.

*******
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rom: http://www.ofheo.gov/media/agreements/3308HomeValuationCodeofConduct.pdf

I. No employee, director, officer, or agent of the lender, or any other third party acting as joint venture partner, independent contractor, appraisal management company, or partner on behalf of the lender, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, bribery, or in any other manner including but not limited to:

withholding or threatening to withhold timely payment for an appraisal report;
withholding or threatening to withhold future business for an appraiser, or demoting or terminating or threatening to demote or terminate an appraiser1;
(1 An “Appraiser” must be licensed or certified by the state in which the property to be appraised is located)
expressly or impliedly promising future business, promotions, or increased compensation for an appraiser;
conditioning the ordering of an appraisal report or the payment of an appraisal fee or salary or bonus on the opinion, conclusion, or valuation to be reached, or on a preliminary estimate requested from an appraiser;
requesting that an appraiser provide an estimated, predetermined, or desired valuation in an appraisal report, or provide estimated values or comparable sales at any time prior to the appraiser’s completion of an appraisal report;
providing to an appraiser an anticipated, estimated, encouraged, or desired value for a subject property or a proposed or target amount to be loaned to the borrower, except that a copy of the sales contract for purchase transactions may be provided;
providing to an appraiser, appraisal management company, or any entity or person related to the appraiser or appraisal management company, stock or other financial or non-financial benefits;
allowing the removal of an appraiser from a list of qualified appraisers used by any entity, without prior written notice to such appraiser, which notice shall include written evidence of the appraiser’s illegal conduct, a violation of the Uniform Standards of Professional Appraisal Practice (USPAP) or state licensing standards, substandard performance, or otherwise improper or unprofessional behavior;
ordering, obtaining, using, or paying for a second or subsequent appraisal or automated valuation model in connection with a mortgage financing transaction unless there is a reasonable basis to believe that the initial appraisal was flawed or tainted and such basis is clearly and appropriately noted in the loan file, or unless such appraisal or automated valuation model is done pursuant to a bona fide pre- or post-funding appraisal review or quality control process; or
any other act or practice that impairs or attempts to impair an appraiser’s independence, objectivity, or impartiality.
Nothing in this section shall be construed as prohibiting the lender (or any third party acting on behalf of the lender) from requesting that an appraiser (i) provide additional information or explanation about the basis for a valuation, or (ii) correct objective factual errors in an appraisal report.
II. The lender shall ensure that the borrower is provided, free of charge, a copy of any appraisal report concerning the borrower’s subject property immediately upon completion, and in any event no less than three days prior to the closing of the loan. The borrower may waive this three-day requirement. The lender may require the borrower to reimburse the lender for the cost of the appraisal.

III. The lender or any third-party specifically authorized by the lender (including, but not limited to, appraisal management companies and correspondent lenders) shall be responsible for selecting, retaining, and providing for payment of all compensation to the appraiser. The lender will not accept any appraisal report completed by an appraiser selected, retained, or compensated in any manner by any other third-party (including mortgage brokers and real estate agents).

IV. All members of the lender’s loan production staff, as well as any person (i) who is compensated on a commission basis upon the successful completion of a loan or (ii) who reports, ultimately, to any officer of the lender other than either the Chief Compliance Officer, General Counsel, or any officer who is not independent of the loan production staff and process, shall be forbidden from: (1) selecting, retaining, recommending, or influencing the selection of any appraiser for a particular appraisal assignment or for inclusion on a list or panel of appraisers approved to perform appraisals for the lender; (2) any communications with an appraiser, including ordering or managing an appraisal assignment; and (3) working together in the same organizational unit, or being directly supervised by the same manager, as any person who is involved in the selection, retention, recommendation of, or communication with any appraiser. If absolute lines of independence cannot be achieved as a result of the originator’s small size and limited staff, the lender must be able to clearly demonstrate that it has prudent safeguards to isolate its collateral evaluation process from influence or interference from its loan production process.

V. Any employee of the lender (or if the lender retains an appraisal management company, any employee of that company) tasked with selecting appraisers for an approved panel or substantive appraisal review must be (1) appropriately trained and qualified in the area of real estate and appraisals, and (2) in the case of an employee of the lender, wholly independent of the loan production staff and process.

VI. In underwriting a loan, the lender shall not utilize any appraisal report prepared by an appraiser employed by:

the lender;
an affiliate of the lender;
an entity that is owned, in whole or in part, by the lender;
an entity that owns, in whole or in part, the lender
a real estate “settlement services” provider, as that term is defined in the Real Estate Settlement Procedures Act, 12 U.S.C.§ 2601 et seq.;
an entity that is owned, in whole or in part, by a “settlement services” provider.
The lender also shall not use any appraisal report obtained by or through an appraisal management company that is owned by the lender or an affiliate of the lender, provided that the foregoing prohibitions do not apply where the lender has an ownership interest in the appraisal management company of 20% or less and where (i) the lender has no involvement in the day-to-day business operations of the appraisal management company, (ii) the appraisal management company is operated independently, and (iii) the lender plays no role in the selection of individual appraisers or any panel of approved appraisers used by the appraisal management company.
Notwithstanding these prohibitions, the lender may use in-house staff appraisers to (i) order appraisals, (ii) conduct appraisal reviews or other quality control, whether pre-funding or post-funding, (iii) develop, deploy, or use internal automated valuation models, or (iv) prepare appraisals in connection with transactions other than mortgage origination transactions (e.g. loan workouts).

VII. The lender will establish a telephone hotline and an email address to receive any complaints from appraisers, individuals, or any other entities concerning the improper influencing or attempted improper influencing of appraisers or the appraisal process, which hotline and email address shall be attended only by a member of the office of the General Counsel, Chief Compliance Officer or other independent officer. In addition: (1) each appraiser now or hereafter on any list of approved appraisers, or, upon retention by the lender, will be notified, in a separate document, of the hotline and email address and their purpose; and (2) each borrower, as part of a cover letter accompanying the provided appraisal, will be notified of the hotline and email address and their purpose. Within 72 hours of receiving any complaint, the lender will begin a preliminary investigation of the complaint and upon completing the inquiry (or, after a period not to exceed 60 days, whichever shall come first) shall notify the Independent Valuation Protection Institute and any relevant regulatory bodies of any indication of improper conduct. The name and any identifying information of the person or entity that has filed such a complaint shall be kept in strictest confidence by the office of the General Counsel, Chief Compliance Officer or other independent officer, except as required by law. The lender shall not retaliate, in any manner or method, against the person or entity which makes such a complaint.

VIII. The lender agrees that it shall quality control test, by use of retroactive or additional appraisal reports or other appropriate method, of a randomly-selected 10 percent (or other bona fide statistically significant percentage) of the appraisals or valuations which are used by the lender, including the results of automated valuation models, broker’s price opinions or “desktop” evaluations. The lender shall report the results of such quality control testing to the Independent Valuation Protection Institute and any relevant regulatory bodies.

IX. Any lender who has a reasonable basis to believe an appraiser is violating applicable laws, or is otherwise engaging in unethical conduct, shall promptly refer the matter to the Independent Valuation Protection Institute and to the applicable State appraiser certifying and licensing agency.

X. The lender shall certify, warrant and represent that the appraisal report was obtained in a manner consistent with this Code of Conduct.

XI. Nothing in this Code shall be construed to establish new requirements or obligations that (1) require a lender to obtain a property valuation, or to use any particular method for property valuation (such as an appraisal or automated valuation model) in connection with any mortgage loan or mortgage financing transaction, or (2) affect the acceptable scope of work for an appraiser in connection with a particular assignment.

Beverly Hills Greater Los Angeles
Association of REALTORS®
SAVE THE DATE!
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Are Proud to Present:
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Thursday, May 1st, 2008
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Before April 28, 2008

The “LOoP” sponsored by The Harris Company, Real Estate Appraisers and Consultants, A Real Estate Services Directory and Custom Search Engine, CSE, (real estate search engine) Get Listed NOW! It’ Free, and IT PAYS! Call 310.337.1973, or use email below

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Real Estate Information (Research and Services) for the Novice and Expert Alike. Built by Real Estate Experts
The Harris Company REA/C
5780 West Centinela Avenue, 1-408
Los Angeles, CA. 90045
310.337.1973
http://www.harriscompanyrec.com
curtis_harris@harriscompanyrec.com
http://www.harriscompanyreac.com/ContactUs
http://www.harriscompanyrec.com/blog/
http://www.harriscompanyreac.com/
http://harriscompanyrec.com/blog1/

Google’s mission is to organize the world’s information and make it universally accessible and useful. The objective of our website/search engine is to organize the world’s real estate information and make it universally accessible and useful. Sometimes it pays to play “Follow the Leader.”
Keywords: “Real Estate Search Engine” “Real Estate Custom Search Engine” “Real Estate CSE” “CSE” “Appraiser”

“Instead of fighting the explosive growth of the Internet, the Open Directory (and the Harris Company, REA/C-CSE) provides the means for the Internet to organize itself. As the Internet grows, so do the number of net-citizens. These citizens can each organize a small portion of the web and present it back to the rest of the population, culling out the bad and useless and keeping only the best content.” From DMOZ-Open Directory Project

To get in the “LOoP” or to contribute please contact Curtis Harris @ above email, IT’S FREE! and Remember: Business happens when you’re in the “LOoP.”

If you are a small firm, and do not have a website, don’t feel left out, for a nominal fee ($25.00 per mo.) we can create a “Someone You Should Know Page” on our Harris Company REA/C website, which can be just as effective as a full blown website.

searches 217 sites, including: http://www.rimcompany.com/, http://www.allbusiness.com/real-estate-appraisals/4972019-1.html, http://www.caledlaw.com/?gclid=CK7Xw7Cm1pICFSVciAod-wiU6g, http://www.harriscompanyreac.com/RealEstateGlossary, http://www.countrywide.com/purchase/f_reo.asp

Keywords: “Real Estate”,”Real Property”,”Construction”,”Commercial Real Estate”, Industrial Real Estate, House

Last updated: Apr 18, 2008
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Appraisers say WaMu cut corners to increase its mortgage business
By Susan Kelleher

Seattle Times staff reporter

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ERIKA SCHULTZ / THE SEATTLE TIMES

Graham Albertini appraises a Burien home for a prospective buyer. Albertini previously worked for WaMu and now works for a Mercer Island firm.

ERIKA SCHULTZ / THE SEATTLE TIMES

Graham Albertini said WaMu’s home-lending safeguards began to deterioriate in 2001 as it chased a larger share of the mortgage market. Now he works as a private appraiser.
Related

Archive | Where WaMu went wrong
Continuing coverage

Check back with seattletimes.com for continuing coverage of today’s WaMu shareholders meeting.
Washington Mutual’s mortgage woes come as no surprise to Graham Albertini, a real-estate appraiser who worked at WaMu’s Bellevue office when its mortgage business was going gangbusters.

Over eight years, Albertini said, he watched the bank trade safety for speed in its home-lending operations. The trade-off, he said, eroded fundamental safeguards put in place to protect WaMu from lending more against homes than they were worth.

When Albertini began working for WaMu in 1999, most mortgages were supported by a complete appraisal, which included an on-site property inspection, detailed measurements of the house and a physical drive-by of comparable homes by bank appraisers to determine if the house was worth what the buyer was willing to pay for it.

Every appraisal was given a cursory review, while pricier homes and houses with unusual features or circumstances were given an even closer review by a second certified appraiser. If everything checked out, the loan was sent to the bank’s underwriting department for completion.

“Up until 2001, it was a pretty good system. Every appraisal was looked at by a human being,” said Albertini, who now works for American Home Appraisals on Mercer Island.

But as loan volume increased, so did the pressures — and the incentives — for WaMu appraisers to work faster and bypass safeguards that could have protected the bank against the high-risk mortgages now dragging it down, Albertini and other appraisers say.

“It’s the elimination of oversight in pursuit of profit. … That’s a formula for a breakdown,” said appraiser Richard Hagar, who works with Albertini and regularly trains other colleagues and law-enforcement fraud investigators on appraisal standards.

WaMu did not respond to several requests for comment. It recently announced it would lay off up to 3,000 employees, cut shareholder dividends and shutter its free-standing home-loan operations. In the latest four quarters it has set aside about $6.4 billion to cover loan losses, and financial analysts say the bank could lose up to $16 billion more.

Priority: Closing the deal

Albertini and Hagar said key safeguards were compromised when the bank began a sweeping effort to capture a larger share of the mortgage market starting in 2001.

First came automation, which allowed the bank to replace the first set of eyeballs evaluating the appraiser’s work — the cursory review by administrative staff — with a type of computer review that was becoming increasingly common in the industry.

Michael Evans, international treasurer with the American Society of Appraisers, said some lenders eventually began using computers alone to establish home values. Others used them conservatively, as an additional tool for their appraisal staff, recognizing that “speed can kill,” he said.

At WaMu, field appraisers quickly learned that by stating that a house was being sold “as is” and listing its market value as greater than the requested loan amount, they could bypass a more in-depth review of their work and get paid more quickly, Albertini said.

The computer system also had glitches that obliterated appraiser comments about conditions that might affect the value of the property, things such as proximity to railroad tracks or unfinished remodeling. The glitches happened often enough, he said, that Albertini stopped working off the computer reports and instead asked appraisers to just send him copies of their original paperwork.

In 2003, the bank instituted a new commission system that paid field appraisers according to the volume of their work.

Then, in 2005, WaMu expanded assignments for its local reviewers, Albertini said. Instead of just checking the work of field appraisers on the Eastside, the reviewers began to conduct limited Internet reviews on appraisals done in Idaho, Utah, Alaska and New Mexico — markets the reviewers didn’t know well, if at all.

By then, lenders such as WaMu had shifted away from simply collecting interest on loans they held. Their new business model was to collect fees for making the loans and resell many of the mortgages on Wall Street, where investors snapped them up as mortgage-backed securities.

To meet investor demand, banks including WaMu began acquiring more of their loans through independent mortgage brokers, paying a commission for each loan the broker arranged. The broker, in turn, selected the appraiser to determine if the house was worth the amount of the loan.

The entire home-financing system, Albertini and Hagar said, was geared toward closing the deal, and appraisers who were willing to play along could make a lot of money.

Those who didn’t want to play complained loudly to federal banking regulators through professional organizations. By the thousands, they also posted their names on an Internet petition, warning as early as 2001 that undue pressure from aggressive brokers and lenders to bend the rules was endangering the nation’s banking system and the economy.

In 2006, federal regulators said they wanted lenders to use appraisers who had no financial interest in the loan. WaMu laid off its appraisers, including Albertini, and hired an outside company to arrange the appraisals.

New York Attorney General Andrew Cuomo alleged in a suit late last year that WaMu corrupted that relationship and used the promise of more business to handpick favored appraisers who would sign off on inflated property values tied to WaMu loans.

The company sued by Cuomo, e-AppraiseIT, has denied any wrongdoing. So has WaMu, which is not a target of the suit.

Similar allegations surfaced again in February when a Sacramento, Calif., appraiser sued the bank, alleging that WaMu and its surrogates stopped using her services because she “refused to compromise her integrity, independence, and refused to violate the laws and include false and deceptive facts about existing market conditions.”

The company denied the charge. The suit is pending.

Stupidity or duplicity?

WaMu’s internal controls in overseeing loans also have been questioned.

In Washington state, a residential appraiser in Pacific County filed a complaint with the state Department of Licensing after determining that a home appraisal performed for WaMu had been inflated by at least $80,000.

Appraiser Elizabeth M. Stevens said WaMu hired her in November 2007 to review the work of another appraiser, who had valued a property for a couple looking to refinance their house. The first appraiser had been from an appraisal-management company under contract with WaMu.

During her review, Stevens discovered that the homeowners had tried selling the home for at least three months. When it didn’t sell, they applied to refinance it for an amount higher than what they tried to sell it for.

“My opinion was the original appraisal was a piece of garbage,” Stevens said. “If the property wouldn’t sell at $200,000, why would it sell at $300,000?”

Stevens said she notified WaMu of her concerns and findings, essentially reporting that the owners were asking to borrow a lot more than the house was worth.

“They [WaMu] can come back and ask questions. In this case, they didn’t,” Stevens said recently. “I just received notice that WaMu ignored my review and loaned on the amount of the original appraisal.”

She declined to provide the property address to The Seattle Times, citing confidentiality concerns, but said she reported it to the licensing department in her complaint against the appraiser.

Stevens said it was impossible to know whether the original appraisal was the result of error or fraud.

“Where does the line fall between someone being stupid and someone deliberately going out of their way to inflate a value to keep a certain client’s business?”

Susan Kelleher: 206-464-25508 or skelleher@seattletimes.com

Copyright © 2008 The Seattle Times Company