Archive for December, 2010

Appraiser Independence Requirements

Appraiser Independence Requirements
Frequently Asked Questions (FAQs)
November 2010

https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/pdf/airfaqs.pdf

The Appraiser Independence Requirements (AIR) were developed by Fannie Mae, the Federal Housing Finance Agency (FHFA), Freddie Mac, and key industry participants to replace the Home Valuation Code of Conduct (HVCC). They went into effect October 15, 2010. The updated requirements maintain the spirit and intent of the HVCC and continue to provide important protections for mortgage investors, home buyers, and the housing market.
The following FAQs provide additional clarification on implementation of these requirements. Fannie Mae’s and Freddie Mac’s FAQs may differ to some extent in style or structure, but present no substantive differences in interpretation or implementation of these requirements, nor do they impose any different operational requirements.
Table of Contents
Table of Contents…………………………………………………………………………………………………………………1
Scope of Coverage………………………………………………………………………………………………………………1
Selection of an Appraiser……………………………………………………………………………………………………….3
In-House Appraisers…………………………………………………………………………………………………………….5
Appraisal Management Companies (AMCs)……………………………………………………………………………..5
Mortgage Brokers………………………………………………………………………………………………………………..6
Transfer of the Appraisal……………………………………………………………………………………………………….7
Payment for the Appraisal………………………………………………………………………………………………………7
Appraisal Report Copies………………………………………………………………………………………………………..8
Appraisal Reviews……………………………………………………………………………………………………………….9
Quality Control…………………………………………………………………………………………………………………..10
Compliance……………………………………………………………………………………………………………………….10
Scope of Coverage
Q1.
What loans are affected by the Appraiser Independence Requirements (AIR)?
AIR applies to all loans of one- to four-unit properties, except government-insured loans as noted in Q5, delivered to Fannie Mae.
© Fannie Mae 2010. Trademarks of Fannie Mae. 11.17.2010 Page 1 of 10
Q2.
What are the professional requirements for an appraiser under AIR?
AIR requires that, at a minimum, an appraiser must be licensed or certified by the state in which the property to be appraised is located.
Q3.
Does AIR allow an appraiser to update an appraisal for another lender?
Yes. AIR allows an appraiser to perform an update of an appraisal for another lender.
Q4.
Who besides Fannie Mae has agreed to adopt AIR? The Federal Home Loan Banks? FHA?
As of this date, only Fannie Mae and Freddie Mac have agreed to adopt AIR.
Q5.
Does AIR apply to a loan that is insured or guaranteed by a federal agency and ultimately sold to Fannie Mae (i.e., FHA or VA loan)?
AIR does not apply to loans that are insured or guaranteed by a federal agency, such as FHA and VA loans.
Q6.
Is it permissible for Fannie Mae to purchase private-label securities backed by mortgage loans that do not meet the requirement of AIR?
Yes. AIR applies only to 1- to 4-unit single-family loans sold to Fannie Mae by mortgage originators. It does not extend to Fannie Mae’s investments in mortgage-related securities.
Q7.
Does AIR require lenders to obtain appraisals in cases which they were under no such requirement pursuant to the Fannie Mae Selling Guide?
No. Nothing in AIR requires a lender to obtain a property valuation, or to use any particular method for property valuation. AIR also does not affect the acceptable scope of work for an appraiser in connection with a particular assignment.
Q8.
Does Section II specifically prohibit a lender from ordering a second appraisal?
No. Section II only prohibits a lender from ordering a second appraisal when they are attempting to influence the outcome of the first appraisal and are now “value-shopping.” As a risk control measure for certain loan products, it may be common for a lender to order more than one appraisal, and this section does not prohibit that practice.
Q9.
Does AIR specifically prohibit communication with an appraiser by a real estate agent?
No.
Q10.
Does AIR apply to the Desktop Underwriter® Property Inspection Report (Form 2075)?
No. Form 2075 is an inspection report. It is not an appraisal; therefore, AIR does not apply.
Q11.
Does AIR apply to appraisals performed for loss mitigation?
AIR applies to loans sold to Fannie Mae. It does not apply to appraisals performed for loss mitigation purposes.
© Fannie Mae 2010. Trademarks of Fannie Mae. 11.17.2010 Page 2 of 10
Q12.
How does Fannie Mae audit compliance with AIR?
Compliance with AIR will be part of the Fannie Mae’s operational review of the lender. By selling us the loan, the lender represents and warrants compliance with all of the Fannie Mae Selling Guide requirements, including compliance with AIR.
Q13.
Does AIR apply to non-appraisal valuation methods (i.e., automated valuation models [AVMs], broker price opinions [BPOs], tax assessments, etc.)?
No. AIR applies only to appraisals.
Q14.
Is the definition of application date the actual date of the application or the date of receipt of the application by the lender?
The application date is defined as the date the borrower(s) signed the application certifying that the information is correct.
Q15.
Does AIR require or prohibit the use of foreclosure data by appraisers?
AIR does not speak to foreclosure data. It is up to the appraiser to determine if the data is applicable and appropriate or not.
Selection of an Appraiser
Q16.
Does AIR change any of Fannie Mae’s requirements regarding the role of the appraiser?
No. The Selling Guide requirements for the appraiser remain at their same high level. Fannie Mae requires the appraiser to provide complete and accurate reports; to report neighborhood and property conditions in factual and specific terms; to be impartial and specific in describing favorable or unfavorable factors; and to avoid the use of subjective, racial, or stereotypical terms, phrases, or comments in the appraisal report. The opinion of market value must represent the appraiser’s professional conclusion, based on market data, logical analysis, and judgment.
Additionally, it is important to note that when an appraiser signs Fannie Mae’s residential appraisal report form, the appraiser is also certifying to the following:
“I have knowledge and experience in appraising this type of property in this market area.”
And
“I am aware of, and have access to, the necessary and appropriate public and private data sources, such as multiple listing services, tax assessment records, public land records, and other such data sources for the area in which the property is located.”
Q17.
When selecting an appraiser, may lenders use a pre-approved appraiser list or panel?
Yes. Lenders may use a pre-approved list or panel to select a residential appraiser, provided that (1) any employees of the lender tasked with selecting appraisers for the list are independent of the loan production staff; and (2) the loan production staff is not involved in selecting appraisers off the list for particular appraisal assignments. © Fannie Mae 2010. Trademarks of Fannie Mae. 11.17.2010 Page 3 of 10
Q18.
How does Section I.B.(8) impact how lenders may remove appraisers from a list of qualified appraisers?
Section I.B.(8) addresses the removal of an appraiser from a list of qualified appraisers in connection with influencing or attempting to influence the outcome of an appraisal. However, Section I.B.(8) does not preclude the management of appraiser lists for bona fide administrative reasons based on written, management-approved policies. Also, Section VIII provides for lenders to have written policies and procedures implementing AIR, including rules on appraiser independence, and to have mechanisms in place to report and discipline anyone who violates these policies and procedures.
Q19.
May a servicer use an affiliate company to order appraisals for borrower-initiated private mortgage insurance cancellation based on current value?
Yes. AIR does not apply to appraisals for cancelling mortgage insurance based on current value. AIR is specific to “a mortgage financing transaction,” and cancellation of mortgage insurance is not “a mortgage financing transaction.” The Fannie Mae Servicing Guide states that “To determine the current appraised value of the property, the servicer must select an appraiser, order a new appraisal (which must be based on an inspection of both the interior and exterior of the property and be prepared in accordance with our appraisal standards for new mortgage originations), and receive the results of the appraisal.”
Q20.
Some lenders have proprietary automated origination systems that include a process for ordering appraisals. How does AIR impact those systems?
The lender must review its systems to ensure that the selection-of-appraiser process is in compliance with AIR.
Q21.
Who should be considered the “loan production staff” for purposes of achieving appraiser independence?
The term “loan production staff” is not defined in AIR. However, the FAQs prepared by federal agencies on the agencies’ appraisal regulations specify as follows:
“The loan production staff consists of those responsible for generating loan volume or approving loans, as well as their subordinates. This would include an employee whose compensation is based on loan volume or the closing of a loan transaction. Employees responsible for the credit administration function or credit risk management are not considered loan production staff.”
Q22.
Are processors, closers, secondary marketing employees, underwriters, etc., permitted to order appraisals if they do not receive commission or incentives to close loans, but they ultimately report up to a senior-level employee who is responsible for loan production?
AIR states that members of the lender’s loan production staff who are compensated on a commission basis or who report to any officer of the lender not independent of the loan production staff and process are not permitted to order appraisals or influence the selection of appraisers. Ideally, a seller should establish complete separation of appraisal activities from loan production activities. At an absolute minimum, the degree of separation should be no less than one level up in the reporting structure. To mitigate any potential conflict of interest due to
© Fannie Mae 2010. Trademarks of Fannie Mae. 11.17.2010 Page 4 of 10
reporting relationships, sellers should establish, maintain, and enforce written policies and procedures that are designed to reinforce independence.
Q23.
May a person on a lender’s staff who is not part of the loan production staff and does not receive a bonus or commission based on loan closings provide an appraisal management company a list or panel of appraisers to use for loans involving a specified mortgage broker, real estate agent, or loan officer?
No person on a lender’s staff may provide an appraisal management company a list or panel of appraisers to be used for loans involving a specified mortgage broker, real estate agent, or loan officer. AIR specifically prohibits lenders from accepting appraisal reports completed by an appraiser selected, retained, or compensated in any manner by mortgage brokers and real estate agents. Mortgage brokers and real estate agents must not be involved in the selection of appraisers for an approved panel or specific assignments under any circumstances. Please refer to Section IV.A for further information regarding who is authorized to select and retain appraisers.
Q24.
What is the definition of a “correspondent” lender?
A “correspondent” is a third-party entity that may originate and underwrite the mortgage. The correspondent closes the mortgage in its own name with its own funds, and sells it to the lender. The mortgage is sold to Fannie Mae by the lender.
In-House Appraisers
Q25.
May in-house appraisers prepare appraisal reports?
Yes. In-house appraisers may prepare appraisal reports in accordance with Section V.
Q26.
May a correspondent lender use in-house appraisers?
Yes. A correspondent lender may use in-house appraisers if they meet the criteria in Section V.
Appraisal Management Companies (AMCs)
Q27.
Is a lender required to use an AMC for ordering appraisals?
No. A lender may order appraisals directly from an individual appraiser.
Q28.
May an AMC affiliated with, or that owns or is owned in whole or in part by the lender or a lender-affiliate, order appraisals?
Yes. An AMC affiliated with, or that owns or is owned in whole or in part by the lender or a lender-affiliate, may order appraisals if the AMC meets the criteria of Section IV.A.
© Fannie Mae 2010. Trademarks of Fannie Mae. 11.17.2010 Page 5 of 10
Q29.
May a lender direct a mortgage broker to a specifically authorized AMC that will receive information from the broker about the loan application and begin the appraisal process?
Yes. The lender may direct a broker to an authorized AMC if the lender has previously arranged for its appraisal process to be managed by the specifically authorized AMC. This process is compliant with AIR because the broker is not responsible for selecting, retaining, or providing for payment of compensation to the appraiser.
Q30.
May a lender that uses a group of specifically authorized AMCs direct a broker to use a specific AMC from the group to submit information about the loan application and begin the appraisal process?
Yes. As stated in the answer to Q29, this process is compliant because the broker is not responsible for selecting, retaining, or providing for payment of compensation to the appraiser.
Q31.
May a lender order an appraisal by directing a broker to select an AMC from among a group of specifically authorized AMCs, one of which would receive information from the broker about the loan application and begin the appraisal process?
No. Such a process would give the broker an element of responsibility for selecting or retaining the appraiser, and therefore would not be compliant.
Q32.
May a lender direct a broker to use a Web portal set up either by the lender, or by the lender’s authorized agent, through which the broker inputs a request for an appraisal and then triggers the lender’s system to order an appraisal?
Yes.
Mortgage Brokers
Q33.
May a lender accept an appraisal prepared by an appraiser that was ordered by a mortgage broker?
No. AIR does not allow a lender to accept an appraisal prepared by an appraiser that was ordered by a mortgage broker as noted in Section IV(A).
Q34.
May a mortgage broker provide the lender with an approved appraiser list for the lender to use when ordering appraisals for that particular broker?
No.
Q35.
May a mortgage broker order an appraisal directly from an AMC that was specifically authorized by the lender?
AIR prohibits brokers from ordering appraisal services, but brokers may initiate the appraisal process on a lender’s behalf in accordance with arrangements made by the lender. See Q29 for details.
© Fannie Mae 2010. Trademarks of Fannie Mae. 11.17.2010 Page 6 of 10
Q36.
Does AIR permit a mortgage broker to select an appraiser from the lender’s list of approved appraisers if the lender is responsible for the relationship with the appraiser, including compensation?
No. AIR prohibits lenders from relying on an appraisal if the broker had a role in selecting, retaining, or compensating the appraiser.
Transfer of the Appraisal
Q37.
May an appraisal be transferred to a lender from a correspondent lender and, if so, under what circumstances?
Yes. A lender may accept an appraisal from a correspondent lender that complies with AIR.
Q38.
A mortgage broker submits a loan to lender A, which orders an appraisal. The broker later decides to submit the loan to lender B because it is offering better terms, or for another reason. May the appraisal obtained by lender A be used by lender B (assuming the mortgage broker has no control over or involvement in the assignment)?
Yes. A lender may accept an appraisal transfer from a different lender. However, the lender delivering the loan to Fannie Mae makes all representations and warranties that the loan complies with the requirements of the Fannie Mae Selling Guide and related documents. Lender A must be named as client on the appraisal report.
Q39.
Lender A (an approved Fannie Mae Seller/Servicer) originates and closes a loan in its name, but sells it to lender B (another Fannie Mae approved Seller/Servicer), which in turn sells that loan to Fannie Mae. Is lender B under any obligation to obtain a new appraisal?
No. Lender B may buy a closed loan from Lender A and sell the loan to Fannie Mae without a new appraisal if Lender B can represent and warrant that any appraisal conducted in connection with the loan conforms to AIR.
Payment for the Appraisal
Q40.
If the appraisal is ordered by the lender in a manner compliant with AIR, are there any specific requirements about how the payment for the appraisal is transferred to the lender?
Except for the requirement that the broker may not be responsible for payment of compensation to the appraiser, AIR does not restrict how a lender obtains fees from a broker. So, for instance, a borrower may write a check to a broker, or provide their credit card information to a broker, for the broker to send to the lender or to an agent authorized by the lender.
Q41.
Are borrowers precluded from providing payment for an appraisal to an AMC?
AIR does not prohibit a borrower from providing payment to an AMC; however, the borrower may not pay the appraiser directly for an appraisal.
© Fannie Mae 2010. Trademarks of Fannie Mae. 11.17.2010 Page 7 of 10
Q42.
Does AIR prohibit an appraiser from collecting payment for the appraisal directly from the borrower?
Yes. For loans to be eligible for delivery to Fannie Mae, AIR requires the lender or any third party specifically authorized by the lender to select, retain, and provide for all compensation to the appraiser.
Appraisal Report Copies
Q43.
Does Section III require the lender to provide the borrower with the appraisal free of charge?
No. Section III requires the lender to provide, free of charge, a “copy” of any appraisal report completed in association with a specific loan. The lender may require the borrower to reimburse the lender for the cost of the appraisal.
Q44.
What is the time frame for providing the “copy” of the appraisal?
The lender must provide the copy promptly upon completion of the appraisal, but no less than three business days prior to closing. The lender may use any means to provide the copy, including but not limited to mail, e-mail, overnight delivery, etc., as long as the borrower receives the copy no less than three business days prior to closing. The seller may provide the borrower at closing a revised copy of an appraisal and information as to the nature of any revisions, so long as the revisions had no impact on value.
Q45.
What are the requirements of AIR Section III requiring borrower receipt of the appraisal?
AIR requires that a borrower be provided a copy of the appraisal no less than three business days prior to the closing of the loan. AIR allows for the borrower to waive the three-day requirement. Situations in which a borrower is unaware of his or her right to a copy of the appraisal prior to the three days and is then provided a waiver of that right at the closing table would not be compliant with the intent of AIR. The time period of rescission in a refinancing situation does not constitute a valid three-day waiver period.
AIR does not specify what form the waiver must take or whether it be oral or written. In addition, AIR does not prohibit that a waiver, given in a timely manner, be recorded at some later point when the parties are available. Each lender must develop its own policies, procedures, and documentation. For example, a lender may obtain a waiver from a borrower through an e-mail, phone call, or some other means, prior to the three-day period, and then have that waiver recorded in writing at the settlement table or at some other time.
The three-day period begins on the day of the receipt of the appraisal. For example, in a non-waiver situation, if a borrower received an appraisal on Monday, the closing could be held on Wednesday. Saturday is included for purposes of counting the three-day period. Sundays and legal holidays are not included for counting the three-day period.
© Fannie Mae 2010. Trademarks of Fannie Mae. 11.17.2010 Page 8 of 10
Q46.
AIR requires the lender to provide the borrower a copy of any appraisal report concerning the borrower’s subject property promptly upon completion. In this instance, what is meant by “completion?”
The word “completion” is meant to reflect when the lender has reviewed and accepted the appraisal to include any changes or corrections required.
Q47.
How is “closing” of the loan defined? Is closing the date the documents are executed or the date the funds are disbursed?
We define “closing” as the date the borrower executes the loan documents.
Q48.
How is the lender required to provide the borrower with a copy of the appraisal?
AIR does not provide a specific method of delivery. The lender is responsible for ensuring that the borrower receives a copy of the appraisal.
Q49.
Section III allows the borrower to waive the three-day requirement for receiving a copy of the appraisal. What is an acceptable procedure if the borrower chooses to waive the three-day requirement?
The lender is responsible for establishing a process and procedure for documenting a borrower’s waiver of the three-day requirement.
Q50.
Can a loan closing proceed if the lender in good faith and according to its policies and procedures sent a copy of the appraisal to the borrower in accordance with the three-day requirement, but the borrower did not receive the copy of the appraisal prior to the scheduled closing?
In those rare instances in which the lender followed its policies and procedures but the borrower did not receive the appraisal three days prior to closing, the loan may close without delay if the borrower waives the three-day requirement and is provided a copy of the appraisal on the day of closing. Although AIR does not specifically require written documentation of the borrower’s waiver or receipt of the appraisal three days prior to closing, we advise lenders to have policies and procedures in place so they can document the borrower’s receipt of the appraisal or the waiver should questions arise.
Appraisal Reviews
Q51.
Who on the lender’s staff, or on the staff of an authorized third party, may have communications with an appraiser to request a correction of objective factual errors in an appraisal report?
Communications with an appraiser regarding the corrections of objective factual errors in an appraisal report may be made by anyone on the staff of the lender, or on the staff of an authorized third party.
© Fannie Mae 2010. Trademarks of Fannie Mae. 11.17.2010 Page 9 of 10
© Fannie Mae 2010. Trademarks of Fannie Mae. 11.17.2010 Page 10 of 10
Q52.
Who on the lender’s staff, or on the staff of an authorized third party, may have communications with an appraiser relating to or having an impact on valuation, including ordering or managing an appraisal assignment?
Anyone who is not part of loan production staff or who is not compensated on a commission basis upon successful completion of a loan or anyone who does not report, ultimately, to any officer of the lender not independent of the loan production staff or process, may have communications with an appraiser relating to or having an impact on valuation, including ordering or managing an appraisal assignment.
Q53.
Does AIR prohibit the appraiser from talking with the real estate agent involved in the subject transaction? Can the real estate agent provide comparable data and/or explain their pricing strategy to the appraiser?
AIR does not prohibit the appraiser from talking with the real estate agent. In many cases, real estate agents can be a source of data in the market in which the subject property is located. Any data provided by a third party must still be researched and verified independently by the appraiser. In addition, the appraiser is required to be provided a copy of the sales contract for a purchase money transaction.
Quality Control
Q54.
Are there separate quality control requirements for AIR?
No. The lender is responsible for meeting Fannie Mae’s quality control requirements, as specified in the Selling Guide, Part D, Ensuring Quality Control.
Q55.
Does AIR require a lender to report appraiser misconduct to the applicable state certifying and licensing agency?
Yes. If a lender has reason to believe an appraiser is violating applicable laws or otherwise engaging in unethical conduct, they shall promptly refer the matter to the applicable board or agency in accordance with Section VII.
Compliance
Q56.
Is a loan eligible for sale to Fannie Mae if the lender purchased the loan from a correspondent that did not comply with AIR in originating that loan?
No. It is the lender’s responsibility to ensure that loans it purchases with intent to deliver to Fannie Mae comply with AIR and all of our Fannie Mae Selling Guide requirements.
Q57.
Do sellers need to adopt policies to address potential misconduct such as bribery or intimidation of appraisers?
Yes. The seller is required under AIR to adopt written policies and procedures ensuring disciplinary rules on appraiser independence, including the principles detailed in Section I. The seller also must ensure that any third parties are in compliance with AIR.

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Two New FHA Mortgagee Letters:

All-

Two New FHA Mortgagee Letters:

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410-8000
ASSISTANT SECRETARY FOR HOUSINGFEDERAL HOUSING COMMISSIONER
December 28, 2010
Mortgagee Letter 2010-43
To: All Approved Mortgagees, All Approved Mortgage Servicers, All FHA Roster Appraisers
Subject: Flood Zone Requirements for Federal Housing Administration (FHA) Insured Mortgages

This Mortgagee Letter provides new guidance on FHA Flood Zone requirements and updates Mortgagee Letter 2009-37. FHA now requires that all Mortgagees obtain a flood zone determination on all properties instead of strongly encouraging such action. In addition, FHA is now consistent with the Coastal Barrier Resources Act (CBRA) by prohibiting FHA Mortgage Insurance for properties located within designated coastal barriers…

AND

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410-8000
ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONER
December 28, 2010
Mortgagee Letter 2010-42
To: All Approved Mortgagees
Subject: Federal Home Loan Bank – Affordable Housing Program, Homeownership Set-Aside Grant Program

This Mortgagee Letter (ML) provides guidance concerning the use of the Federal Home Loan Bank (FHLB), Affordable Housing Program (AHP), Homeownership Set-Aside Program in conjunction with Federal Housing Administration (FHA) insured financing. This guidance refers to the Homeownership Set-Aside Program for purposes of downpayment assistance only and is effective immediately. This ML does not provide any guidance regarding any other eligible use of FHLB AHP grant funds…

To read these mortgagee letters and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2010 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

AND

New FHA Federal Register Notice:

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5436-N-02]
TITLE: Mortgagee Review Board: Administrative Actions
AGENCY: Office of the Assistant Secretary for Housing–Federal Housing Commissioner, Department of Housing and Urban Development (HUD).
ACTION: Notice.

SUMMARY: In compliance with Section 202(c) of the National Housing Act, this notice advises of the cause and description of administrative actions taken by HUD’s Mortgagee Review Board against HUD-approved mortgagees…

To read this Notice in its entirety please visit: http://edocket.access.gpo.gov/2010/pdf/2010-32443.pdf

AND

New Webinar Training on FHA’s Home Equity Conversion Mortgage (HECM):

January 19, 2011 – Webinar: FHA’s Home Equity Conversion Mortgage. This FREE Webinar training will provide an overview and the latest updates to FHA’s HECM reverse mortgage product. The covered topics will include: HECM purchase transactions, refinances, and updates to the HECM process, HECM standard and the New HECM Saver. New lenders to HECM, HECM experts and Housing Counselors will all benefit from this training. Registration required, no fee. All times are MDT. For more information: http://www.hud.gov/emarc/index.cfm?fuseaction=emar.registerEvent&eventId=694&update=N

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Appraisal Institute, MAI-He’s Back!

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Origination News

Guidelines Said to Curb AVM Models http://www.originationnews.com/
PrintEmailReprintsFeedbackShare | Monday, December 27, 2010
New federal guidelines will significantly curb the use of automated valuation models in the appraisal process, says default management and valuation firm Integrated Asset Services, but they could also lead to more use of “hybrid” models.

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Earlier this month the five federal banking regulators that make up the Federal Financial Institutions Examination Council—the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corp., the National Credit Union Administration and the Office of Thrift Supervision—issued guidelines that forbid regulated institutions from relying solely on technological tools like AVMs for a real estate valuation.

The agencies define AVMs as “computer programs that estimate a property’s market value based on market, economic, and demographic factors.”

According to the guidelines, “the results of an AVM would need to address a property’s actual physical condition, and therefore, could not be based on an unsupported assumption, such as a property is in ‘average’ condition.”

Ryan Tomazin, president of Integrated Asset Services LLC in Denver, said that given these requirements, lenders may consider “hybrid” models that incorporate both a licensed appraiser and an AVM for certain applications.

AVMs have been a point of contention in the mortgage industry. Technology providers have promoted their use as a way to get more accurate valuations in less time.

But some appraisers say they are an inefficient substitute for trained, localized professionals.

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Housing Scorecard

Housing Scorecard
Each month, the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury produce a monthly scorecard on the health of the nation’s housing market. The scorecard incorporates key housing market indicators and highlights the impact of the Administration’s unprecedented housing recovery efforts, including assistance to homeowners through the Federal Housing Administration (FHA) and the Home Affordable Modification Program (HAMP).
December Scorecard
November Scorecard
October Scorecard
September Scorecard
August Scorecard
July Scorecard
June Scorecard

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Michigan Association of REALTORS® Buys Appraisal Management Company

Michigan Association of REALTORS® Buys Appraisal Management Company

Since the first hints of problems with appraisals surfaced over two years ago, the Michigan Association of REALTORS® has been working at all levels to address the issues of rising costs to the consumer, geographic competence and third party modifications to the scope of work reducing valuation independence. Earlier this year, these problems resulted in some creative thinking about how best to provide clients with superior levels of appraisal services in full compliance with appraisal independence regulations. This culminated recently with the acquisition of Midwest Appraisal Management Group, Inc., an existing AMC located within Michigan and operating profitably within seven states.

The acquisition of Midwest AMG makes it a wholly owned “for profit” subsidiary of the MAR using only REALTOR® appraiser members. This means in addition to industry “best practices,” those doing appraisals will be held to the higher standards dictated by REALTOR membership. It is through this melding of standards that Midwest AMG and the Michigan Association of REALTORS® intend to create the “Gold Standard” for appraisal services.

Utilizing its extensive network of appraiser members, Midwest AMG maintains an environment producing the best possible appraisal experience. Perhaps most importantly, the selection of appraisers and the distribution of assignments are tailored to adhere to geographic competence by seeking those with neighborhood experience and professional expertise. Only by applying these requirements and others can the dream of home ownership be protected and the soundness of mortgage securities be promoted.

The team at Midwest AMG is under the direction of both Martin J. Wagar IFA-S, a State certified Real Estate appraiser with extensive appraisal experience and background in FNMA and FHA underwriting procedures and Robert E. Taylor, Jr., ABR, CRB, CRS, GRI & RAM and immediate Past President of the Michigan Association of REALTORS®.

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COUNSELING GRANTS TO HELP FAMILIES FIND AND KEEP HOUSING

HUD No. 10-269
Lemar Wooley
(202) 708-0685 FOR RELEASE
Thursday
December 23, 2010

OBAMA ADMINISTRATION ANNOUNCES NEARLY $73 MILLION IN
COUNSELING GRANTS TO HELP FAMILIES FIND AND KEEP HOUSING
HUD funding critical to support more than 500 counseling agencies nationwide

WASHINGTON – In an effort to help families find decent housing and to prevent future foreclosures, the Obama Administration today announced nearly $73 million in housing counseling grants to more than 500 national, regional and local organizations. As a result of the funding announced today, hundreds of thousands of households will have a greater opportunity to find housing or keep the homes they have because of the housing counseling and counseling training grants awarded today by U.S. Housing and Urban Development Secretary Shaun Donovan.

The grants announced today represent a $13 million, or 22 percent increase over last year’s funding level. In announcing the grant awards, Donovan said HUD-approved housing counseling agencies are a critical part of the nation’s housing recovery.

“These organizations are on the front lines of helping families who are desperate to remain in their homes,” said Donovan. “Now, more than ever, it’s crucial that we support these agencies that are working with struggling families on a one-to-one basis to manage their money, navigate the homebuying process, and secure their financial futures.”

Housing counseling grants will assist families in becoming first-time homeowners and remaining homeowners after their purchase. HUD-approved counseling agencies not only provide homeownership counseling, but also offer financial literacy training to renters and homeless individuals and families.

“Now, more than ever, it is crucial that Americans better understand how to manage their money, navigate the homebuying process, and secure their financial future.” said Donovan. “This critical funding will help counseling organizations continue to assist families in making more informed choices before they purchase a home and counsel families facing foreclosure.”

Nearly $68 million will support the direct provision of housing counseling services by 24 national and regional organizations, 5 multi-state organizations, and 484 state and local housing counseling agencies. In addition, HUD is awarding more than $5 million to three national organizations to train approximately 4,500 counselors who will receive the instruction and certification necessary to effectively assist families with their housing needs.

National and regional agencies distribute much of HUD’s housing counseling grant funding to community-based grassroots organizations that provide advice and guidance to low- and moderate-income families seeking to improve their housing conditions. In addition, these larger organizations help improve the quality of housing counseling services and enhance coordination among other counseling providers.

Counseling agencies will use $9.5 million to help assist senior citizens seeking reverse mortgages or Home Equity Conversion Mortgages (HECM). These agencies will provide counseling for the rapidly growing number of elderly homeowners who seek to convert equity in their homes into income that can be used to pay for home improvements, medical costs, and other living expenses.

The organizations that provide housing counseling services help people become or remain homeowners or find rental housing, and assist homeless persons in finding the transitional housing they need to move toward a permanent place to live. Grant recipients also help homebuyers and homeowners realistically evaluate their readiness for a home purchase, understand their financing and downpayment options, and navigate what can be an extremely confusing and difficult process.

In addition, grantees help combat predatory lending by helping unwary borrowers review their loan documentation, and avoid potential mortgage scams, unreasonably high interest rates, inflated appraisals, unaffordable repayment terms, and other conditions that can result in a loss of equity, increased debt, default, and even foreclosure. Likewise, foreclosure prevention counseling helps homeowners facing delinquency or default employ strategies, including expense reduction, negotiation with lenders and loan servicers, and loss mitigation, to avoid foreclosure. With foreclosures at critical levels nationwide, these services are more important than ever.

HUD awards annual grants under the housing counseling program through a competitive process. Organizations that apply for grants must be HUD-approved and are subject to performance reviews to maintain their HUD-approved status.

For a list of all grants, organized by state, visit HUD’s website.

For summary of each grant, organized by state, visit HUD’s website.

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GET IN THE LOOP!

GET IN THE LOOP! Add our search engine to your site, your clients will thank you.

http://www.google.com/cse/home?cx=000747579154309164948:nnakvu69iqy

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IRS Auction

Direct your questions regarding individual items for sale to the IRS Representative in charge of the sale. Please mention that you saw the advertisement on the Web. http://www.treasury.gov/auctions/irs/cat_Real7.htm

Click on the links below to see the sales ads
AZ – Somerton
Commerical Real Estate 4.87 Acres with 3 Buildings on Property
Date of Auction: 1/13/2011, at: 10:00 AM

CA – AGOURA HILLS
´Single Family Residence Across the Street From Neighborhood Park/Play Ground, Near Elementry School´
Date of Auction: 1/11/2011, at: 11:00 AM

CA – Calabasas
**UPDATE – Change of City**Judicial Sale – Home in Quiet Calabasas Neighborhood
Date of Auction: 1/11/2011, at: 11:00 AM

CA – Santa Monica
Home on lovely, tree lined street a block up from the ocean
Date of Auction: 1/11/2011, at: 11:00 AM

FL – Lake Placid
Great Business Opportunity
Date of Auction: 1/4/2011, at: 10:00 AM

GA – Albany
**UPDATE- Documents & pictures**Improved & Unimproved Real Estate in Albany, GA. Great Deals!
Date of Auction: 1/5/2011, at: 10:00 AM

LA – Houma (New Orleans Area)
**UPDATE – Contact information & Minimum Bid Change**Commercial Real Estate currently being used as a animal hospital; Great price & investment. Good location – Houma is less than 100 miles from New Orleans
Date of Auction: 1/12/2011, at: 11:00 AM

MI – Hastings
Great opportunity, small fixer upper home on beautiful Gun Lake in West Michigan.
Date of Auction: 12/28/2010, at: 11:00 AM

MI – South Haven
Beautiful A frame vacation home overlooking Lake Michigan
Date of Auction: 1/5/2011, at: 11:00 AM

MN – Milaca
What An Opportunity! One-half Interest In A Large Steel Machine Shed Building, Currently Occupied By A Transmission Service Business.
Date of Auction: 2/15/2011, at: 1:00 PM

MN – Princeton
**UPDATE – Pictures included**Judicial Sale – You don´t want to pass up this deal! Nice split level home with 1008 sq. ft. per level.
Date of Auction: 1/5/2011, at: 12:00 PM

NY – Albany
Approximately 2,100 Sq. Ft. residential/commerical building situated on 25×100 lot in heart of Albany, NY. Easy access to NY State Thruway. Great investment opportunity.
Date of Auction: 1/13/2011, at: 12:00 PM

NY – Camden
Beautiful Multi Family Home in Village of Camden, NY. Close to Shopping, Verona Beach, Oneida Lake, New York Thruway. Rental Income Potential.
Date of Auction: 1/26/2011, at: 11:00 AM

OK – Tulsa
Judicial Sale – 3 Bedroom 1 1/2 Bathroom with attached Garage, living area 1544 sq ft.
Date of Auction: 1/25/2011, at: 10:00 AM

OK – Tulsa
One story house with 3 Bedrooms, one and a half baths with 1,120 sq ft of living space on lot size of 7,875 sq ft.
Date of Auction: 1/25/2011, at: 10:00 AM

TX – Burnet
Nice, well maintained home, located on 1.7500 acres, large backyard, near Austin, TX; Marble Falls, TX; & The Texas Hill County – great price, great location!!!
Date of Auction: 1/7/2011, at: 10:00 AM

TX – Round Rock
Redeemed Property! A 1,482 sq ft, brick ranch style home; 3 br, 2 full baths, mature trees. Great starter home or good investment property.
Date of Auction: 1/6/2011, at: 10:00 AM

VA – Palmyra
**UPDATE – SALE ADJOURNED UNTIL FURTHER NOTICE**Beautiful parcel of land in a great location in Fluvanna County, VA – Develope or build your own house ´in the country´! Lots of trees for shade or to timber the land…don´t miss this one!
To Be Announced

WI – Pickerel
**UPDATE – Notice of Encumbrance included **40 Acres located near W6336 Monnot Dr Pickerel, WI
Date of Auction: 1/25/2011, at: 10:00 AM

Comments

TO: All Fannie Mae Single-Family Lenders
Uniform Appraisal Dataset and Uniform Collateral Data Portal
Introduction
In an effort to enhance appraisal data quality and consistency and promote the collection of electronic appraisal data, Fannie Mae and Freddie Mac, at the direction of their regulator, the Federal Housing Finance Agency (FHFA), have worked together to develop the Uniform Appraisal Dataset (UAD) and the Uniform Collateral Data Portal (UCDP).
This Lender Letter includes an overview of the following:

Fannie Mae and Freddie Mac Uniform Appraisal Dataset requirements

Uniform Collateral Data Portal

Future updates to Fannie Mae policies
The information in this Lender Letter that pertains to the UAD requirements and UCDP is similar to the information being issued concurrently by Freddie Mac. The future updates pertain to Fannie Mae’s policies only and will align the Selling Guide with the UAD requirements.
Fannie Mae and Freddie Mac Uniform Appraisal Dataset Requirements
Fannie Mae and Freddie Mac have created the UAD Specification document to provide business and technical requirements for implementation of the UAD. The UAD includes all data elements required to complete the following appraisal report forms (collectively referred to as the “four UAD appraisal report forms”):

Uniform Residential Appraisal Report (Fannie Mae Form 1004)

Individual Condominium Unit Appraisal Report (Fannie Mae Form 1073)

Exterior-Only Inspection Individual Condominium Unit Appraisal Report (Fannie Mae Form 1075)

Exterior-Only Inspection Residential Appraisal Report (Fannie Mae Form 2055)
The UAD also standardizes the input values for certain elements (e.g. specific date and dollar amount formats) and standardizes the definitions for select key appraisal data elements (e.g. property condition and quality of construction) on the four UAD appraisal report forms.
The UAD is required for appraisals with effective dates on or after September 1, 2011 that are completed on the four UAD appraisal report forms. Only conventional mortgages sold to Fannie Mae that are accompanied by one of the four UAD appraisal report forms must meet this requirement.
Lender Letter LL-2010-15 Page 1

Other appraisal report forms may be completed using the standards contained in the UAD Specification to the extent those standards are applicable to that particular form. In addition, although not required, the UAD may be used for appraisal reports with effective dates prior to September 1, 2011.
The UAD Specification may be amended from time to time. The current version of the UAD Specification can be found on eFannieMae.com.
Uniform Collateral Data Portal
On May 1, 2009, Fannie Mae notified lenders in Announcement 09-11, Mortgage Loan Data Requirements, that submission of electronic appraisal data elements would be required for mortgage loan applications dated on or after January 1, 2010. Subsequent to that Announcement, the effective date was postponed and Fannie Mae began working with Freddie Mac, at FHFA’s direction, to develop a common approach to the standardization and collection of appraisal data. As a result of that collaborative effort, the UCDP was developed to serve as the joint portal through which lenders will submit electronic appraisal reports to Fannie Mae (and Freddie Mac).
Effective for all conventional mortgage loans for which an appraisal report is required and with application dates on or after December 1, 2011 and delivery dates on or after March 19, 2012, the following appraisal report forms, including all exhibits, addenda, and photographs, must be submitted to UCDP before the delivery date of the mortgage loan to Fannie Mae. This includes the four UAD appraisal report forms and four additional forms:

Uniform Residential Appraisal Report (Fannie Mae Form 1004)

Manufactured Home Appraisal Report (Fannie Mae Form 1004C)

Small Residential Income Property Appraisal Report (Fannie Mae Form 1025)

Individual Condominium Unit Appraisal Report (Fannie Mae Form 1073)

Exterior-Only Inspection Individual Condominium Unit Appraisal Report (Fannie Mae Form 1075)

Exterior-Only Inspection Residential Appraisal Report (Fannie Mae Form 2055)

Individual Cooperative Interest Appraisal Report (Fannie Mae Form 2090)

Exterior-Only Inspection Individual Cooperative Interest Appraisal Report (Fannie Mae Form 2095)
The submissions to UCDP must consist of either an acceptable Extensible Markup Language (XML) data stream, including an embedded Portable Document Format (PDF) file, or a first-generation PDF file. The PDF file must include all exhibits, addenda, and photographs, including the Market Conditions Addendum to the Appraisal Report (Fannie Mae Form 1004MC). Refer to the UAD Overview on eFannieMae.com for a list of acceptable XML formats.
Lenders may deliver appraisal reports through UCDP as soon as the portal becomes available, which is currently scheduled for June 2011. Fannie Mae will notify lenders when the portal is available.
Appraisal report forms not listed above must not be delivered through UCDP.
Lender Letter LL-2010-15 Page 2

Lender Letter LL-2010-15 Page 3
Future Updates to Fannie Mae Policies
As noted above, the UAD Specification provides standardized definitions for property condition and construction quality. The new definitions are expressed as a rating. Property condition will be rated C1 – C6, and quality of construction will be rated Q1 – Q6. Refer to the UAD Specification; Appendix D, Field-Specific Standardization Requirements; Exhibit 1, Requirements – Conditions and Quality Ratings Usage, for the definitions and for additional information.
The Selling Guide will be updated no later than the required implementation date of the UAD to reflect these standardized definitions. B4-1.4-15, Appraisal Report Review: Property Condition of the Improvements of the Selling Guide, will be updated to indicate that condition ratings C1 – C4 will be eligible for delivery in “as-is” condition. Condition ratings C5 and C6 will be applicable if the appraiser identifies physical deficiencies that affect the soundness, structural integrity, or livability of the subject property. Mortgage loans secured by properties with these ratings will be eligible for delivery, but the required repairs must be completed before the mortgage is delivered to Fannie Mae. Additionally, the Selling Guide will be updated to reflect that mortgage loans secured by properties with construction quality ratings Q1 – Q5 will be eligible for delivery to Fannie Mae, but properties with a quality rating of Q6 will not meet Fannie Mae’s property eligibility requirements.
*****
Lenders who have questions about this Lender Letter should contact their Customer Account Team.
John S. Forlines
Vice President
Single-Family Chief Risk Officer

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