Statement 7: Prohibition Against Discrimination

Statement 7: Prohibition Against Discrimination

State agencies should be aware that Title XI and the Agencies’ regulations prohibit federally regulated financial institutions from excluding appraisers from consideration for an assignment solely by virtue of their membership, or lack of membership, in any appraisal organization. Federally regulated financial institutions should review the qualifications of appraisers to ensure that they are qualified for the assignment for which they are being considered. It is unacceptable to assume that an appraiser is qualified solely due to membership in, or designation from, an appraisal organization, or the lack thereof. The Agencies have determined that financial institutions’ appraisal policies should not favor appraisers from one or more organizations or exclude individuals based on their lack of such membership. If a State agency learns that a certified or licensed appraiser allegedly has been a victim of such discrimination, the State agency should inform the Agency which has regulatory authority over the involved financial institution.

The ASC has determined that such discrimination also is inappropriate in the establishment and administration of a State’s certification and licensing system. The ASC urges States to adopt legislation, regulations or other procedures to prohibit such discriminatory practices.

In addition, State agencies should avoid discriminatory practices regarding appraiser educational course providers. Some State agencies inappropriately: (1) have charged a course review fee to private course providers while not charging such a fee to certain professional appraiser organizations; (2) have delayed approval of private school appraisal courses while rapidly approving those of professional appraiser organizations; and (3) have forced non-affiliated proprietary schools to maintain and use fixed school room locations, while certain professional appraisal organizations have been allowed to teach courses at non-fixed commercial sites, such as hotels, motels and office locations. State agencies should review their internal procedures and take steps to ensure that all educational providers are afforded equal treatment in all respects, including course review fees, timeliness of review and course location requirements.

Comments

Wanted: Skilled Appraisers

http://realtormag.realtor.org/daily-news/2012/01/19/wanted-skilled-appraisers

http://realtormag.realtor.org/sites/realtormag.realtor.org/files/Ruotolo.pdf

Wanted: Skilled Appraisers

Daily Real Estate News | Thursday, January 19, 2012

In markets where foreclosures and distressed properties are common, experienced appraisers should be used to conduct the complex appraisals.

However, has acknowledged that new rules blocking lenders from hiring their own appraisers mean that appraisers are often hired by appraisal management companies, which generally absorb some of the fee that appraisers earn.

The National Association of REALTORS® has long asserted that appraisals conducted by less experienced appraisers can derail transactions and impede the market’s recovery. A recent REALTOR® Magazine webinar addresses these issues and offers advice on how to work with appraisers. Download the presentation slides or playback the event recording.

Source: “Unskilled Appraisers Seen as Problem,” NASDAQ (01/17/12)

Read More:

Webinar: Productive Engagement With Appraisers

NAR’s Appraisal Resources

Comments

Residential Appraiser

WEST COAST APPRAISER (213) 617-1400 http://www.westcoastappraisers.com/
Home
Services
Service 2

Appraiser since 1977, specializing in Urban Appraising in
Los Angeles, San Bernardino, Riverside and Orange Counties.
Single Family Residences, Multiple Units, Condominium.
Certified Review Appraiser
Certified General Appraiser

Real Estate Broker since 1980, sellers’ representation specialist
Los Angeles and Orange counties. Single Family Sales, Multiple Family Sales, Condominium Sales.

Approved Independent Appraiser for (small sampling):
U.S. Veterans Administration, CA Veterans Administration, Bank of America
U.S. Federal Housing Administration (FHA), Chase Manhattan Bank,
U.S. Dept. of Housing and Urban Development (HUD), First California Equities,

Comments

The Federal Housing Administration (FHA) is offering appraisal webinar

The Federal Housing Administration (FHA) is offering appraisal webinar and seminar training in January and February 2012 for seasoned and new real estate appraisers:
————
January 17, 2012 – Property Inspection Requirements for FHA Appraisers: Webinar

Have you ever thought, “Am I in compliance with HUD requirements if I do not inspect the subject’s attic?” This FREE webinar training is geared towards the FHA Single Family Roster Appraiser and will cover property inspection requirements to include neighborhood influences, site analysis, and improvements. Appraisers new to the FHA Roster, as well as seasoned professionals wishing to refresh their knowledge, will benefit from this in-depth look at property inspection requirements and HUD/FHA expectations. Registration required, no fee.

Tuesday, January 17, 2012: 9:00am to 11:30am Mountain Time, 11:00am to 1:30pm Eastern Time, 10:00am to 12:30pm Central Time, 8:00am to 10:30am Pacific Time.

Click here to register

http://www.visualwebcaster.com/FHA/84153/reg.html

———————-

February 16, 2012 – The FHA Appraisal – Denver, CO:

This FREE one-day class discusses FHA appraisal requirements including FHA Appraisal Protocol, updates to FHA appraisal policy, as well as equips attendees with the knowledge to determine property eligibility. This course provides a refresher to seasoned FHA appraisers, as well as provides valuable information to appraisers new to the FHA roster. Registration required, no fee.

http://www.hud.gov/emarc/index.cfm?fuseaction=emar.registerEvent&eventId=1120&update=N

————

FHA Training Survey: Tell FHA what you want!!
The Department of Housing and Urban Development (HUD) has contracted with Total Learning Solutions (TLS) to develop and implement a comprehensive training program for its FHA business partners. We invite you to participate in a brief email survey to obtain your input regarding the overall training program design. In order to make certain your FHA training needs are considered, please take a few minutes to complete the survey. To access the survey click on the link provided:

https://www.research.net/s/FHA-TLS-ALLREGS-SURVEY2

Comments

USPAP-UNIFORM STANDARDS OF PROFESSIONAL

USPAP-UNIFORM STANDARDS OF PROFESSIONAL
APPRAISAL PRACTICE!

http://www.harriscompanyrec.com/USPAP.html

Comments

the results demonstrate the usefulness of appraisal estimates in the

Appraisals, Automated Valuation
Models, and Mortgage Default
Austin Kelly
Associate Director, Division of Enterprise Regulation
Austin.kelly@fhfa.gov
Subtitle: “the results demonstrate the usefulness of appraisal estimates in the
prediction of claim propensities, over and above the information contained in AVMs.”

“Abstract http://www.fhfa.gov/webfiles/15047/Kelly.PDF
. . . Previous research has suggested the possibility that professional appraisals or
econometric estimates of collateral value may be indicative of credit risk. This paper
examines the issue by estimating the probability of a mortgage default (defined both as 90
day delinquency and as a claim on mortgage insurance) as a function of the difference
between sales price of a home and the estimated value of the home at the time of the
purchase, produced by both an appraisal and by an Automated Valuation Model (AVM).
Logistic regression is used to estimate the quarterly hazard of a serious delinquency, or. . .

1. Introduction and Literature Review
. . . Appraisers provide the estimate of value used in determining initial equity. A handful of
papers have examined the role of appraisers in the underwriting process. Horne and
Rosenblatt (1996) examine the distribution of the differences between appraised values
and purchase prices. They find that differences between appraised values and sale prices
are almost always less than one percent, and appraisals for less than the purchase price are
extremely rare. LaCour-Little and Malpezzi (2001) estimates a model similar to the one
in this paper.. . .

Shiller and Weiss (1999) lay out a framework for evaluating the profitability of AVM
deployment. This paper takes a step towards filling the data requirements of their
framework, estimating the correlation between appraisal/selling price and AVM
valuation, and demonstrating the effectiveness of AVM systems in predicting default,
foreclosure, and loss severity.

Section 6 offers concluding
remarks and some observations concerning the relative predictive power of appraisals and
AVMs.

2. Model
The focus of this paper is the effect of appraisal and AVM quality on the credit risk in
mortgages. An appraisal is a measure of the “market value” of a property. In a highly
liquid market with large numbers of identical commodities traded, this is a simple
concept. In the housing market, with infrequently traded heterogeneous properties,
market value is a more tenuous concept. To some extent, the fact that a buyer is willing
to pay $X for a house sets $X as the market value, rendering an appraisal somewhat
superfluous. From the perspective of the entity holding the credit risk on the mortgage
(lender or, in this case, insurer), the most relevant concept might be the value that the
second highest bidder is willing to spend on the property, a notion that mixes the concepts
of “market value” and “liquidity.” This is because the holder of the credit risk cares
about the price at which the buyer could later sell the property, which determines the
buyer’s choice of prepayment or default in the face of trigger events, and determines the
amount of recovery in case of default. This may be expressed as
Market Value = Transaction Price + Idiosyncrasies (1)
where Market Value refers to the expected selling price if a property were immediately
resold. Transaction Price is the price agreed upon by the buyer and seller. Idiosyncrasies
represent any unique characteristics attached to the transaction, such as a buyer uniquely
attracted to a particular property characteristic, or a seller motivated to sell exceptionally
quickly, or, for that matter, fraud.

The appraisal process can provide an estimate of property value independent of the
idiosyncratic circumstances that might cause a buyer to be the highest bidder. Single
family appraisals are generally based upon the sale prices of comparable properties, with
adjustments made for differences in characteristics between the property in question and
the comparables, and with adjustments made for area-wide trends in price. An appraisal
constitutes an estimate of the market value. Such an estimate may be biased or unbiased.
Sources of bias to the high side are pressure from buyers, sellers, brokers, etc. who need
an appraisal for at least the agreed upon price so that the transaction can take place. The
holder of the credit risk on the transaction, for example, the insurer, would presumably
wish to pressure appraisers for an accurate estimation, but in many cases the appraiser is
hired by the lender, although the risk is borne primarily by the insurer.3
Appraisal Value = Market Value + Bias1 + _1 (2)
where Appraisal Value is the value assigned by an appraiser, Bias1 represents any
possible tendency to assign a value other than the expectation of Market Value, and _1 is
the inherent noise in any estimation process.

(3FHA does maintain a list of approved appraisers, and can remove an appraiser from the list for fraud or
unethical behavior, but it is not clear how effective this might be in the case of modest upward bias of the
sort considered here. See US GAO (2004) for a discussion of FHA’s role in monitoring appraisers.
5)

An AVM produces a second estimate of the market value (wrong) of the property. An AVM
estimate may be less subject to bias (wrong), as AVM services are sold to a wide variety of
parties, such as lenders, insurers, GSEs, or MBS investors, with no clear incentive to
produce “high” or “low” estimates (wrong). On the other hand, AVMs constitute a mass-appraisal
approach, rely upon generally available characteristics, and do not involve visits to
properties to ascertain condition or incorporate local knowledge (the announcement of a
factory closing or plans for a new transit stop), so that their variances may be much higher
than the variances of appraisals.

AVM Value = Market Value + Bias2 + _
_ (3)

where AVM value is the value assigned by an AVM, Bias2 is the tendency (if any) for an
AVM to produce a value other than the expectation of market value, and _
_ is the inherent
noise in the AVM estimation process.
The relevant questions for a holder of mortgage credit risk are, 1) “does an appraisal
contain any information helpful to the assessment of default propensities, and 2) “does an
AVM estimate contain any information beyond that contained in an appraisal?” The
latter will be the case if the mean square error of the AVM is not too large, relative to the
mean square error of the appraisal, and if the correlation between the two errors is not too
high. One way to test this proposition is to estimate equations such as
Prob(Default) = fn(Appraisal, AVM Estimate, other risk variables) (4)
Loss Given Default = fn(Appraisal, AVM Estimate, other risk variables) (5)
and test the coefficients on the Appraisal and AVM Estimate values.
Underwriters, and FHA guidelines in particular, generally take the minimum of the sale
price or the appraised value as the denominator when calculating the loan-to-value ratio,
used as a key indicator of default probability. Thus, the extent to which an appraisal
exceeds the transaction price has no effect on the underwriting decision, or perceived
degree of risk attached to the loan by the underwriter. An appraisal less than the
transaction price has serious consequences, however, generally requiring an increase in
the cash that the buyer has to bring to the table, or a decrease in the price received by the
seller, or the failure of the transaction to go through. Thus appraisals may produce
benefits in ways not captured by transaction data, either by preventing transactions on
overpriced properties, or by triggering renegotiated prices.
AVMs are generally not used in FHA underwriting4. However, AVM estimates may
provide an additional source of information on the value of the collateral; therefore on the
level of credit risk for a given mortgage. The extra predictive power could be useful for
risk monitoring on the part of FHA or other insurers, risk accounting, and for investor
evaluations of portfolios of mortgages.

6. Conclusions
AVM estimates are predictive of both claim and delinquency propensities. Appraisal
ratios also have predictive power for claims. Examined separately, each is useful as a
predictor of the claim propensity of a mortgage. Entered together, the correlation
between the two estimates is weak enough that each serves as a useful indicator of credit
18In the interest of space, only the full model for the GAOrisk specification is included for the Atlanta
results. Other results were similar, with AVM values predictive of risk and appraisal ratios insignificant,
and with the GAOrisk specification slightly outperforming the TOTAL scorecard specification.
27
risk, although the significance levels are higher on the AVM estimate when both are in
the regression.
The confidence measure attached to the AVM estimate also serves as a predictor of credit
risk. Properties that are easier to value have lower credit risk, even after conditioning on
a host of standard underwriting variables. Additionally, AVM estimates are a significant
predictor of loss given default, an important but often ignored dimension of credit risk.
Much of the value of an appraisal presumably comes prior to origination, in preventing
transactions at prices far above market value, or contributing to the renegotiation of price
prior to closing. The results here should not be taken to imply that appraisals have less
value than AVMs, only that appraisal values have less post-origination predictive power
than do AVMs.
These results confirm the value of econometric estimates of property value first found by
LaCour-Little and Malpezzi, using a more recent, larger, and nationally representative
sample, and focusing on claims and losses, not just delinquency. Additionally, this work
demonstrates the utility of commercial, off-the-shelf, AVM estimates for predicting credit
risk. Finally, the results demonstrate the usefulness of appraisal estimates in the
prediction of claim propensities, over and above the information contained in AVMs.”

Thanks!
Curtis D. Harris, BS, CGREA, REB
Bachelor of Science in Real Estate, CSULA
State Certified General Appraiser
Real Estate Broker
ASTM E-2018 Commercial Real Estate Inspector
HUD 203k Consultant
HUD/FHA Real Estate Appraiser/Reviewer
FannieMae REO Consultant
CTAC LEED Certification

The Harris Company, Forensic Appraisers and Real Estate Consultants
*PIRS/Harris Company and the Science of Real Estate-Partners*
1910 East Mariposa Avenue, Suite 115
El Segundo, CA. 90245
310-337-1973 Office
310-251-3959 Cell
WebSite: http://www.harriscompanyrec.com
Resume: http://www.harriscompanyrec.com/CURRICULUMVITAENAME2011a.pdf
Commercial Appraiser Blog: http://harriscompanyrec.com/blog/

We Make a Simple Pledge to

Communicate, in a timely fashion, each appraisal, analysis, and opinion without bias or partiality

Abstain from behavior that is deleterious to our clients, the appraisal profession, and the public

Hold paramount the confidential nature of the appraiser/consultant – client relationship

and

Comply with the requirements of the Uniform Standards of Professional Appraisal Practice and the
Code of Professional Ethics of the National Society of Real Estate Appraisers

IT’S THE LAW-Designation Discrimination is Illegal [FIRREA, Sec. 564.6]: Professional Association Membership http://www.orea.ca.gov/html/fed_regs.shtml#Statement7 Membership in an appraisal organization: A State Certified General Appraiser may not be excluded from consideration for an assignment for a federally related transaction by virtue of membership or lack of membership in any particular appraisal organization, including the appraisal institute.

CONFIDENTIALITY/PRIVILEGE NOTICE: This transmission and any attachments are intended solely for the addressee. The information contained in this transmission is confidential in nature and protected from further use or disclosure under U.S. Pub. L. 106-102, 113 U.S. Stat. 1338 (1999), and may be subject to consultant/appraiser-client or other legal privilege. Your use or disclosure of this information for any purpose other than that intended by its transmittal is strictly prohibited and may subject you to fines and/or penalties under federal and state law. If you are not the intended recipient of this transmission, please destroy all copies received and confirm destruction to the sender via return transmittal

Comments

Residential Appraiser News

Residential Appraiser News
http://realtormag.realtor.org/

3 Predictions for Distressed Properties in 2012
There are certain trends regarding distressed properties that can be predicted with some level of assurance. Here are a few important ones for the coming year.
Read more >

Fed Advocates REO Rental Program
The Federal Reserve is calling on the government to come up with initiatives to help lifting housing, including a program to rent out foreclosures to stop the downward pressure on home values.
Read more >

Leave Square Footage Off Listing, Expert Advises
Listing the square footage in your marketing may land you in trouble since there’s no exact science to measuring a home, a housing expert warns.
Read more >

Low Vacancies, Higher Rents Keep Rental Market Booming
The apartment vacancy rate is at its lowest level since late 2001 as the rental market continues to soar.
Read more >

Banks Pilot Cash Incentive Programs for Short Sales
A recent Bank of America program offered up cash to home owners willing to do a short sale, but the program received mixed reactions from real estate professionals, who complained the eligibility requirements were unclear.
Read more >

Home Owners Rent Out Driveways for Extra Cash
Home owners looking for extra money are turning to their largest asset: their house. And they’re realizing their driveway or garage may be a money-maker.
Read more >

How to Navigate the Minefield of Divorcing Clients

Buyer’s Guide: 2012 Autos

Property Rights at Root of Supreme Court Case

Not all Energy Upgrades are Equal; Post Free Money-Saving Info to Facebook

Read more >

Comments

HUD Calendar Event

HUD Calendar Event

Information by State
Esta página en español
Print version

The FHA Appraisal
Event Date: February 16, 2012
Event Time: 8:30 AM-4:30 PM

Description: This FREE one-day class discusses FHA appraisal requirements including FHA Appraisal Protocol, updates to FHA appraisal policy, as well as equips attendees with the knowledge to determine property eligibility. This course provides a refresher to seasoned FHA appraisers, as well as provides valuable information to appraisers new to the FHA roster. Industry participants including Underwriters and Loan Processors may also benefit. Attendees will receive 7-hours of continuing education acceptable for the State of Colorado appraisal licensing requirements. Class size is limited, first-come, first served. On the day of the class, check-in begins at 8:00 a.m. Class begins promptly at 8:30 a.m.
Location: Department of Housing and Urban Development, 1670 Broadway, 25th Floor, Denver, CO 80203

Contact Name: Elizabeth Clark

Contact email: denverhoc-pudtraining@hud.gov

For more information, please call: 800-225-5342

Additional information: Register online using link below.
Additional information on the web available at: http://www.hud.gov/emarc/index.cfm?fuseaction=emar.registerEvent&eventId=1120&update=N

Comments

Single-Family Seller/Servicer Guide (“Guide”) Bulletin,

Bulletin
NUMBER: 2011-25
TO: Freddie Mac Sellers December 16, 2011
SUBJECTS
With this Single-Family Seller/Servicer Guide (“Guide”) Bulletin, we are providing the following updates and revisions to our selling requirements:
Mortgage eligibility and credit underwriting

Updating our requirements for Mortgages used to pay off balances under land contracts or contracts for deed

Revising our requirements to permit a cash-out refinance Mortgage when the property was purchased free and clear of liens and the Borrower has not been on the title to the subject property for at least six months prior to the Note Date, provided the underlying purchase transaction and the cash-out refinance Mortgage meet specific requirements
Property eligibility and appraisal requirements

Requiring specific appraisal forms to be used for appraisal field reviews, appraisal updates and completion certifications

Providing guidance to Sellers on reconciling multiple opinions of market value

Updating language in Guide Section 44.4, Appraisers, to provide consistency with Uniform Standards of Professional Appraisal Practice (USPAP)
2012 Loan limits

Updating applicable Guide sections to reflect the 2012 base conforming loan limits and maximum loan limits, announced on November 22, 2011, for Mortgages secured by properties in designated high-cost areas
We are also reminding Seller/Servicers of their obligation to maintain mortgage insurance coverage for Freddie Mac’s benefit, an obligation that includes responding in required time frames to an MI request for information and documentation prior to MI issuance of a coverage rescission or claim denial.
EFFECTIVE DATE
All of the changes announced in this Bulletin are effective immediately, unless otherwise noted.
Page 1
MORTGAGE ELIGIBILITY AND CREDIT UNDERWRITING
Land contracts and contracts for deed
We are updating our requirements for Mortgages used to pay off balances under land contracts or contracts for deed, including, but not limited to, establishing criteria for when the transaction is considered a purchase or a “no cash-out” refinance. Sections 23.7, Land Contract; Contract for Deed, 24.5, Requirements for “No Cash-Out” Refinance Mortgages, and H33.3, General Eligibility Requirements, have been updated to reflect these changes.
Cash-out refinance seasoning requirement
We have revised Section 24.6, Requirements for Cash-Out Refinance Mortgages, to allow a cash-out refinance Mortgage when the property was purchased free and clear of liens and the Borrower has not been on the title to the subject property for at least six months prior to the Note Date, provided the underlying purchase transaction and the cash-out refinance Mortgage meet specific requirements.
PROPERTY ELIGIBILITY AND APPRAISAL REQUIREMENTS – EFFECTIVE APRIL 1, 2012
Use of appraisal field review reports and appraisal updates
We have updated Sections L33.6, Special Appraisal and Collateral Requirements, 44.9, Appraisal and Inspection Report Forms and the Property Inspection Alternative (PIA), and 48.5, Reverifications Made by Seller, to require Sellers to use Guide Form 1032, One-Unit Residential Appraisal Field Review Report, or Form 1072, Two-to Four-Unit Residential Appraisal Field Review Report, as applicable, when obtaining an appraisal field review report. Appraisal field review reports are subject to Freddie Mac’s appraisal requirements and must be obtained in compliance with Guide Exhibit 35, Appraiser Independence Requirements.
We have also updated Section 44.7, Overview of Appraisals and Inspections and the Property Inspection Alternative (PIA), to require Sellers to use Form 442, Appraisal Update and/or Completion Report, when obtaining an appraisal update.
Reconciling multiple opinions of market value
When obtaining subsequent opinions of value, Sellers must comply with Exhibit 35. The Seller’s appraisal review and reconciliation process must result in the Seller relying on the most accurate and supported opinion of market value. If the Seller determines that the opinions of market value are equally accurate and well supported, then the lower of the opinions of market value must be used to underwrite the Mortgage. New Section 44.16, Reviewing Appraisal Reports, Obtaining Subsequent Appraisal Reports and Appraisal Field Review Reports, and Reconciling Multiple Opinions of Market Value, contains this requirement.
Appraisers
To provide consistency with USPAP, we have updated language in Section 44.4 to state that Sellers must select appraisers with “knowledge and experience in appraising the property type in the market area and access to applicable data sources.”
Page 2
2012 LOAN LIMITS
In our Single-Family Update e-mail on November 22, 2011, we announced that our base conforming loan limits and the loan limits for designated high-cost areas will remain at current levels for 2012, with the exception of Fairfield County, Connecticut, where the high-cost area loan limit will increase.
We have updated Section 23.3, Maximum Original Loan Amounts for Home Mortgage Purchases, to reflect the 2012 base conforming loan limits and Section L33.2, Maximum Original Loan Amounts for Super Conforming Mortgages, to reflect the high-cost area loan limits for super conforming Mortgages with Note Dates on or after October 1, 2011 and Freddie Mac Funding or Settlement Dates on or before December 31, 2012.
REMINDER – SELLER/SERVICER OBLIGATION TO MAINTAIN MORTGAGE INSURANCE COVERAGE – RESPONSE TO MI REQUEST FOR INFORMATION AND DOCUMENTATION
As stated in our August 12, 2011 Industry Letter and as we reminded Sellers in Bulletin 2011-23, Freddie Mac is seeing a material increase in mortgage insurer rescissions, cancellations and denials of coverage of Freddie Mac-owned Mortgages.
Seller/Servicers are reminded that it is both a selling and Servicing obligation to maintain mortgage insurance coverage for Freddie Mac’s benefit. The obligation to maintain the mortgage insurance coverage includes responding in the required time frames to the MI’s requests for information and documentation prior to the issuance by the MI of a rescission of coverage or a denial of claim.
Before Freddie Mac is notified of the MI’s decision to rescind coverage or deny a claim under such coverage for a given Mortgage, certain MIs may allow Seller/Servicers to appeal the MI rescission or claim denial decision to reinstate the mortgage insurance coverage or to facilitate a claim payment to Freddie Mac. In these scenarios, Seller/Servicers must ensure that all applicable MI requirements for rescission or claim denial appeals are satisfied, in accordance with Section 53.2, The Servicer to Satisfy FHA, VA, RHS and MI Requirements. Specifically, if the MI requests information or documentation from the Seller/Servicer pertaining to the appeal of a rescission or claim denial decision, then the Seller/Servicer must work expeditiously to provide the information or documentation to the MI within the required time frames, so that Freddie Mac can regain full benefit of the mortgage insurance.
If the Seller/Servicer fails to provide the information required by the MI in a timely manner either initially or as part of the MI’s claim review or subsequently as part of the process for appealing a rescission or claim denial to the MI, Freddie Mac will issue a repurchase request to the Seller/Servicer after Freddie Mac is notified of the MI’s rescission or claim denial decision.
After Freddie Mac is made aware of the MI’s decision to rescind coverage or deny claim under such coverage for a given Mortgage and issues a letter to the Seller/Servicer requiring repurchase of the Mortgage, any concurrent or outstanding Seller/Servicer appeal to the MI related to the Mortgage does not change the Seller/Servicer’s obligation to repurchase Freddie Mac’s interest in the Mortgage in accordance with Section 72.1, Repurchases Required by Freddie Mac.
As a further reminder, Section 72.6, Appealing a Repurchase Request, allows Seller/Servicers to file only one appeal within 30 days from the date of Freddie Mac’s letter requiring repurchase, or within such other time frame as specified by Freddie Mac, if the Seller/Servicer has additional supporting information and/or documentation that may affect Freddie Mac’s decision.
ADDITIONAL GUIDANCE
Title insurance
We have changed Section 39.2, Title Insurance Policy Requirements, to replace the term “beneficiary” with the term “insured” as the term “beneficiary” does not exist in the standard American Land Title Association (ALTA) title insurance policy forms.
Page 3
CPA compliance forms
We have updated the following forms to provide clearer instructions and layout:

Form 483, Wire Transfer Authorization

Form 900, Selling System Authorized User Identification & Certification Form

Form 987, Wire Transfer Authorization for a Cash Warehouse Delivery

Form 987E, Wire Transfer Authorization for a Cash Warehouse Delivery – For Use Only with the Freddie Mac Selling System

Form 988SF, Certificate of Incumbency – For a Corporation or Limited Liability Company Only

Form 988ASF, Addendum to Certificate of Incumbency – For a Corporation or Limited Liability Company Only

Form 989SF, Certificate of Incumbency – For a Partnership or Sole Proprietorship Only

Form 989ASF, Addendum to Certificate of Incumbency – For a Partnership or Sole Proprietorship Only
We have also made the forms fillable for Seller convenience.
REVISIONS TO THE GUIDE
The revisions included in this Bulletin impact:

Chapters 4, 23, 24, H33, L33, 39, 44 and 48

Forms 483, 900, 987, 987E, 988SF, 988ASF, 989SF and 989ASF
CONCLUSION
If you have any questions about the changes announced in this Bulletin, please contact your Freddie Mac representative or call (800) FREDDIE and select “Loan Origination.”
Sincerely,
Laurie A. Redmond Vice President Offerings Effectiveness

Comments

Body of Knowledge Issues. AI/MAI/Appraisal Institute/Foundation, 19th Century Thinking

Body of Knowledge Issues. AI/MAI/Appraisal Institute/Foundation, 19th Century Thinking

By Don Epley, MAI Director

Center for Real Estate Studies University of South Alabama

Abstract

The two current bodies-of-knowledge used by appraiser candidates to qualify for a designation and to practice the profession contain topics in need of discussion and revision to estimate property value accurately. This paper identifies the most pressing topics and makes recommendations to improve the appraiser’s understanding and practice of the profession.

The entire article is available in PDF format: Body of Knowledge Issues.

http://www.appraiserresearch.org/fileadmin/user_upload/body-of-knowledge-issues/Abstract_20111010143708.pdf

You will have to read this nonsense for yourself. For some reason I could not cut and paste which would make it easier for me to address each of my concerns indivually and in a logical method. Basically, it is the most ridiculous paper I have read in the past 30, no 40 years. It starts out with the rationalization that the mai, appraisal institute members did not use statical analysis because the data was not available. I have been in the real estate industry since the 70′s and know full well that this data was available. They then, as they do know, lacked the expertise to use statistical inference, effectively. They have always maintained that appraisal was an “ART,” this postulate makes it impossible to attempt a scientific approach to real estate valuations. In fact it would be more appropriate to use statistics when valuing Goya vs. Rembrandt.

He blasts the National Association of Realtors, the Federal House Finance Agency, and the Chase-Shilling indices, but cannot produce a better one available from his potentates, the appraisal institute/foundation.

He talks about real estate statistics as if it were teh production of Ball Barings, where you produce a million, and accept or reject, the product line with a sample of ten thousand. The first year statistics student knows that stastical analysis does not produce reliable results with small population. Ah!. . . READ IT THEN WE CAN DISCUSS IT FURTHER.

Thanks!
Curtis D. Harris, BS, CGREA, REB
Bachelor of Science in Real Estate, CSULA
State Certified General Appraiser
Real Estate Broker
ASTM E-2018 Commercial Real Estate Inspector
HUD 203k Consultant
HUD/FHA Real Estate Appraiser/Reviewer
FannieMae REO Consultant

CTAC LEED Certification

The Harris Company, Forensic Appraisers and Real Estate Consultants
*PIRS/Harris Company and the Science of Real Estate-Partners*

1910 East Mariposa Avenue, Suite 115
El Segundo, CA. 90245
310-337-1973 Office
310-251-3959 Cell

WebSite: http://www.harriscompanyrec.com

Resume: http://www.harriscompanyrec.com/CURRICULUMVITAENAME2011a.pdf

Commercial Appraiser Blog: http://harriscompanyrec.com/blog/

We Make a Simple Pledge to

Communicate, in a timely fashion, each appraisal, analysis, and opinion without bias or partiality

Abstain from behavior that is deleterious to our clients, the appraisal profession, and the public

Hold paramount the confidential nature of the appraiser/consultant – client relationship

and

Comply with the requirements of the Uniform Standards of Professional Appraisal Practice and the
Code of Professional Ethics of the National Society of Real Estate Appraisers

IT’S THE LAW-Designation Discrimination is Illegal [FIRREA, Sec. 564.6]: Professional Association Membership http://www.orea.ca.gov/html/fed_regs.shtml#Statement7 Membership in an appraisal organization: A State Certified General Appraiser may not be excluded from consideration for an assignment for a federally related transaction by virtue of membership or lack of membership in any particular appraisal organization, including the appraisal institute.

CONFIDENTIALITY/PRIVILEGE NOTICE: This transmission and any attachments are intended solely for the addressee. The information contained in this transmission is confidential in nature and protected from further use or disclosure under U.S. Pub. L. 106-102, 113 U.S. Stat. 1338 (1999), and may be subject to consultant/appraiser-client or other legal privilege. Your use or disclosure of this information for any purpose other than that intended by its transmittal is strictly prohibited and may subject you to fines and/or penalties under federal and state law. If you are not the intended recipient of this transmission, please destroy all copies received and confirm destruction to the sender via return transmittal

Comments

« Previous Page« Previous entries « Previous Page · Next Page » Next entries »Next Page »