Archive for October, 2010

Holmes v. Summer (2010) 188 Cal.App.4th 1510,


By Glen C. Hansen

In Holmes v. Summer (2010) 188 Cal.App.4th 1510, the Court of Appeal for the Fourth Appellate District held that when a real estate agent or broker for a seller is aware that the amount of existing monetary liens and encumbrances exceeds the sales price of a residential property, so as to require either the cooperation of the lender in a short sale or the ability of the seller to put a substantial amount of cash into the escrow in order to obtain the release of the monetary liens and encumbrances affecting title, the agent or broker has a duty to disclose this state of affairs to the buyer, so that the buyer can inquire further and evaluate whether to risk entering into a transaction with a substantial risk of failure.

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New FHA Mortgagee Letter:


New FHA Mortgagee Letter:

Date: October 22, 2010
To: All Approved Mortgagees
Mortgagee Letter: 2010-36
Subject: Requirements for Combined Loan Amounts

This Mortgagee Letter eliminates the requirement that the sum of all liens not exceed the geographical maximum mortgage limit for both purchase and refinance transactions. Only the FHA-insured first lien is subject to FHA’s maximum mortgage limits. This Mortgagee Letter supersedes ML 2010-24 in its entirety…

To read this mortgagee letter and any attachments in their entirety, please visit: view the 2010 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.


New FHA Training and Events:

October 26, 2010 – FHA REO Webinar. Learn about homebuyer’s & property eligibility criteria, recent updates, sales contract requirements, HUD’s special discount sales programs & how to calculate the maximum mortgage amounts. This FREE training course is for underwriters, originators, real estate agents, & other industry partners. Registrants will receive an email web link, a toll-free dial-in number, & instructions for participation prior to the webinar training date. Registrants must have internet access. ALL TIMES ARE MDT. Registration required, no fee. More info at:

October through December – HUD & the California Association of Realtors® (C.A.R.) are offering free, one-hour FHA webinars to C.A.R. members. These webinars cover a variety of FHA programs & policies. Sponsored by HUD & C.A.R. Registration required & only available to C.A.R. members, no fee. More info at:
October through December – HUD & the California Association of Mortgage Professionals & the Oregon Association of Mortgage Professionals are offering free, one-hour FHA webinars. These webinars cover a variety of FHA programs & policies. Registration required & All webinars are FREE & limited to the first 1,000 registered from California & Oregon. More info at:
November 3-5, 2010 – New Orleans, LA. National Reverse Mortgage Lenders Association 2010 Annual Meeting & Expo. Learn about the latest reverse mortgage products & programs. Sponsored by the National Reverse Mortgage Lenders Association. Registration required, fee. More info at:

November 10, 2010 – HECM Webinar. This FREE Webinar training will provide an overview & the latest updates to the HECM process, HECM Standard, & the New HECM Saver. The covered topics: HECM purchase transactions, refinances, & any updates to the HECM process. Anyone in the lending or housing industry including Housing counselors wanting to better understand the HECM process will benefit from this training. All times are MDT. Registration required, fee. More info at:

February 15-16, May 17-18, & August 16-17, 2011 – Oklahoma City, OK. Early Delinquency Servicing Activities and HUD’s Loss Mitigation Program Training. 3 training dates available. This training includes coverage of: HUD Handbook 4330.1 REV-5, Chapter 7, Delinquencies, Defaults, Mortgage Collection Activities and Initiation of Foreclosure and HUD’s Loss Mitigation Program. Additionally, overviews will be presented pertaining to Extension of Time Requests and Variances, Single Family Default Monitoring System. Registration required, no fee. More info at:


FHA Unveils New FAQs

FHA Unveils New FAQsOctober 18, 2010 by Jerome Nagy · 1 Comment
Filed under: FHA
The Federal Housing Administration (FHA) last week unveiled a new list of frequently asked questions (FAQ ). The 26 page document covers a variety of topics on several FHA programs. Topics include:

New Construction
Wood Destroying Insects/Termites
Utilities – Well and Septic
Inspections & Certifications
Cost Approach
Accessory Dwelling Units
Manufactured Housing
Two Unit Properties
Lender Concerns
Reconsideration of Value
Appraisal Portability
FHA Appraisals
Title Concerns


FHA Unveils New FAQs
The Federal Housing Administration (FHA) last week unveiled a new list of frequently asked questions (FAQ ). The 26 page document covers a variety of topics on several FHA programs. Read more…

Federal Reserve Board Issues Appraiser Independence Regs
On 10/18/2010, the Federal Reserve Board released an interim final rule on appraiser independence. The much-anticipated interim final rule is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111-203). Read more…

Right Tools, Right Now – The Fundamentals of Listing and Selling Commercial Real Estate Available At-cost
Get a complete foundation for a career in Commercial Real Estate Industry with this publication available at-cost through Right Tools, Right Now. There’s still time to take advantage of over 400 free and at-cost NAR products and services – initiative ends December 31, 2010. Visit today. Read more…


Materials And Links From The Webconference “Eminent Domain After Kelo”

Materials And Links From The Webconference “Eminent Domain After Kelo”

Materials And Links From The Webconference “Eminent Domain After Kelo”
Posted: 22 Oct 2010 12:16 AM PDT
Here are the slides that I used and links to the cases I discussed in “The Whacky and Wonderful World of Eminent Domain After Kelo.”
My presentation was entitled “Schlimmbesserung – Eminent Domain for Redevelopment.” Schlimmbesserung is one of those wonderful German compound words that have no direct translation into English, and means “worsening by improvement.” That term summed up for me how several of the more notorious efforts to use eminent domain in redevelopment efforts have fared (e.g., Poletown, Kelo). Professor Gideon Kanner recently posted some thoughts on “redevelopment blunders” here.
Joining me on the panel was Andrew W. Schwartz, a partner in San Francisco’s Shute, Mihaly & Weinberger, who suggested that redevelopment was good, and that eminent domain was a necessary part of the process when market forces break down, or there are holdouts. The session was moderated by John Clapp, Ph.D. of the UConn Center for Real Estate, and Michele Maresca, a land use attorney at Robinson and Cole in Hartford.
I’m usually reluctant to post slides from presentations without the accompanying narration, but we received quite a few requests, so here you go. Some of the slides lack context, but I’ll bet you get the drift in most of them. Links to the cases below the window.
download slides from the 10-21-2010 webconference
Eminent Domain After Kelo
View more presentations from inversecondemnation.
Here are links to the cases I mentioned (and some which I did not have time to discuss, but wish I did):
§ Uptown Holdings, LLC v. City of New York, No. 2882 (Oct. 12, 2010) (notable for Judge Catterson’s concurring opinion: “[T]here is no longer any judicial oversight of eminent domain proceedings [in New York].”
§ 49 Wb, LLC v. Village of Haverstraw, 44 A.D.3d 226 (2007), a case in which the Appellate Division invalidated a taking because the condemnor’s “sole purpose [was] assisting private entities by means of condemnation.”
§ The cert petition in Tuck-It-Away, Inc. v. New York State Urban Dev. Corp., which seeks U.S. Supreme Court review of the New York Court of Appeals’ decision in the Columbia “blight” case, Kaur v. New York State Urban Development Corp., No. 125 (June 24, 2010).
§ County of Hawaii v. C & J Coupe Family Ltd. P’ship, 198 P.3d 615 (Haw. 2008) – the Kelo majority opinion requires a trial court to take seriously a property owner’s claim that the government’s proffered reasons for condemning private property is really just a pretext hiding private benefits
This seminar was part of the 2010 Real Estate Teleconference Series sponsored by the Counselors of Real Estate, the University of Connecticut, and Robinson & Cole.


THROW THE BUMBS OUT, Subject: Re: FRB-Congressman Kanjorski

Subject: Re: FRB-Congressman Kanjorski

Kanjorski is a supporter of the The Appraisal Institute, however is a strong Supporter of the AFI. Kanjorski is aware now that the AI only represents about 28% of Appraisers and only 7% of those actually perform appraisals, whereas the AFI represents everyone else.


Appraiser Independence Requirements

Appraiser Independence Requirements
I. Appraiser Independence Safeguards A. An “appraiser” must be, at a minimum, licensed or certified by the State in which the property to be appraised is located. B. No employee, director, officer, or agent of the Seller, or any other third party acting as joint venture partner, independent contractor, appraisal company, appraisal management company, or partner on behalf of the Seller, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or in any other manner including but not limited to:
(1) Withholding or threatening to withhold timely payment or partial payment for an appraisal report;
(2) Withholding or threatening to withhold future business for an appraiser, or demoting or terminating or threatening to demote or terminate an appraiser;
(3) Expressly or impliedly promising future business, promotions, or increased compensation for an appraiser;
(4) 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 value estimate requested from an appraiser;
(5) Requesting that an appraiser provide an estimated, predetermined, or desired valuation in an appraisal report prior to the completion of the appraisal report, or requesting that an appraiser provide estimated values or comparable sales at any time prior to the appraiser’s completion of an appraisal report;
(6) 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;
(7) Providing to an appraiser, appraisal company, appraisal management company, or any entity or person related to the appraiser, appraisal company, or appraisal management company, stock or other financial or non-financial benefits;
(8) Removing an appraiser from a list of qualified appraisers, or adding an appraiser to an exclusionary list of disapproved appraisers, in connection with the influencing or attempting to influence an appraisal as described in Paragraph B above (this prohibition does not preclude the management of appraiser lists for bona fide administrative or quality-control reasons based on written policy); and
© 2010 Fannie Mae. Trademarks of Fannie Mae 2 of 4 October 15, 2010
This document is incorporated by reference into the Fannie Mae Selling Guide.
(9) Any other act or practice that impairs or attempts to impair an appraiser’s independence, objectivity, or impartiality or violates law or regulation, including, but not limited to, the Truth in Lending Act (TILA) and Regulation Z, or the Uniform Standards of Professional Appraisal Practice (USPAP).
II. Acceptability of Subsequent Appraisals
A Seller must not order, obtain, use, or pay for a second or subsequent appraisal in connection with a Mortgage financing transaction unless: (i) 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 Mortgage file, or (ii) such appraisal is done pursuant to written, pre-established bona fide pre- or post-funding appraisal review or quality control processes or underwriting guidelines, and so long as the Seller adheres to a policy of selecting the most reliable appraisal, rather than the appraisal that states the highest value, or (iii) a second appraisal is required by law.
III. Borrower Receipt of Appraisal
The Seller shall ensure that the Borrower is provided a copy of any appraisal report concerning the Borrower’s subject property promptly upon completion at no additional cost to the Borrower, and in any event no less than three days prior to the closing of the Mortgage. The Borrower may waive this three-day requirement if such waiver is obtained at least three days prior to the closing of the Mortgage. 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.
The Seller may require the Borrower to reimburse the Seller for the cost of the appraisal.
IV. Appraiser Engagement
A. The Seller or any third party specifically authorized by the Seller (including, but not limited to, appraisal companies, appraisal management companies, and Correspondent lenders) shall be responsible for selecting, retaining, and providing for payment of all compensation to the appraiser. The Seller 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). B. There must be separation of a Seller’s sales or Mortgage production functions and appraisal functions. An employee of the Seller in the sales or Mortgage production function shall have no involvement in the operations of the appraisal function.
(1) Certain parties are prohibited from:
(a) 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 or forbidden to perform appraisals for the Seller; and
© 2010 Fannie Mae. Trademarks of Fannie Mae 3 of 4 October 15, 2010
This document is incorporated by reference into the Fannie Mae Selling Guide.
(b) Having any substantive communications with an appraiser or appraisal management company relating to or having an impact on valuation, including ordering or managing an appraisal assignment.
These parties are:
All members of the Seller’s Mortgage production staff;
Any person who is compensated on a commission basis upon the successful completion of a Mortgage; and
Any person whose immediate supervisor is not independent of the Mortgage production staff and process.
Seller personnel not described in Section IV.B (1)(i) through (iii) above are not subject to the restrictions described above, and may engage in communications with an appraiser. In addition, any party, including the parties described in Section IV.B (1)(i) through (iii) above, may request that an appraiser provide additional information or explanation about the basis for a valuation, or correct objective factual errors in an appraisal report.
(2) If absolute lines of independence cannot be achieved as a result of the Seller’s small size and limited staff, the Seller must be able to clearly demonstrate that it has prudent safeguards to isolate its collateral evaluation process from influence or interference from its Mortgage production process. C. Any employee of the Seller (or if the Seller retains an appraisal company or 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 appraisals; and (2) In the case of an employee of the Seller, wholly independent of the Mortgage production staff and process.
V. Use of Appraisal Reports by In-House Appraisers or Affiliated Appraisers
A. In underwriting a Mortgage, the Seller may use an appraisal report:
(1) Prepared by an appraiser employed by:
(a) The Seller;
(b) An affiliate of the Seller;
(c) An entity that is owned, in whole or in part, by the Seller; or
© 2010 Fannie Mae. Trademarks of Fannie Mae 4 of 4 October 15, 2010
This document is incorporated by reference into the Fannie Mae Selling Guide.
(d) An entity that owns, in whole or in part, the Seller.
(2) Prepared by an appraiser employed, engaged as an independent contractor, or otherwise retained by an appraisal company or any appraisal management company affiliated with, or that owns or is owned, in whole or in part, by the Seller or an affiliate of the Seller, provided that the Seller complies with the provisions of these Appraiser Independence Requirements.
B. The Seller also may use in-house staff appraisers to: (1) Order appraisals; (2) Conduct appraisal reviews or other quality control, whether pre-funding or post-funding; (3) Develop, deploy, or use internal Automated Valuation Models; or (4) Prepare appraisals in connection with transactions other than Mortgage origination transactions (e.g., Mortgage workouts), if the Seller complies with the provisions of these Appraiser Independence Requirements.
VI. Transfer of Appraisals
A Seller may deliver to Fannie Mae a conventional Mortgage with an appraisal prepared by an appraiser selected by another lender, including where a Mortgage Broker has facilitated the Mortgage application (but not ordered the appraisal). The Seller delivering the loan to Fannie Mae makes all representations and warranties to Fannie Mae regarding the appraisal set forth in the Mortgage Selling and Servicing Contract, the Selling Guide and related documents, including the representation that the appraisal is obtained in a manner consistent with these Appraiser Independence Requirements.
VII. Referrals of Appraisal Misconduct Reports
Any Seller that has a reasonable basis to believe an appraiser or appraisal management company is violating applicable laws, or is otherwise engaging in unethical conduct, shall promptly refer the matter to the applicable State appraiser certifying and licensing agency or other relevant regulatory bodies.
VIII. Compliance
Sellers must adopt written policies and procedures implementing these Appraiser Independence Requirements, including, but not limited to, adequate training and disciplinary rules on appraiser independence, including the principles detailed in Section I. Additionally, Sellers must ensure that any third parties, such as appraisal management companies or Correspondent lenders, used in conjunction with the sale and delivery of a Mortgage to Fannie Mae are also in compliance with these Appraiser Independence Requirements.


Attorneys’ fees under the private attorney general doctrine codified in Code of Civil Procedure section 1021.5

Attorneys’ fees under the private attorney general doctrine codified in Code of Civil Procedure section 1021.5 have become almost a “given” when a petitioner wins a CEQA suit. Two decisions that came down in 2010 explore the limits of attorneys’ fees in CEQA cases, and the rulings illustrate both what it means to be a successful party for purposes of Section 1021.5 and the vast discretion given to the trial court in determining the amount awarded.

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Uniform Appraisal Dataset Summary

Uniform Appraisal Dataset Summary
September 22, 2010
To improve the quality and consistency of appraisal data on loans delivered to the GSEs, Fannie Mae and Freddie Mac are developing the Uniform Appraisal Dataset (UAD). As previously announced in August, we expect to provide business and technical details of the UAD, implementation dates for the Uniform Collateral Data Portal (UCDP), and use of the UAD and UCDP later this year. The implementations will occur in 2011. In the meantime, we are providing a high-level summary of the UAD requirements and related information.
UAD Overview
The UAD includes all data points required for a complete appraisal report and standardizes key data points. The standardization of certain data points will support consistent appraisal reporting, regardless of geographic location of the property or any localized reporting conventions, by addressing vague or disparate data currently included on some appraisal reports, such as:

Variations in formatting numbers, dates, and measures

Inconsistent terminology for identical information (such as waterfront vs. oceanfront)

Inconsistent use of descriptions (for example, property condition is sometimes reported in absolute terms such as “brick” and in relative terms, such as “average”)
The GSEs are focused on enhancing the quality of key appraisal data that is either most material to the valuation of a property and/or critical to determining a loan’s eligibility for sale to the GSEs. The GSEs are working with appraisal forms vendors to incorporate the UAD requirements into the software appraisers use to complete appraisal reports. Upon implementation of the UAD, the GSEs will require that appraisals be completed with standardized responses in certain appraisal form fields. The UAD standardized response requirements include:

Standardized formats for fields that include dates, values, etc.

Allowable values from a list of choices provided for certain fields

Standardized abbreviations to allow more information to fit on the printed appraisal forms

Standardized ratings and definitions for the “Condition,” “Quality,” and “Updating/Renovations” of the property
Initially, the UAD will apply only to the following most commonly used uniform residential appraisal report forms (Fannie Mae / Freddie Mac form numbers), which represent the vast majority of appraisals supporting loans delivered to the GSEs:

Uniform Residential Appraisal Report (Form 1004/70)

Individual Condominium Unit Appraisal Report (Form 1073/465)

Exterior-Only Inspection Individual Condominium Unit Appraisal Report (Form 1075/466)

Exterior-Only Inspection Residential Appraisal Report (Form 2055/2055)
© 2010 Fannie Mae. Trademarks of Fannie Mae. 9.22.2010 Page 1 of 2
© 2010 Fannie Mae. Trademarks of Fannie Mae. 9.22.2010 Page 2 of 2
The GSEs plan to extend the UAD and the standardized responses to the other residential appraisal forms at a later date.
UAD Business Overview and Implementation Specifications
Before the end of December, the GSEs will publish the full details of the UAD, which will include the following:

UAD business overview (for lenders and appraisers) – a list of standardized definitions and responses for a key subset of fields on the four uniform residential appraisal report forms initially covered by the UAD and relevant details for appraisers and lenders to understand the requirements.

UAD implementation specifications (for appraisal software/forms vendors, appraisal management companies, and high-volume lenders) – MISMO XML-based mapping information and other technical details. This information is used to translate the data entered on the form into the format expected by the Uniform Collateral Data Portal (UCDP) and will be used by appraisal software/forms vendors and any lender or lender agent, such as an appraisal management company (AMC), that will be consuming the data from the form electronically.
Support and Training
In addition to providing the business and technical requirements for the UAD, the GSEs are working on a full range of job aids, training opportunities, and other resources to assist lenders in implementing the UAD requirements. These tools will help lenders understand how to incorporate the UAD into their business processes. To aid appraisers in adopting the new data standards, the GSEs plan to work with appraisal trade associations to distribute information, training, and job aids.
Electronic Appraisal Data Submission through the UCDP
To facilitate delivery of electronic appraisal report data, the GSEs are developing the UCDP through which lenders must submit appraisal data for delivery to either or both of the GSEs. In addition to providing a PDF version of the appraisal report, lenders will be required to submit electronic appraisal data to the GSEs through UCDP prior to loan delivery for all residential appraisal forms. The UAD will be integrated into the UCDP so that submissions can be validated against the GSEs’ requirements for completeness and standardized responses. More details on the availability of the UCDP and its required use will be provided at a later date.
More Information
For additional information, refer to the Uniform Mortgage Data Program page on
This communication relates to the Uniform Mortgage Data Program, an effort undertaken jointly by Freddie Mac and Fannie Mae at the direction of their regulator, the Federal Housing Finance Agency.


Dear friends,

I would like to introduce you to my architectural newsletter, a weekly brief that will deliver short articles on unique architectural topics. By way of introduction, I am Mario Ortner, principal at Ortner Design, an architectural firm specializing in residential design.

I have recently returned from a 4-month-around-the-world journey. I spent my days admiring the architecture of ancient streets, getting lost in back alleys and exploring historical sites. On occasions I wondered about the style of a particular building, the year it was built and so on. Many people share my curiosity, people who had seen a house they liked and had asked me to identify its style by name. My goal is to provide a snippet of each and all known architectural styles, famous architects, fascinating buildings, green architecture and so on.

This is new territory for me but I have always enjoyed writing and hope to make this architectural newsletter entertaining and informative. You can help too. Please feel free to leave comments and let me know if there is a specific subject that interests you.

Welcome to my newsletter.
Mario Ortner


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