Appraisal Institute Offers Input on Interagency Rulemakings

January 23, 2012 by Appraisal Institute Staff

The Appraisal Institute recently participated on a conference call with staff of key federal agencies – including the Federal Deposit Insurance Corporation, Federal Housing Finance Agency and Consumer Financial Protection Bureau – to discuss rules resulting from the Dodd-Frank Act that address:

blog_image_1_23_12

When interior inspection appraisals are required in “higher-cost” (i.e., subprime) mortgages;
When second appraisals are required for properties sold within 180 days;
Minimum operating and state registration requirements for AMCs and reporting obligations to the National Registry maintained by the Appraisal Subcommittee; and
Development of quality control standards for automated valuation models (AVMs).

The Appraisal Institute emphasized that interior inspection appraisals are the “gold standard” within the industry. The Dodd-Frank Act provision sought to quell use of drive-by and desktop appraisals in higher risk mortgages. It also sought additional collateral risk assessment to combat property flipping. The Appraisal Institute strongly supports these provisions. [Read more…]

Appraisal Institute Seeks Separation of Appraisal and AMC Fees

January 20, 2012 by Appraisal Institute Staff

The Appraisal Institute continues to represent the interests of its members in ongoing rulemakings resulting from the Dodd-Frank Act, including the separation of appraisal and appraisal management fees in order to provide transparency to consumers.

blog_post_1_20_12 Last November, AI and the American Society of Farm Mangers and Rural Appraisers urged the Consumer Financial Protection Bureau to separate appraisal fees and appraisal management fees. Last month, Appraisal Institute representatives met with CFPB officials about a new Consumer Disclosure Form slated to replace the current HUD-1. The Dodd-Frank Act authorizes, but does not require, separation of appraisal and appraisal management fees on these loan documents. The CFPB is expected to issue a Notice of Proposed Rulemaking this summer and will seek public comment.

The Appraisal Institute believes that appraisal management is different than appraisal services and will continue to advocate for clear separation of fees on the new form. Appraisal Institute members should voice their opinions during the public comment periods. [Read more…]

Appraisal Institute Helps Appraisers Choose Comparable Sales in Declining Markets

January 19, 2012 by Appraisal Institute Staff

The nation’s largest professional association of real estate appraisers published guidance this week to help appraisers know when and how to use distressed sales, such as foreclosures, as comparable sales. Such knowledge is particularly crucial in the current market where distressed sales are common, creating complex valuation challenges.

The Appraisal Institute noted that appraisers often use comparable sales (or “comps”) to help develop an opinion of value. But in today’s distressed real estate market, many potential comparable sales represent foreclosed properties. Some owners have complained their home’s values have fallen because appraisers have used such sales as comps.

The Appraisal Institute’s “Guide Note 11: Comparable Selection in a Declining Market” notes that “transactions used in an appraisal assignment require adjustments for changes in market conditions.”

According to the Appraisal Institute, qualified and competent appraisers with local market knowledge are capable of using their experience and education to determine when – and how – to use distressed sales as comparables. These appraisers know what adjustments to make, if any, when using distressed sales as comparables, for such methods are taught in basic coursework and updated seminar materials available to professional appraisers.

The Appraisal Institute’s Guide Note says: “A declining market will likely exhibit very little sales activity. When the sales comparison approach is necessary, but there are virtually no current sales in the market area to analyze as comps, the appraiser must: 1. Expand the geographic area for comp search, then adjust for location as appropriate, and/or 2. Use less recent sales, then adjust for market conditions as appropriate.”

Designated members of the Appraisal Institute – such as those who have earned the MAI (commercial/general) or SRA (residential) designation – are among the appraisers capable of properly performing difficult assignments such as those found in today’s challenging real estate market. They have achieved levels of education, experience, standards, ethics and peer review above those of licensed or state certified appraisers.

Click here to download the Appraisal Institute’s six-page pdf of “Guide Note 11: Comparable Selection in a Declining Market.”

If you have an “opinion of value,” please share your comments.

Designated Appraisers Rise Above the Competition

January 14, 2012 by Appraisal Institute Staff

blogpost_1_17_12 Real estate appraisers know how challenging it can be to differentiate themselves from the competition. But appraisers who have received the MAI and/or SRA designation from the Appraisal Institute have found the best way to achieve that goal.

Designated members know it’s about taking their career to the next level, enhancing their reputation, expanding their earning opportunities and having the satisfaction that they are among the best of the best.

Obtaining a designation shows appraisers’ clients that they have gone above and beyond the education and experience needed for state certification and have demonstrated professional knowledge, understanding and ability.

[Read more…]

Appraisal Institute Honors January Volunteers of Distinction

January 11, 2012 by Appraisal Institute Staff

The Appraisal Institute has announced its “Volunteer of Distinction” honorees for January: Iverson C. Grove, MAI, SRA, of Region V (Northern Indiana/Southwest Michigan Chapter); Orell C. Anderson, MAI, of Region VII (Southern California Chapter); and Roman Cherwonogrodzky, SRA, of Region VIII (Houston Chapter).

[Read more…]

Appraisal Institute’s 2012 President Shares Vision for Coming Year

January 3, 2012 by Appraisal Institute Staff

blog_presidentheaders

Although the housing market is beginning to show some signs of improvement, many challenges still lie ahead for organizations that serve real estate professionals. During my presidency, the Appraisal Institute’s focus will be on enhancing the knowledge and professionalism of our members and guiding AI on the path toward becoming a professional society rather than a professional association.

[Read more…]

Appraisal Institute Volunteers of Distinction Set Tone for Community Service

December 28, 2011 by Appraisal Institute Staff

With the holiday season winding down, it’s likely that many people have counted their blessings and hopefully have thought about how to help others in the coming year. As leaders in their communities, appraisers often have a clear picture of where their volunteer time and effort could benefit their neighbors.

In 2012, the Appraisal Institute will seek to expand the “Volunteers of Distinction” member recognition program. These individuals serve AI, the real estate valuation profession and their local communities. They are a model to all of us not only for what we aspire to be during the holiday season, but in their communities throughout the year. [Read more…]

Article in The Appraisal Journal Says Market Knowledge Key to Preventing Delays

December 22, 2011 by Appraisal Institute Staff

In today’s real estate market, a variety of issues can cause delays, which can result in appraisers being tasked with providing a credible, reliable opinion of value under challenging circumstances.

The appraisal process can cause delays in a property’s development or sale, according to an article published in the current edition of The Appraisal Journal, reinforcing the need to have appraisers with local market knowledge provide reliable opinions of value – especially in the current market.

[Read more…]

Appraisal Institute Board Approves Candidate for Designation Program

December 15, 2011 by Appraisal Institute Staff

Following extensive deliberation and careful consideration of member feedback, the Appraisal Institute Board of Directors voted Dec. 13 to approve the proposed Candidate for Designation program, effective Jan. 1, 2013.

The Board of Directors in 2010 approved a new strategic vision that will transition the organization from a professional association to a professional society by 2016. The Board’s action will begin that transformation.

[Read more…]

Appraisal Institute Continues Leadership Role in Green Valuation

December 13, 2011 by Appraisal Institute Staff