taking back control of the appraisal process
TRANSCRIPT
TAKING BACK CONTROLOF THE APPRAISAL
PROCESS
presented by:SCOTT HAMLING
Cherry Creek Mortgage
The euro's dramatic fall against the dollar, due to Europe's economic weakness, will reduce US inflationary pressures, hurt US exports and reduce equity values. Therefore, the Fed may wait longer before raising rates. However, the ECB is hoping the Fed raises rates faster thus weakening the euro more. As a result, any Fed delay in raising rates will force the ECB to very reluctantly act more swiftly and forcefully. Elliot F. Eisenberg, Ph.D.GraphsandLaughs, [email protected]: 202.306.2731www.econ70.com
HISTORY
Important: HVCC did NOT cover Realtors……
Dodd/Frank DOES cover realtors!
But more important………Realtors have the right to discuss valuation with
appraisers
In 2009: Home Valuation Code of Conduct (HVCC)
HVCC has been replaced with Dodd/Frank Act
Dodd/Frank RulesDodd/Frank makes it a Federal crime for anyone with an interest
in the transaction to;
Compensate, coerce, extort, collude, instruct, induce, bribe, or intimidate the appraiser.
Mischaracterize the appraised value of the property Seek to influence an appraiser or otherwise to encourage a
targeted value.
Realtors have the right to discuss valuation with appraisers
Dodd/Frank RulesThe requirements of subsection (b) shall NOT be construed as prohibiting a
mortgage lender, mortgage broker, mortgage banker, real estate broker, appraisal management company, employee of an appraisal management company, consumer, or any other person with an interest in a real estate transaction from asking an appraiser to undertake 1 or more of the following: it is OK to Ask Appraiser to
(1) Consider additional, appropriate property information, including the consideration of additional comparable properties to make or support an appraisal.
(2) Provide further detail, substantiation, or explanation for the appraiser's value conclusion.
(3) Correct errors in the appraisal report.
AMC vs. Local LenderHow does an AMC (national lender appraiser pool) compare with a local lenders appraisal pool?
Cherry Creek Mortgage Co:In-house appraisal management divisionIdentified best appraisers in the marketStrict guidelines, lending training, and good pay for appraisers
Appraisers have no incentive to do a great job – you need to be proactive in protecting your transaction!Use a loan officer that works for a company that has local control
of the quality of appraisers used.
Watch FHA and VA – Appraised value sticks with the property for:FHA – 4 monthsVA – 6 months
Recommendations for Listing Agent
The Seller will be angry with YOU if the deal does not close (not buyer, buyer’s agent, or lender)
Get it right the first time – less than 10% chance of increasing the valuation after appraisal
Meet the appraiser at the property
Recommendations for Listing AgentBefore looking for comparables:
1. Pull up a 1004MC form
2. This form will dictate the comparables needed
3. Example: 1004MC shows
values are declining Investor requires minimum
3 comps that closed in past3 months
PLUS 2 listing or pending sales
4. All comparables must adjust for at or above appraised value
Recommendations for Listing AgentAppraiser packet suggestions:
1. Contract2. Listing brochure3. List of all property upgrades, completion dates and costs4. The sketch if property was measured before listing5. County assessor records6. Listing history7. 1004MC form obtained from MLS listing service8. Comparables to support sales price (listed, pending, sold)
Recommendations for Listing Agent
Meeting the appraiser at the property:
Setup as for a buyer showing (clean and well cared for matters)
Meet somewhere you can spread out materials you prepared: Review 1004MC form Explain why you chose the comps you have Show other comps you found, and explain why they are poor
comps Tell about the property’s special features
Recommendations for Listing AgentMeeting the appraiser at the property:Turn appraiser loose (do not follow from room-to-room)Before appraiser leaves:
Would you please give me the same consideration that VA requires it’s appraisers to give and call to INVOKE TIDEWATER if you find you are not reaching sales price.
If there are value issues – don’t panic! Stay friendly with appraiser Offer to do more research on comps Consider contract extension – remember you only have a 10%
chance of getting the appraised value increased
Realtor vs. Appraiser Valuation
Realtors and Appraisers value differently:
Realtors value properties using PPSF
Appraisers value properties by making adjustments for differences
Accessing the 1004MC Form
Accessing the 1004MC Form
Accessing the 1004MC Form
Accessing the 1004MC Form
Accessing the 1004MC Form
Accessing the 1004MC Form
Accessing the 1004MC Form
UCDP…What is it?
How will this affect my business?
If you are interested in receiving Scott’s daily blog please send an email to:
Copyright 2014 Cherry Creek Mortgage Co., Inc. Company NMLS# 3001. All rights reserved. Cherry Creek Mortgage is not endorsed by, nor acting on behalf of or at the direction of the U.S. Department of Housing and Urban Development, Federal Housing Administration, the Veterans Administration, the U.S. Department of Agriculture or the Federal Government. This material is informational only and is not an offer to lend or recommend available products. This is not an advertisement to extend credit as defined by Regulation Z, nor an application for credit as defined by RESPA/Regulation X. All applications are subject to underwriting guidelines and approval based upon the credit, assets, value of subject property and borrower’s ability to repay. Not all applicants are eligible for or qualify for all loan products offered. All loan programs, terms and conditions are subject to change without notice.
Questions?Thank you for your participation!
Call with questions – We are here to help.
Copyright 2014 Cherry Creek Mortgage Co., Inc. Company NMLS# 3001. All rights reserved. Cherry Creek Mortgage is not endorsed by, nor acting on behalf of or at the direction of the U.S. Department of Housing and Urban Development, Federal Housing Administration, the Veterans Administration, the U.S. Department of Agriculture or the Federal Government. This material is informational only and is not an offer to lend or recommend available products. This is not an advertisement to extend credit as defined by Regulation Z, nor an application for credit as defined by RESPA/Regulation X. All applications are subject to underwriting guidelines and approval based upon the credit, assets, value of subject property and borrower’s ability to repay. Not all applicants are eligible for or qualify for all loan products offered. All loan programs, terms and conditions are subject to change without notice.
Jay RabideauLoan OriginatorNMLS # 2411191435 Stuart Street, 3rd FloorDenver, CO 80204Phone: 303-586-3182Cell: 720-989-6836Fax: 303-200-7887