"Four national associations of real estate appraisers have asked Congress* for major regulatory reforms in the wake of an Associated Press investigation that identified key failings within the existing system."
*Thanks to Scott Austin, Austin Appraisal, LLC, I now have a copy of the letter sent by the AI, ASA, NAIFA, and ASFMRA Download AI_ASA_ASFMRA_NAIFA_Response_Letter_AP.pdf
*Thanks to Scott Austin, Austin Appraisal, LLC, I now have a copy of the letter sent by the AI, ASA, NAIFA, and ASFMRA
Download AI_ASA_ASFMRA_NAIFA_Response_Letter_AP.pdf
Naturally . . .the organizations suggest that the use of designated appraisers from a nationally recognized professional appraisal organization " . . .would help mitigate concerns about appraiser involvement in mortgage fraud.
But they go on to specifically address Title XI which, " . . . has several structural deficiencies that we previously identified, which are highlighted in the Associated Press article, as follows: "
Click here to continue reading . . .
According to the IAR July sales report, home sales were down 5.76 percent in July 2008 to 11,021 sales compared to June 2008 sales of 11,694; year-over-year sales were down 25.2 percent from July 2007 totals of 14,738.
The Illinois median price in July was $199,900, down 4.8 percent from $210,000 in July 2007.
“While most housing-related indicators reveal continued problems, there is some increasing evidence the supply and demand may be moving more into balance, especially in many metropolitan markets in Illinois,” said Dr. Geoff Hewings, director of U of I's Regional Economics Applications Laboratory (from the August 2008 forecast pdf).
Webcast Author: David A. Braun, MAI, SRA (President, Braun & Associates, Inc.) has been actively engaged in real estate appraisal, review, and consulting since 1976. David is also the author of Appraising in the New Millennium - Due Diligence & Scope of Work, 3rd Ed.
David Braun, MAI, SRA has been working with the a la mode, inc.'s Labs Project on the development of a new Market Conditions Analysis (MCA) form that runs in Excel.
This webcast is the third in a three-part series that will be discussing:
In this third webcast David talks about what defines a "Market Bubble" in his down-home Tennessee style. Here's an excerpt:
"Now the best way that I can describe what happens is by telling you a story about when I was young. We used to have these little balsa wood gliders that we would throw. And, you could set the wings up and back. And, depending on how you set the wings on those, they could go up . . .or they could go down.""Occasionally, we'd set the wings so far to one side that when we threw it, it would go up, and then it would stall . . . and down it would come! ""So that's what I think about. As soon as the activity slows down. . . as soon as that "plane" that's going up slows down, the nose goes up and BOOM! Right down on its tail! An that's what a lot of "Investors" have done now."
"Now the best way that I can describe what happens is by telling you a story about when I was young. We used to have these little balsa wood gliders that we would throw. And, you could set the wings up and back. And, depending on how you set the wings on those, they could go up . . .or they could go down."
"Occasionally, we'd set the wings so far to one side that when we threw it, it would go up, and then it would stall . . . and down it would come! "
"So that's what I think about. As soon as the activity slows down. . . as soon as that "plane" that's going up slows down, the nose goes up and BOOM! Right down on its tail! An that's what a lot of "Investors" have done now."
Appraiser Asks: Can you help me explain that just because Homeowner Association (HOA) dues are paid doesn't mean the appraised property is in a Planned Unit Development (PUD)? The Loan Underwriter rejected my appraisal because HOA dues of $300 per year are paid for maintenance of a drain water lagoon. The Underwriter says: "Either remove the HOA dues from the report or indicate subject is located in a PUD. We can't have one without the other." Thanks Bill
Bill, I think this may be a case where the Underwriter has a valid point! FNMA/FHLMC indicate that if the following are true for the property, the subject is located within a PUD by FNMA/FHLMC definition.
If the above are true, the subject would be deemed to be a PUD unit by FNMA/FHLMC. Zoning is not the key to determining whether a unit is located within a PUD for purposes of addressing this section of the report.
However, if the subject is zoned “PUD”, it would-be appropriate to add commentary in the appraisal report addressing whether the subject meets the above definition for a PUD unit or not and if not, why not. The PUD section of the URAR appraisal is only to be completed if the following condition is met:
“the developer/builder is in control of the HOA and the property is an attached dwelling unit.” This is according to the FNMA/FHLMC. However, there may be instances where the reporting of the information would be required under USPAP, despite the requirements of FNMA/FHLMC. If the information would be required in order to be compliant with USPAP, the information would be required in the report.
For units within an established PUD project, the comparable sale selection should be from sales within the subject project. If sufficient sales are not available from the subject project, commentary addressing this and why it was necessary to utilize sales from a differing project will need to be included in the appraisal report. For units in a new or newly converted PUD project, the comparable sale selection should include both sales from within the project and outside the project. At least one sale from within the project should be utilized and at least one outside sale should be utilized. Any other sales included in the appraisal report may come from either the subject project or outside the project. If a sale from the subject complex cannot be provided, commentary addressing this would need to be included in the report.
(Note: In this commentary “outside sale” should be construed to mean “outside the control of the seller of the subject property.” In other words, it is most acceptable and appropriate to utilize sales from the subject project that were re-sales or transactions not involving the developer or builder of the subject property, however, if the sale is new and by a different builder/seller, commentary should be included stating it is by a different builder/seller and identify the name of builder/seller in the report.)
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