2008 Officers

Wayne Feinberg
President
S. Curtis Hayes, Inc.
PO Box 1325, 20 Broadway
Saranac Lake, NY 12983
518-891-2020      
topbroker@adelphia.net 

Rebecca L. Jones
President-elect
Upstate Appraisal
1 Booth Road
Binghamton, NY 13905
607-770-6064      
rebecca@upstategroup.com 

George S. Wonica
Secretary/Treasurer
Wonica REALTORS & Appraisers 
2546 Arthur Kill Road 
Staten Island, NY 10309
718-984-1515       
gswonica@wonicaREALTORS.com 

Staff

Duncan R. MacKenzie
Chief Executive Officer
New York State Association
of REALTORS
130 Washington Avenue
Albany, NY 12210
518-463-0300

Ali Mann
Divisions Director
New York State Association of REALTORS
130 Washington Avenue
Albany, NY 12210
518-463-0300
amann@nysar.com





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Welcome to the new NYSSREA Newsletter 

Welcome to the first edition of NYSSREA’s online newsletter. This new paperless newsletter, which is replacing the quarterly printed version, will help keep members informed about the appraisal industry, events and education, and will also include traditional newsletter content like USPAP Q&A and conference recaps.

The 14th Annual Arthur G. McCartney Spring Appraisal Conference held May 8-9 in Fishkill, NY, was a success. I’d like to thank Conference Chair Domenic Zagaroli, GAA, ITI, instructor David Cassese, MRA, as well as Keith Simon and Marc Mastrobuono from the New York State Department of State. Big thanks also go out to our sponsors, the Westchester County Society of Real Estate Appraisers and Professional Liability Consulting Services, Inc. 

The conference offered attendees information on the New York State Department of State’s recent changes in appraiser requirements as well as in-depth information on the Federal Housing Administration’s (FHA) appraisal requirements and guidelines. It is my hope that you will take the time to read this entire newsletter, as it offers comprehensive information on all topics covered at the conference.

As Domenic Zagaroli, GAA, ITI, pointed out at the beginning of his course “Changes in the AQB and the NYS Appraisal Requirements and its Impact on the Industry,” the Department of State is now conducting 100-percent audits on all appraisers renewing their license. Please note that it is the appraiser’s responsibility to know when his/her license needs to be renewed, and that when doing so, the DOS will require all original completion certificates. Once the audit is complete, the DOS will return the original certificates.

As the 2008 president of the New York State Society of Real Estate Appraisers, I am happy to inform you that our website, NYRealEstateAppraisers.com, will soon include a search function that will assist lenders and consumers in finding an appraisal professional in their area. The “Find an Appraiser” function will be unveiled in the coming weeks. Once this function is live, you will receive information on how to login and select your service areas, so watch your inbox for more information. 

Since NYSSREA is moving into a more electronic way of practice, we urge you to provide us with your most current e-mail address. This will allow you to receive all information from the Society. You can do this by contacting Ali Mann at NYSSREA headquarters by e-mail her at amann@nysar.com or by phone at             518-463-0300       x203.

We are also taking into consideration your legislative concerns and NYSSREA is working to put together a legislative agenda so we can be more proactive in this arena. We ask you to e-mail office headquarters with those issues that are important to you.

I am honored to serve as this year’s president and look forward to serving the Society’s best interests.

  

Wayne Feinberg
2008 NYSSREA President 

Two-day spring conference offers plenty for appraisers 

More than 40 appraisers from across New York State attended the 14th Annual Arthur G. McCartney Spring Appraisal Conference held May 8-9 in Fishkill, NY. The conference, which was sponsored by the Westchester County Society of Real Estate Appraisers and Professional Liability Consulting Services, Inc., gave appraisers the chance to discuss new Department of State licensing requirements along with FHA requirements and guidelines, among other things. Both days were approved by the New York State Department of State for appraiser and real estate continuing education credit. And something new this year, both days were approved by the NYS Office of Real Property Services for assessor continuing education credit.

Conference Chair Domenic Zagaroli, GAA, ITI, offered the preconference seminar “Changes in the AQB and NYS Appraisal Requirements and its Impact on the Industry” on May 8. The course discussed at length, the changes in appraiser licensing requirements that took effect January 1, 2008. To help appraisers better understand this topic, an in-depth article is included in this newsletter.

On May 9, David Cassese, MRA, offered “FHA Appraising in 2008 the Lending Process.” The course discussed the role Federal Housing Administration (FHA) mortgage programs play in today’s housing market, the types of properties that qualify for financing and lender risk associated with these loans. For more information on this topic, please see the included article.

Keith Simon, supervisor of the exam unit for the NYS Department of State and Marc Mastrobuono, senior license exam technician for the NYS Department of State joined attendees for a May 9 lunch. Simon discussed the new requirements for each license type as well as the recent addition of computer-based testing for the new federal exam. Mastrobuono talked auditing and explained that all appraisers will be audited when renewing/upgrading their license. He stressed the importance of keeping up-to-date records and discussed what appraisers can do if they haven’t met the education requirements: pay a fine up to $2,000, take the required classes or surrender their license. For information on requirements, visit the DOS website or click here for a comprehensive Student Appraiser Guide from the Appraisal Qualifications Board (AQB).

Debra L. Voltz of Fishkill was the recipient of this year’s spring conference basket. In addition to some nice treats like jams, crackers and cookies, the basket included a complimentary registration for next year’s program. The proceeds from the sale of the raffle tickets will be sent to Camp Good Days and Special Times, a camp for children with life-threatening diseases. Other door prizes included wine, chocolates and $50 continuing education certificates from Professional Liability Consulting Services.

New state appraisal licensing requirements explained

In 2004, the Appraisal Qualifications Board (ABQ) adopted changes to the federal appraiser qualification criteria, which meant increased requirements for New York State appraisers beginning January 1, 2008. January has come and gone, and yet some appraisers still question what constitutes compliance for the new AQB requirements.

In an effort to help appraisers understand the requirements for all license levels, Domenic Zagaroli, GAA, ITI, offered a pre-conference course called “Changes in the AQB and NYS Appraisal Requirements and its Impact on the Industry” on May 8 in Fishkill, NY. The course, which included three hours of appraiser and real estate continuing education credit, covered education and experience requirements for Appraiser Assistants, Licensed Residential Appraisers, Certified Residential Appraisers and Certified General Appraisers.

Appraiser Assistant

Required education: 150 hours

Basic Appraisal Principles (R-5) 

30 hours

Basic Appraisal Procedures (R-6) 

30 hours

15-hour National USPAP or Equivalent 

15 hours

Residential Market Analysis and Highest and Best Use (R-7) 

15 hours

Residential Appraisal Site Valuation and Cost Approach (R-8) 

15 hours

Residential Sales Comparison and Income Approach (R-9) 

30 hours

Residential Report Writing and Case Studies (R-10) 

15 hours


Required experience: 
None

Required exam: 
None

Licensed Residential Appraiser

Required education: 150 hours

Basic Appraisal Principles (R-5)

30 hours

Basic Appraisal Procedures (R-6)

30 hours

15-hour National USPAP or Equivalent

15 hours

Residential Market Analysis and Highest and Best Use (R-7)

15 hours

Residential Appraisal Site Valuation and Cost Approach (R-8)

15 hours

Residential Sales Comparison and Income Approach (R-9)

30 hours

Residential Report Writing and Case Studies (R-10)

15 hours


Required experience: 

2000 hours in no less than 24 months

Required exam: 
New exam based on qualifying courses

Certified Residential Appraiser

Required education: 200 hours plus an Associates Degree or 21 hours college credits in specific courses  

Basic Appraisal Principles (R-5) 

30 hours

Basic Appraisal Procedures (R-6)

30 hours

15-hour National USPAP or Equivalent 

15 hours

Residential Market Analysis and Highest and Best Use (R-7)

15 hours

Residential Appraisal Site Valuation and Cost Approach (R-8) 

15 hours

Residential Sales Comparison and Income Approach (R-9) 

30 hours

Residential Report Writing and Case Studies (R-10) 

15 hours

Statistics, Modeling and Finance (SMF) 

15 hours

Advanced Residential applications and Case Studies (R-11) 

15 hours

Introduction to Residential Income Properties (RE-1) 

20 hours

OR

 

Fair Housing, Fair Lending and Environmental Issues (RE-2) 

20 hours


Required experience: 

2500 hours in no less than 24 months

Required exam: 
New exam based on qualifying courses 

Certified General Appraiser

Required education: 300 hours plus a Bachelors Degree or 30 college credits in specific courses

Basic Appraisal Principles (R-5) 

30 hours

Basic Appraisal Procedures (R-6) 

30 hours

15-hour National USPAP or Equivalent 

15 hours

General Market Analysis and Highest and Best Use (G-4) 

30 hours

Statistics, Modeling and Finance (SMF) 

15 hours

General Appraiser Sales Comparison Approach (G-5) 

30 hours

General Appraiser Site valuation and Cost Approach (G-6) 

30 hours

General Appraiser Income Approach (G-7) 

60 hours

General Appraiser Report Writing and Case Studies (G-8) 

30 hours

Fair Housing, Fair Lending and Environmental Issues (GE-1) 

15 hours

Specialty Appraisals (GE-2) 

15 hours

OR

 

Using the HP12C Financial Calculator (GE-3) 

15 hours


Required experience: 

3000 hours in no less than 30 months

Required exam: 
New exam based on qualifying courses

For complete requirements from the New York State Department of State (DOS), click here
For a list of DOS frequently asked questions regarding real estate appraiser requirements, click here.

Cuomo successfully pushes appraisal code of conduct

New York State Attorney General Andrew Cuomo’s Home Valuation Code of Conduct will affect appraisers nationwide beginning January 1, 2009. The Code, which took shape in late 2007, aims to prohibit lenders from influencing or attempting to “influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, [or] bribery.”

The Code, which was developed as part of Cuomo’s industry-wide investigation into mortgage fraud, only applies to loans funded by Fannie Mae and Freddie Mac.

The Code prohibits Fannie Mae and Freddie Mac lenders from:

  • Using in-house appraisers.
  • Directly hiring appraisers.
  • Employing the services of appraisers who work for a company that is lender-owned (more than 20 percent).

In addition, the code says lenders must “establish a telephone hotline and an e-mail address to receive any complaints from appraisers, individuals, or any other entities concerning the improper influencing or attempted improper influencing of appraisers or the appraisal process.”

To read the entire Home Valuation Code of Conduct, click here.

In an attempt to further ensure property appraisals remain independent and free of lender influence, Cuomo backed the Escrow, Appraisal, and Mortgage Servicing Improvements Act (H.R. 3837), federal legislation that was introduced in November of 2007.

H.R. 3837 was eventually rolled into another House bill: The Mortgage Reform and Anti-Predatory Lending Act of 2007 (H.R. 3915), which successfully passed on November 15, 2007. The Senate currently has no counterpart for the legislation, but it’s anticipated that they will consider the Houses’ bill with expected negotiation.

Concerning appraisers, H.R. 3915 will do the following:

  • Prohibit specified interested parties in a real estate transaction from engaging in certain practices to influence improperly the development, reporting, result, or review of a real estate appraisal sought in connection with a mortgage loan.
  • Direct the Comptroller General to study and report to Congress on possible improvements in the appraisal process, including the consistency and the effectiveness of improvements in state compliance efforts and programs in accordance with title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).
  • Require that, in any case in which an appraisal is performed in connection with an extension of credit secured by an interest in real property, the mortgage originator make available to the credit applicant a copy of all appraisal valuation reports upon completion, but no later than three business days before the transaction closing date.

The legislation also calls for the creation of an Appraisal Subcommittee, charged with “protecting consumers from improper appraisal practices and the predations of unlicensed appraisers.” According to the bill, each individual state’s licensing authority will be required to report to the subcommittee all “sanctions, disciplinary actions, license and certification revocations, and license and certification suspensions.”  The subcommittee will also “monitor state appraiser certifying and licensing agencies for compliance with certain requirements.”

To read a summary of H.R. 3915, click here.

FHA appraisal basis: Are you doing it right

“FHA Appraising in 2008 and the Lending Process” offered by David Cassese, MRA, on May 9 gave conference attendees a comprehensive look at the role Federal Housing Administration (FHA) mortgage programs play, and offered insight into general FHA requirements and guidelines, the types of properties that qualify for financing and lender risk associated with FHA loans.

Since 1934 the FHA, which is part of the U.S. Department of Housing and Urban Development, has been helping people obtain the American Dream of homeownership. The way it works: The FHA insures a loan allowing lenders to offer buyers a better deal on a mortgage. The FHA is funded by proceeds from its mortgage insurance premiums - the only government agency that operates entirely from self-generated income. The agency draws interest from prospective buyers because it’s easy to qualify, requires a low down payment and is accompanied by lower interest rates.

As Cassese explained, the FHA offers four types of loans:

  • 203(b) Mortgage Insurance Program. This loan type, for one-to-four family homes, requires a low down payment the option to finance closing costs and limited fees, with HUD setting a limit on the amount that may be insures.    

  • 203(H) Mortgage Insurance Program for Disaster Victims. This loan type, specifically designed to help victims of a major disaster, requires no down payment, the up-front payment of an insurance premium and limited fees, with HUD setting a limit on the amount that may be insures.    

  • 255 Home Equity Conversion Mortgage Program (HECM) Reverse Mortgages for Seniors. This loan type, designed for homeowners age 62 and older looking to convert the equity of their home into monthly streams of income and/or line of credit, has specific financial, borrower and property requirements.  

  • 203(k) Rehab Program. This loan type, designed specifically for the rehabilitation and repair of single-family properties in either a refinance or purchase transaction, requires that the cost of rehabilitation be at least $5,000, but the total value of the property must still fall within the FHA mortgage limit for the area.

Because properties must meet specific requirements to qualify for an FHA loan, underwriting lenders may only accept appraisals from appraisers on the FHA roster. For in-depth information on how to become an FHA-approved appraiser, click here. Please note that all FHA roster appraisers are expected to be familiar with the Valuation Analysis for Single-Family One- to Four-Unit Dwellings (4150.2).

Cassese also discussed with attendees general FHA requirements and what property characteristics will require specific actions.

At a minimum, all appraisers are required to:

  • Perform a complete visual inspection of the interior and exterior.
  • Inspect the neighborhood.
  • Inspect each of the comparable sales from, at least, the street.
  • Research, verify and analyze data from reliable public and/or private sources.
  • Report the analysis, opinions and conclusions in the appraisal report.

In their report, all appraisers are required to include the following:

  • All required reporting forms. Click here to access all FHA forms.
  • Photos of the front and rear of the site at opposite angles to show all sides of the dwelling.
  • Photos of any improvements with contributory value that are not captured in either the front or rear photo.  
  • Street scene photo to include a portion of the site.

To qualify for an FHA loan, conditions that will require automatic repair include:

  • Inadequate access/egress from bedrooms to exterior of home.
  • Leaking or worn-out roof.
  • Evidence of structural problems (i.e. foundation damage caused by excessive settlement).
  • Defective paint surfaces in homes constructed prior to 1978.
  • Defective exterior paint surfaces in homes constructed after 1978, where the finish is otherwise protected.

To qualify for FHA financing, the property must meet the following requirements:

  • Must not have conditions that would threaten the safety and well-being of the occupants
  • Must have a closet in each bedroom
  • Must have handrails on all stairs

It is important, Cassese explained, to following all FHA requirements, as making one mistake on the reporting forms can mean lost financing for a prospective homebuyer. For all information on FHA financing, visit the FHA Resource Center website.