Important issues come to the forefront
What an exciting year it has been for the New York State Society of Real Estate Appraisers.
The 15th Annual Arthur G. McCartney Spring Appraisal Conference took place in Fishkill on May 29, 2009, with pre-conference seminars available on the 28th.
As a different approach to the NYSSREA update lunch session, an open forum was conducted addressing key issues in our industry. Many great ideas and concerns where brought from the floor - one being the society's need to become more involved with the Independent Valuation Protection Institute. This is the body where appraisers can make their complaints. The society needs to become more aware of the development of this group.
As you all might be aware, the Home Valuation Code of Conduct (HVCC) has been an area of concern for appraisers in New York State. While the concept of the code addresses major problems with appraisal fraud in the mortgage industry, it poses a threat to the integrity of the appraisal process when Appraisal Management Companies (AMCs) are involved. There is a great need for regulation from the state regarding the AMCs.
Mandatory licensing has always been an issue on the horizon for our group. The concept is currently being addressed with the state.
Non-conforming zoning and Fannie Mae’s position; there is a concern with the underwriting guidelines not lending money on properties that are zoned as legal non-conforming use or grandfather use. This could impact our market place, with the loss of bank funding on a large amount of our housing stock. This is an issue that I have experienced personally with my appraisal assignments. Our organization is not only staying on top of current issues, we are also watching for future issues.
Watch for the appraisal tour in 2010. Appraisal courses throughout New York State will be offered for appraiser and real estate continuing education. Information will be available at www.NYRealEstateAppraisers.com.
Also, don’t forget to update your services areas under "Find and Appraiser" on www.NYRealEstateAppraisers.com.
Rebecca L. Jones
2009 NYSSREA President
Arthur G. McCartney Spring Appraisal Conference
The 15th Annual Arthur G. McCartney Spring Appraisal Conference was held on May 29 at the Holiday Inn, Fishkill, NY. The education class, "Short Sales and Foreclosures: The Real Estate Agent, the Appraiser, and the Lender," presented by Subomi Macauley, received positive reviews from those in attendance.
Pre-conference seminars included, "New 2009 Fannie Mae Appraisal Polices, Including Market Conditions Addendum to the Appraisal Report (Form 1004MC)" and "Appraisal Report Writing Formats for Private and Lender Clients," both taught by Domenic Zagaroli, GAA, ITI. Each course was approved by the New York State Department of State for three hours of appraiser and real estate continuing education credit.
During the lunch session, conference chair Domenic Zagaroli addressed the group and welcomed all. NYSSREA President Rebecca Jones provided an update on NYSSREA activites as well as the most current issues in the appraisal industry (outlined in the above president’s message).
Victor J. Stanionis was the recipient of a Camp Good Days and Special Times gift basket, which included a complimentary certificate for next year’s spring conference.
Jones gives testimony regarding tax assessment
NYSSREA President Becky Jones was given the opportunity to present oral testimony regarding tax assessment before the New York State Senate Standing Committee on Local Government and the New York State Assembly Standing Committee on Real Property Taxation. Click here to read the testimony.
Give your opinion on the Home Valuation Code of Conduct
In February, NYSSREA’s Board of Governors sent a letter to New York State Attorney General Andrew Cuomo requesting that the Home Valuation Code of Conduct be suspended until the code addresses appraisal management companies (AMC) and their potential negative effect on the real estate market and lending process.
The code, which became effective May 1, states that all real estate agents and mortgage brokers are prohibited from selecting appraisers if the lender sells mortgages to Fannie or Freddie. The HVCC calls for the use of AMCs, but does not limit lenders to using AMCs. Lenders are permitted to use in-house staff appraisers to conduct appraisals. However, the loan production staff is prohibited from selecting, retaining, recommending or influencing the selection of an appraiser. In addition, loan production staff cannot have any substantive conversation with that appraiser regarding valuation. To read the entire HVCC, click here.
The National Association of REALTORS is concerned that the rules could delay or actually eliminate a number of potential home sales. To assess the extent of the problems, NAR is asking for you help. Please complete this brief online questionnaire. It will help NAR and policymakers address the potential problems. All responses will be treated as confidential and will be complied into a brief report. If you provide your e-mail address, we will request that NAR send you a copy of the report when it is available. The survey closes June 30.
I have been engaged to perform a real property valuation assignment. The assignment is to develop an opinion of the market value of the subject property in its current “as-is” condition. USPAP states, “Current appraisals occur when the effective date of the appraisal is contemporaneous with the date of the report.” In this context, what defines contemporaneous with the date of the report?
In USPAP, there are three different types of appraisals: retrospective, current, and prospective. Statement on Appraisal Standards No. 3 (SMT-3) addresses retrospective appraisal assignments, while Statement on Appraisal Standards No. 4 (SMT-4) addresses prospective appraisal assignments.
“Current” appraisal assignments are based on the effective date of the appraisal being contemporaneous with the date of the report. Contemporaneous means arising, existing or occurring during the same time period. In this context, contemporaneous is not intended to mean simultaneous. Because the “same time period” may very well differ from assignment to assignment; one single specific time period cannot be provided and used for all assignments. However, for an assignment to include a current appraisal opinion there must not have been a significant change in the property characteristics or market conditions between the effective date of the appraisal and the date of the report.
I heard about the changes to the conduct section of the Ethics Rule and I am concerned. Is it true that I will not be able to reappraise a property for three years after a prior appraisal?
No. The revised Ethics Rule that goes into effect on January 1, 2010, will require appraisers to disclose any services regarding the subject property provided as an appraiser or in any other capacity during the three years prior to the new assignment. It does not include any prohibition against reappraising a property.
I occasionally receive requests to appraise a property that I have appraised in the past. With the changes to the Ethics Rule, I will be required to disclose any assignments that I performed within the three years prior to the date of acceptance of the assignment. Is such a disclosure a violation of an appraiser’s responsibility under the confidentiality section of the Ethics Rule?
Generally, no. The confidentiality section of the Ethics Rule prohibits, with some exceptions, the disclosure of “confidential information or assignment results prepared for a client.” The mere fact that an appraiser appraised a property is not confidential information as defined in USPAP. However, the appraiser must be careful not to disclose confidential information from a previous assignment in the new assignment.
I am concerned that when I tell a prospective client that I have previously provided a service related to a property, it will lead to questions that I cannot answer without violating the confidentiality section of the Ethics Rule. I am sure the new client will want to know when I appraised it, and what my value conclusion had been. How can I address these questions and comply with USPAP?
It is likely that many potential clients will ask such questions. However, without authorization from the original client, the appraiser cannot disclose the results of the previous appraisal or any other confidential information. One way to address this problem would be to explain that as an appraiser, you are subject to confidentiality requirements and cannot disclose that information. You could go on to explain that the confidentiality requirements are in place to protect clients, including the one who is engaging you for the new assignment.
Those parties who regularly order appraisals will become accustomed to the new disclosure requirements, and will likely stop asking after a relatively short time.
The following appraisal CE class is sponsored by the Elmira-Corning Regional Board of REALTORS.
For more info, visit their website.
New York Fair Housing & Human Rights; Know the Law* (3.5 Hrs. CE)
Thursday, October 15, 2009, 1 - 4:30 p.m.
Instructor: Terri Burke
*This course fulfills the Department of State fair housing requirement.
The following appraisal CE class is sponsored by the Greater Rochester Association of REALTORS.
Residential Market Conditions Form 1004MC (3 Hrs. Appraiser CE)
Tuesday, July 28, 2009, 9 a.m. - 12 p.m.
Cost: $45 GRAR members / $85 Non-members
Instructor: Nathan Gabbert, SRA, IAO
The focus of this presentation will be on researching, analyzing, and reporting market condition in the subject's specific market.