A year of important issues and big plans
First, I would like to introduce myself. I am Becky Jones, your 2009 president of the New York State Society of Real Estate Appraisers. I am extremely honored to be holding this position in a year with a variety of significant issues on the horizon. My leadership team and I plan to do all that is in our power to tackle these issues, making the appraisal industry more effective and efficient, while helping you to gain knowledge through education courses on issues we deal with as appraisers in today’s market.
As you will read in this newsletter, our Board of Governors met this past February and discussed critical issues that affect our industry including mandatory licensing for appraisers and the new Home Valuation Code of Conduct put forth by New York State Attorney General Andrew Cuomo’s office. An exhilarating new venture also discussed was the formulation of an "Appraisal Tour of the State." While details still need to be worked out, our education committee hopes to offer several appraisal courses across the state for continuing education credit.
Information on and registration for the 15th Annual Spring Appraisal Conference in Fishkill, NY will soon be available. You will not want to miss this informative event and the opportunity to network with your peers.
The society is always looking for ways to help our members, so I encourage you to send any questions, concerns or comments my way. I will make every effort to respond to your needs. I am more than thrilled to be taking on the initiatives of this organization and hope to serve you well in the year to come.
Rebecca L. Jones
2009 NYSSREA President
NYSSREA committees meet at Turning Stone
On Monday, February 2, committees of the New York State Society of Real Estate Appraisers met at the Turning Stone Resort & Casino in Verona, NY. President Rebecca Jones welcomed the Board of Governors along with President-elect George S. Wonica and Secretary/Treasurer Steve Roefaro.
After reviewing the 2009 NYSSREA budget, a motion was made, seconded and carried to approve the budget contingent upon clarification of fall conference expenses.
Communications Committee Chair Jones discussed the new electronic E-newsletter and the recently updated NYRealEstateAppraisers.com, where consumers and companies can search for an appraiser by city. Jones emphasized the importance of educating members about this function, and Marketing Committee Chair Roefaro spoke about a postcard that was mailed to all NYSSREA members explaining the steps appraisers must take to update the cities they serve.
Education Committee Chair Domenic Zagaroli announced that the 2009 Spring Appraisal Conference will be held May 28-29 in Fishkill and the 2009 Fall Appraisal Conference will be held October 21-23. A task force of the Board of Governors was established to put together an "Appraisal Tour of the State." While details still need to be worked out, the tour will likely consist of education courses throughout the state in 2009.
The Legislative Committee and Board of Governors discussed the favorable opinion of the mandatory licensing issue currently being considered by Gov. David Paterson and discussed the possibility of a Call for Action. Another area of concern is the Home Valuation Code of Conduct agreement between New York State Attorney General Andrew Cuomo and Fannie Mae and Freddie Mac. NYSSREA’s Board of Governors drafted a letter regarding their concerns and sent it to Cuomo. The letter was also read at a February Appraisal Board Meeting. The code of conduct aims to improve the reliability of home appraisals, but the NYSSREA Board of Governors is asking for a suspension of the document.
During the meeting, a motion was also made, seconded and carried to appoint James Knight of the Buffalo Niagara Association of REALTORS to the NYSSREA Board of Governors for a term of 2009-2011 to fill a vacant position.
Zagaroli offers February course on Fannie Mae appraisal policies
NYSSREA Education Committee Chair and real estate instructor Domenic Zagaroli, GAA, ITI, offered “New 2009 Fannie Mae Appraisal Policies Including the Market Conditions Addendum to the Appraisal Report (Form 1004MC)” at the Turning Stone Resort & Casino in February.
Approximately 100 people attended the course for a detailed explanation about the market conditions addendum (Form 1004MC) and information about the requirements to provide the sales contract to the appraiser. In addition, Zagaroli discussed the use of supervisory appraisers, valuating the entire site of a property and utilizing the cost approach to value for insurance purposes.
The course, which received rave reviews, offered attendees three hours of appraiser and real estate continuing education credit.
NYSSREA calls for suspension of 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 becomes 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.
NYSSREA believes AMCs could potentially limit the quality of an appraisal report, extend the time period in which an appraisal is completed and jeopardize a report’s review process. Click here to read the letter drafted by NYSSREA and sent to Cuomo. The letter was read at a New York State Real Estate Appraisal Board meeting in Albany.
Does USPAP allow me to appraise a property without knowing the intended use or user if there is an agreed upon scope of work?
No. USPAP requires an appraiser to identify the intended use and any intended users by name or type prior to determining the scope of work in an appraisal assignment.
A property is being appraised for a probate court in a state that has a statute stipulating that appraisal fees for these assignments shall be based on the appraised value of the property. Does USPAP allow me to appraise the property under this compensation arrangement?
Yes. This is an example where the Jurisdictional Exception Rule applies. In order to comply with the requirements of the Jurisdictional Exception Rule, the appraiser must disclose in the appraisal report the reason(s) that prohibit compliance with USPAP and cite the basis for the jurisdictional exception.
I was contacted by a sworn peace officer who simply requested the workfile of an assignment I had previously completed. The officer made this request without a subpoena or any form of court order. If the workfile contains confidential information, does USPAP allow me to comply with the officer’s request?
The answer to the question depends on whether or not the officer’s request qualifies as “due process of law.” The Confidentiality Section of the Ethics Rule states, in part:
“An appraiser must not disclose confidential information or assignment results prepared for a client to anyone other than the client and persons specifically authorized by the client; state enforcement agencies and such third parties as may be authorized by due process of law…” (Bold added for emphasis)
It is likely that this determination would need to be made by a court or other legal body since USPAP does not define what “due process of law” constitutes. You may want to seek legal advice to determine an appropriate response.
It is also important to note that if the officer made the request on behalf of a state enforcement agency, the portion of the Confidentiality Section of the Ethics Rule quoted above allows the appraiser to communicate confidential information.
I’ve been engaged for a real property appraisal review assignment and have a question about the appraisal report under review. Does USPAP require the date of value to be cited each time the opinion of value is stated in the appraisal report?
No. USPAP does not require the appraiser to state the effective date of the appraisal with each statement of the value opinion. In a real property appraisal report, the requirements that apply to reporting the effective date can be found in Standards Rules 2-2(a)(vi) for a Self-Contained Appraisal Report, 2-2(b)(vi) for a Summary Appraisal Report, and 2-2(c)(vi) for a Restricted Use Appraisal Report. Each of these appraisal reporting options simply requires the appraisal report to “state the effective date of the appraisal and the date of the report.”
However, you should take care to assure that intended users are not misled, such as by stating the effective date of value in a manner that does not clearly establish the context for the value opinion. In most instances, reporting the value opinion with the effective date of the appraisal, especially when the effective date is significantly different (retrospective or prospective) from the date of the report, assists intended users to clearly understand the context for the value opinion.
The following appraisal CE classes are sponsored by Westchester Community College, Valhalla, NY.
For more info, call 914-606-6830
Appraisal Report Writing Formats for Private and Lender Clients (3 Hrs. CE)
Tuesday, March 10, 9 a.m. - Noon
7-Hour National USPAP Update Course
Friday, April 17, 9 a.m. - 5 p.m.