New FHA Handbook Comes Into Effect on September 14th.

In an article that I read about the new FHA Single Family Housing Policy Handbook, it’s said that HUD wanted to be more clear about what the appraiser must do*.

So, being the intrepid former investigator that I am, I searched the 867-page document we’ll call Handbook 4000.1for the number of times the phrase appraiser must occurred. I’ll break down my results using a Good News/Bad News model:

GOOD NEWS:    It’s found on only 10% of the pages (86).
BAD NEWS:         On those 86 pages it’s found 405 times.

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Expanding appraisal education beyond the classroom

If you surveyed a group of appraisers about what changes need to take place within the
appraisal industry, increasing education requirements would probably not crack the top
10 most popular answers.

That’s due in no small part to the Appraiser Qualifications Board’s (AQB’s) ongoing focus
on improving competency through more rigorous requirements for licensure and certification.

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What residential appraisers say with respect to contract analysis doesn’t have to be limited to the UAD-required commentary. Of course, appraisal software sets of alarms and tells you you’re ignorant if you don’t write things just so in the Contract section of the report. Then, your AMC wants a little something special, too. I feel ya!

That doesn’t stop us from supplementing that information with commentary on the appropriate page.* I recommend that appraisers do this every time a purchase is what prompted the appraisal. Here’s a checklist I use:

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Would you be alarmed if your doctor took your temperature by placing a hand on your forehead? “Oh, yes, you feel hot. I’ll give you a prescription.”

Would you keep the CPA who told you that you owe the IRS an approximate amount? “Write ‘em a check for around $10,000. It’ll probably be less than that, so they’ll send back what they don’t use.”

We have an expectation that professionals will not provide an opinion or conclusion without first collecting, verifying, and analyzing relevant data. 

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USPAP Classes and Traffic School

I haven’t taught a defensive driving course, but I have to think it’s similar to teaching USPAP. I’ve been to my fair share of the former, and I’ve taught a number of the latter. And a common thread is found in the fabric of the two: they’re attended by victims.

Ask enrollees at traffic school how they got there, and inevitably, there’s a “but” in their stories. “Well, I was doing 76 in a 65 but everyone else was too.”

Likewise, those at a USPAP class: “Okay, so that’s what USPAP says, but in the real world ….”

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The Residential Appraiser Has Learned to Fill Out a Form Competently

As a trainee, I learned quickly to make report look as though it was competently produced. However, it took me several years after that to learn how to produce an appraisal competently.

Without a doubt, most residential appraisers can produce a good-looking appraisal report on the pre-printed forms they’re asked to use. They say all the right things.

The trouble is they often don’t do the right things.

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Appraisers With a Complaint Don’t Know the Half of It 

An appraiser with a bullet-proof defense against allegations can still get in trouble when a complaint is filed.
​ When a notice of a complaint is sent to an appraiser from the state board, the appraiser is given a certain number of days to submit a response. This response should contain the at-issue appraisal report, the report’s workfile, and an explanation of the appraiser’s side of things....

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Articles by Mark Loftus

But I Have An A+ Rating With My AMC!

I hear this often. Usually it’s after a complaint has been filed and the state board is finding USPAP violations the appraiser didn’t know existed. Variants of this remark include: “My lenders love my work,” and “The seller’s just angry that I didn’t reach the list price.” There is a simple reason your state board will view your work differently...

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We’ve all heard it in the courtroom dramas. So, what does it have to do with appraisal practice? Plenty.

Hearsay is “testimony that is given by a witness who relates not what he or she knows personally, but what others have said…” [Black’s Law Dictionary, Second Pocket Edition, © 2001 by West Group]

Okay, but you still don’t see what it has to do with appraisal practice. Let me ask you:

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When to File a Complaint with TALCB

When I was an investigator with TALCB, the appraisers I knew or met seemed to fall into three categories with respect to filing a complaint against other appraisers:

  1. The ones who think it's snitching on their colleagues;
  2. The ones who thought they'd get a Boy Scout merit badge if they reported a certain number; and
  3. The other 90% who seldom, if ever, were confronted with the questionable work of other appraisers

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