McKissock Appraisal School

Rev. 1-20-2013

Ken Guilfoyle Senior Certified National

Instructor McKissock L.P.

P.O. Box 1673Warren, PA 16365 - 3158

Phone: 800-328-2008Fax: 814-723-7289

On the Web:www.mckissock.com

E-Mail: ken@mckissock.com

You want Snacks? You’re lucky you got

coffee!

I’d like the memory of meto be a happy one,

I’d like to leave an afterglowof smiles when my life is done.

I’d like to leave an echowhispering softly down the ways,

of happy times and laughingtimes and bright and sunny days.

I’d like the tears of thosewho grieve, to dry before the sun.Of happy memories that I leave

when my life is done.

Are Appraisers Represented ?

Who is working on our behalf to keep ethical standards in place?

Many appraisal association representatives are involved with The Appraisal Foundation Advisory Council (TAFAC)

Appraisers serve on state appraisal boards and we are part of the Association of Appraisal Regulatory Officials (AARO)

Are Appraisers Represented ?

Appraisers are or have been involved in writing the appraiser upgrade exams, reviewing texts for the Appraiser Qualifications Board (AQB) and being represented on the Joint Government Relations Committee

Appraisers are working with the department of Housing and Urban Development (HUD), the Veterans Administration (VA), and other governmental bodies such as the Internal Revenue Service (IRS), the Department of the Interior, and the U.S. Army Corps of Engineers to make things better for the appraiser profession as a whole

Are Appraisers Represented ?

Appraisers from the Appraisal Institute, the American Society of Appraisers, the Association of Farm Managers and Rural Appraisers, and the National Association of Independent Fee Appraisers are working together to present Appraisal Issues to the U.S. Congress and the Federal and State Governmental Agencies that have the authority to impact the Appraisal Profession.

Are Appraisers Represented ?

Appraisers serve on The Appraisal Foundation’s Appraisal Standards Board (ASB), the Appraisal Qualifications Board (AQB), the Appraisal Practices Board (APB), and their various specialty sub-committees

Appraisers are working with the Appraisal Sub-Committee (ASC) which is a part of the Federal Financial Institutions Examination Council (FFIEC)

Appraisers serve as instructors, moderators, mentors, and trainers, sharing their knowledge and experience, all for the betterment of the appraisal profession

Consumer Financial Protection Bureau's New Hot-

LineNewest and least-publicized source of federal help: the CFPB’s home-mortgage complaint and dispute-resolution hotline

The complaint hotline is accessible by toll-free phone between 8 a.m. to 8 p.m. Eastern (855-411-CFPB) or online at: www.consumerfinance.gov

Our U.S. Presidents and where they came from.

Arkansas - Clinton California - Nixon Connecticut - G. W. Bush Georgia - Carter Hawaii - Obama Illinois - Reagan Iowa - Hoover Missouri - Truman Nebraska - Ford New Jersey - Cleveland

Our U.S. Presidentsand where they came from.

New Hampshire - Pierce Kentucky - Lincoln Pennsylvania - Buchanan South Carolina - Jackson

North Carolina - Polk & Andrew Johnson Texas - Eisenhower & Lynden Johnson Vermont - Arthur & Coolidge

New York - Van Buren, Fillmore, T. Roosevelt & F.D. Roosevelt

Our U.S. Presidentsand where they came from.

Massachusetts - J. Adams, J.Q. Adams, Kennedy & G. H. Bush

Ohio - Grant, Hayes, Garfield, B. Harrison, McKinley,

Harding & Taft

Virginia - Washington, Jefferson, Madison, Monroe, W.H. Harrison, Tyler, Taylor & Wilson

USPAP “Scope of Work Rule”

Define the Problem. Determine your Scope of Work. Disclose the Scope of Work actually

performed in your appraisal report.

We alone are responsible for our Scope of Work decision. We will be held accountable for our Scope of Work decision. If not right, we may incur the liability for our incompetence.

Useful WEB Sites

www.HeartHub.org Warning signs for heart attack, stroke, sudden cardiac arrest

www.MayoClinic.com/health/fitness/SM00086 Quick tests to measure fitness and track progress

www.USA.gov/directory/federal/index.shtml Contact info for hundreds of US agencies and departmentsreference: Bottom line newsletter, January 2013

Five Worst Gov. Web Sites

Time.gov Weather.gov USDA.gov SSA.gov USMINT.gov

Reference: Congressorg@capwiz.com,

How Busy are Appraisers ?

A survey by Appraisalport.com quotes:Up to 6 hours per day 298

responsesUp to 7 – 8 hours per day 903 “Up to 9 – 10 hours per day 2195 “Up to 11 – 12 hours per day 1576 “Up to 13 – 14 hours per day 636 “Up to 15 – 16 hours per day 251 “16 or more hours per day184 “

Reference: Appraisal Today Newsletter, 11-04-12

Appraisal-Port Survey turn times up

What is your average quoted residential appraisal turn time? -2 days   415 votes     7%- 3-4 days 1,196 votes     21%- 5-6 days 1,625 votes     29%- 7-8 days 1,088 votes     19%- 9 days or more 595 votes 11%     Total Votes: 5,645 Reference: Appraisalport.com survey

States with the Highest Percentage of Jumbo Loans

States that have the highest number of Jumbo Loans include:

Hawaii 43 %California 41 %Dist. of Columbia 30 %New York 22 %New Jersey 10 %

Who owns the most private land in America ?

According to www.finance.yahoo.com the top three landowners are:

John Malone owns 2.2million acres stretching from Wyoming to Maine

Ted Turner owns 2 million acres throughout the mid-West and New Mexico

The Emmerson family holds1.9 million acres in the Pacific North West.

FDIC is Still Very Busy !

The FDIC took over 92 banks in 2011. Total amount of assets was $57.6B.

There were 159 banks taken over by FDIC with $95.1B of assets in 2010

139 institutions were seized in 2009 with $170.3B of assets.

FDIC believes that bank failures peaked in 2010

Reference: CRE News Update, 6-13-12

Senate Panel Report on WaMu Failure Highlights Appraisal Role

The U.S. Senate Permanent Subcommittee on Investigations released a 650-page report April 13th that included a case study on Washington Mutual's failure, highlighting the role of unsound appraisal practices in the bank's collapse.

Reference: Appraiser News on-line

Who is Looking at Your Appraisal?

Our Appraisals are being looked at more than ever by people who are not appraisers. According to data from the Appraisal Institute:

There are about 13,000 +/- appraisal reviewers

Approximately 1/3 are working with appraisal firms

Can You Support “Effective Age”?

Go to: www.mckissock.com

Click on:“Help”

Then Click on: “Student Download”You will find it there

Let's say it's 6.15pm and you're driving home (alone of course) after an unusually hard day on

the job.You're really tired, and

frustrated……

YOU ARE REALLY STRESSED AND UPSET ….

Suddenly you start experiencing severe pain in your chest that starts to radiate out into your arm and up into your jaw. You are several blocks from the nearest hospital.

Unfortunately you don’t know if you will be able make it that far

WHAT TO DO ???

You have been trained in CPR,

But the guy that conducted the course did not tell you

how to perform it on yourself !!!!!

HOW TO SURVIVE A HEART ATTACK WHEN ALONE?

SINCE MANY PEOPLE ARE ALONE WHEN THEY SUFFER A HEART ATTACK, WITHOUT HELP, THE PERSON WHOSE HEART IS BEATING IMPROPERLY AND WHO BEGINS TO FEEL

FAINT, HAS ONLY ABOUT 10 SECONDS LEFT BEFORE LOSING CONSCIOUS

WHAT TO DO ??

ANSWER:

DO NOT PANIC, BUT START COUGHING REPEATEDLY AND VERY VIGOROUSLY.

A DEEP BREATH SHOULD BE TAKEN BEFORE EACH COUGH, THE COUGH MUST BE DEEP AND PROLONGED, AS WHEN PRODUCING SPUTUM

FROM DEEP INSIDE THE CHEST.

A BREATH AND A COUGH MUST BE REPEATED ABOUT EVERY TWO SECONDS WITHOUT LET-UP UNTIL HELP ARRIVES, OR UNTIL THE HEART IS

FELT TO BE BEATING NORMALLY AGAIN.

DEEP BREATHS GET OXYGEN INTO THE LUNGS AND COUGHING MOVEMENTS SQUEEZE THE HEART AND KEEP THE

BLOOD CIRCULATING. THE SQUEEZING PRESSURE ON THE HEART ALSO HELPS IT REGAIN NORMAL RHYTHM. IN THIS WAY, HEART ATTACK VICTIMS CAN GET TO A

HOSPITAL

ARTICLE PUBLISHED ON N.º 240 OF JOURNAL OF GENERAL HOSPITAL ROCHESTER

TELL AS MANY OTHER PEOPLE AS POSSIBLE ABOUT THIS.

IT COULD SAVE THEIR LIVES !!!

DON'T EVER THINK THAT YOU ARE NOT PRONE TO A HEART ATTACK, EVEN IF YOUR AGE IS LESS THAN 25 OR 30. NOWADAYS

DUE TO THE CHANGES IN LIFE STYLE,

HEARTATTACKS ARE FOUND AMONG PEOPLE OF ALL AGE GROUPS.

Top- Earning DEAD Celebrities

According to Forbes’ Annual Celebrity list:Michael Jackson (2009) $275

MillionElvis Presley (1977) $ 60 MillionJ.R.R. Tolkien (1973) $ 50 MillionCharles Schultz (2000) $ 33

MillionJohn Lennon (1980) $ 17 MillionDr. Seuss (1991) $ 11

MillionAlbert Einstein (1955) $ 10

MillionGeorge Steinbrenner (2010) $ 8

Million

The Statue of Liberty Sits on her very own island in New York

harbor and is recognized around the world as the symbol of freedom

Officially dedicated on October 28,1886 and titled as “Liberty Enlightening the World”

The 25 windows represent the earth’s 25 minerals. The 7 spikes on her crown represent the 7 seas and the 7 continents

She is more than 300 feet tall. Her sandal is 25 feet long and one must climb 22 stories to reach her crown.

The Golden Gate Bridge

Opened to the public on May 27, 1937

Took 4.5 years to completeCost $35 million dollars to buildApproximately 1.7 miles longMain span is 4,200 feet746 feet at tallest point11 workers died during

construction

Finally, This appraisal is done!

“When the American people no longer believe that this country is a place where only their willingness to work hard will determine their success in life, we’ll have a whole bunch of people sitting on a couch waiting for their next government check”

We will become a “paternalistic entitlement society”

Reference: American Legion Magazine

A daily dose of laughter might just keep the doctor away.

When you laugh, it:Stimulates circulationTones musclesEnergizes the lungs and respiratory

systemStimulates the immune systemsProvides aerobic exerciseReduces stress and depressionHeightens sense of well being and

creativity

A Humorous Disclaimer for you

It has been suggested/implied that this office knows EVERYTHING.  While we find this flattering/amusing, it must be disclosed that while we MAY have an answer for everything, these answers are frequently offered in a very random manner and may have nothing at all to do with the question asked.  We realize this can be a problem and are diligently working on a solution.

K I S S – “Keep it Simple --” Math – the infinities of our math system stem

from 10 simple numbers. Michelangelo used just 4 primary colors when he

painted the Sistine Chapel. Abraham Lincoln’s Gettysburg Address, one of the

world’s most famous speeches was 278 words and 215 of those words were simple one syllable words.

Simple can be pretty powerful. Greatness can come from simple things.

Reference: Business Review Newsletter

Did You Ever Wonder Why---To stop Windows, you need to click on

“Start” ?Doctors call what they do “Practice” ?Lemon juice is made with artificial flavor,

dishwashing liquid made with real lemons ?

You do not ever see the headline “Psychic Wins Lottery” ?

“Abbreviated” is such a long word ? They sterilize the needle for lethal

injections ?

                                                                                                                                           

                                                                                              

 

     

Info. from the ASC Appraiser Registry.

Active Appraiser Licenses:Licensed ---------------- 11,865Certified Residential -- 52,568Certified General ----- 37,974Transitional ------------ 7

Total --------- 102,414*

*The ASC indicates there are actually 89,000 (+/-) licensed and certified appraisers throughout the United States per their annual report to Congress

Ref: ASC Federal Register Summary Report , 1-2013

Top 6 States -- Active Appraisers

State # of Appraisers

California 11,661Florida 6,378Texas 5,289Illinois 4,205New York 4,140Georgia 3,850

Reference: ASC National Registry, 1-2013

Additional Info. from the ASC Appraiser Registry.

States that have retired or eliminated the “License” category for Appraisers:

Alaska, Connecticut, Florida, Indiana, Illinois, Iowa, Missouri, Louisiana, Mariana Islands, North Carolina, South Carolina, Pennsylvania, Tennessee, Wyoming, and the Virgin Islands

“Working Real Estate” Appraiser Survey

Number of years in the appraisal practice:Years (#): Less than: 1 5 10 20

30+ Totals 1% 23% 27% 33% 16%

Appraiser’s average age: (Overall = 52 years)

Under 30 31-40 41-50 51-60 61-70 71+

Totals 4% 18% 29% 34% 13% 2%

Top Residential Mortgage Providers

As of October 2012, a Report by Inside Mortgage Finance:

Wells Fargo 19.9 % Bank of America 17.2 %

Chase 12.4 %Citi 6.2 %Ally Financial 3.4 %U.S. Bank-Home 2.0 %

Reference: Appraiser Newsletter

Top Commercial Mortgage Servicers

According to the Mortgage Banker’s Association, the top Commercial Mortgage Servicers in 2012 were:

Wells FargoPNC Real Estate/Midland Loan

ServicesBerkadia Commercial MortgageBank of America Merrill LynchKey Bank Real Estate Capital

Reference: Appraiser Newsletter

AppraiserWorld.comAppraiser Survey

Gender distribution of active appraisers:

Female – 26 % Male – 74 %

TAF Survey(The Appraisal Foundation)

Have appraisers ever belonged to one of the TAF sponsoring Appraisal Associations?60 % (+/-) of appraisers said “no”.

Have appraisers ever belonged to any appraisal or valuation association?85 % of appraisers said “no”.

“Working Real Estate” SurveyFeb. 2012

What is the appraiser’s highest level of formal education completed?

High School 22 %Undergrad Degree 25 %Graduate Degree 45 %Post Grad Degree 8 %

TAF Survey

What is the primary area of your appraisal practice?

Residential 69%Commercial 16%Bus. Valuation 1%Agriculture 4%Mass Appraisal 3%Personal Property 1%All Other 6%

TAF Survey

Employment Category:

Owner operator 60%Company / Partnership 19%Government Agency 6%Mortgage Lending 5%Other 10%

TAF Survey

Reporting the appraisal:71% of appraisers said that 75%

of their reports are form type reports.

22% of appraisers said that less than 25% of their work was reported on a prepared form.

Are appraisers willing to mentor a trainee?

Only 25% of appraisers are willing to act as a mentor for a trainee.

Appraisal Management Company (AMC) Participation

73 % of appraisers are currently working with AMCs.

20 % of appraisers have worked with an AMC within the last 5 years, but not now.

25 % of appraisers are not currently working with AMCs, and have not worked with an AMC in the past 5 years.

Source: “Working Real Estate” Survey”

Valuation Review’s “Voice of the Appraiser Survey”

According to the Valuation Review Survey of Appraisers: Appraisal services provided by residential appraisers:

Full Appraisal Services 99 %

Drive-by Appraisals57 %

Property Condition Reports 38 %

Broker Price Opinions 7 %

Valuation Review’s “Voice of the Appraiser Survey”

Residential Appraiser’s believe their Fees are: 12 % Unlivable

53 % too low for work required 25 % Reasonable for work

required 10 % Above the Average AMCs believe Residential Appraiser’s Fees

are: 8 % Unlivable 13 % Fees too low for work required 62 % Reasonable for work required 17 % Above the Average

More Poll Results from Appraisers

(4,691 responses) What percent of your assignments

result in requests for clarification from the client?0% 10% of the time --- 45% 11%-20% of the time - 19 %21%-30% of the time – 13%31%-40% of the time - 8%40% + of the time ---- 15% Reference:

www.Appraisalport.com

More Poll Results from Appraisers

(5,632 Responses) How often does your client request

information that is already in the original report?“Often” 60% responded“Almost always” 12%

responded“Rarely” 27% responded“Never” 1% responded

Reference: www.Appraisalport .com

Taking Back your Profession!If you are receiving less than a

customary and reasonable fee or working with an AMC who doesn’t seem to care about the quality of your appraisals or the competency of their staff, you’re working with the wrong company. **Note**

Customary and reasonable fees form the base and can be negotiated upward from there depending on complexity, etc.

Questioning AMC’s Policies

If a loan fails to close, is it within the law to withhold your payment for the appraisal?

NO.

Questioning AMC’s Policies

Is the person running an AVM required to have the requisite experience, which means be “licensed” as an appraiser? Yes, If the valuation is to be used by the bank for lending purposes.

Questioning AMC’s Policies

Is it a good idea to “change” your report at the request of an AMC or Lender after submission?

NO.“Changing” your report will probably result in a complaint being filed with your state appraisal board by the AMC or Lender.

Questioning AMC’s Policies

Is it legal for an AMC to choose an appraiser based solely on the lowest fee?

NO.Selecting an appraiser solely based on the lowest fee is prohibited by numerous federal regulations.

Questioning AMC’s Policies

Is it okay for an appraiser to give a verbal” value estimate” over the phone just to verify whether there’s value?

NO.This is a prohibited practice if the verbal opinion is for a “lending purpose”.

Questioning AMC’s Policies

Is it legal for an FHA appraisal to include a fee for management of the appraisal process?

NO.

Questioning AMC’s Policies

Appraisers need to know much more than their USPAP rules today.

Appraisers need to be familiar with the applicable Fannie Mae, Freddie Mac, FHA, and VA requirements, Interagency Guidelines, state and federal laws, and the Certifications that appraisers sign and include in every report.Reference: This slide and the previous 7 slides taken from the OREP/Working RE webinar, Part 2

All McKissock Instructors areAQB Qualified USPAP Instructors

Time Time is absolutely the most precious

gift we have. None of us know how much time we have or how long it will last.

You can’t buy it. You can’t replace it. You can’t really give it to anyone. You can only use it.

How you use your time is how you make yourself different from

everyone else.

Residential Appraisal Production Time

Time (hours) Description 0.20 Receive, setup, maintain files

1.50 Research, data, maps, file info0.20 Setting & confirming appointments2.50 Drive to & from appointments (includes comps. no shows and re-inspections) 1.35 Average appraisal inspection time5.00 Writing report0.50 Review, edit, corrections0.20 Delivery, follow up confirmation1.05 Unproductive time amortized

12.50 Average Appraisal Production Time

“How Did You Get That Adjustment ?”

When a reviewer or underwriter asks about your adjustment or says:

“This adjustment is not right.”

You might want to respond with: “Show me that I am wrong.”

This often works. But be sure that you can support your adjustment figure.

Square Footage & Public Records

Local Assessors are quick to point out their data is a creation of mass appraisal data for specific use within the tax assessment process

Experienced Assessor’s comment: “if any agent uses the square footage info we provide to figure out property values, someone’s in big trouble.”

Where does that leave Appraisers?Reference: Kirchmeyer Klips Newsletter

Rebutting that “Blacklist” Letter

How can you rebut that “We will no longer use you” letter you received from the bank or AMC with no explanation?

The Office of Comptroller of Currency (OCC) has a Consumer Assistance Group and you can file a complaint online at:

www.Helpwithmybank.gov .

A letter to your state appraisal board will trigger an inquiry for explanation from the AMC.

Reference: Working RE, Summer 2012, Pg 12

Why do Appraiser’s Leave this Business ?

According to an Appraisal-Port Poll of 6,200 Appraisers:

AMC fee splits/ Lower fees 3,530Increased report scrutiny

829Endless new legislation

621Increased liability 406Current market conditions 298Getting old & tired

165Wouldn’t leave for any reason

351

Did You Know ?

36 % of U.S. households (or 32.4 million) own at least one cat.

90 million cats are owned in the United States.

74.8 million dogs are owned in the United States.

39 % of U.S. households (or 29.2 million) own at least one dog.

Reference: American Pet Products Manufacturers Association

Did You Know ?

90 % of the continental United States is still open space or farm land.

On average, 40 % of all hotel rooms in the United States remain empty every night.

If the Great Pyramid of Cheops were disassembled, you would get enough stones to encircle the earth with a brick wall 20 inches high.

The ostrich has the largest eyes of any other land creature.

Reference: Business Review Newsletter

Did You Know?The 102 story Empire State Building

has 6,000 windowsOn a $100 dollar bill, the

Independence Hall clock shows the time as 4:10

When Lifebuoy soap was introduced in 1897, it was called Life buddy soap.

More arguments occur in the kitchen than in any other room of an American home. Reference: Business Review Newsletter

Did You Know?

West Virginia has the highest number of homeowners at 77 %

New York State has the lowest number of homeowners at 55 %

50 % to 70 % of home water use goes toward gardens and lawns

14 % is the portion of the water a homeowner pays for that is never used; it leaks down the drain.

Reference: Liberty Lines Newsletter

Did You Know ?

Lightning strikes the United States 25 million times every year

There are 4 million miles of public roads throughout in the United States

The average thunderstorm lasts 30 minutes and has a diameter of 15 miles

In 2010, tornadoes accounted for more than $566 million in property damages

Reference: Liberty Lines Newsletter

Did You Know ? Bugs Bunny was the first cartoon

character to be on a U.S. postage stamp in 1997

About 30 million American adults do not own a cell phone

97 % of on-line pharmacies sell fake, expired, or contaminated products not approved by the FDA

Reference: Bottom Line newsletter, January 2013

Check for Exclusions in Your E&O Policy!

If your policy has an FDIC exclusion (no coverage for claims initiated by the Federal Deposit Insurance Corporation) or a more general exclusion for claims arising from “the failure and/or insolvency of a financial institution,” your coverage and protection may be limited or none.

Check with your E & O provider for an explanation of your insurance terms.

Checklist for a Good Relationship

Think “we” not “me”Learn to listenWork as a teamLearn to negotiateGo on datesPraise your partner

YOUR JOURNEY THRU LIFE

Life is not a journey to the grave with the intention of arriving safely and pretty in a well preserved body.

but rather, it is to skid in broadside, thoroughly used up, totally worn out and loudly proclaiming

“WOW – WHAT A RIDE !!!”

From: Melissa@mckissock.com

Leadership and YouTrue leaders are not those who

strive to be first but those who are first to strive, who have good attitudes and give their all for the good of their profession.

Our lives are not determined by what happens to us but how we react to what happens; not what life brings to us but by the attitude we bring to life !

Top 6 Languages of the World

Mandarin Chinese, 1 Billion +English, 512 MillionHindi, 501 MillionSpanish, 399 MillionRussian, 285 MillionArabic, 265 Million

Reference: Business Review Newsletter

Largest Private Owned Home in U.S.A.

The “Biltmore Estate” is a large private estate located in Asheville, North Carolina

It is still owned by the Vanderbilt’s descendants , with 250 rooms encompassing some 178,926 square feet of living area. Constructed 1889-1895

www.romanticasheville.com/biltmore_house.htm

CONVERSION CHART

INCH = DECIMAL INCH = DECIMAL

1” .083 7” .583 2” .1667 8” .667

3” .25 9” .754” .33 10” .8335” .416 11” .9166” .5 12” 1.00

MEASUREMENTS7.92 inches = 1 link25 links = 1 rod16.5 feet = 1 rod4 rods = 1 chain320 rods = 1 mile5,280 feet = 1 mile43,560 sq ft = 1 acre640 acres = 1 sq mile640 acres = 1 section36 sections = 1

township27 cubic feet = 1 cubic yard1 stone = 14 pounds

Ethics & Integrity

Always be ready to humble yourself and find a mentor

along the way. No matter how successful we are there is

always room for improvement when we open up our minds to

others, otherwise, we will stagnate and fall by the

wayside.

Ethics & Integrity

How far we go in life depends on your being tender with the young, compassionate with the aged,

sympathetic with the striving, and tolerant with the weak and the

strong. Because someday in life, you will have

been all of these.

Observations

You can tell a lot about a person by the way he or she handles three things:

1. A rainy day 2. Sitting in traffic jams 3. Tangled Christmas tree lights

Additional Observations

People will forget what you said ------

People will forget what you did -----But people will never forget how

you made them feel.People remember people who

remember them.

The Perfect Husband

A husband forgot his wife’s birthday… His wife told him, “tomorrow there better

be something in the driveway for me that will go from zero to 200 in 2 seconds flat”.

The next morning the wife found a small package on the driveway…When she opened the package, she found a brand new bathroom scale.

Funeral arrangements for the husband have been set for Saturday….

WE IS FRIENDS !

Me and You is Friends…

You Smile, I Smile… You Hurt, I Hurt…. You Cry, I Cry… You Jump off a

Bridge… I Gonna Miss You.

Did You Know..The average American

Has 31 blood tests. Eats 114,000 Tootsie Rolls. Buys 6 cameras. Makes 184,702 phone calls. Eats 250 pounds of peanut butter. Spends 4 years traveling in automobiles.

Reference: Business Review Newsletter

Did You Know..The average American

Spends 2 years unsuccessfully returning phone calls

Six months sitting at stop lightsSeven years waiting in linesEight months opening junk mail andWatches 1 year of TV commercials.

Reference: Business Review Newsletter

Additional Observations

Population of U.S.A. =310 million (+/-)

50 million (+/-) lack enough info in their credit history for a reliable FICO score.

AVM estimates of Value: Approximately 80 % of the U.S.A. lacks enough data for a reliable estimate of value

Appraiser’s License Information

The FHFA has mandated that Fannie and Freddie collect the license/certification numbers of appraisers for the state in which a subject property is located

This information is being incorporated into Fannie and Freddie’s electronic delivery system.

No More “Exterior Only” Appraisals

Fannie Mae has announced that they will no longer purchase mortgages with the 2055 Summary Report Form used for the mortgage finance transaction.

Reference: Appraisal Institute News letter, December,2012

FHA still has their own HVCC

FHA issued Mortgage letter # 2009-28 to ensure that their appraisers are not subject to pressure from clients and that they are allowed to operate independently.

FHA’s Mortgage Letter is very similar to the FHFA interim rules issued on 10-19-10 for Fannie And Freddie.

HUD has their own blog:“The HUDdle”

More interactive - advanced sharing, embedding and multi-media with regular and guest bloggers, video blogs and special behind-the-scenes at HUD content.  

Check it out at:

http://hud-blog.omnitecinc.com  Reference: OREP Newsletter

This is Not Good News !

According to the Federal Reserve Bank of New York and the New York University, more than 40 percent of the FHA loans originated from 2007 through 2009 will be delinquent within 5 years

The study goes on to say that the FHA has significantly underestimated that risk.

Reference: The FHA Update, July 2, 2012

Two Issues Facing HUD/FHA  

   The FHA has announced that it will implement substantial reforms to strengthen its single-family mortgage loan program. The program is apparently 16.3 billion dollars in the red.

The changes will limit borrowers with credit scores below 620 to a total debt-to-income ratio of 43 %. It has also been proposed that these borrowers have 10 % down payment for purchases

  

FHA also announced that it will discontinue its reverse mortgage program that permits elderly homeowners to take as much as 77% of appraised value out of the residence. This program has proved to be too costly for FHA.

FHA will continue to offer an alternative program, which acts essentially the same as a home equity program which the homeowner may borrow against.

Reference: eVIP Appraisal News

Quote of the Week

“If you follow the rules that HUD has given to you to the extent that you can — you recognize that there may be a glitch here and there — as long as you are operating in good faith and trying to comply, HUD will help you get to full compliance rather than try to slam you for an immaterial oversight." - Jeff Arouh, partner, Holland & Knight, New York,

Reference: RESPANEWS.com

GSEs Uniform Appraisal Dataset (UAD)

Fannie Mae and Freddie Mac have standardized the language used in the residential appraisal reporting process.

The stated purpose is to improve and bring consistency to the quality of reporting data that is most material to the valuation of a property and/or critical to determining the loan’s eligibility for sale to the GSEs.

GSEs Uniform Appraisal Dataset (UAD) Conti.

GSEs require appraisals be completed with standardized responses in certain appraisal report fields to include:

Standardized formats for fields that include dates, values, etc.

Allowable values from a list of choices provided

Standardized abbreviationsStandardized ratings and definitions for

condition, quality, and updating/renovations of the property

Uniform Appraisal Dataset (UAD)

The current version (Version 1.4, dated June 17,2012) of the UAD specifications and the 77 FAQs can be found on:

www.efanniemae.com click on “Appraisers”

GSE’s Uniform Collateral Data Portal (UCDP)

GSEs have developed the UCDP for the electronic delivery of appraisal report data, by lenders, to both Freddie Mac and Fannie Mae.

A PDF version of the appraisal report and additional appraiser information delivered using the UCDP prior to loan delivery for the four residential appraisal report forms is now in effect.

The Fannie Mae Selling Guide has updated UAD Info

Most appraiser requirements and appraisal information are located in: Part B, Sections 2 & 4.

Appraisers are cautioned to stay current, as the guide is constantly being updated.

The link is: https://www.efanniemae.com/sf/guides/ssg/sg/pdf/sel 072611.pdf

Reminder About the UAD 

The so-called "hard-stops" or “rejects” kicked in on January 28th, and there are lot of problems. Just to play it safe, you should look at:

https://www.fanniemae.com/content/user_guide/ucdp-user-guide-fannie-mae-messaging.pdf

   You might just go ahead and refresh on all the UAD guidelines, at www.efanniemae.com , click on "Appraisers."

FHA Requires UADFrom FHA's Appraiser Newsletter: "When performing appraisals

reported on the URAR and the individual condominium unit report form, FHA Roster Appraisers are required to submit reports which are UAD compliant.”

FHA does not permit the use of either of the two “Exterior only (2055 & 1075) appraisal reporting forms."

V A requires the UAD too..

The V A also requires the use of the UAD for the modified Fannie Mae 1004 and 1073 forms.

Start date for UAD compliance by FHA and VA was January 1, 2012

The UAD and Appraisal-Port Poll Question

Now that you are reporting appraisals using the new UAD format, do you find it any more effective or helpful with supporting your value?

-- Yes (5.1%) 271 votes-- No, it actually makes it more difficult to explain and support my research. (66.1%)

3525 votes-- It's about the same as the previous

format in that regard. (28.8%) 1539 votes

Total Votes: 5335

Reference: Appraisal today Newsletter, Dec. 2012

Updated Requirements for Residential Appraisers.

To be consistent with the Uniform Standards of Professional Appraisal Practice (USPAP), Fannie Mae is specifying that their lenders (Financial Institutions) must select appraisers with the knowledge and experience in appraising the property type in the market area and have access to all the applicable data sources

Reference: Fannie’s Selling Guide Update

Age of Housing Units in the United States

Pre - 1920 8 % 1920 - 1939 9 % 1940 – 1959 16 % 1960 – 1979 32 % 1980 – 1999 26 % 2000 – 2005 8 % 2006 – Present 1 %

Source: U.S. Housing Market Conditions, Third Quarter, 2012

Composition of Housing StockHousing Type # of Units %

Total Occupied: Owner Occupied: 75,665,000

59.0 Renter Occupied: 35,954,000

27.3Vacant: 13,092,000 10.2Seasonal: 4,392,000 3.4

All Housing: 129,103,000 100.0

Reference: U.S. Housing Market Condition, 3rd Qtr. 2012

How is your Appraisal Business?

FannieMae Appraisals per business day = 9,000 (+/-)

@ $300.00 (+/-) per appraisal.

That is 2.7 million dollars paid out for appraisals every business day.

How is your Appraisal Business?

FreddieMac Appraisals per business day = 7600 (+/-)

@ $300.00 (+/-) per appraisal.

That is 2.3 million dollars paid out for appraisals every business day.

How is your Appraisal Business?

FHA Appraisals per business day = 12,000 (+/-)

@ $300.00 (+/-) per appraisal.

That is 3.6 million dollars paid out for appraisals every business day.

Reference: Appraisal Today Newsletter

Want to Appraise for FHA?

Here is the web address for application information and to apply on line. There is no test required. There is no cost to apply.

http://www.hud.gov/groups/appraisers.cfm

Reference: ICAP Bulletin , October, 2010

FHA FAQ Web Site

http://faq.fha.gov/ is a 24/7 source for FHA information. Over 1,000 Q & A info items with the mortgage letter or handbook references.

FHA has deleted the requirement for second appraisal on refinance loans above $417,000.

FHA still requires a second appraisal for properties resold 91 to 180 days. Client to pay for the second appraisal. No second case number required.

Reference: FHA Mortgagee letter 09-48

FHA Questions?

The new primary E-Mail address for FHA is effective as of August 15,2011:

answers@hud.gov or www.HUD.GOV/answers

In addition, you may use the “Contact FHA” tab to submit questions directly to FHA.Reference: jerrold.h.mayer@HUD.GOV, e-mail, Aug.8, 2011

V.A. continues to expand their Appraiser Roster

through 2013 Appraisers and Compliance Inspectors

receive assignments on a rotational basis from the V.A.

For information, application forms, and V.A. requirements, go to the VA website at:

www.benefits.va.gov/homeloans/appraisal.asp.

Click on “Fee Panel Application”

REF: Gerald Kifer, Chief VA Appraiser Program

Not a Good Sign !

Revised “Home Affordable Refinance Program (HARP

2.0)”Obama administration has

announced a revised program to step up aid to homeowners and revive the housing market. President Obama had originally announced the “Making Homes Affordable Program” in 2009, setting a goal of 3 million to 4 million refinanced loans by the end of 2012.

Reference: Mortgage Bankers Newsletter

USPAP -- 17th Century Version

Whereas you are the chosen appraizers of such lands or goods as are now presented to you, you do heerby swear by the Living God, that all partialite, prejudice and other sinister respects layed aside, you shall appraize the same, and everie part thereof, according to the true and just value thereof at this present, by common account, by your best judgement and conscience. So help you God.

Appraisers Oath, Massachusetts Code, 1648

Words by Teddy Roosevelt

It is not the critic who counts, not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man in the arena, whose face is marred by dust and sweat and blood, who strives valiantly … who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause,

Teddy Roosevelt, continued:

Who at best knows in the end of triumph of high achievement, and who at the worst, if he fails, at least fails while doing greatly, so that his place shall never be with those cold and timid souls who have never known neither victory or defeat.

Teddy Roosevelt was President of the United States, 1901 – 1909.

My Living Will

Last night, my kids and I were sitting in the living room and I said to them,

“I never want to live in a vegetative state, dependent on some machine and fluids from a bottle. If that ever happens, just pull the plug.”

They got up, unplugged my computer and threw out my wine!!

-- Smart Aleck Kids

Nice People Do Finish First !!

People want to deal with people they like.

People like people with whom they feel a connection.

Connections build trust between people. People want to help people with whom

they feel a connection. People refer friends to people with whom

they feel a connection. People want to do repeat business

with people they share a connection with.

Appraisal “Myth” Busting Time

Myth: “No taking comp or subject photos with people in them.”

There is NO such prohibition and never was. Even HUD has been stymied by the fact that so many in the lending profession really think it’s been a law since 1968. Fannie Mae has never had such a rule but they have heard this since the 1970’s.

Reference: Illinois Appraisal Newsletter, October 2009

Want more info? Brian.Weaver@illinois.gov

LEARNING PYRAMID

Lecture

Reading

Audio-Visual

Demonstration

Discussion

Practice by Doing

Teaching Others

We Remember :

10 % of what we hear.15 % of what we see.20 % of what we see and hear.40 % of what we discuss with

others.80 % of what we experience

directly.90 % of what we teach others.

Lets Hear it for Doodling !!A recent study from the University of

Plymouth in England found that people who doodled while listening to a tape had 29 % better recall than the other participants, on average.

Researchers theorize that doodling can keep you from daydreaming while not distracting you from the main activity.

Reference: Bottom Line News, 1-15-11

Appraisers Ranked # 8 in the “Top 10 Jobs”

MONEY magazine has listed Real Estate Appraisers as # 8, among the top 10 jobs in the U.S.A.

WHY? -- Valuations are needed whenever a property is sold, mortgaged, insured, taxed, or developed. Research isn’t the pain it used to be, thanks to the internet.

HOWEVER – There is still a lot of legwork and advancement is limited.

BUT – There is still going to be work, even when the market slows down.

Working Real Estate Survey

93 % of the appraisers surveyed stated that “appraising” was their primary source of income

7 % of appraisers surveyed said that “appraising” was a secondary or supplemental source of income.

Appraisal-Port Survey5,000 respondents as of: 3-25-

122011 Appraiser Gross

Income: 8 % = $1 to $25 K 17 % = $26 K to $50 K 19 % = $51 K to $75 K 18 % = $76 K to $100 K 11 % = $101 K to $125 K 7 % = $126 K to $150 K 11 % = $151 K + 9 % = Not Sure

Some of the Reasons why it is great be an Appraiser !!

Dazzle your friends with your knowledge of external obsolescence

Enter that wonderful world of rats, bats, fleas, spiders, and snakes

Be a part of the profession that is blamed for the collapse of the Savings & Loan industry

See places in people’s houses that usually require a search warrant

Arouse suspicion of an entire neighborhood when inspecting comparable sales

More Reasons why it is great be an Appraiser !!

Chance to really irritate annoying real estate sales people

Walk around holding a clipboard just like “Skip” down at the Jiffy Lube

Spend hours writing volumes of supporting documentation to justify the market value of a property you already decided on when you pulled into the driveway

Remodeling Costs vs. Returns – as of: December 2012

Item $ Cost % Return Steel Entry Door Repl. $ 1,200. 102 % Garage Door Replacement $ 1,200. 102 % Roof Replacement $14,200. 72 % Vinyl Windows Repl. $10,200. 73 % New Exterior Siding $12,100. 80 % Add Family Room $74,800. 72 % Deck Addition $15,039. 73 % Remodel Basement $64,000. 70 % Remodel Bathroom $40,590. 63 % Minor Kitchen Remodel $28,000. 76 %

Check out your specific area at: http://www.costvsvalue.com

Replacement Time-lines Re: Consumer Reports, October

2012 Clothes Dryer 6 years Dishwashers 5 years Microwave ovens 5 years Ranges (gas/electric) 7 years Refrigerators: (side by side) 7 years Refrigerators: (Top Freezer) 5 years Refrigerators: (Bottom Freezer) 7 years Vacuum Cleaners (upright) 4 years Wash Machine (Front Load) 7 years Wash Machine (Top Load) 6 years Digital Cameras 3 years Camcorders 4 years Computers (desk and Laptop) 3 years

The replacement timelines are a result of the high cost of repairing these items.

Competency

What is the secret of your success? “ good decisions.”

How do you know how to make the right decisions?

“ Competency and Experience.”

How do you get this experience? “ Bad decisions.”

Typical Appraiser’s Excuses

1. I didn’t think.2. I didn’t know.3. I don’t care.4. I was too busy.5. I leave well enough alone.6. I am not interested.7. I have no time to read and find

out.

5 Major Causes of Failure

1. Carelessness2. Laziness3. Indifference4. Forgetfulness5. Temptation

Professionalism

Thoughts - Become Words Words - Become Actions Actions - Become Habits Habits - Become Character Character - Becomes Destiny Destiny - Becomes Professional

The appraiser’s professionalism was confirmed in FIRREA and further reinforced by the Dodd – Frank Act of 2010.

FIRREA

The Financial Institutions Reform Recovery Enforcement Act was 20 years old in 2009.

Here is another definition of FIRREA ----

Finally, I’m a Rich Real Estate Appraiser.

Well – Maybe not yet !!

Appraiser’s Role in Home Ownership

The independent Real Property Appraiser may be, the only unbiased opinion that purchasers have to depend on for sound investments in real property housing.

The ability, for millions of people to reasonably obtain the American dream, is directly impacted by the appraiser’s role in the attainment of home ownership.

Can You Support “Effective Age”?

Go to: www.mckissock.com

Click on:“Help”

Click on: “Student Download”You will find it there

Copyrighting your Appraisals Definition of terms:

Author – The creator of the original work.

Original work - Your opinions, analyses, and conclusions can be said to be original work by you.

Copyright mark – The copyright symbol, or the word copyright and the date. Note: A mark is not required to indicate copyright on a photograph.

Release – Written notification from the author granting permission to use or copy their original work.

Copyrighting Your Appraisals It is not necessary to notify the U.S.

Copyright Office to ensure copyright of your document.

Here is a sample copyright statement you may use in your appraisals:“The analyses, opinions, and conclusions

contained in this document are copyrighted and are the proprietary products of ------- Appraisal Company. Any unauthorized use, reproduction, or transfer of this document or any of its contents, in any medium, is strictly prohibited. Offenders will be prosecuted to the fullest extent allowed by copyright laws.”

Copywriting? Be Careful!If you register the appraisal with the

U.S. Copyright Office it includes public disclosure of the appraisal report. Such disclosure of the assignment results would constitute a breach of the Confidentiality section of the ETHICS RULE of USPAP, unless the appraiser had prior approval from the client for such registration.

Reference: 2012/2013 USPAP, FAQ # 70

Some days are like that!

LOST DOG ---- NOTICE

Dog has three legs, blind in left eye, missing right ear, tail broken, recently castrated….

Answers to the name of “LUCKY”

Some Days are like that!

I want to thank you, Almighty One, for being close to me, so far this day. With your help I haven’t been impatient, lost my temper, been grumpy, judgmental, or envious of anyone…..

BUT I WILL BE GETTING OUT OF BED IN A MINUTE,

And I think I will really need your help then. Amen

Some Days are like that!

I was put on this Earth to accomplish a certain number

of things.

Right now, I am so far behind, I will never die.

It’s all in how you look at it..

My wife and I were sitting at a table at my high school reunion, and I kept staring at a drunken lady sitting at a nearby table swigging her drink.

My wife asked if I knew her and I replied “yes, she was my old girl friend and when we split up many years ago, she took to drinking and I hear she hasn’t been sober since.”

“My God” my wife replied, “Who would think a person could go on celebrating that long.”

I guess there are really two ways to look at everything..

Definition of an Appraiser

An Appraiser is a person who passes as an exacting technical expert on the basis of being able to turnout, with prolific fortitude, infinite strings of incomprehensible estimates calculated with micrometric precision, from vague assumptions and debatable figures taken from inconclusive data, obtained with recording devices of problematical accuracy by uninformed persons of doubtful reliability and questionable mentality !!

The Appraisal Process

Define the Appraisal ProblemDetermine the “Scope of Work”Collect and Analyze the DataDetermine “Highest and Best Use”Value the Property using the

Applicable Approaches to ValueReconcile the Value IndicatorsPrepare the Appraisal Report

Mysteries of life

Why is it that when someone tells you there are over a billion stars in the universe, you believe them, but if they tell you there is wet paint somewhere, you have to touch it to make sure?

“Stressed” spelled backward is “Desserts.”

“Growing old is mandatory. Growing wise is optional.”

If a man is talking in the forest, and no woman is there to hear him, is he still wrong?

“HUD” spelled backwards is _______?

Terrific Trivia Venus is the only planet that rotates clockwise.

90 % of Canada’s population live within 100 miles of the U.S. border.

The biggest dog on record was an Old English mastiff that weighed 343 pounds. He was 8 feet, 3 inches from nose to tail.

In 1997, the fully restored USS Constitution (aka “Old Ironsides”) celebrated her 200th birthday by setting sail for the first time in 116 years.

The ZIP in ZIP code stands for: “Zoning Improvement Plan”.

More TriviaMany years ago in Scotland, a new

game was invented. It was ruled “Gentlemen Only …. Ladies Forbidden” Thus the word GOLF entered the English Language.

The average number of people airborne over the U.S. in any given hour is 61,000.

Bulletproof vests, fire escapes, windshield wipers, and laser printers were all invented by women

Sign of the times

Do you want to speak to the “man” in charge, or to the “woman” who knows what’s going on ?

Arguing with an appraiser is like wrestling with a pig in the mud. After a while you realize that the pig enjoys it !!

Some Dodd – Frank Act Requirements

Mandates customary and reasonable fees for appraisers (Now assigned to the BCFP)

Designations can be a factor in deciding which appraiser gets the assignment

ASC will assume the duties of the IVPI (which never did materialize) to handle appraiser independence violations

Federal Regulators update Appraiser Independence Standards for FRTs

Some Dodd – Frank Act Requirements

Appraisers now pay $40 per year to support the ASC as of Jan. 2012

ASC to give grants to State Appraisal Boards to assist in enforcement actions

Independent AMCs required to be registered in the state in which they operate

Independent AMCs subject to peer review by State Appraisal Boards

Some Dodd-Frank Act Requirements

Lenders are not required to have Licensed or Certified Appraisers to review appraisals

Lenders must send the appraisal reports to the state enforcement agency if there are significant errors or evidence of Ethics or other USPAP violations.

Update : Customary and Reasonable Fees

As of July 1, 2011, the Federal Reserve Board handed this issue to the Bureau of Consumer Financial Protection (BCFP).

The authority for this new consumer protection bureau was part of the Dodd-Frank Bill.

The BCFP officially began operations on June 21, 2011.

Credit Card Theft?

Report it, and request that a fraud alert be placed on your credit file.

Experian 888-397-3742Equifax 800-525-6285Trans Union 800-680-7289

Want a Copy of your Credit Report?

Federal law allows you to receive a free copy of your credit report once a year from the big three credit reporting companies. To order:

From Experian, Equifax, and Trans Union, call: 1-877-322-8228

Internet site: www.annualcreditreport.com

Mail address: Annual Credit Report Request Service, POB # 105283, Atlanta, GA 30348-5281

Someone using your Social Security Number ?

Report the unauthorized use to the Social Security Administration’s Fraud Hot Line at:

1-800-269-0271

Other Items of Interest “Don’t call me anymore” (for home

and cell phones)Call: 1-888-382-1222 Internet: www.donotcall.gov (good for 5

years)

“Stop the credit card junk mail”Call: 1-800-353-0809 Call: 1-888-567-8688 (For all three credit

bureaus)

“Stop giving, sharing or selling my personal financial data” Inform the sender of your “OPT-OUT” decision.

You only have to do this once. This is included with their privacy notice which you must receive annually.

Did You Know?

The hottest air temperature ever recorded was in Africa (Libya) at +136.4 degrees Fahrenheit on September 13,1922.

The coldest temperature ever recorded was in Antarctica at -129.6 degrees Fahrenheit.

Manholes are round so their covers can’t accidentally fall inside when tipped on their ends.

Did You Know?

The Declaration of Independence has 25 signatures affixed to the document.

Chicago’s Sears Tower has its own zip code.

According to his business card, Al Capone bought and sold used furniture.

Mount Everest grows at a rate of 4 millimeters per year.

Our necessities never equal our wants.

Did You Know?

The State of Michigan has more than 3,000 miles of shoreline, which is longer than the entire Eastern seaboard from Maine to Florida.

“Uncle Tom’s Cabin” was the first American novel (published in 1852) to sell more than one million copies.

The world’s smallest church is located in Oneida, New York. It is only 3 ½’ x 6’.

Richard Nixon was the first U.S. president to visit China (February, 1972).

Did You Know? The sentence: “The quick brown fox jumps

over the lazy dog” uses every letter of the alphabet.

The words ”racecar”, “kayak”, and “level” are the same whether they are read left to right or right to left (palindromes).

:Stewardesses” is the longest word typed with only the left hand and “lollipop” with your right hand.

Maine is the only state whose name is just one syllable.

And Finally, Did you Know?Henry Ford failed in business 5 times

before he started the Ford Motor Company.

Michael Jordan was cut from his high school basket ball team.

Warren Buffett failed to qualify for entrance to Harvard’s Business school.

“Success is the process of becoming

who you already are.”

There are NO Generic Appraisals!!

Judgment phase of the Appraisal:Identify the problemDetermine the appropriate Scope of Work

that will produce credible assignment results for the intended use

Execution phase of the Appraisal:Perform the Scope of WorkDisclose the Scope of Work actually

performed, in the Appraisal report, so the client and intended users are not mislead

Reference AO-22, Scope of Work --

Relevant Characteristics

The Scope of Work requires the appraiser to identify the relevant characteristics of the property being appraised.

Relevant characteristics consist of:Legal Characteristics – i.e.: zoning, Leasehold

and/or leased fee interests, etc.Economic Characteristics – i.e.: the marketPhysical Characteristics – i.e.: remodeling,

renovations, stigmas, etc.

Reference AO-23, Relevant Characteristics --

McKissock Appraisal School

You want Snacks? You’re lucky you got

coffee!

Story with a Moral !

Charles Schwab was president of the worlds largest steel company. He died a pauper!

Edward Hobson was the president of the largest gas company. He went insane!

Richard Whitney was the president of the New York Stock Exchange. He was released from prison to die at home!

Story with a Moral ! Arthur Cooger was the greatest wheat

speculator. He died abroad, penniless! The president of the Bank of International

Settlement committed suicide! Gene Sarazen won the U.S. Open and was

golf’s PGA champion. He played golf until he was 92, and died in 1995 at the age of 95. He was financially secure at the time of his death.

The Moral: Work less, Take the Time

to Enjoy your life !

Your Success Motivators

Think about these things as you look into the mirror every morning: You were born to become the best that

you can be. You were born to achieve things that

make a real contribution to life and happiness—including your own.

You know your success potentials. Work with them.

Your Success Motivators

You can create a new dynamic personality through your own personal enrichment program.

You are a winner, not a loser.You can achieve your goals not by

stepping on other people but by using your own talents to ensure success.

Take one day at a time, but you need to get started today.

Avoiding Lawsuits

Do Not accept an assignment beyond your experience. If you get into trouble with the assignment, get help quickly.

Document everything you do and keep a complete work file. Good records make for a good defense if it comes to litigation.

Avoiding Lawsuits

Photograph all properties appraised. Take pictures of any deficiencies noted. Take additional pictures, for your files, to show condition at time of appraisal.

Establish sound office procedures to eliminate those clerical errors. Proof all reports before they leave the office.

Avoiding Lawsuits

Never assume a structure’s defects will be noted by other professionals. Note all property deficiencies in your report and their effect on value / marketability.

Use disclaimers if you find a situation outside your area of expertise. Identify, disclose, and disclaim.

Avoiding LawsuitsDo not assume or take the client’s /

owner’s word on anything. You will be held accountable. Remember, you are supposed to be the expert. Verify and document the extent of the verification.

Do not give casual advice or opinions. You are the professional and you will be held to that higher standard of care.

Avoiding Lawsuits

Plan the appraisal. Carefully determine the appropriate SCOPE OF WORK to satisfy the assignment with a credible opinion of value.

Know who your client is. Know who the intended users are. Know exactly what the intended use is for your appraisal.

Avoiding Lawsuits

You hold yourself out to the public as an appraiser. You are the expert! You will be held to a higher degree of care and competency by your peers, the public, and the courts.

Do not criticize work accomplished by another appraiser without having all of the facts.

Avoiding Lawsuits

Stay “up-to-date” on current trends, rules and regulations, and supplemental standards.

Not being “up-to-date” is not an excuse. It is a violation of the COMPETENCY RULE, found in the Uniform Standards of Professional Appraisal Practice (USPAP).

Who is Suing Appraisers?

Four of the parties that are suing the most appraisers:LSF6 Mercury REO InvestmentsLehman Brothers Holdings, IncHeritage Pacific FinancialFederal Deposit Insurance Corporation

Note: The FDIC has also begun targeting commercial appraisers with lawsuits and subpoenas

Reference: Appraisal Management Liability Webinar

FDIC getting “Aggressive”

The FDIC has begun to get very aggressive with appraisers that supplied appraisals to banks that the FDIC has closed, merged, or taken over in the past 4 years.

FDIC is suing the appraisers for

monetary damages in connection with discrepancies found in their appraisal reports.

FDIC Sues More Appraisers

"In the two weeks leading up to Thanksgiving Day, the FDIC sued 32 individual residential appraisers and several mortgage brokers/bankers in 12 separate lawsuits. 

-- in the last three years, the FDIC has sued a total of 151 appraisers and appraisal firms in AZ, CA, GA, IL, MD, MI, MN, NV, NY, SC, and UT.  In addition, the FDIC has identified approximately 350 additional appraisers as having delivered negligent appraisals to the two AMCs it has sued.“

Reference: Appraisal Today Newsletter, Dec. 2012

FHFA Sues UBS to Recover GSE Mortgage LossesUBS Americas Inc., several of its

subsidiaries, and former executive officers were sued on July 27, 2012 in U.S. District court for the Southern District of New York.

The Federal Housing Finance Agency (FHFA) brought suit charging violations of securities laws in the sale of private label residential mortgage-backed securities to Freddie Mac and Fannie Mae.

* IRS Requires Qualified Appraisers * (Part 1)

Congress has approved the Pension Reform Act.

As part of this Act, the IRS requires that appraisals for Estate Taxes and for non-cash Charitable Contributions (conservation and historical preservation easements) be performed by qualified appraisers, such as those who have earned a designation from a professional appraisal organization (AI, NAIFA, ASA, etc.) and who meet other requirements.

Ref: Appraisal News On Line, 10-3-07

* IRS Requires Qualified Appraisers * (Part 2)

The I.R.S. is now requiring appraisals to be in conformance with generally accepted appraisal standards (USPAP) and the Federal Appraisal Standards of Practice (better known as the Yellow Book) when applicable.

They now have the authority to impose accuracy-related penalties on taxpayers and appraisers who provide substantial or gross miscalculations.

Ref: Appraisal News On Line, 10-3-07

IRS: Tax Preparer Definition Includes

Appraisers The Internal Revenue Service

has issued a memorandum reminding appraisers engaged in the preparation of gift or estate tax returns that they are subject to civil and criminal penalties for conduct the Internal Revenue Service considers problematic.

IRS & Appraisers, (conti.)

As stipulated in the Pension Protection Act of 2006 under Internal Revenue Code Section § 6695 (and the subsequently added Section § 6695A), appraisers who submit substantial or gross valuations are subject to monetary penalties if they knew, or reasonably should have known, that the appraisal would be used in a tax return or refund claim.

Reference: Appraiser News on-line, Appraisal Institute, 9-30-09

Bizarre Quotes

“As of tomorrow, employees will only be able to access the building using individual security cards. Photos will be taken next Wednesday and employees will receive their cards in two weeks” –Microsoft Corp.

“E-Mail should not be used to pass on information or data. It should be used for company business.” –Electric Boat Corp.

Bizarre Quotes

Memo from senior management saying: “This is to inform you that a memo will be issued today regarding the subject mentioned above.” – Microsoft Corp.

Quote from a manager: “Teamwork is a lot of people doing what I say.” –Citrix Corp.

More Bizarre Quotes

The lawyer asked the witness: “ Now Doctor, isn’t it true that when a person dies in his sleep, he doesn’t know about it until the next morning?”

In a divorce case the judge announced: “I have decided to give your wife $775 a week.” The ex-husband replied: “That sounds fair, your Honor. I’ll try to send her a few bucks myself.”

More Bizarre Quotes

A church bulletin announcing an upcoming marriage: “So ends a friendship that began in their school days.”

A church bulletin announced their annual tithing campaign with the slogan:

“I upped my pledge … up yours.”

Bizarre Quotes

“Doing it right is no excuse for not meeting the schedule. No one will believe you solved this problem in one day! We’ve been working on it for months. Now, go act busy for a few weeks and I’ll let you know when its time tell them.” –Mining & Manufacturing Div./3M Corp.

Bizarre Misprints“Arthur Adams was seriously injured

Saturday afternoon when he came into contact with a high voltage wife.”

“For Sale. Lovely rosewood piano. Owner going abroad with beautiful twisted legs.”

“At the fair they will exhibiting a full range of shoes for girls with low cut fancy uppers.”

Bizarre Misprints

“Wrap poison bottles in sandpaper and fasten with scotch tape or a rubber band. If there are children in the house, lock them in a small box.”

“A heavy pall of lust covered the upper two-thirds of Texas last night and was expected to drift south-east over the rest of the state by morning.”

How About This!

The French customs inspector admonished the elderly 83 year old man for not having his passport ready for inspection saying that all Americans have to show their passports upon arrival in France.

The elderly American quietly replied “ When I came ashore at Omaha Beach on D-Day in 1944 to help liberate this country, I couldn’t find any Frenchmen to show it to.”

These comments were made in 1959

“I’ll tell you one thing, if things keep going the way they are, it’s going to be impossible to buy a week’s groceries for $20.”

“If cigarettes keep going up in price, I’m going to quit. A quarter a pack is ridiculous.”

“Did you hear the post office is thinking about charging a dime just to mail a letter.”

“Have you seen the new cars coming out next year? It won’t be long before $2,000 will only buy a used one.”

How many types of Appraisals are there?

There are still two types of Appraisals:

Good Appraisals and Bad Appraisals.

DefinitionsRural - Suburban - Urban

If you stand naked on the front porch and the neighbors can’t see you …… it’s Rural.

If you stand naked on the front porch and the neighbors call the cops on you….. it’s Suburban.

If you stand naked on the front porch and the neighbors ignore you….. it’s Urban.

Only for those, who can relate.

1983: TODAY: Long hair Longing for hair Hoping for a BMW Hoping for a BM Going to a new, hip Receiving a new

joint. hip joint. Rolling Stones Kidney Stones Disco Costco

Passing the driver’s Passing the Vision test. test. KEG EKG

Acid Rock Acid Reflux

The Year was 1913 !!Average life expectancy was 47

years.Only 14 percent of homes had

bathtubs.Only 8 percent of homes had a

telephone.The maximum speed limit in most

cities was 10 mph.There were only 8,000 cars and only

144 miles of paved roads.The average wage was 22 cents per

hour.

Census Tract Info & Maps

For Census Tract information and statistics, using the street address:

http://www.ffiec.gov/geocode/default.htm

For Census Tract maps: http://ftp2.census.gov/plmap/pl-trt/ click

on state, then county.

Source: www.appraisersforum.com

Are You Being Sued?Game Plan:

1) Send the summons and complaint to your Insurance carrier immediately.

2) Retain an attorney, if you do not have E & O Insurance.

3) Collect and organize your work file. Make a copy and give to your attorney.

4) Do not discuss the lawsuit with other involved parties or their counsel.

Are You Being Sued?Game Plan:

5) Be prompt, be courteous, be thorough, and be truthful with your insurance representative or with your attorney.

6) Become a partner with your attorney. The attorney works for you, not the other way around.

Are You Being Sued?Game Plan:

7) Provide the following in a timely fashion: Provide a detailed narrative including

everything about your role in the case.Insist on an early face-to–face meeting

with your attorney and have all pertinent documents available.

Actively participate in both the discovery and settlement (if applicable) phases of the litigation.

Are You Being Sued?Game Plan:

Dealing with a lawsuit can be a very stressful experience.

The lawsuit will not simply disappear. It must be resolved in some way.

You must take some proactive steps toward resolution.

The successful resolution of the suit will allow you to return to your productive business as soon as possible

Ken Guilfoyle Senior Certified National

Instructor McKissock L.P.

P.O.B 1673 Warren, PA 16365 - 3158

Phone: 800-328-2008 Fax: 814-723-7289

On the Web:www.mckissock.com E-Mail: ken@mckissock.com

Who Files Complaints Against Appraisers ?

50% are initiated by lenders, lender regulators, staff appraiser reviewers, etc.

20% are initiated by borrowers and

homeowners. 20% are initiated by other appraisers. 10% fall into the others category.

Who Sues Appraisers ?

50% to 70% of appraiser law suits are from third parties – sellers, buyers, borrowers, other party in a divorce, etc.

30% are from lenders trying to recover monies from a mortgage in default.

Why do Appraisers get Sued?

Main reasons for lawsuits:

Appraiser’s failure to detect and disclose obvious defects.

Errors in Square Footage. Don’t rely on public records or someone else’s appraisal.

Over or under valuation of the property

When do Appraisers get Sued?

Average of 18 to 48 months after the appraisal.

If there is a buyer defect, within a couple of months.

As long as 10 years for lender claims.There is no statute of limitations for

fraud.

Reference: Appraisal Today Newsletter

Why Are Appraisers Disciplined ?

1) Failing to inspect the subject property and/or the comparable sales.

2) Failure to seek the professional assistance of another individual.

3) Falsely claiming a personal inspection of the subject property.

4) Forgery of another appraiser’s signature and/or license number.

5) Use of an expired license.

Why Are Appraisers Disciplined ?

6) Failure to analyze prior sales, pending sales, and/or listings of the subject property.

7) Use of a suspended license. 8) Falsified Appraisal Log for upgrade

certification. 9) Failure to adequately disclose the scope

of work performed in appraisal assignments.

10) Commission of errors in the sales comparison approach to value.

Why Are Appraisers Disciplined ?

11) Appraiser lacked either geographical or technical competency.

12) Misrepresentation of relevant property characteristics, i.e. neighborhood factors, site, improvements, stigmas, etc.

13) Commission of errors in the cost approach and income approach to value.

14) Reliance on boiler-plate comments that are not relevant to the assignment.

15) Omission of relevant information from the appraisal report.

Do You need E&O Insurance?

An appraiser is being sued for not reporting that insulation in a home was vermiculite and contained asbestos.

Trial date is set. Estimated cost to defend the appraiser is $35,000.

E&O Insurance cost is $1,400 (+/-) per year.

It you appraise long enough there is a good chance that you will be sued.

Without E&O Insurance, you have no protection at all.

10 Tips to Reduce Your E & O Exposure

Keep good work files in anticipation of litigation

Establish sound office procedures to reduce errors

Do not accept assignments outside your geographical area or your area of expertise.

Clarify your Scope of Work as effectively as possible.

10 Tips to Reduce Your E & O Exposure

Verify information given to you by others.

Use specifically drafted additional language to limit your liability and clarify your Scope of Work.

Take interior and exterior photographs of all properties appraised.

Limit the distribution of your report whenever possible.

10 Tips to Reduce Your E & O Exposure

Before hiring a new appraiser, employee or independent contractor, thoroughly investigate their qualifications and experience.

Affiliate with a nationally recognized appraisal association and keep up to date with new developments in your profession.

REMEMBER WHEN--?

“2012/20013 USPAP” Remember these 24 pages !

Pg 7: Ethics Rule Pg 10: Record Keeping Rule Pg 11: Competency Rule Pg 13: Scope of Work Rule Pg 15: Jurisdictional Exception Rule Pg 16 thru 21: Standard 1, Developing a

Real Property Appraisal Pg 22 thru 30: Standard 2, Reporting a

Real Property Appraisal

Sample Statements Requiredby 2012-2013 USPAP

I have not provided any services in any capacity to the subject property within the past three years. (Ref: SR 2-3)

The exposure time for the subject property is similar to the comparable or competitive properties as identified in the appraisal report. ( Ref: SR 2-2b(v) Comment)

Exposure Time Sample (conti.)

 The following statement is actually taken from the pre-2005 Fannie/Freddie certification pages (1004B):

   "Unless noted otherwise in the report, exposure time is the same as the marketing time indicated in the Neighborhood Section."  

Keep in mind that exposure time is looking back, while marketing time is looking forward.

“2012/2013 USPAP-on-Line”

Looking to paste something from USPAP into your report?

Here is the link to “USPAP-on-Line” from the Appraisal Foundation…

http://www.uspap.org/2012USPAP/eUSPAP2012.htm

2014-2015 USPAP Courses

The Appraisal Foundation (TAF) contracted with McKissock, L.P. to write the 2014-2015 USPAP 7 Hour Update and the 15 Hour USPAP “on-line” courses, subject to oversight by TAF

TAF will write both of the “in-class” 2014-2015 USPAP courses.

Appraising Vacant Land

Licensed or Certified Residential Real Property Appraisers may appraise vacant land that is zoned for residential 1 to 4 unit use or the highest and best (HBU) is residential 1 to 4 unit use.

All other vacant land must be appraised by a Certified General Real Property AppraiserReference: TAF’s “The Real Property Appraiser Qualification Criteria” booklet,

effective January 1, 2008

Can You Support “Effective Age”?

Go to: www.mckissock.com

Click on:“Help”

Click on: “Student Download”You will find it there

How Do You Extract “Forecasting” & “Quick Sale”

Adjustments Go to:

www.mckissock.com

Click on: “Help”

Click on: “Student Download”

You will find it there.

Fannie Mae, Freddie Mac, & FHA Set Loan Limits for 2013

The Maximum Loan amounts for 2013 (announced 12-1-12) are $417,000. for one-unit properties except for certain “permanent” high-cost areas in the Northeast and Southern California. Maximum loan amounts will be reduced to $625,000.00 in those areas

Congress continued FHA’s Maximum Loan amount for one unit properties to $417,000. for most areas in the U.S. as of January 1,2013

Reference: Appraisal institute Newsletter, & www.efanniemae.com, Loan limits page

What is a Billion?

A billion seconds ago, it was 1974. A billion minutes ago, Jesus was

alive. A billion hours ago, our ancestors

were living in the stone age. A billion days ago, no one walked on

the earth on two feet. A billion dollars ago, was only 6

hours and 20 minutes at the rate our government spends our money.

What is a Trillion? If you paid someone a dollar a

second to reach $1 Trillion, it would take 31,700 years.

If someone paid you $100 every second, you would be a millionaire in one day with more than $8.6 million. To amass $1 Trillion, you would have to receive the money day and night for 317 years.

$1 Trillion would be equal to a stack of $1,000 bills 67 miles high.

Reference: Washington Post article, “Thinking about the Unthinkable”

Is This Really True ?

What four positive numbers have a sum that is equal to their product? Meaning: a + b + c + d = a x b x c x d

Reference: Parade magazine, March, 2008

Answer: 1, 1, 2, and 4.

What Do You Really See ?

What Do You Really see?

ATTENTION: FHA Appraisers

HUD has moved its HUDClips website for notices, handbooks, mortgagee letters, FAQs, federal register notices, Q & A information, and other important documents to: http://www.hud.gov/offices/adm/hudclips/index.cfm 

 

What Do You Really See?

Do You Know This About

COMPETENCY ?

If you stay even – You loose !!

Continuing Education is a MUST.

What Do You Really See?

Can You Recognize a “STROKE” Victim?

Neurologists say they can reverse the effects of a STROKE, if treated within three hours.

Bystanders can recognize a STROKE by asking three simple questions:Ask the individual to SMILE.Ask him or her to RAISE BOTH ARMS.Ask the person to SPEAK A SIMPLE SENTENCE

(coherently).

If he or she has trouble with any of these tasks, call 9-1-1 immediately and describe the symptoms to the dispatcher.

Stress Management Technique

Close your eyes. Picture yourself near a stream.

Birds are softly chirping in the cool air. No one but you knows your secret place. You are in total seclusion from the hectic

pace called the world. The soothing sound of a gentle waterfall

fills the air with a cascade of serenity. The water is crystal clear. You can easily make out the face of the

person you’re holding underwater. See! You’re smiling already.

Heard at Zoning Hearings

R / E / A / DR / E / A / D

__MAN__BOARD

__MAN__BOARD

CYCLECYCLE

CYCLE

CYCLECYCLE

CYCLE

He’s / HimselfHe’s / Himself

Do YouUnderstand

__WEAR__LONG

__WEAR__LONG

TOWN

TOWN

SANDSAND __STAND__I

__STAND__I

GROUNDFeetFeetFeetFeetFeetFeet

GROUNDFeetFeetFeetFeetFeetFeet

DiceDice

DiceDice

LE VEL

LE VEL

R R O A D

AD

R R O A D

AD

____0____BA

MBA

PHD

____0____BA

MBA

PHD

__MIND__MATTER

__MIND__MATTER

Interpretation

R / E / A / DR / E / A / D

__MAN__BOARD

__MAN__BOARD

CYCLECYCLE

CYCLE

CYCLECYCLE

CYCLE

He’s / HimselfHe’s / Himself

Sand BoxMan OverboardI UnderstandSix Feet UndergroundCross RoadsRead Between the LinesMind Over MatterLong UnderwearDowntownTri CycleUn LevelTwo DiceHe’s Beside Himself3 Degrees Below Zero

Sand BoxMan OverboardI UnderstandSix Feet UndergroundCross RoadsRead Between the LinesMind Over MatterLong UnderwearDowntownTri CycleUn LevelTwo DiceHe’s Beside Himself3 Degrees Below Zero

__WEAR__LONG

__WEAR__LONG

TOWN

TOWN

SANDSAND __STAND__I

__STAND__I

GROUNDFeetFeetFeetFeetFeetFeet

GROUNDFeetFeetFeetFeetFeetFeet

DiceDice

DiceDice

LE VEL

LE VEL

R R O A D

AD

R R O A D

AD

____0____BA

MBA

PHD

____0____BA

MBA

PHD

__MIND__MATTER

__MIND__MATTER

Interpretation

Hire It Or

Lease It

Hire It Or

Lease It

Use It Use It

Enter ItOr

Easement

Enter ItOr

Easement

Sell ItSell It

Rights In

Real Estate

GUSHERGUSHER

Refuse to Do anything

Refuse to Do anything

Give It AwayGive It Away

Our Bundle of Rights

Physically Possible

Legal

Financially Feasible

Maximally Productive

All Possible Land Uses

Highest and Best Use

Mortgage Loan Fraud

“Mortgage Fraud is rampant. It’s a crisis in the making.”

This is according to the FBI.

Mortgage fraud is committed for one of two reasons

To obtain a property

To gain a profit

What should you remember?

When appraisers go bad, they need to be prosecuted.

Don’t send your problems down the street.

From the FDIC !The FDIC Vice-Chairperson recently

testified at a Congressional Sub-Committee Hearing (March 2012):There are 4,375 Mortgage Fraud

investigations now in process by the FDIC.

The FDIC expects to open more than 9,000 investigations in the next 3 years.

The investigations are targeting Mortgage Brokers, Attorneys, Agents, Appraisers, Title Companies, and Insurance Companies.

Reference: Appraisal Scoop News Letter

FDIC filing Lawsuits --The FDIC is now filing MBS

complaints and lawsuits against mortgage originators, banks, and other MBS investors.

FDIC now using retrospective AVM models to claim that appraisals at issue were flawed and failed to comply with USPAP

Reference: Appraisal today news letter, April 10, 2012

We Saw This Coming !!Financial institutions filed

19,934 suspicious activity reports involving mortgage loan fraud  in the three months ended Sept. 30,2012, up from 16,567 in the same period of 2011.

Nearly 62% of the filings in the quarter involved suspicious appraisal activity that began at least four years ago.

Reference: Financial Crimes Enforcement Network.

Appraiser’s Mortgage Fraud Settled via Consent Orders

Two Real Property Appraisers have settled their mortgage fraud claims with consent orders issued by a U.S. District Judge.

Both appraisers will pay $100,000 in penalties and are barred from performing appraisals for federally-insured loans.

They were charged with conspiring to commit mortgage fraud in connection with the sale of residential properties.

Reference: Mortgage Fraud blog

From “Valuation Review” Newsletter

The Property Valuation Fraud Index has increased 46 % from the same period one year ago.

Analysts expect the Index to continue to rise over the next three years as ARM loans reset throughout 2012 & 2013.

Comment: Do not let your E & O Insurance lapse.

Reference: Valuation Review Newsletter, 11-09-12

Additional Thoughts….??

• Rather fail with honor than succeed by fraud. (by: Socrates)

• Crime pays or there would not be any crime. (by: G. Gordon Liddy)

• The worst day at work is better than the best day in prison. (by: Unknown)

• I didn’t do it. Nobody saw me do it. Can’t prove anything. (by: Bart Simpson)

Types of FraudFraud for Property/Housing

Types of FraudFraud for Property/Housing

Perpetrator is borrowerInvolves single loan:

Income & property value may be alteredDown payment may be borrowedDebt may be undisclosed

Borrower seeks housing and/or cash from loan

Borrower intends to repayAccounts for approx. 20% of all

Mortgage Fraud

Types of Fraud Fraud for Profit

Types of Fraud Fraud for Profit

Often involves industry professionalsMultiple loan transactions and/or

institutionsIncludes many (Gross)

misrepresentationsParticipants frequently paid for

participationBorrowers sometime unaware of

scheme Accounts for approx. 80% of all

Mortgage Fraud

Typical Fraud (For Profit) Schemes

Backward ApplicationAir LoansSilent Second Nominee LoansProperty “Flips” Inflated AppraisalsEquity SkimmingForeclosure Schemes

Another Study about Mortgage Fraud

Base-Point Analytics has found that misrepresentations on loan applications have accounted for up to 70 % of mortgage early payment defaults (EPDs)

Analyses of more than 16,000 loans revealed misrepresentations in the loan file that later led to default.

The misrepresentations included: Income inflated by more than 500 %Overvalued property appraisals by 100 % or

moreFictitious employers, and falsified tax records

Reference: http://home.businesswire.com 2-16-12

Modified Loans Re-default at High Rates

A report issued by the Office of the Comptroller of the Currency and the Office of Thrift Supervision has found that 55 % of loans modified in the first quarter of 2011 were 30 or more days delinquent after six months.

The findings were based on loan-by-loan data in a standardized format for 35 million first-lien mortgages.

Reference: Appraiser News

Mortgage Loan FraudCOMMON MISREPRESENTATIONS

INCOME & EMPLOYMENT

1. Income is overstated.2. Length of employment is overstated.3. Fictitious employment is reported.4. Employment is

backstopped by co-conspirators.

OCCUPANCY1. Borrower intends to use property for rental income.2. Borrower is purchasing property for another party.3. Appraisals almost

always list the propertyas owner occupied.

Mortgage Loan FraudCOMMON MISREPRESENTATIONS

ASSETS AND COLLATERAL

1. Assets are overstated.2. Collateral is overstated.3. Collateral is nonexistent (forged promissory notes

and Land Contracts).4. Collateral is stolen orcounterfeit (fraudulentmoney orders).

DEBT & CREDIT1. Borrower's debts are not fully disclosed.2. Borrower's credit history

is not fully disclosed oris altered.3. Borrower assumes the SSAN# of anotherperson.

Mortgage Loan FraudCOMMON MISREPRESENTATIONS

DOWN PAYMENT

1. Down Payment does not exist.2. Down Payment is

concealed in a non-existent Land Contract.3. Down Payment isborrowed and disguised with a fraudulent gift letter.

PROPERTY VALUE

Property value is inflated to:

1. Increase the sales value to make up for no down payment..2. Generate cash proceeds in fraud for profit.

Money Lost to Mortgage Fraud?

The actual amount of money lost to mortgage fraud each year is unknown.

No central organization collects mortgage fraud loss data.

Federal Bureau of Investigation

Supervisory Special Agent: Ronda Heilig, Financial Institution Fraud Unit Work Phone: (202) 324-8634

How to avoid getting snared in a Fraud Scheme

Always check prior sales and prior listings

Verify comps given to you by others – especially if you are told that you don’t need to do so

If your research shows numerous sales of similar properties in the same neighborhood involving the same parties, You may be dealing with a fraud scheme

When you are the only one that can be trusted with this assignment

How to avoid getting snared in a Fraud Scheme, conti:

Don’t accept assignments outside your geographic area of expertise

Use caution when asked for that assignment to be treated as a “rush” job

Be most professional when working with friends

The con man is that individual that speaks well, is so nice, exudes trust, and has your confidence

Most of all, be careful who you trust

Sound-bites from the “Valuation Fraud

Symposium”

Sponsored by The Appraisal Foundation (TAF)

Sound-bites

“If you have never fired a client, you’re probably not doing a very good job as an appraiser”, --- Danny Wiley, Past ASB board Chairperson

Sound-bites

“We (appraisers) are the most regulated profession in the Real Estate Industry. AMCs and Mortgage Brokers should have the same level of regulation”, --- Ken Guilfoyle, McKissock Appraisal School Instructor

Sound-bites

“Fannie Mae refers unacceptable appraisal reports to state licensing or regulatory boards for any action they deem appropriate”, ---Mark Simpson, Director of Residential Property Standards for Freddie Mac

Sound-bites

“Negligence and incompetence are a slippery slope that put many appraisers at risk for falling into fraudulent behavior”, --- Rachel Dollar, Symposium panelist

Sound-bites

“Lenders look closely at the appraisal’s transfer history, the use of less recent or less proximate comparable sales, a sales price that is higher than the listed price, unreasonable adjustments, and the use of all or multiple non-MLS sales as comps”, --- Douglas Vincent, Bank of America

Sound-bites

“Appraisers need to be especially vigilant against identity fraud, someone using your signature without your knowledge”, --- John Arterberry, Former Executive Deputy Chief, U.S. Department of Justice

10 Ways to Differentiate your Business: By Doug Smith, IFAS

Manners & Courtesy: These things account for your repeat business or referral business

Constantly upgrade your knowledge about the appraisal environment

Appropriate training for you and your staff

Always look your best. Look professional with your business cards, stationary, etc.

10 Ways, continued:

Make service delivery a priority: Speed does count in today’s market

Zero Defects: Review the report for mistakes and spelling before it leaves your office

Be a reliable provider: Make adjustments to your schedule to satisfy your client

10 Ways, continued:

Build your identity: Remember that dress and appearance really do count

Project a community image: Participate in community affairs

Promote Feedback: Listen to what your customers are saying about your company and your services. Your reputation as a professional is everything!

Some Good Advice !!

Before getting into your car, look around you and look into your car.

If you are parked next to a big van, enter your car from the passenger side.

As soon as you get into your car, lock the doors and leave.

Your elbow is the strongest point on your body. If you are close enough to use it, DO SO !

Facts about Pittsburgh, PAThese are some of the things that

were first introduced in Pittsburgh:First Ferris Wheel, 1892-1893First Banana Split, 1904First Baseball Stadium, 1909First BINGO Game, 1920’sFirst Polio Vaccine, 1953First Pull-Tab cans, 1962First Mr. Yuk Sticker, 1971

U.S. Facts and MoreHarry S. Truman was the only

president in this century who didn’t have a college education.

The first gold rush in the United States happened in Dahlonega, Georgia 1828.

The only food that does not spoil is Honey

General Ulysses S. Grant’s real name was Hiram

Maine is the only state in the lower 48 that touches only one other state.

FREE Information from WEB-SITES

www.census.gov All kinds of free information here including population, housing, income, etc.

www.zillow.com Individual property information and trend analyses. Registration required but it is free.

www.city-data.com Free information about individual communities.

www.neighborhoodscout.com Free information about individual communities.

www.USA.Kaspersky.com select “Free Antivirus Scan” at the top of the page.

www.building-cost.net Cost approach information, Replacement Costs for residential improvements.

www.Online-Home-Values.com Check home values, any U.S. address

Continued Education?I’d rather be --

If you think education is expensive ---- try ignorance !!

- Ken Guilfoyle