Real Estate Appraisals

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Views and opinions expressed by individual authors do not necessarily state or reflect those of USPAP, The Appraisal Foundation or other supporting bodies, and may not be used for advertising or product endorsement purposes.

The Appraiser Qualifications Board of The Appraisal Foundation adopted changes to the Real Property Appraiser Qualification Criteria that will become effective on January 1, 2008. These changes represent the minimum national requirements that each state must implement for individuals applying for a real estate appraiser license or certification as of January 1, 2008.
The major components of the appraiser qualification criteria change are Qualifying education experience.

1. There are college-level course requirements for the Certified Residential and Certified General classifications.
2. The required number of classroom hours in appraisal education has increased significantly in all three licensure classifications.
3. There are minimum classroom hours of coverage requirements for specific topic areas, which are known as modules.

Official Executive Summary.

The Uniform Standards of Professional Appraisal Practice (USPAP) are the generally accepted standards for professional appraisal practice in North America. USPAP contains standards for all types of appraisal services. Standards are included for real estate, personal property, business and mass appraisal.

The Office of Housing Enterprise Oversight (OFHEO) in its quarterly same-house market report last January, stated, sort of in passing, that the rate of housing appreciation declines as the rate of refinancing rises. The report does not offer a reason for this phenomenon, nor does OFHEO, which has regulatory oversight of Fannie Mae and Freddie Mac, appear particularly concerned, but the reason seems fairly transparent. Many people who are refinancing have sufficient equity so that, even if with a cash out for debt consolidation or other reasons, may not have a critical need to hit a value point (the amount of the desired mortgage). However, in many home purchases buyers are being qualified based on a certain amount of down payment. For someone putting 20 percent down, a low appraisal might reduce the loan to value (LTV) to 85 percent and force the buyer to pay for Private Mortgage Insurance (PMI). For buyers with only 5 percent to put down, a low appraisal may end their homeownership dream and the lender’s commission. In many refinances an appraiser doesn’t have to push very hard to find comparables that will allow a comfortable loan to value for the proposed mortgage.

Attorney General Eliot Spitzer and the Attorneys General and banking regulators of 48 states announced a $325 million agreement with the nation’s largest subprime mortgage lender to overhaul its existing sales, appraisal and closing practices.

The two-year investigation revealed that Ameriquest created a hyper-aggressive, high pressure sales culture that encouraged its sales personnel to engage in deceptive and fraudulent conduct, including:

• Charging consumers thousands of dollars in discount points that resulted in higher commissions for sales personnel but failed to yield a lower interest rate for borrowers;
• Concealing the interest rate and loan costs during the application process;
• Sending inaccurate “good faith estimates”;
• Making misleading comparisons between borrowers’ existing loans and Ameriquest’s loan proposals;
• Falsifying loan documents to push through loans, including inflating borrowers’ incomes;
• Pressuring appraisers to inflate the values of borrowers’ homes;
• Closing loans before they were approved by the corporate office; and
• Failing to fund loans in a timely fashion.

The settlement agreement requires Ameriquest to:

• Provide the same interest rates and discount points for similarly situated consumers;
• Provide full written and oral disclosures regarding interest rates, discount points and prepayment penalties, and provide important information regarding consumers’ pricing options;
• Overhaul its appraisal practices by prohibiting sales personnel from selecting, contacting, or attempting to influence appraisers;
• Provide accurate good faith estimates;
• Refrain from soliciting borrowers for refinancing within two years of the original loan, except under limited circumstances;
• Use independent loan closers; and
• Adopt policies to protect whistle-blowers and facilitate reporting of improper conduct.

We specialize in appraising single family homes and townhouse/condominiums. Our service area includes Los Angeles, Orange County, San Diego, Riverside and San Bernardino.

Our goal is to provide quality appraisal services with excellent turn around times and competitive rates.

Being residents and natives of the area, we know the communities and market conditions very well. Our in-depth knowledge of the area and the real estate market helps produce a well informed opinion of value.

We are committed to our clients, because of todays busy work schedules and time contraints we understand that not all appraisals inspections can be performed during regular business hours, we are available seven days a week and after 5 PM.

To schedule an appraisal please contact:

Due to the large amount of ARM type mortages adjusting to a highter rate we can soon expect a refinance frenzy, not to mention a fair amount of foreclosure and bank REO appraisal work.  ARM adjustments can boost mortage payments as much as 30 percent more per month.