TAKING BACK CONTROLOF THE APPRAISAL

PROCESS

presented by:SCOTT HAMLING

Cherry Creek Mortgage

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HISTORY

Important: HVCC did NOT cover Realtors……

Dodd/Frank DOES cover realtors!

But more important………Realtors have the right to discuss valuation with

appraisers

In 2009: Home Valuation Code of Conduct (HVCC)

HVCC has been replaced with Dodd/Frank Act

Dodd/Frank RulesDodd/Frank makes it a Federal crime for anyone with an interest

in the transaction to;

Compensate, coerce, extort, collude, instruct, induce, bribe, or intimidate the appraiser.

Mischaracterize the appraised value of the property Seek to influence an appraiser or otherwise to encourage a

targeted value.

Realtors have the right to discuss valuation with appraisers

Dodd/Frank RulesThe requirements of subsection (b) shall NOT be construed as prohibiting a

mortgage lender, mortgage broker, mortgage banker, real estate broker, appraisal management company, employee of an appraisal management company, consumer, or any other person with an interest in a real estate transaction from asking an appraiser to undertake 1 or more of the following: it is OK to Ask Appraiser to

(1) Consider additional, appropriate property information, including the consideration of additional comparable properties to make or support an appraisal.

(2) Provide further detail, substantiation, or explanation for the appraiser's value conclusion.

(3) Correct errors in the appraisal report.

AMC vs. Local LenderHow does an AMC (national lender appraiser pool) compare with a local lenders appraisal pool?

Cherry Creek Mortgage Co:In-house appraisal management divisionIdentified best appraisers in the marketStrict guidelines, lending training, and good pay for appraisers

Appraisers have no incentive to do a great job – you need to be proactive in protecting your transaction!Use a loan officer that works for a company that has local control

of the quality of appraisers used.

Watch FHA and VA – Appraised value sticks with the property for:FHA – 4 monthsVA – 6 months

Recommendations for Listing Agent

The Seller will be angry with YOU if the deal does not close (not buyer, buyer’s agent, or lender)

Get it right the first time – less than 10% chance of increasing the valuation after appraisal

Meet the appraiser at the property

Recommendations for Listing AgentBefore looking for comparables:

1. Pull up a 1004MC form

2. This form will dictate the comparables needed

3. Example: 1004MC shows

values are declining Investor requires minimum

3 comps that closed in past3 months

PLUS 2 listing or pending sales

4. All comparables must adjust for at or above appraised value

Recommendations for Listing AgentAppraiser packet suggestions:

1. Contract2. Listing brochure3. List of all property upgrades, completion dates and costs4. The sketch if property was measured before listing5. County assessor records6. Listing history7. 1004MC form obtained from MLS listing service8. Comparables to support sales price (listed, pending, sold)

Recommendations for Listing Agent

Meeting the appraiser at the property:

Setup as for a buyer showing (clean and well cared for matters)

Meet somewhere you can spread out materials you prepared: Review 1004MC form Explain why you chose the comps you have Show other comps you found, and explain why they are poor

comps Tell about the property’s special features

Recommendations for Listing AgentMeeting the appraiser at the property:Turn appraiser loose (do not follow from room-to-room)Before appraiser leaves:

Would you please give me the same consideration that VA requires it’s appraisers to give and call to INVOKE TIDEWATER if you find you are not reaching sales price.

If there are value issues – don’t panic! Stay friendly with appraiser Offer to do more research on comps Consider contract extension – remember you only have a 10%

chance of getting the appraised value increased

Realtor vs. Appraiser Valuation

Realtors and Appraisers value differently:

Realtors value properties using PPSF

Appraisers value properties by making adjustments for differences

Accessing the 1004MC Form

Accessing the 1004MC Form

Accessing the 1004MC Form

Accessing the 1004MC Form

Accessing the 1004MC Form

Accessing the 1004MC Form

Accessing the 1004MC Form

UCDP…What is it?

How will this affect my business?

If you are interested in receiving Scott’s daily blog please send an email to:

SCOTT@SCOTTHAMLING.COM

Copyright 2014 Cherry Creek Mortgage Co., Inc. Company NMLS# 3001. All rights reserved. Cherry Creek Mortgage is not endorsed by, nor acting on behalf of or at the direction of the U.S. Department of Housing and Urban Development, Federal Housing Administration, the Veterans Administration, the U.S. Department of Agriculture or the Federal Government. This material is informational only and is not an offer to lend or recommend available products. This is not an advertisement to extend credit as defined by Regulation Z, nor an application for credit as defined by RESPA/Regulation X. All applications are subject to underwriting guidelines and approval based upon the credit, assets, value of subject property and borrower’s ability to repay. Not all applicants are eligible for or qualify for all loan products offered. All loan programs, terms and conditions are subject to change without notice.

Questions?Thank you for your participation!

Call with questions – We are here to help.

Copyright 2014 Cherry Creek Mortgage Co., Inc. Company NMLS# 3001. All rights reserved. Cherry Creek Mortgage is not endorsed by, nor acting on behalf of or at the direction of the U.S. Department of Housing and Urban Development, Federal Housing Administration, the Veterans Administration, the U.S. Department of Agriculture or the Federal Government. This material is informational only and is not an offer to lend or recommend available products. This is not an advertisement to extend credit as defined by Regulation Z, nor an application for credit as defined by RESPA/Regulation X. All applications are subject to underwriting guidelines and approval based upon the credit, assets, value of subject property and borrower’s ability to repay. Not all applicants are eligible for or qualify for all loan products offered. All loan programs, terms and conditions are subject to change without notice.

Jay RabideauLoan OriginatorNMLS # 2411191435 Stuart Street, 3rd FloorDenver, CO 80204Phone: 303-586-3182Cell: 720-989-6836Fax: 303-200-7887