Topics addressed in this document include

• Exam preparedness when changing a credential
• Supervision of a trainee's work
• College degree, or in liew of education when changing a credential

A copy of the complete Q&A may be downloaded by clicking on the attachment below.

The AQB has issued a Guide Note that relates to the verification of experience credit as specified in the Real Property Appraiser Qualification Criteria that became effective January 1, 2008.

The Criteria mandates that the forms used to verify experience credit include ALL of the identified items. While five of the six items are fairly self-explanatory, the AQB has received inquiries regarding the intent of item #4 Description of work performed by the trainee/applicant and scope of the review and supervision of the supervising appraiser.

It is the intent of the AQB that the verification of experience clearly identifies three things under item #4. Please click on the link below for a complete copy of Guide Note 6 and the AQB's clarification of this issue. A sample log has also been provided.

The Required Core Curriculum specifies the educational topics and hours required for each classification in the 2008 criteria. The Interpretation attached below is designed to identify those portions of the Required Core Curriculum that must be satisfied when changing from one classification level to another.

When an appraiser's credential cycleencompasses any period of a partial year (<12 months), what are the CE requirements necessary to renew the credential under the new Real Property Qualification Criteria?

Should a waiver or deferral be granted to individuals who are unable to meet CE requirements of the Real Property Qualification Criteria?

State Regulators now have the ability to update an appraiser’s record on the ASC’s National Registry in real-time. Historical views of an appraiser’s credentials will also provide financial institutions and other users of appraisal services with more complete information for determining an appraiser’s eligibility to perform an appraisal.

The ASC has reorganized material under the tabs: “What’s New,” “Resources For,” “About the ASC,” “Resources and Records,” “National Registry,” “Legal Framework,” “State Appraiser Regulatory Programs,” “Frequently Asked Questions” and “About this Site.”

Click here to visit the ASC home page.

To take a quick guided tour of navigating through the site, click here.

FOR IMMEDIATE RELEASE

Washington, DC--The Appraisal Foundation has begun its annual search for qualified candidates to serve on the Appraiser Qualifications Board (AQB) and the Appraisal Standards Board (ASB). Completed applications for these vacancies must be received by Friday, August 13, 2010.

There are at least two vacancies on each board. The Appraisal Foundation is always interested in expanding the diversity of all Boards by considering applications from business leaders with an interest in valuation or involved in various appraisal disciplines such as business valuation or personal property.

Background and Qualifications:

The AQB is responsible for setting minimum qualification criteria for state licensure and certification of real estate appraisers and has established voluntary qualification criteria for personal property appraisers. Familiarity with appraiser qualifications is a pre-requisite of service on the AQB, and a minimum of ten years of appraisal experience is required. The AQB meets four times per year for approximately ten days in total. Individuals serving on the AQB are compensated for their time and are reimbursed for travel expenses. The individuals selected for the AQB positions will serve a term of up to three-years commencing January 1, 2011.

The ASB is charged with developing, interpreting and amending the Uniform Standards of Professional Appraisal Practice (USPAP). Familiarity with USPAP is a pre-requisite of service on the ASB, and a minimum of ten years of appraisal experience is required. The ASB meets four times per year for approximately ten days in total. Individuals serving on the ASB are compensated for their time and are reimbursed for travel expenses. The individuals selected for a position on the ASB will serve a term of up to three-years commencing January 1, 2011.

Application packages for all positions outlined above are now available directly from

https://appraisalfoundation.sharefile.com/d-s231e959bb8241f8b

or on-line at the Foundation web site: www.appraisalfoundation.org (located directly under the AQB or ASB sections).

If you would like to request an application package via email or if you have questions please feel free to contact Anne Raley (anne@appraisalfoundation.org).

When requesting information on the applications via e-mail, please use the phrase "2010 AQB/ASB APPLICATION INFORMATION" in the subject line, and please include your full name, email address and phone number.

Contact: For further information on this release, please contact:

Paula Douglas Seidel
The Appraisal Foundation
The Madison Building

The Maryland Association of Appraisers is pleased to announce our participation as a panelist on this upcoming introductory webinar , along with appraisers from North Carolina and Florida.

Considered to be a complex appraisal assignment, appraisers will be introduced to:

• What is happening in the market in terms of construction and sales of energy efficient and green homes, especially in new home construction
• How this rapidly evolving technology is impacting the marketplace, and in turn, the valuation process
• How to overcome barriers, such as inadequate databases, in these early stages, through recognized appraisal techniques and methodologies, to provide credible adjustments and supportable opinions of value

Register here for this important webinar

National Program Indicators

• 1,080,113 ENERGY STAR qualified homes built to date
• 24,835 ENERGY STAR qualified homes built 2010 to date
• 106,391 ENERGY STAR qualified homes built in 2009
• 9,775 ENERGY STAR for Homes Partners

• 9,491 ENERGY STAR qualified homes built to date
• 155 ENERGY STAR qualified homes built 2010 to date
• 923 ENERGY STAR qualified homes built in 2009
• 147 ENERGY STAR for Homes Partners

Program Indicators in Baltimore-Towson Area alone

• 6,344 ENERGY STAR qualified homes built to date
• 84 ENERGY STAR qualified homes built 2010 to date
• 572 ENERGY STAR qualified homes built in 2009
• 81 ENERGY STAR Builder Partners

• NVR, NVR-Ryan, NVR-NV (Partners since 2008, 2010 respectively - committed to building 100% of their homes to ENERGYSTAR performance guidelines)-257 homes
• Pulte Homes (partner since 2004) 1,222 homes built
• Richmond American Homes of MD (partner since 2009)85 homes built
• Barry Andrews (partner since 2009) 397 homes built
• Bob Ward and Associates (partner since 1997) 2,194 homes built
• Ryland Homes (partner since 2008) 72 homes built

For a more comprehensive coverage of this rapidly emerging issue, MAA would like to call your attention to our 1 day “Green Residential Valuation” course which is more relevant to appraisers than any other Green course currently available, because it doesn’t talk about only green building attributes, but also about how to appraise them.

USPAP implications presented by the Green home appraisal, Green financing, and the challenges of how to address these Green features within the Sales and Cost Approaches to valuation are also covered, as well as Practical application , through an actual case study of an appraisal performed here in Maryland, including all relevant commentary and documentation.

Approved for 7 hours of CE in MD, PA, DE, and W VA,

All USPAP courses taken for qualifying and continuing education credit must be the National USPAP Courses developed by the Appraisal Foundation, or their equivalent as determined through the AQB Course Approval Program.

In order for a real property appraiser to receive state credit for attending one of the National USPAP Courses or their equivalent course, an AQB Certified Instructor who is also a state certified residential or general appraiser must have taught the course.

Continuing education requirements for real property appraisers have been modified to require 7-hours of USPAP instruction every 2 years. The overall continuing education requirement of 14 hours per year remains unchanged.

The Maryland Real Estate Appraisers Commission has unanimously adopted these new requirements, commencing January 1, 2003. For clarification:

The 7-hour USPAP requirement for continuing education must be taken by all appraisers by December 31, 2005. The 6-hour course previously taught under the old requirements and taken by individuals prior to 01-01-03, will be accepted for license renewals.

After 01-01-03, the 15-hour National USPAP Course or its equivalent must be completed to sit for the state examinations.

• Individuals who took any approved USPAP course prior to 01-01-03 will be able to use that course for qualifying education or CE.



• Any USPAP course taken after 01-01-03 must be the National USPAP Course(7-hr or 15-hr), or its equivalent as determined by the AQB, and must be taught by an AQB Certified Instructor in order to receive credit toward Real Estate Appraiser Licensing or CE.



• Students who fail the 15-hour National USPAP Course Examination are allowed to re-take the examination up to three times without re-taking the course. Each time the examination is re-taken, the examinee will be given a different version of the exam. After three unsuccessful attempts, the examinee must re-take the course.

WASHINGTON, D.C., June 9, 2009 – The Appraisal Foundation, announced that the Appraisal Standards Board (ASB) adopted revisions for the 2010-2011 edition of the Uniform Standards of Professional Appraisal Practice (USPAP), at its recent public meeting in New Orleans.

The 2010-2011 edition of USPAP will be valid for two years, effective January 1, 2010 through December 31, 2011. As with the current edition of USPAP, the new edition will include guidance from the ASB in the form of the USPAP Advisory Opinions and the USPAP Frequently Asked Questions (FAQs).

The new edition of USPAP is scheduled to be available by October 1, 2009. However, appraisers and users of appraisal services should begin familiarizing themselves with the changes to the document as soon as possible. To this end, the ASB has issued a Summary of Actions document, which explains the changes that are being made and the rationale for those changes.

The summary of actions is available by visiting this link to the Appraisal Foundation's website:

Most of the revisions that will become effective on January 1, 2010 involved improving the clarity, understandability and enforceablility of the ETHICS RULE, the COMPETENCY RULE and STANDARD 3: Appraisal Review, Development and Reporting.

There were also two significant changes:

• A requirement was added to the Conduct section of the ETHICS RULE, stating that, prior to accepting an assignment (and if discovered at any time during the assignment), an appraiser must disclose to the client and in the report certification any services regarding the subject property performed by the appraiser within the prior three years, as an appraiser or in any other capacity.

• The appraiser’s obligation to allow a client access to his or her workfile when providing a Restricted Use Appraisal Report was removed.

“The change to the Conduct section of the ETHICS RULE is significant,” said Sandra Guilfoil, Chair of the ASB, the Foundation Board that promulgates USPAP. “It creates a new requirement for appraisers to disclose, up front to prospective clients, any involvement the appraiser might have had with the property within the past three years.”

The ASB believed this new requirement was necessary for public trust. “In a current climate with a focus on things like transparency in financial transactions, the ASB did not believe that USPAP was adequately serving public trust by allowing an appraiser to complete an assignment without initially notifying the client of any recent involvement with the property. “The ASB believes the client has a right to know about an appraiser’s involvement and make the decision whether or not to engage the appraiser in that particular assignment,” said Guilfoil.

In fact, the ASB believed this particular revision was so important that it issued a series of Q&A’s on this topic in April 2009, providing guidance to appraisers almost eight months before the change takes effect. “We understand this new obligation may be unpopular with some appraisers and are doing our best to provide them with guidance,” Guilfoil stated. Finally, Guilfoil added, “We encourage appraisers and users of appraisal services to read through the Summary of Actions now, and thoroughly familiarize themselves with the requirements well in advance of the January 1, 2010 effective date.”

Founded in 1987, The Appraisal Foundation is authorized by the U.S. Congress as the source of appraisal standards and appraiser qualifications for real property appraisers. Through its effective production of the Uniform Standards of Professional Appraisal Practice (USPAP), The Foundation has been instrumental in setting a high level of professionalism in the industry. The Foundation is governed by a Board of Trustees, which oversees two independent boards, the Appraiser Qualifications Board (AQB) and the Appraisal Standards Board (ASB). The Foundation also receives valuable advice from four advisory councils: The Appraisal Foundation Advisory Council (TAFAC), Industry Advisory Council (CAC), Educational Council of Appraisal Foundation Sponsors (ECAFS) and International Valuation Council (IVC). For more information on The Foundation, visit www.appraisalfoundation.org

The following press release has just been issued:

Appraisal Practices Board (APB) to Commence Work in July 2010

Contact: Paula Douglas Seidel, 202.624.3048, paula@appraisalfoundation.org

Washington, DC, February 17, 2010 — The Appraisal Foundation, a Congressionally authorized non-profit organization dedicated to promoting professionalism in appraising through the establishment of appraisal standards and appraiser qualifications, announced today that applications are now available for qualified candidates to serve on the Appraisal Practices Board (APB).

Late last year, the Foundation Board of Trustees unanimously voted to establish this new Board. The APB will be charged with studying the issue of how to best address a void in the marketplace related to guidance on appraisal methods and techniques that would be available to all appraisers practicing in the United States. This guidance will eventually cover all valuation disciplines, with a focus on emerging issues.

After a recent vote of the Board of Trustees to amend the Bylaws and Articles of Incorporation, the APB has now been officially established. The new Board will be similar in structure and composition to the already existing independent boards, the Appraiser Qualifications Board (AQB) and the Appraisal Standards Board (ASB).

The purpose of the APB is to issue voluntary timely guidance to appraisers on emerging valuation issues that are occurring in the marketplace. This guidance will be of assistance to appraisers, appraiser regulators and educators. The new Board will enlist the help of market surveys to identify issues that need to be addressed and will empanel small groups of volunteer Subject Matter Experts (SME) to draft the guidance for review and approval by the Board. The SME panels will be selected by the APB to address specific topic issues within agreed upon timeframes. It is anticipated that the SME panels will be established in the latter part of 2010.

The Appraisal Foundation is now seeking qualified candidates to serve on the APB. The APB will commence work in July 2010. Examples of qualifications that the Boards Nominating Committee will seek in candidates include the following:

• • A minimum of ten years of appraisal experience
• • A strong familiarity with the Uniform Standards of Professional Appraisal Practice (USPAP)
• • Familiarity with valuation methodology and techniques
• • Experience in writing on valuation topics and/or curriculum development
• • Experience with public speaking and/or teaching on valuation topics
• • Experience in serving on a publicly accountable board.

The Application factsheet and form is available online on the Foundation’s web site - and can also be downloaded by clicking on the attachment below

Applications will be reviewed by the Boards Nominating Committee of The Appraisal Foundation and an extensive interview process will be conducted. The final interviews will be conducted in a public forum at the Spring Meeting of the Board of Trustees on May 21, 2010 in California.

Inquiries on the Application or the selection process can be directed to Paula Douglas Seidel (paula@appraisalfoundation.org).

### The Appraisal Foundation, a Congressionally authorized non-profit organization established in 1987, is dedicated to the professional advancement of the appraisal profession. The Foundation accomplishes its mission through the work of its three independent Boards, the Appraisal Standards Board (ASB), the Appraiser Qualifications Board (AQB) and the new Appraisal Practices Board (APB), which will commence its work in July 2010. More information on The Appraisal Foundation is available on the Internet at http://www.appraisalfoundation.org.

The press release appears below.

Thank you,
Beth Riedel,
President, MAA

Appraisal Practices Board (APB) to Commence Work in July 2010

Contact: Paula Douglas Seidel, 202.624.3048, paula@appraisalfoundation.org

Washington, DC, November 5, 2009 — The Appraisal Foundation, a Congressionally authorized non-profit organization dedicated to promoting professionalism in appraising through the establishment of appraisal standards and appraiser qualifications, announced today the establishment of a third independent board, the Appraisal Practices Board (APB).

Earlier this year, the Foundation Board of Trustees established a Task Force to study the issue of how to best address a void in the marketplace related to guidance on appraisal methods and techniques that would be available to all appraisers practicing in the United States. This guidance will cover all valuation disciplines, with a focus on emerging issues.

With the unanimous consent of The Appraisal Foundation Board of Trustees, it was agreed that a new board be established, similar in structure and composition to the already existing independent boards, the Appraiser Qualifications Board (AQB) and the Appraisal Standards Board (ASB).

The purpose of this third board is to issue voluntary timely guidance to appraisers on emerging valuation issues that are occurring in the marketplace. This guidance will be of assistance to appraisers, appraiser regulators and educators. The new Board will enlist the help of market surveys to identify issues that need to be addressed and will empanel small groups of volunteer Subject Matter Experts (SMEs) to draft the guidance for review and approval by the Board.

The need for this type of guidance was underscored with the onset of the declining real estate market. Many appraisers had not previously faced this type of market condition and the impact of foreclosed properties and short sales. Because a majority of state licensed and certified real estate appraisers do not belong to a professional society, they had limited access to guidance.

“In unanimously supporting this concept, the Board of Trustees strongly believes that this is the best avenue for issuing voluntary guidance to appraisers,” said Paul Welcome, Chairman of The Appraisal Foundation Board of Trustees. “We believe that this is the right thing to do for the profession, that it is the right time to do it and that we are the right organization to undertake the task,” added Welcome.

Those interested in serving on the Appraisal Practices Board should consult The Appraisal Foundation’s web site (http://www.appraisalfoundation.org/) for more details after the first of the year. Applications for qualified candidates will be solicited in the Spring of 2010, with the new Board to be constituted and commencing work in July 2010. We anticipate that selection of SME panels will follow in the latter part of 2010.

Success!! Unwavering persistence, alot of hard work by many, and patience have finally paid off.

H.R. 4173 was passed this afternoon by the US Senate by a vote of 60-39. MAA has been an active supporter of H.R. 4173 and these critically important reforms. As reported in my broadcast e-mail to you July 1st, it had passed the House of Representatives last month and is now anticipated to be signed into law by President Obama within the week.

Known as the Dodd-Frank Wall Street Reform and Consumer Protection Act (short title for H.R. 4173), this legislation includes the most significant modernization of the appraisal regulatory structure since 1989.

As previously reported, in addition to ammendments relating to AMC regulation, Appraisal Subcommittee of FFIEC, appraiser independence monitoring, appraiser complaint hotline, AVM's and BPO's, Subtitle F (Appraisal Activities) of Title XIV, Section 1471 of H.R. 4173 Mortgage Reform and Anti-Predatory Lending Act includes a federal appraisal independence standard that intends to replace the Home Valuation Code of Conduct and also includes major changes to Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), including funding for state oversight, administration and enforcement.

Significantly, language was added that would require payment of customary and reasonable fees to appraisers. Specifically, the provision adds payment of customary and reasonable fees to appraisers to the new appraisal independence standard under the Truth in Lending Act.

Evidence of such fees must include government agency fee schedules and independent surveys that exclude appraisal orders from known appraisal management companies. The Truth in Lending Act will be enforced by the new Consumer Financial Protection Bureau created under the bill, and the law also can be enforced by state attorneys general.

In addition to the customary and reasonable fee provision, Title XIV of the bill contains significant reforms relating to Title XI of FIRREA.Highlights include:

The Appraisal Foundation

• AQB Qualification Criteria for Licensed Residential Real Property Appraisers, which is currently voluntary for the states, becomes mandatory for states having such a classification.
• AQB Qualification Criteria for Trainee Real Property Appraisers, which is currently voluntary for the states, becomes mandatory for states having such a classification.
• Any qualification criteria issued by the AQB regarding Supervising Appraisers becomes mandatory for the states.
• The Appraisal Subcommittee shall encourage states to accept courses approved by the AQB Course Approval Program.
• Appraisals for federally related transactions shall be subject to appropriate review for compliance with the Uniform Standards of Professional Appraisal Practice. (Current law simply states that they must be performed in accordance with USPAP).
• Quality control standards for automated valuation models (AVMs) will be established by the Federal financial institution regulatory agencies, in consultation with the Appraisal Standards Board and the staff of the Appraisal Subcommittee.

The Appraisal Subcommittee

Composition

• The Federal Housing Finance Agency (FHFA), the regulators of Fannie Mae and Freddie Mac, and the newly established Bureau of Consumer Financial Protection (to be housed in the Federal Reserve), both become members of the Appraisal Subcommittee.
• The Office of Thrift Supervision, which is being merged into the Office of the Comptroller of the Currency, will no longer be a member of the Appraisal Subcommittee.

Regulatory Authority

• The Appraisal Subcommittee gains additional regulatory authority to prescribe regulations relating to temporary practice, national registry, information sharing and enforcement. To assist in this effort, the ASC shall establish an advisory committee.

Grant Making Authority

• The grant making authority of the Appraisal Subcommittee is expanded to include state appraiser regulatory bodies.

National Registry of Appraisers

• To provide for this additional grant making authority, the National Registry fees, currently set at $25 with a $50 cap, can go to $40 with an $80 cap. The ASC is to review the fee every five years to determine if an adjustment should be made to account for inflation.

National Appraisal Complaint Hotline

• If a national appraisal complaint hotline does not exist within six months of the date of enactment of the legislation, the Appraisal Subcommittee shall establish a national appraisal complaint hotline.

Broker Price Opinions

• In conjunction with the purchase of a consumer’s principal dwelling, broker price opinions may not be used as the primary basis to determine the value of a piece of property for the purpose of a loan origination of a residential mortgage loan secured by such piece of property.
• The term ‘broker price opinion’ means an estimate prepared by a real estate broker, agent, or sales person that details the probable selling price of a particular piece of real estate property and provides a varying level of detail about the property’s condition, market, and neighborhood, and information on comparable sales, but does not include an automated valuation model.

Appraisal Management Companies

• The Federal financial regulatory agencies will set the minimum requirements for appraisal management companies (AMCs).
• AMCs will register with and be subject to the supervision of the state appraiser regulatory agencies.
• The Appraisal Subcommittee will monitor the requirements established by the states for the registration and supervision of the operations and activities of appraisal management companies.
• The Appraisal Subcommittee will maintain a national registry of AMCs that are registered in the states. AMCs will pay an annual fee to the ASC to appear on this registry.

GAO Study

• Within 12 months of the date of enactment, the Government Accountability Office (GAO) will conduct a comprehensive study on the effectiveness and impact of various appraisal methods, valuation models and distribution channels, and on the Home Valuation Code of Conduct and the Appraisal Subcommittee.

Please note, this is not an all-inclusive list of the valuation-related changes.

Click here to download the complete Bill.

Scroll down to Page 134, line 11 entitled Subtitle F - Appraisal Activities, through Page 179 for the complete language as it pertains to these issues.

The House-Senate Conference Committee on Financial Reform completed work last friday on appraisal provisions in the final version of the Dodd-Frank Wall Street Reform and Consumer Protection Act (short title for H.R. 4173), which includes the most significant modernization of the appraisal regulatory structure since 1989.

In addition to ammendments relating to AMC regulation, Appraisal Subcommittee of FFIEC, appraiser independence monitoring, appraiser complaint hotline, AVM's and BPO's, Subtitle F (Appraisal Activities) of Title XIV, Section 1471 of H.R. 4173 Mortgage Reform and Anti-Predatory Lending Act includes a federal appraisal independence standard that intends to replace the Home Valuation Code of Conduct and also includes major changes to Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), including funding for state oversight, administration and enforcement.

Significantly, the Conference Committee approved an amendment offered by House members, led by Rep. Paul Kanjorski, D-Pa that would require payment of customary and reasonable fees to appraisers. Specifically, the provision adds payment of customary and reasonable fees to appraisers to the new appraisal independence standard under the Truth in Lending Act.

Evidence of such fees must include government agency fee schedules and independent surveys that exclude appraisal orders from known appraisal management companies. The Truth in Lending Act will be enforced by the new Consumer Financial Protection Bureau created under the bill, and the law also can be enforced by state attorneys general.

In addition to the customary and reasonable fee provision, Title XIV of the bill contains significant reforms relating to Title XI of FIRREA, including:

• State registration requirements for appraisal management companies, with the exception of those owned and controlled by federally regulated financial institutions (who will be subject to federal oversight and pending registry fees)

• Provisions to separate appraisal and appraisal management fees on the HUD-1 Settlement Statement

• Codification of the Federal Housing Administration’s and Government-Sponsored Enterprises’ policy that prohibits the use of broker price opinions in mortgage origination

Authorization of grant funds to state appraisal boards to conduct oversight, administration and enforcement.
• Clarification that, as is currently the case, membership in a nationally recognized professional association may be a criteria considered in the appraiser hiring process in federally related transactions, in addition to educational achievement, experience, sample appraisals and references from prior clients, though lack of membership shall not be the sole bar against consideration for an assignment under these criteria.

The Conference Committee met over two weeks and considered a range of amendments to the underlying bill. The base text of the conference report included the appraisal reforms that were passed by the House twice last year, indicating that they received a strong degree of support among House and Senate members.

Offered by House members but not approved by the full Conference Committee was an amendment to allow licensed mortgage brokers who adhere to the new appraisal independence standard to order real estate appraisals. While Senate members rejected that amendment they did accept the amendment relating to customary and reasonable fees to appraisers.

The bill is currently awaiting final floor consideration in both the House and Senate. Passage in the House is expected by July 2, but the timing for consideration in the Senate may be delayed due to the unfortunate June 28 death of Sen. Robert Byrd, D-W. Va. Senator Byrd would have constituted the required 60th vote to break any potential filibuster on the bill. President Obama and the leaders of the House-Senate Conference Committee had originally set an unofficial goal of July 4 for signing the bill into law.

MAA actively supports H.R. 4173 and these important reforms. We will continue to keep you updated.

Click here to download the complete Bill.

Scroll down to Page 134, line 11 entitled Subtitle F - Appraisal Activities, through Page 179 for the complete language as it pertains to these issues.

At that point, things began moving very quickly which began with us getting it pried out of the Senate Rules Committee and re-referred to the Senate Finance Committee. We personally appealed to Senators Glassman and Kelley, and provided all the committee members with the point paper, which helped get it reported out favorably (7 to 4) to the full Senate. Unfortunately, it made it to the Senate floor on the last day of the session, and there were too many pieces of legislation ahead of it. The clock struck midnight before HB 1407 could be heard.

We knew from the start that the calendar was against us, so this is not surprising. The good news is that it is well-positioned for a successful run in the next session, in both the House and the Senate.

The lesson reconfirmed is that you pick your issues carefully, look for the opportune moment, then work around the clock to gain support by providing facts and logic to the decision-makers. We didn’t completely succeed this time as the clock was against us, but we fully intend to see it through next time around.

For those of you who contacted your legislators in support of HB 1407 - we thank you - it definately made a difference.

Most appraisers have experienced threats of blacklisting and non-payment if they do not declare a market value above a specified amount or to remove any references in the appraisal report to deficiencies in the property being appraised - and have been denied business because they did not comply. Appraisers should not be forced to choose between violating the standards and ethics of our profession and staying in business.

As you recall, this bill would make threatening, bribing, or other types of coercion of an appraiser a felony punishable by up to a $25,000 fine and/or 5 years imprisonment.

A lot has happened very quickly since the hearing last Thursday – which is critical, since the clock is running out on new legislation this legislative session. Three groups testified in favor of the bill – myself on behalf of the Maryland Appraisers Coalition, John Councilman on behalf of the National Association of Mortgage Brokers and the Maryland Association of Mortgage Brokers, and Scott DiBiasio on behalf of the Appraisal Institute in Washington D.C. (whose role was to discuss similar legislation in the 45 other states across the country). There were additional letters of support from DLLR and the national coalition of the Appraisal Institute, The American Society of Appraisers, The American Society of Farm Managers and Rural Appraisers, and the National Association of Independent Fee Appraisers. No one testified in opposition. The importance of the Bill was not lost on the Committee.

As the result of our contact with Delegate Donna Stiffler (who represents both Mr. Councilman’s and my district) prior to the hearing, she subsequently promised her support both in the Committee and on the floor of the house. In response to our testimony and further questions from Committee members, Friday and Saturday saw a flurry of e-mails and telephone calls among John, Scott, Delegate Stiffler and her staff, Legislative Services, and myself to add clarifying language similar to that which has been incorporated into State laws and regulations of many of the other 45 states, as well as Regulation Z. It more specifically delineates what constitutes acceptable and unacceptable communications between clients and appraisers, as well as clarification about what would be considered inappropriate pressure and “crossing the line” to influence an appraiser. Delegate Stifler, in cooperation with Delegate Conaway, the Bill’s sponsor, had the appropriate amendments written and the amended Bill was submitted to the committee on Saturday, where she anticipated it would be approved and favorably reported out.

Although running short on time, the Delegate and staff are doing everything possible to see that the Bill passes and makes it to the Senate in time to be passed this year. If, in fact, that does not happen, she has vowed to get it in earlier next session for passage. A huge amount of effort and almost no time, but I remain cautiously optimistic. We will keep you updated.

Beth Riedel
President, MAA

As a reminder, the appended HB 1407, for the first time, makes it a felony ($25,000 fine and/or 5 years imprisonment!) to threaten or bribe an appraiser. Threats, of course, would include the threat of “blacklisting”.

We have prepared the following point paper and have arranged for its distribution to all committee members through our lobbying firm Manis and Canning:

"We urge you to support HB 1407. Appraiser independence is crucial to continued public trust in the nation’s financial system, yet appraisers are highly vulnerable to pressures from lender clients to “make a deal work.” Consider that:

1) 45 of the 50 states, including neighboring Delaware, Pennsylvania, and West Virginia, have passed similar legislation, as has the District of Columbia. 40 of these states did so since awareness of the housing crisis emerged in 2007.

2) Presently, it is illegal for an appraiser to take a bribe (in any form, including promises of future appraisal work), but it is not illegal for a lender to pay (or offer) one. This is an odd aberration – bribery and coercion are typically a criminal offense for both the offeror and the recipient. In Maryland, however, bribing or threatening an appraiser is a legally acceptable business practice.

3) Lenders, as the principal customers of appraisers, have a uniquely powerful position from which to influence the results of an appraisal. Methods that have been widely used include:

Blacklisting – the industry-wide withholding of business - or the threat of blacklisting an appraiser if a certain value is not met in an appraisal. This can and has resulted in forcing good appraisers, who stand on their integrity, out of the profession altogether because many lenders will comply with a blacklist, even when they don’t know the facts behind why the appraiser was put on the list; and

Refusing to pay a previously agreed fee for appraisal work performed, when the completed report did not state a client-specified value

The housing consumer must be able to trust that the real estate appraiser engaged by the lender is acting independently and without bias or outside influence. This is very important consumer protection legislation that does not impose new administrative costs and punishes only those who prey on consumers."

We strongly encourage all appraisers to voice their support of this much needed legislation directly to the following members of the House Economic Matters Committee at the e-mail addresses listed below.

charles.barkley@house.state.md.us
aisha.braveboy@house.state.md.us
emmett.burns@house.state.md.us
dereck.davis@house.state.md.us
brian.feldman@house.state.md.us
jeanne.haddaway@house.state.md.us
hattie.harrison@house.state.md.us
sue.hecht@house.state.md.us
rick.impallaria@house.state.md.us
sally.jameson@house.state.md.us
james.king@house.state.md.us
ruth.kirk@house.state.md.us
carolyn.krysiak@house.state.md.us
maryann.love@house.state.md.us
roger.manno@house.state.md.us
james.mathias@house.state.md.us
brian.mchale@house.state.md.us
warren.miller@house.state.md.us
joseph_minnick@house.state.md.us
david.rudolph@house.state.md.us
donna.stifler@house.state.md.us
herman.taylor@house.state.md.us
michael.vaughn@house.state.md.us
mary.roe.walkup@house.state.md.us
frank.conaway@house.state.md.us

This is a good piece of consumer protection legislation and we remain cautiously optimistic that the bill will be successful after thursday's hearing.

As I reported to you on February 3, when Delegate Conaway agreed during the Coalition’s (represented by members of the Maryland Association of Appraisers and The Appraisal Institute) meeting with him to withdraw HB 42, he also promised to look into our recommendation for legislation to foster appraiser independence. I am pleased to tell you that he has followed through on that commitment.

The appended HB 1407, for the first time, makes it a felony ($25,000 fine and/or 5 years imprisonment!) to threaten or bribe an appraiser. Threats, of course, would include the threat of “blacklisting”.

This is an extremely important piece of legislation, and we will be doing everything possible to ensure its passage. We will keep you informed as to when it will be heard in committee.

Good news! I am pleased to report that as a result of our meeting with Delegate Conaway prior to today's hearing, HB 42 was withdrawn.

Following a very productive meeting this morning between the Maryland Appraiser's Coalition, represented by personnel from both MAA and the Appraisal Institute, and Delegate Conaway and his staff, he agreed to do so. As we had suspected, although well intentioned, he had been unaware that the bill's restrictions inadvertently did more harm than good, in addition to being both counterproductive and unrealistic. He was extremely receptive to learning the facts and as a result of our discussion, the Delegate came away with a much greater understanding of the issue of appraiser independence, for which he is now considering future legislation. After our meeting and prior to the hearing, he wrote a letter to the Chairman of the House Economic Matters Committee withdrawing HB 42, stating that he was considering other legislation that would more effectively address that issue without causing inadvertent problems for appraisers.

To all that took the time to contact your legislators, MAA wishes to extend our warmest thanks.

You should be aware that Delegate Conaway of Baltimore City has introduced Legislation (HB42) in the Maryland House of Delegates that would prohibit a licensed or certified appraiser from appraising property if the appraiser knows the asking or selling price of the real estate. Violators would be guilty of a criminal misdemeanor and would be subject to significant monetary penalties. There are obvious problems with the bill that make it unlikely to go anywhere. It was likely pre-filed at the request of a constituent without having an understanding of the appraisal profession and the dire implications such a law would create.

We have been in contact with the Delegate since the bill was first pre-filed earlier this month and have made the following points:

Specifically, an important requirement of USPAP is that the appraiser must ". . . analyze all agreements of sale, options, and listings of the subject property current as of the effective date of the appraisal; and analyze all sales of the subject property that occurred within the three years prior to the effective date of the appraisal" - and compliance with USPAP is required by Maryland law. The obvious reason for this is to ensure that the intended users of the appraisal are fully aware of any such documents and the effect they might have on the value and marketability of the property. If any of those values differ significantly from the market value opined by the appraiser, that difference must be analyzed and explained. Preventing the appraiser from examining these and understanding the prices contained in them seriously lessens the meaningfulness of the appraisal.

Secondly, since appraisers must analyze the market by searching for comparable sales and listings in the appropriate multiple list systems, it would be virtually impossible to not see an active listing for the subject - inadvertently placing the appraiser in violation of the law by simply exercising the due diligence required of him by law.

And finally, the requirement to consider contracts and listings was strengthened by FannieMae, FreddieMac, VA and the FHA in the wake of the recent mortgage lending debacle and earlier flipping scandals. Prohibiting appraisers from adhering to those federal regulations and guidelines would likely have grave consequences for Maryland homebuyers and bring lending to a halt.

The hearing is scheduled for 1 PM tomorrow, February 3rd in Annapolis before the Economic Matters Committee. Not surprizingly, there has been substantial opposition from all sides of the real estate and lending community, including the Maryland Appraisers Coalition (of which MAA is a founding member), the National Appraisal organizations (AI, ASA, IFA, NFMRA), Maryland Bankers Association, DLLR and the Real Estate Appraisers Commission, among others. We will be providing testimony at tomorrow's hearing.

You may download a complete copy of the bill here.

Members can voice their opposition directly to the following members of the House Economic Matters Committee at the e-mail addresses listed below.

charles.barkley@house.state.md.us
aisha.braveboy@house.state.md.us
emmett.burns@house.state.md.us
dereck.davis@house.state.md.us
brian.feldman@house.state.md.us
jeanne.haddaway@house.state.md.us
hattie.harrison@house.state.md.us
sue.hecht@house.state.md.us
rick.impallaria@house.state.md.us
sally.jameson@house.state.md.us
james.king@house.state.md.us
ruth.kirk@house.state.md.us
carolyn.krysiak@house.state.md.us
maryann.love@house.state.md.us
roger.manno@house.state.md.us
james.mathias@house.state.md.us
brian.mchale@house.state.md.us
warren.miller@house.state.md.us
joseph_minnick@house.state.md.us
david.rudolph@house.state.md.us
donna.stifler@house.state.md.us
herman.taylor@house.state.md.us
michael.vaughn@house.state.md.us
mary.roe.walkup@house.state.md.us

We are cautiously optimistic that the bill will die after tomorrow's hearing. We will keep you updated.

IMPLEMENTATION DATES

Although Section 202(f) of the National Housing Act was made effective upon enactment, FHA has determined that the loss of available FHA Roster appraisers in certain locations will impede its ability to support affordable mortgage financing in those areas, which would contravene the goals of the HOPE for Homeowners Program and hinder use of other FHA single family programs at a time when use of those programs has increased significantly. Therefore, in order to implement this change in appraiser eligibility requirements in a manner that is not disruptive to the FHA mortgage lending process, the requirement will be phased in as follows:

• Effective October 1, 2008, FHA stopped accepting applications to the FHA Appraiser Roster from licensed but uncertified appraisers. All applicants for the FHA Appraiser Roster must be state certified (certified residential or certified general) appraisers who meet the minimum certification criteria issued by the Appraiser Qualifications Board (AQB) of the Appraisal Foundation. The requirements that applicants not be listed on the General Service Administration (GSA) Excluded Parties List System (EPLS), HUD’s Limited Denial of Participation List (LDP), or HUD’s Credit Alert Interactive Voice Response System (CAIVRS) remain unchanged.
• 
  No Later than October 1, 2009, all FHA Appraiser Roster appraisers, in all states and territories must be state certified in order to be eligible to conduct appraisals for FHA-insured mortgages and remain on the FHA Appraiser Roster.

Commencing October 1, 2009, all FHA-approved lenders must use state certified appraisers for FHA-insured mortgages. The appraiser assignment field within the Case Number Assignment screen in FHA Connection must be input with an appraiser who is listed as either certified residential or certified general on the FHA Roster for the state in which the property is located. If, on or after October 1, 2009, an FHA-approved lender enters an appraisal assignment into FHA Connection for a property from a FHA Roster Appraiser who is licensed but not certified in accordance with this Mortgagee Letter, the appraisal will be unacceptable for FHA-insured financing and a second appraisal, performed by a state certified appraiser, must be completed at the lender’s expense.

When appraisal assignments (case # assignments) are given to licensed appraisers prior to October 1, 2009, but the appraisal is not completed until after that date, the appraisal will be acceptable. However, the lender must assure that the appraisal assignment date is entered accurately into FHA Connection which must be a date prior to October 1, 2009. In these cases, the appraisal assignment must be submitted to the lender no later than October 30, 2009.

Appraisals that were completed by licensed appraisers prior to the deadline, which are transferred to a new lender, may be used as long as the original assignment date occurred prior to October 1, 2009.

Appraiser Qualification Criteria

Appraisers seeking to become state certified should review the 2008 Real Property Appraiser Qualification Criteria at:

http://www.appraisalfoundation.org

Procedures to Obtain Placement on the FHA Appraiser Roster

Applicants who meet all eligibility criteria may apply on-line at: http://www.hud.gov/appraisers

If you have any questions concerning this Mortgagee Letter, please call 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may access this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).

For applicants to the FHA Appraiser Roster:

On May 5, 2008 FHA will launch an online appraiser application process that will replace the existing paper applications. In preparation for the transition, the cut off date for submitting paper applications is April 22, 2008. Applications that are postmarked or time dated later than April 22, 2008 will not be accepted nor returned. Appraisers are encouraged to wait until May 5, 2008 to make application rather than rush to submit a paper application. Appraisers who have already submitted paper applications do not need to reapply online. In the coming weeks, be on the look out for updates that will be posted to http://www.hud.gov/offices/hsg/sfh/appr/apr_rost.cfm regarding the online application process.

For FHA Roster appraisers renewing licenses/certifications:

Due to a recent audit by HUD’s Office of the Inspector General (OIG), FHA must ensure that the license or certification number listed on the FHA Appraiser Roster matches exactly with the number posted on the National Registry of the Appraisal Subcommittee (ASC). Appraisers may visit ASC’s web page at http://www.asc.gov/ to compare their state issued license or certification number with that posted on the National Registry. Although FHA has not yet implemented this policy of exactly matching the appraiser’s state issued license or certification number, as renewals come in our processors have begun to match the numbers exactly with that posted on the National Registry to assure timely renewals in the future.

For FHA lenders unable to locate appraisers in FHA Connection:

If FHA lenders are unable to locate an appraiser listed on the FHA Appraiser Roster by using the number shown on the state issued license or certification, lenders should use the FHA Connection Appraiser List screen and search by name and state. The license or certification number displayed on the Appraiser List page for the selected appraiser should be used when ordering a Case Number on the Case Number Assignment screen.

Click on the link below to download a complete copy of the FHA Appraiser Roster Requirements.

For eligibility requirements, please visit the FHA Appriaser Roster page at www.hud.gov/groups/appraisers.cfm.

01/01/2008- Please note: The Commission has implemented the AQB policy requiring that Supervisory Appraisers for trainees must be either Certified Residential or Certified General. Licensed individuals will no longer be able to act as Supervisory Appraisers for new trainees. In addition, the number of trainees under the supervision of any one individual has been limited to three.

Trainees should take note that the clock for their two-year experience requirement is not automatically tied to the issue date of the Trainee License as it does not begin until they actually find a mentor and begin working on a regular basis after their trainee license has been issued. There is no recognition of experience that may have been accumulated before the trainee license was issued.

For additional clarification, please contact Patty Schott at the Maryland Real Estate Appraiser's Commission at 410 230-6165.

As a result of post-purchase reviews of mortgage loan files by Fannie Mae, new policy requirements and clarifications concerning existing lender requirements are being added to a number of appraisal sections of the Selling Guide, including:

• Inclusion of interior photographs in the appraisal report
• Lender changes to the appraised value and guidance on addressing appraisal deficiencies
• Appraiser selection criteria
• Sources of comparable market data
• Communication under HVCC
• Seller concessions
• Treatment of personal property
• Market Conditions Addendum to the Appraisal Report (Form 1004MC)

These updated topics are dated June 30, 2010. With the exception of Appraiser Selection Criteria and Selection and Use of Comparable Sales, which become effective immediately, most become effective 09/01/10.

For each policy change or clarification, the topics and specific paragraphs are noted and are linked to the updated Selling Guide.

You may download the complete announcement and details of changes here.

The complete communication may be downloaded by clicking on the attachment below.

Market Conditions Addendum to the Appraisal Report

In Announcement 08-30, Fannie Mae introduced the Market Conditions Addendum to the Appraisal Report (Form 1004MC) to further enhance the transparency of the conclusions made by the appraiser related to market trends and conditions.

To add clarity, Fannie Mae has added several shaded areas to the form to recognize that all the requested data may not be available from the data sources used by the appraiser and therefore the information may not be provided. The lack of completion of these areas is acceptable as long as the appraiser provides an explanation as to why these sections of the form are not complete. However, if the data is available, the appraiser must include the data in the analysis.

Fannie Mae is also modifying the requirement for the "Median List-to-Sale Price Ratio" to now label it as "Median Sale Price as a Percentage of List Price." Additional research indicated that this figure is typically provided by data sources as a percentage.

The revised form is dated March 2009 and is available on eFannieMae.com. It was also provided to the major form software vendors. Lenders are encouraged to use the updated version immediately; however, it will be required for all one- to four-unit appraisals dated on or after July 1, 2009.

Use of Supervisory Appraisers

Announcement 08-30 provides additional policy and guidance on the use of supervisory appraisers when they sign an appraisal report on the left-hand side of the form as the "appraiser." Fannie Mae is providing the following clarification.

The Fannie Mae Selling Guide defines the appraiser as "the individual, who personally inspected the property being appraised, inspected the exterior of the comparables, performed the analysis, and prepared and signed the appraisal report as the appraiser."

The Announcement was intended to address instances where a trainee or unlicensed appraiser (who does not sign the report and where it is allowable by state law) completes the inspection, but the supervisory appraiser signs on the left-hand side of the appraisal as the "appraiser," when they have never inspected the subject property. In Announcement 8-30, Fannie Mae was conveying that this practice is unacceptable. Any appraiser signing on the left-hand side as the "Appraiser" must perform the level of inspection required by the assignment.

This guidance does not require the supervisory appraiser to inspect the subject property in all instances.

Time Adjustments on the Appraisal Report

Announcement 08-30 clarified that time adjustments may be either positive or negative. It also stated the adjustments must reflect the difference in market conditions between the date of sale of the comparable and the effective date of the appraisal for the subject property. The term "date of sale" was used in lieu of "contract date." The correct terminology as stated in the Selling Guide is "contract date."

Due to current economic conditions, Fannie Mae has established its own separate appraisal requirements to supplement USPAP. These include new or updated policies as well as clarification of existing policies as outlined below.

New or Updated Policies

• Implementation of the Market Conditions Addendum to the Appraisal Report (Form 1004MC) that will be required with all appraisals of one-to-four unit properties effective April 1, 2009. This form is intended to provide lenders with a clear and accurate understanding of the market trends and conditions prevalent in the subject neighborhood.
• Use of Supervisory Appraisers
• Requirement to provide the sales contract to the appraiser
• Requirement regarding the appraiser's selection of comparable sales

• Repair escrows for existing construction
• Research and reporting of the current and prior listings of the Subject property
• Appraising the entire site of the property
• Time adjustments on the appraisal report
• Verification of a sales transaction
• Neighborhood boundaries and the selection of comparable sales
• Effective age of the Subject property
• Utilizing the cost approach to value for insurance purposes

Please click on the attachment below to download this important quidance.

Freddie Mac recognizes the challenges that current market conditions pose in connection with determining accurate property values. Sellers are accountable for the quality, integrity and accuracy of the appraisal and other collateral documentation. To help them address these challenges, Sellers must review Chapter 44, Appraisal Reports, Inspection Reports and the Property Inspection Alternative (PIA), including the Home Valuation Code of Conduct (HVCC), to understand our requirements for appraisals. An appraisal should provide a complete and accurate description of the property, and a supported market-based opinion of value.

Due to current market conditions, with this Bulletin we are reminding Sellers of certain existing appraisal requirements. This section covers the following topics:

■ Qualified appraisers ■ Credible appraisals ■ Comparable sales ■ Monitoring appraisal quality

We are also providing additional best practices identified in the exhibit attached to this Bulletin to assist Sellers in their determination of whether the collateral value is accurate. To help ensure that Seller/Servicers meet our appraisal requirements, Freddie Mac is recommending the adoption of these best practices.

The portion of the Bulletin that addresses appraisal issues may be downloaded below.

TO: ALL FHA APPROVED MORTGAGEES
ALL FHA ROSTER APPRAISERS
SUBJECT: UPDATED HUD REO LEAD-BASED PAINT APPRAISAL REPORTING REQUIREMENTS

The purpose of this Mortgagee Letter is to amend Handbook 4150.2, Valuation Analysis for Home Mortgage Insurance for Single Family One-to-Four Unit Dwellings, Appendix A.

The amendment will affect how appraisers disclose defective paint in HUD’s real estate owned (REO) properties. This change is effective on all appraisals performed on HUD REO properties with an effective date on or after June 1, 2010. HUD will only order a lead-based paint evaluation for HUD REO properties constructed before 1978, and purchased with FHA-insured financing.

Handbook Change Appendix A, Section A-3, bullet two is being replaced in its entirety with the language below:

If the appraiser observes defective paint in a home that was built before 1978, in the physical deficiencies or adverse conditions section of the appraisal report, the appraiser must enter an “X” in the “Yes” box, and note all areas affected.

However, if the appraiser does not observe defective paint in a home that was built before 1978, an explanation is not required in the physical deficiencies or adverse conditions section of the appraisal report.

If you should have any questions concerning this Mortgagee Letter, call 1-800-CALLFHA.

Persons with hearing or speech impairments may access this number via TDD/TTY, by calling 1-877-TDD-2HUD (1-877-833-2483).

Appraisal Management Firms may charge the mortgagor a fee for the appraisal that may encompass fees for services performed by the firm as well as fees for the appraisal itself. However, the total of these fees is limited to the customary and reasonable fee for an appraisal in the market area where the appraisal is performed. Compliance with all aspects of RESPA is required. While the owners/operators of such Appraisal Management firms may be licensed, the appraiser actually performing the FHA appraisal must be on HUD's approved Roster.

No "supervisory" appraisals will be accepted. That is, the assigned licensed/approved appraiser must visit the subject and all comparable sales and complete the appraisal analysis themselves - it cannot be performed by an appraiser trainee. If any portion of the work involves assistance from others, the appraiser must summarize the extent of that assistance including providing the name (s) of those providing assistance. Appraisal trainees are not eligible to perform nor sign an FHA appraisal report.

HUD has provided the following additional clarification

Trainees can assist in FHA appraisals, such as helping to measure the house, gathering data, etc. Secretaries and other licensed appraisers can also assist in appraisals. Anyone that assists in an appraisal must be mentioned in the report and the extent of their assistance must be reported. That is a USPAP requirement, which FHA always enforces.

“Perform” means “doing” the appraisal, i.e. doing the inspection of the subject, inspecting and taking photos of all of the comps, gathering, selecting, and analyzing all of the comp information, completing the appraisal and determining a final value estimate, etc. For FHA appraisals, this is not permitted for trainees. Only the FHA Roster appraiser that was selected to perform the appraisal is permitted to "perform" the appraisal.

Trainees can learn how to do FHA appraisals by aligning themselves with an FHA qualified appraiser and “helping” to complete the appraisal, but cannot actually “do” or “perform” the appraisal.

To summarize:

Subjects covered within this document are:

• When to use the Appraisal Update and/or Completion Report
• Who can use this report
• When the report may not be used
• How to use the report
• Additional guidance

Attached below is a downloadable copy of the complete Mortgagee Letter.

Delayed Implementation Date for New Requirements in ML 2009-28

Enactment of ML 2009-28, Appraiser Independence, will be delayed until February 15, 2010. ML09-28 (originally planned for a January 1, 2010 implementation) has two parts: a) prohibition of mortgage brokers and commission-based lender staff from the appraisal process, and b) appraiser selection in FHA Connection. The effective date for both sections of this guidance will now take effect for all case numbers assigned on or after February 15, 2010. This extension will provide FHA and lenders additional time to adjust systems to accommodate the changes.

Detailed instructions on changes to FHA Connection will be issued in a new mortgagee letter. However, lenders should be aware that the requirement for inputting the appraiser ID and the appraisal assignment date in the FHA Connection case number assignment screen will be removed. Instead, lenders will be required to enter all appraisal data, including the appraiser ID, in the Appraisal Update Screen once the completed appraisal is received by the lender and prior to closing the loan.

Delayed Implementation Date for ML 2009-51

ML 2009-51, Adoption of the Appraisal Update and/or Completion Report, states an effective date of January 1, 2010. The effective date is being extended and will now apply to all case numbers assigned on or after February 15, 2010. This extension will provide additional time needed by FHA and lenders to adjust their systems to accommodate use of the form.

All FHA Mortgagee Letters can be read online at: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/

This Mortgagee letter has been issued to remind mortgagees and FHA roster appraisers of their responsibilities to determine if a property is located within a Special Flood Hazard (SFHA) as designated by FEMA, as well as to reiterate FHA's eligibility requitements for properties located in such zones.

The Mortgagee Letter may be downloaded in its entirety by clicking on the attachment below. (Note: Once you select "open" - if a second small box appears that says "opening" hit the cancel button. The screen may briefly turn blue and then will open the attachment.)

These changes in policy put into regulation for FHA mortgages many of the safeguards and protections that are included in both the HVCC and HR 1728. They become mandatory effective January 1, 2010.

Specifically, these new requirements address

Appraisal and Appraisal Management Company/Third Party Organization Fees

FHA-approved Lenders Must now ensure that:

• FHA Appraisers are not prohibited by the lender, AMC or other third party, from recording the fee the appraiser was paid for the performance of the appraisal in the appraisal report
• FHA roster appraisers are compensated at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised
• The fee for the actual completion of an FHA appraisal may not include a fee for management of the appraisal process or any activity other than the performance of the appraisal
• Any management fees charged by an AMC or other third party must be for actual services related to ordering, processing, or reviewing of appraisals performed for FHA financing
• AMC and other third party fees must not exceed what is customary and reasonable for such services provided in the market area of the property being appraised

FHA-approved lenders are now prohibited from accepting appraisals prepared by FHA Roster appraisersd who are selected, retained, or compensated by a mortgage broker or any member of a lender's staff who is compensated on a commission basis tied to the successful completion of a loan.

Appraiser selection in FHA Connection

Lenders are now responsible for assuring that the name of the appraiser in the appraiser log-in screen is the same appraiser who actually completed the appraisal.

This Mortgagee Letter further affirms Existing Requirements that address:

• Prevention of Improper Influences on Appraisers
• Appraiser Independence Safeguards, and
• Appraiser Engagement - Knowledge of Market Area - Geographic Competency.

Highlights of this important announcement include:

• Prohibition of "appraiser shopping where lenders order appraisals in an attempt to assure the highest possible value and/or the least amount of deficiencies and/or repairs noted and required by the appraiser
• Appraisal transfer and change of Client name in the appraisal report
• Appraiser selection in FHA Connection, and
• Lender Compliance

Effective January 1, 2010 the validity period for all appraisals on existing and proposed and under construction new homes will be 120 days. This is a change from 6 months for an appraisal of an existing property and 12 months for proposed and under construction properties.

The complete announcement is attached below.

Question

I inspected a home in Accokeek – at the time of inspection the hot water heater was turned off at the breaker. I was unable to personally test the hot water heater. I did review the home inspection report which verified that all systems were working properly and that the hot water was working on the day of his inspection. I noted this in the report and valued “as-is” and referenced the home inspection report. The lender is telling me this is not acceptable to FHA. Can you verify this? There are many times that I have to review receipts and cannot actually inspect the repair (roof) for example and I indicate on the report that the roof was repaired based upon receipts provided to me from the contractor.

Answer

The lender is right. If the appraiser can’t inspect something then they must condition for someone else to perform that task or when the utility is turned on then they can come back and inspect it. (The appraiser should bill for this service)

If a hot water is off, then the appraisal should be made “subject to “ the hot water being turned on and inspected by someone the lender deems qualified. In that case it could be the appraiser or a plumber.

Regarding a roof, (or electrical, plumbing, heating/ac, etc) the appraiser is to inspect it from the ground as well as from the attic. On a pitched roof, the ground inspection is usually pretty easy, however, on a flat or slightly pitched roof, the interior attic inspection will identify if there are any areas that appear to be wet. The upstairs ceilings may also show signs of dampness. If so, the appraiser should condition the appraisal “subject to” an inspection by someone the lender deems qualified to inspect this area (often times this is a home inspector, contractor, or roofer) and for correction of the problem if one exists. Once the correction is made, the company that completes the task is to supply the lender with a certification that the work is done. It is not the appraiser’s responsibility to review this document to ensure it is correct. That is the Underwriter’s responsibility. Appraiser’s are value experts, not roofers, plumbers, or electricians.

Often times homeowners will let appraiser’s know of recent updates. The inspection will confirm this. It is common for appraiser’s to mention them in their report and this usually gives good support for their opinion of the condition of the subject property. There is nothing wrong with this as long as the appraiser can actually verify this information. If the homeowner said they “renovated“ the master bath and all that was done was painting and a new light, the appraiser should not report it that way.

Please refer to FHA’s policy on Roofs & Attics at the web site listed below:

Question

What is HUD’s policy on Appraisal Management firms, Supervisory Appraisers, and trainees.

Answer

Appraisal Management Firms may charge the mortgagor a fee for the appraisal that may encompass fees for services performed by the firm as well as fees for the appraisal itself. However, the total of these fees is limited to the customary and reasonable fee for an appraisal in the market area where the appraisal is performed. Compliance with all aspects of RESPA is required While the owners/operators of such Appraisal Management firms may be licensed, the appraiser actually performing the FHA appraisal must be on HUD's approved Roster. No "supervisory" appraisals will be accepted. That is, the assigned licensed/approved appraiser must visit the subject and all comparable sales and complete the appraisal analysis. If any portion of the work involves assistance from others, the appraiser must summarize the extent of that assistance including providing the name (s) of those providing assistance. Appraisal trainees are not eligible to perform nor sign a FHA appraisal report.

HUD has included the following link to where this is written since this is one policy that is violated far too many times.

HUD has just released Mortgagee Letter 2009-16 that addresses changes to manufactured housing requirements for new and existing construction. Specific topics covered include:

• Definitions
• Property eligibility and general requirements
• Foundation systems
• Engineer's certification on foundations compliance
• Flood zone areas
• Inspections
• Perimeter enclosures
• Termite protection for new construction
• Condominium project approval
• Title issues
• Data quality
• Underwriting Eligibility requirements

Please also refer to Appendix D of the HUD Handbook for additional appraisal requirements, such as the need for the cost approach, to ensure full compliance with FHA appraisal quidelines and requirements.

FHA has recently announced that in order to ensure greater transparency and accuracy of appraisals performed for FHA-insured financing, FHA has adopted the Market Conditions Addendum (Fannie Mae Form 1004MC/Freddie Mac Form 71).

Effective 4/1/09, all appraisals performed for FHA must include the 1004MC Market Conditions Addendum.

To download a complete copy of the Mortgagee Letter, click on the link below.

The Maryland Association of Appraisers (MAA) has been listening to appraisers from across the state express concerns about appraisal management companies. Those of you who were able to attend the fall dinner meeting answered a brief preliminary questionaire prepared by our AMC Task Force. That questionaire helped the task force develop this more detailed survey. Our objective is to obtain quantifiable information on your experiences with AMC's. This survey is intended to be a neutral device to collect information about both good and deficient business practices. You should be able to complete the survey in less than 10 minutes.

To begin, Click Here to take survey Please complete the survey only once so that results do not become skewed.

Your feedback is extremely important in the understanding of the full range of issues that surround AMC's and how they are impacting the appraisal profession. Your efforts are sincerely appreciated. Please take time to complete this survey now so that it doesn't get put aside and inadvertantly forgotten about.

Thank you,

A significant number of appraisers are reporting the following practice with a number of AMC’s. Although this article specifically addresses the practices of TSI, it is not unusual to see similar clauses in the agreements with other AMC’s. Often an AMC will start off by giving, or promising, a company a lot of business and then they drop the bombshell that, in order to continue doing business with them, you must sign a contract taking all responsibility for the loan, including having to pay back the loan, no matter who makes the error. Do not enter into these agreements! Carefully read every word and make sure you completely understand the terms of the agreement before you sign. You are putting your license in jeopardy and, as is made quite clear in this article, because the potential for liability is so great – it will not be covered by any insurance company. No ethical AMC would ever require this. Walk away – this is not business that you need or want.

The following article by Peter Christensen, General Counsel for Liability Insurance Administraters, may be downloaded with permission

AMC Appraiser Agreements and Indemnity

• · Review Section: Consists of extensive questions and explanations arranged by topic to help you efficiently prepare for your exam. Topics include Influences on real estate; Legal considerations; Types of value; Economic principles; Real estate markets and analysis; Valuation process; Property description; Highest and best use; Appraisal math and statistics; Sales comparison approach; Site value; Cost approach; Income approach; Valuation of a partial interest; and USPAP.
·
• Exam Section: Because questions are randomly selected from a huge databank each time this section is accessed, no two exams are the same. This provides a virtually unlimited number of timed tests that simulate the actual exam. Exams are graded and categorized to identify weak areas. In addition, all answers include the rationale to help explain the concept.
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• Results Section: Allows you to review the answers and results for your 19 most recent exams.

MAA is offering this excellent review and examination preparation study aid at the discounted price of $70.00, which includes shipping. To order, please call the MAA office at (410) 879-1341.

Origination and Repossession Appraisals Must be Consistent!

A loan for an existing manufactured home requires an origination appraisal for the purpose of determining the home's value. If the loan defaults and is subsequently repossessed, another appraisal must be done. When a claim is filed for insurance bebefits, a claims examiner will compare the appriasals for consistency regarding the configuration of the unit. If a serious discrepancy is noted, the claim may be denied. The discrepancy may then be difficult to rectify due to the fact that the unit has already been sold and is no longer available for re-inspection. We recommend that you review and compare these appraisals carefully.

Title I Letter 437, issued on January 29, 1996, instructs lenders to provide the repossession appraiser with a copy of the manufacturer's invoice for a loan on a new unit. That gives the appraiser an opportunity to look at the list of features on the invoice and account for them on the appraisal. We think that a similar advantage can be given to the repossession appraiser by providing him/her a copy of the origination appraisal for a loan on an existing home. The repossession appraiser can use the origination appraisal as a tool to help prevent any errors or ommissions on his/her appraisal.

It is important that you request this information if not provided to you. For more information, please contact Financial Operations Center and the Title I Program. 1-800-669-5152.

The proposed regulations would require responsible persons that possess evidence of a release of controlled hazardous substances (CHS) into the environment above certain regulatory levels to notify the Department within 48 hours of discovery of the release. In addition, the proposed regulations would require a Responsible Person to notify MDE if he or she posesses evidence of a release that occured. The Department estimates that the proposed regulations would become effective by January 31, 2010. The statute will not be in effect until the regulations are finalized. The Department will, however, accept voluntary notifications during the interim period.

For your convenience, links to relevant fact sheets that address Q&A and the notification form may be accessed by clicking on the link below and those in the next two articles.

The Maryland Association of Appraisers, Inc. is pleased to inform its members that it is recommending the General Star National Insurance Company Errors and Omissions Insurance Plan for members of the Maryland Association of Appraisers.

Members can access the program through The Moscker Insurance Agency of Severna Park, MD or via the Maryland Association of Appraisers website, www.mdappraisers.org.

To download a full description of benefits and an application, click on the link below

Due to the success of the Maryland Association of Appraisers, Inc. (MAA) Education Program, there are two(2) Scholarships that are offered by the association. Applications are awarded throughout the year based on availability of funds. Committee decisions are made within 30 days from receipt of application

The Scholarship opportunities are outlined below with detailed descriptions and applications available on this website or from the MAA administrative office (410-879-1341).

Applicants are reminded to carefully review all instructions as the granting of an award is based on compliance with instructions, neatness of presentation as well as content.

The MAA Board of Directors is pleased to be able to offer these opportunities in support of education.

MAA SCHOLARSHIPS

Appraisal Trainee Financial Aid Scholarship

Tuition-Free Enrollment in Maryland Association of Appraisers, Inc. Appraisal Trainee Module. Module must be completed within 12 months from date of Award. Applicant is responsible for transportation, lodging and meals. If Applicant fails the final examination of the Trainee Module Class or Classes, the Applicant is responsible for payment of any and all re-testing fees and/or fees to re-take the failed Class or Classes.

Scholarships are based on the financial need of the applicant.

Appraisal Education College Credit Financial Aid Scholarship

This scholarship is designed to provide financial assistance to those who are licensed and certified appraisers or those who are otherwise employed within the appraisal profession and must obtain college level education credits to obtain an appraisal license or upgrade their current license status to Certified Residential and/or Certified General appraiser.

A maximum of five awards are made in each calandar year. Applications are accepted throughout the year. Committee decisions are made within 30 days from receipt of the application.

Applicants agree to permit the publication of the scholarship award in the news media, on the MAA website and within the MAA Appraisal Addendum publication.

Additionally, applicants may be requested to meet to have a photograph taken for publication, at the sole option of the MAA Scholarship Committee.

The following courses to be taught by The Maryland Association of Appraisers this summer now have West Virginia Approval as well as PA, MD, and DE:

• June 14:7 hr National USPAP Update - Chesapeake Community College
• June 15:"Green" Building Valuation - Riggs Building, Hyattsville
• June 17-18: (note date change) - Statistics, Modeling,& Finance (Course 301)-Carroll Community College
• June 18-19: Residential Site Valuation and Cost Approach (Course 202)-Hagerstown Community College
• June 24-26: Mastering Unique and Complex Property Appraisal (Course 501 - 20 hr elective) - Baltimore Museum of Industry
• July 13-14: Residential Income Approach (Course 205) - Anne Arundel Copmmunity College
• July 16-17: Residential Sales Comparison (Course 203)-Hagerstown Community College
• July 22-23: Advanced Residential Applications and Case Studies (Course 302) -Harford Community College
• August 5-7: Mastering Unique and Complex Property Appraisal (Course 501 - 20 hr elective) - Riggs Building, Hyattsville
• August 10: "Green" Residential Valuation - Carroll Community College
• August 13-14: Residential Income Approach (Course 205)- Hagerstown Community College
• August 19-20: Appraising Small Commercial Properties (Course 503 elective) - Baltimore Museum of Industry

As a matter of clarification, all of MAA's licensing and certification courses through Certified Residential now carry West Virginia Approval, in addition to MD, PA, and DE, as do all of our electives and our General Appraiser Income classes. Look for additional CE and Certified General courses to be approved through West Virginia this fall.

The course schedule page has been redesigned with a variety of downloadable documents added for your convenience. While you will still continue to receive the course brochure as usual in the mail, you now will have the ability to view and/or download the entire course brochure on the MAA website, including the registration form. Please visit

the MAA website and click on the Appraisal Course Schedule link

We also wish to announce that we have a new 7 hour on-line CE course entitled "Introduction to HP-12C Calculator" that should go live the week of January 22, 2010.

• When: Tuesday, May 18, 2010
• Where: Snyder’s Willow Grove Restaurant (410) 789-1149<
  841 N Hammonds Ferry Road,
  Linthicum, MD 21090, AA ADC Map 2, D3.
  Directions: Baltimore Beltway (I-695) exit 8 - loops around to right into restaurant lot.
• Time: Cash Bar (Happy Hour) 6:00 pm
  Dinner 7:00 pm
  Speaker 8:00 pm
  
• Price: $38 (Members, Non-members, and guests

We are extremely fortunate to have Sam Rashkin, Team Leader for EPA’s ENERGY STAR New Homes Program Division, as our guest speaker who will be addressing the rapidly changing and emerging issue of "green" building technology and its impact on real estate values. Energy efficient homes are growing quickly in popularity, particularly with high energy costs during this depressed economy. Their value is already being recognized through the Market’s willingness to pay the additional upfront costs, both in new construction and in retrofitting existing homes, for the immediate and long term savings realized through substantially reduced monthly utility bills. During these early stages, however, when databases are somewhat limited, appraisers need to be able to think outside the box. Competent analysis and reporting of both anecdotal and factual data is essential to avoid complaints by accurately reflecting the market’s perception of this added value through appropriate adjustments. Undervaluing a property through incompetency is as much of a USPAP violation as is overvaluation. Mr. Rashkin’s presentation will cover the value proposition of energy efficient homes vs conventional homes, the role that appraisers can play in making sure that value is captured, and the impact it has had on the supply and demand for energy efficient homes This is most definitely another “don’t miss” evening. A more detailed announcement will be sent out closer to the date. Because we are expecting a high turnout - Please respond early to ensure your reservation.

Need some CE?? We will be offering an approved 3-hour CE seminar on the topic of “Oddball Property Appraisal,” 3-6 PM, prior to the meeting. Expand your knowledge and expertise! This course has been designed to provide an opportunity for practicing appraisers to share information regarding appraisal projects that they have completed for unusual and unique appraisal assignments. Less experienced appraisers will benefit from the knowledge and experience of others in the field as actual case studies are discussed. Discussion topics will include the implications of accepting – and reporting – the unique appraisal assignment; review of USPAP Competency Rule; and the presentation of several case studies that will cover a historic and unusual dwelling, a house with auxillary unit, a contaminated dwelling, raw land with no good comps, and developing market rent with no rental comps. This “mini” class provides an enjoyable and useful way to pick up 3 hours of approved Appraiser. Members: $65.00, Non-members: $80.00. Sign up for both the class and the dinner and save a total of $5.00 on the combination.

I am only in need of completing about 10-15 appraisals.

I am not looking to get paid, I just need the hours.

I am usually available for appraisal assignments Saturday-Tuesday. A copy of my resume is attached below.

If you need hours and want to learn please contact Bob by email (metrowide@mris.com) or voice mail at 301-253-7723.

Good opportunity.