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?

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.

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.

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.

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.

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.
·
• 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 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.

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 vary but may include assignments such as condemnation, environmentally impaired properties, special purpose properties, homes with an auxiliary dwelling unit, historic residence, park and recreation facilities, etc. Participants are encouraged to bring a case study from their files to present and review for discussion. 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.

• Baltimore City/Baltimore County and surrounding areas
• Prince Georges County
• Montgomery County
• Washington D.C.
• Virginia

• Must be FHA approved
• Must have E&O Insurance that would cover the above geographic areas
• Equal split or fee

Interested parties, please fax Qualifications and information to 410 296-1197

Certified appraiser with FHA credentials for Maryland, Washington DC, and Virginia
50/50 split
E&O Insurance

Interested appraisers please contact by e-mail to

fjwoerner@yahoo.com

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.