Expert Appraiser: Trusts, Divorce, Property Tax

As of May 1, 2009, all Freddie/Fannie/conforming loan appraisals are required to be administered through a third party company (called an Appraisal Management Company, or AMC), to avoid contact from lender to appraiser. This is the result of a settlement between a bank & an Attorney General, as the bank was threatening appraisers to push value higher, for more commissions for the bank. Click here for Fannie Mae link

Most big banks (B of A, Chase, Wells Fargo & others) have adopted this program. They can no longer hire local expert appraisers for a conforming mortgage loan, and must go through an AMC.  Appraisers are not allowed to talk to the lender at all. They can talk to the listing/selling agent.

This was to apply to conforming/Freddie Mac/Fannie Mae loans, those up to $729,750, but the lenders are applying it to all loans, including jumbo, super jumbo, & FHA, tho not required. Be aware that now you will have out-of-area appraisers calling you to schedule your appraisals, and they will not know the area.

Following are some tips to consider:

1. Write your loan contingencies and escrows for a much longer period of time, to allow for these extra intermediary steps from this system, including conditions, low appraisals, and value re-considerations.

2. Take the time to prepare an appraiser package of comparables. I appreciate it when the agent emails or faxes their selections to me ahead of time. Personal notes are invaluable: “Was tenant occupied, needs updating”, or “ Bad floor plan, lots of stairs” really help.

Currently, most lenders are requiring:

    - 2 closed sales within 90 days, plus a required 3rd sale within 6 months.

    - 2 pendings or actives, that can support value even with a 10% discount.

    - I often use an older 4th closed sale, that supports value, with a 7 -10% time adjustment.

    - On more complex assignments, it’s helpful to consider 7, 8 & even 9 comparables.

3. Now appraisers are additionally required to do four separate batches of research, fill out additional forms, yet, with the 40% AMC fee commissions, they are only getting 50% of previous pay. This means they are working twice as hard, to try to survive. Typically, they will be pulling up only the most obvious local comparables, those nearby, and missing those few full-value sales you used to develop your pricing.

The only way to make sure the appraiser can see your comps, is to be sure to email them to him, follow up with hard copy, & discussing them at inspection.

4. Many of these are less experienced, & they will come in low, which ruins the deal. Don't even think about getting a reconsideration of value, as it can take weeks. You have only one shot at this.

Some banks, those under $250 million, and credit unions, can set up their own in-house system to order appraisals, without using the AMC’s. Check with them. It is also possible that an out-of-town lender can use a local recommended appraiser.

Your favored local appraiser can still help you with VA, FHA, Relocations, as well as trusts, estates, divorces, tax rebuttals, restoring HELOCs, and other valuation needs.

Another option is to use your local appraiser as a consultant, to prepare material to give to that random appraiser. A local appraiser could be hired to review the local sales and listings, to determine a listing price, or to interpret how difficult it might be for the random appraiser to support the sale.

Check out these website connections: Click for great video summary

Try this as well

Here is a Realtor taking action on her own

And remember, our office is here to answer any and all questions, at any time. We are ready to preview market conditions for you today. Give us a call with your concerns.

James Ebert 310.505.5916 / 818.991.9322

james@eas2.com

RECENT 2009 RECOMMENDATIONS FOR EBERT APPRAISALS

Realtor thanks to us, about an Historical Architectural Home Purchase: “Well it took 30 days – but the bank approved your appraisal – we had appraisal review, then a desk top appraisal, then appraisal review of the desk top appraisal, then a field appraisal, and then finally an approval – set to close this week – Thanks again” Andrew J

“As president of First Capital Mortgage, a company providing over $2 Billion in mortgage loans annually, I know many appraisers, and Mr. Ebert has continued to be on my first call list. For over fifteen years, he has assisted many of my fellow colleagues as well. He continually receives high praise from my clients.” - Jay Robertson President, First Capital Mortgage

“Your experience in understanding the market, including the specialty market, has been invaluable. Most appraisers do not have the depth of knowledge that you have. I thank you for your diligence.” David Jaffe JPMorgan /Chase Home Mortgage

“I want to thank you for your assistance in the appraisal audit. The Internal Revenue Service had challenged the values of their property and, before an appeals officer, because of your expertise and professional representation, I won the case. The Internal Revenue service accepted your valuation, with no changes.” - Certified Public Accountant