Recent e-mail I received. Sounds interesting.
The Valuation 2007 Conference was a terrific success in bringing appraisers together to address the issues of the day. A repeated discussion at the conference was around the pending legislation associated with the “mortgage meltdown”. A number of these bills have legislation directed at appraisal, the most significent being H.R. 3837. While this legislation does help address the appraisal issues at a high level, none of the current legislation provides tangible help to the appraiser in the areas of fraud, identity theft, and the most outspoken issue of “appraiser independence".
Two of the proposals presented at the conference are the introduction of an "Appraisal Registry" and the requirement for a "Letter of Engagement" in each loan file. We need your vote to get Congress to listen to appraisers and tell Congress we want these two items included in any legislation that is considered. Today, we appraisers do not have a voice; no one organization has enough members. This is your opportunity to be heard and get some action done. If we do not take control of our own destiny, others will dictate it for us as in the past. Here is a brief overview of both proposals:
Currently, the Appraisal Subcommittee is authorized by Congress to maintain a national registry of all Licensed and Certified Appraisers. The increased prevalence of fraud in mortgage banking as well as alarming escalations in appraisal related fraud have created a need to better identify, minimize and curtail appraisal related fraud in the areas of overvaluation, flipping, and appraiser identity theft. This proposal is designed to take advantage of the ASC database, already in place, and expand its usefulness by creating an “Appraisal Registry”:
- The ASC National Registry of Appraisers would be enhanced to include a system of registry for all appraisals completed for loan purposes on Single family 1-4 unit properties.
- The appraisal registry system of records would be comprised of approximately seven useful fields such as property address, lender client name, appraised value, effective date, CLTV, purpose (e.g Refi or Purchase, REO), and comments.
- Appraisers would be required to log into the system each time they perform an appraisal and input data concerning that assignment.
- Before accepting the data, the system would check and verify the appraiser’s license and geographic qualifications for that subject property.
- After acceptance the appraiser would receive an email confirmation with a unique ID number for that transaction.
- Appraisers must include this unique ID in the appraisal before delivery to the lender client.
- The lender client can then access the system and enter the ID number to verify the appraisal has been done by that appraiser.
With the above data maintained in an expert system, the lender client and the appraiser would also be able to view all previous appraisals ( the above mentioned seven fields) completed on the subject property and determine if the recent value determination is appropriate. The database would be protected so it cannot be used to search for data and then used for marketing or to feed other databases.
Regulated institutions would be required to be a member of the system as licensed appraisers are today ($25 per year of your license fee supports the ASC) and would pay an annual fee to help maintain the system. Non-regulated lenders would be eligible if they fund loans in excess of an amount yet to be determined.
This is a natural evolution of the Appraiser Registry that would help appraisers, clients and consumers. Today we have no idea how many appraisals are completed on a property for mortgage related purposes. This would help all parties do a better job and be held responsible for their actions. This Registry is very similar to other industries that have databases to help enhance their productivity; these include Termite Inspectors, health care and insurance.
Obviously some of the details need to be decided, however, a complete ten page business requirements document has been created to get he process started.
I am sure you have questions and I would be glad to answer them, but we need your approval now to get this in front of Congress to get their attention while we work out the details.
LETTER OF ENGAGEMENT
The Letter of Engagement is a simple requirement that would make it mandatory for a Letter of Engagement to be included in each loan file.
This would require for an individual to take responsibility for the appraisal order so if any issues surface concerning the client’s request compared to the appraiser’s scope of work can be addressed, including pressure to hit a value or include or delete information.
Today there is no indication in the loan file as to who took responsibility for the appraisal request. This would at least provide a starting point if there are issues.
YOUR ACTION IS NEEDED
If you agree that these two issues need to be considered by your Congressman and Senators then send an email to the following address with your name , license number and address.
[email address removed]
We are trying to get 20,000 appraisers to respond so we can approach Congress with a constituency behind us. The response to this proposal has been positive but Legislatures ask “who supports this?”, I want to be able to say I have 20,000+ appraisers supporting this legislation. Tell a friend.
Who is we you might ask. We is me, Lewis J. Allen and others. I have been lobbying these issues for some time, meeting with Congressional staff, the MBA and others to build support. I need your support to continue and get their attention. This is strictly a volunteer effort.
The appraisal community has never been well organized. Now is our time to get government attention to our needs, if we can do this, then more can follow.
Thanks for your help and voice!
Lewis J. Allen
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