Federal Transaction Appraisal!

[Adios]

[QUOTE Banks do have to get an evaluation but the evaluation can pretty much be done by anyone.

Not according to the IAG.


Back to my original question:

I am reading this to ask, of the appraisals completed that require an appraisal, what is the percentage of those that fall under the FRT definition? And, I'm presuming we are only talking residential mortgages here.

Ok. I'll buy off 8% of all those appraisers are for FRTs.
GSEs (VA, FHA, etc.) require appraisals for their programs (exception on certain properties).
FRTs are required to obtain an appraisal on a property exceeding the de minimus or when the risk associated with that transaction warrants more than an evaluation.
If the two groups above represent 100% of appraisal universe that is the basis for the question, then I certainly can believe of that entire group, 8% represents the FRT component.

But what is the point of that statistic other than to demonstrate the size of non-FRT required-appraisals relative to FRT required-appraisals? They all require an appraisal.[/QUOTE]

That's the thing... no appraisal is required. Yes it was a shock to me, as well as state regulators to learn that they set up agencies to license appraisers for only 8% of the transactions. The only transactions that require an appraisal are portfolio loans. It was even a shock to Ed DeMarco.

 

[Terrel L. Shields]

Not according to the IAG.

Persons who perform evaluations should possess the appropriate appraisal or collateral valuation education, expertise, and experience relevant to the type of property being valued. Such persons may include appraisers, real estate lending professionals, agricultural extension agents, or foresters.
​

Pray tell what license a "lending professional" have to hold? Or, an extension agent? At least foresters are often certified...and to value forest land in Arkansas must be certified foresters. What training of an extension agent lends support to them valuing agricultural property?

Basically, the loan secretary can take a couple of McKissock or Kaplan courses and qualify as an "evaluation" professional for any home loan in America under $250,000. They need no license nor experience hours.

The real catch 22 is that an appraiser can "do" an evaluation in the eyes of the banker, but the law outside a couple of states means the appraiser is doing an appraisal. The difference is daylight and dark. The appraiser cannot comply with USPAP with a mere evaluation, so he/she must do an appraisal. The non-appraiser has no such limitation and does not have to make any deep analysis of the comps used nor the methods applied.

 

[Howard Klahr]

no appraisal is required. Yes it was a shock to me, as well as state regulators to learn that they set up agencies to license appraisers for only 8% of the transactions. The only transactions that require an appraisal are portfolio loans.

For someone that has been actively involved in the appraisal profession for as long as you have been the misinformation you perpetuate is appalling. While not FRTs, Fannie, Freddie, FHA, VA, USDA all require appraisals. And NO portfolio loans are not he only loans that "require" appraisals. To say otherwise is blatantly incorrect and you know it. Portfolio loans may be the only ones that are FRTs but again not the only ones where appraisals are required.

State Regulators were fully aware that agencies were set up or in several cases just an expansion of regulation that was already occurring.

 

[Adios]

[QUOTE Banks do have to get an evaluation but the evaluation can pretty much be done by anyone.

Not according to the IAG.


Back to my original question:

I am reading this to ask, of the appraisals completed that require an appraisal, what is the percentage of those that fall under the FRT definition? And, I'm presuming we are only talking residential mortgages here.

Ok. I'll buy off 8% of all those appraisers are for FRTs.
GSEs (VA, FHA, etc.) require appraisals for their programs (exception on certain properties).
FRTs are required to obtain an appraisal on a property exceeding the de minimus or when the risk associated with that transaction warrants more than an evaluation.
If the two groups above represent 100% of appraisal universe that is the basis for the question, then I certainly can believe of that entire group, 8% represents the FRT component.

But what is the point of that statistic other than to demonstrate the size of non-FRT required-appraisals relative to FRT required-appraisals? They all require an appraisal.[/QUOTE]

That's the thing... no appraisal is required. Yes it was a shock to me, as well as state regulators to learn that they set up agencies to license appraisers for only 8% of the transactions. The only transactions that require an appraisal are portfolio loans. It was even a shock to Ed DeMarco.

For someone that has been actively involved in the appraisal profession for as long as you have been the misinformation you perpetuate is appalling. While not FRTs, Fannie, Freddie, FHA, VA, USDA all require appraisals. And NO portfolio loans are not he only loans that "require" appraisals. To say otherwise is blatantly incorrect and you know it. Portfolio loans may be the only ones that are FRTs but again not the only ones where appraisals are required.

State Regulators were fully aware that agencies were set up or in several cases just an expansion of regulation that was already occurring.

The law that was written to require has exempted them! Scary thought and I completely understand why no one knows about it. THe GSEs are exempt ! Even the former regulator could not believe it was true. AARO wrote and letter and CRN wrote a letter. it was clarified in EGRIPPRA in February 2017. No appraisals needed. So at anytime a Fannie and Freddie can use their AVMs if anything.

 

[hastalavista]

Persons who perform evaluations should possess the appropriate appraisal or collateral valuation education, expertise, and experience relevant to the type of property being valued. Such persons may include appraisers, real estate lending professionals, agricultural extension agents, or foresters.
​

Pray tell what license a "lending professional" have to hold? Or, an extension agent? At least foresters are often certified...and to value forest land in Arkansas must be certified foresters. What training of an extension agent lends support to them valuing agricultural property?

(my bold)

They may not have to hold any license (current or inactive).
Terrel-

You don't like the fact that an evaluator doesn't need to have a license? Ok, that is your prerogative.
But the IAG clearly states that an evaluator needs to have the competency, experience, etc., to perform the evaluation. Valuations were done by non-licensed persons long before licensing became a requirement for appraisers. The lack of a license doesn't mean that a person isn't qualified to perform an evaluation. Institutions are required to ensure that is the case. If it isn't, and there is a problem, the problem falls squarely on the institution.

A license isn't required for an evaluator. Competency and experience is required. The results must be credible.
There is no inconsistency in the above three sentences.

 

[gregb]

Given who FDIC will allow to complete evaluations, I do not see where there is a viable role for me to play, unless a lender is willing to engage a certified appraiser, with commensurate fee/pay.

https://www.FDIC.gov/news/news/financial/2016/fil16016.pdf

 

[Howard Klahr]

That's the thing... no appraisal is required.

Before you go off spouting unsubstantiated statements how about we introduce some facts to the situation?

For most loans, Fannie Mae requires that the lender obtain a signed and complete appraisal report that accurately reflects the market value, condition, and marketability of the property

Underwriting the Property The Mortgagee must underwrite the completed appraisal report to determine if the Property provides sufficient collateral for the FHA-insured Mortgage.

‘‘§ 129H. Property appraisal requirements ‘‘(a) IN GENERAL.—A creditor may not extend credit in the form of a higher-risk mortgage to any consumer without first obtaining a written appraisal of the property to be mortgaged prepared in accordance with the requirements of this section.

Is there some part of any of the above that you are unclear on that requires appraisals?

I am quite aware that not all loan transactions are FRTs. Especially that Fannie, Freddie, FHA, VA, USDA, etc are NOT FRTs. That does NOT however imply that appraisals are NOT required.

The law that was written to require has exempted them!

There never was a law written that required appraisals for non-FRTs. In fact FIRREA was specifically written to exclude them at the time it was passed. Each of the GSEs and VA FHA, USDA have however always required appraisals on their own. Things are as they have been for over 25 years. Nothing new here.

 

[Mike Kennedy]

Joan Trice said: The law that was written to require has exempted them!

The law that was written to require has exempted them! [/QUOTE]

link??

 

[Howard Klahr]

Joan Trice said: The law that was written to require has exempted them!

There never was an "exemption", they were never included in the "law" to begin with.

 

[Terrel L. Shields]

Given who FDIC will allow to complete evaluations, I do not see where there is a viable role for me to play, unless a lender is willing to engage a certified appraiser, with commensurate fee/pay.

Exactly...if I could do work to eval standards then still an issue of whether our "due diligence" is viewed differently than Donnie the intern with a couple on line courses under his belt.