Evening star., 1936-02-22
STANDARDS PUT
ON APPRA|SALS
Essentials to Be Basis of
Mortgage Loan Are
Outlined.

A three point statement of specific
essentials Of sound practice for the i'm
portant appraisal that Is to be the basis
of q mortgage loan has been incorpo-
rated into the bylaws Of the newly
formed National Mortgage Board Of
the National Association Of Real
Estate Boards.
The action, taken by the governing
council of the new mortgage board,
and announced today, is Of particular
Importance because of the inevitable
reopening presently Of new large-scale
mortgage financing. It states clearly,
to the public and to large institutional
investors, the standards which mort
gage board members must hold in rela-
tion to sppraisals In their control. 1t
gives, further, q simple outline that
may well guide mortgage makers and
mortgage investors generally as to
what to look for in the appraisal back
Of the loan.
The statement, which amplifles the
bylaws of the board in respect to
standards of business practice required
of persons and firms and corporations
to be admitted to its membership, was
discussed in detail at the Atlantic City
convention of the association, and then
went to the entire membership Of the
board for further study.
Must Have Good Record.
The National Mortgage Board draws
its membership from individuals, part
nerships, trusts or corporations actively
engaged in the business Of originating,
making, buying, selling, negotiating or
servicing mortgages. Members must
have good business record, must meet
certain very specific requirements as to
business practice. including: Cd sesre-
cation Of all funds collected on behalf
Of principals, so that none of these
funds are at any time commingled with
their own; ca maintenance of ade-
quate records; 80 provision for sound
ly made real estate appraisal in their
loan work.
The group. expected to be an i'm
portant instrument for real estate ad-
vance, in its statement on appraisal
standards gets squarely behind the de-
tailed work for sound appraisal car
ried on by the American Institute OF
Real Estate Appraisers Of the associa-
ton, definitely professional body Or
ganized In 1882 to widen understand
ing Of appraisal principles and identify
competent real estate appraisers.
The Mortgage Boards bylaw
amendment in text is as follows:
The members of the National Mort
gage Board subscribe in principle to
the standards, purposes and principles
Of the American Institute Of Real
Estate Appraisers. and that all ap-
praisals within the control OF its mem
bers shall be made in a manner con-
sistent Herewith.
Specific Points Given.
Specifically:
(a) The appraiser shall be man of
good moral character. experienced in
the appraisal of real estate, and who,
in his appraisal work, adheres to the
principles Of ethics and standards Of
practice of the American Institute Of
Real Estate Appraisers.
(b) Each appraisal shall be made
only after thorough interior and ex-
terror physical inspection, and will take
due note Of the physical replacement
costs; the past, present and future
gross income and expense or outgo Of
every nature; neighborhood trends and
other appraisal fundamentals.
(c) Appraisals will not be influenced
by the amount of loan requested, the
land and building will be valued as a
single unit and not as two separate
items later to be added together, valua-
tions beyond the territory with which
the appraiser is thoroughly familiar
will be made only after collaboration
or consultation with an appraiser well
Informed as to the territory where the
property Is located.