Source: http://appraisalnewsonline.typepad.com/appraisal_news_for_real_e/2008/01/index.html
Timestamp: 2017-06-22 14:09:09
Document Index: 421206604

Matched Legal Cases: ['art 9', 'art 9', 'art 3', 'art 2', 'art 3', 'art 8', 'art 8', 'art 8']

A regional vice president claims Countrywide Home Loans fired him for objecting to its illegal tricks that included using an (un-named) appraiser that it knew inflated the value of homes. The suit also alleges that Countrywide was flipping loan applicants from a "full doc" loan program to a "stated income" loan program (NINJA) and demanding that 10% of the backlog of its unapproved loan applications be approved each day, while also fabricating income levels (Shadow Approvals) for applicants. See Mark Zachary's federal lawsuit: Download ZachvCntrywd.pdf
Zachary began having concerns about the lending practices when he discovered, a month after he started with the company, that Countrywide used only one appraiser for KB Home, the lawsuit claims."The appraiser, as known to Countrywide executives, was being strongly encouraged to inflate the homes' appraised value by as much as 6 percent to allow the homeowner to "roll up" all closing costs" according to the lawsuit.Zachary said, "Not only would the home buyer be duped by this act, the end investors (the secondary market) providing funds for these loans were also duped because they were not made aware that the actual home value could actually be less than the loan amount tied to the mortgage note."
Zachary v. Countrywide Financial Corporation et al Fired Countrywide VP files suit against lender
Outside the Boxes: Part 9 - Exposing Yourself . . . The URAR & Liability Issues
AUTHOR: Patrick Egger is a Certified General Appraiser located in Las Vegas, NV. He teaches continuing education classes on the housing market, appraisal issues for real estate agents and appraisers. He can be reached at lvreqa@cox.net See Patrick Egger's latest TV interview - Poised For Recovery? Click Here Also - Look for the new Outside The Boxes category for a collection of Patrick's articles on Appraisal Scoop!
One of the most overlooked sections of the URAR is the standard Assumptions, Limiting Conditions and Certifications. This is an area the appraiser should be very concerned with since many of the statements and terms contained on those pages are subject to different and broad interpretations and thereby increase the appraiser's liability. Under FNMA Guidelines and as stated within the URAR form itself, you cannot add certifications (unless they area required by law or professional memberships) nor can any be removed, however nothing precludes you from clarifying your understanding of the certifications and citing what your actions were with respect to the scope of work, assumptions, certifications, etc. Making sure you are "Crystal Clear"We follow orders or people die, it's that simple. Are we clear? Yes, sir. ARE WE CLEAR! Crystal! From the movie "A Few Good Men"Communication is the key to an effective appraisal report. In my opinion, the URAR and its Scope of Work, Assumptions, Limiting Conditions and Certifications don't adequately clarify the extend of the appraisal process or the steps taken by the appraiser to meet the requirements of the assignment. Consider key statements on pages 4-6 of the URAR, show in "italics" below. Click here to continue reading . . .
Continue reading "Outside the Boxes: Part 9 - Exposing Yourself . . . The URAR & Liability Issues" » Posted by Patrick Egger on January 26, 2008 in Appraisal, Appraisal Process, Outside The Boxes, Scope of Work, Single-Family | Permalink
Underwriting: FHA Property Red Flags For Processors
About the Writer. Stacey Sprain is currently a National Association of Mortgage Professionals (NAMP) member in good standing and is a NAMP Certified Ambassador Loan Processor (CALP). The following article is reprinted, with permission, from the NAMP blog.There are a few things that need to be clearly communicated to you as the processor for each incoming FHA file so that you are able to “head off” what can turn into last minute processing requirements. If you receive a file without these details clearly established, you need to ask the questions necessary to determine the answers. Asking a few simple questions up front can save you a lot of grief and conditions that can pop up later in the process, hold up the file and hold up the customer’s closing. As I have found based on experience through the years, the following details are of utmost importance when I'm receiving any new FHA file for processing: #1- Age of the property. This is important for several reasons. If the property was built prior to 1978, you will want to watch the FHA appraisal carefully for any lead base paint inspection or repair requirements (CLICK HERE FOR ATTACHMENT). If the property was built within the past 12 months, you need to follow new construction property protocol (CLICK HERE FOR ATTACHMENT) which may include processing the file as existing construction, under construction or as proposed construction. Additional documentation requirements may be necessary depending on the status of the construction at time of processing. #2- Type of property. It is equally important to know if the subject is a standard single family detached home, an attached home or townhome, a condominium, or a manufactured home. You will have varying documentation requirements based on the property type alone. Click Here For Examples . . .
Continue reading "Underwriting: FHA Property Red Flags For Processors" » Posted by Brian Davis on January 25, 2008 in HUD/FHA, Underwriting | Permalink
The Zaio Chronicles - Part 3 - The Process Begins
My name is Greg Wood. I am a Certified General appraiser with over 18 years experience. This post is the 3rd in a series of articles on my journey as a Zaio zone owner. This is not intended to be a series cheer-leading for Zaio, but rather an honest portrayal of why I bought my single zone in Torrance, CA, and an ongoing diary of the ups and downs of bringing my investment operational. See Part 2: Zaio Chronicles - The Summit.Sometime in December (it seems like such a LONG time ago), I began the phase of my zone processing we lightly call “prescoring”. This is the process by which I take a huge file of properties (which now have photos and assessor data attached), separate them into market groups, confirm the assessor’s data, and mark each accordingly. The task is enormous, but if it’s not done correctly the basis for values, and therefore the values themselves, will be wrong. I am actually fortunate in my choice of zones. There are large tracts of homes, most built in the mid-50’s, with some smaller (and more recent) tracts, and of course a heavy salting of remodeled and custom homes. Determining the market groups is the most critical portion of this phase. My zone consists of 3 MLS areas, and they are very good market breaks. Additionally, I have subdivided two of the MLS areas, giving me a total of 5 basic locational groups. Because of how the Zaio software works, I am actually better off making more groups than less…at a later point, I can connect market groups together as similar (using the same comparables and adjustments), or change these groupings as the current real estate market dictates. Most simply, if I were doing a single appraisal in the area, the market group is my pool of similar properties from which my comparable sales would be drawn. Within my five basic groups, I have subdivisions of tracts (50’s, 80’s, remodel and custom, for example). I just counted, and total I have 27 subdivisions. It’s starting to sound like a lot, but remember I am trying to categorize every property in my zone…well over 12,000! (I know that I said 16,000 in an earlier post, but we’ll get to that later) But we aren’t done. Within each subdivision, there is also size (all properties are automatically divided into similar size ranges, e.g. 1300-1599 square feet), style (1 story, 1.5 story, etc.) and type (R-Single Family Detached, R- Condo Townhouse, various commercial, etc.). So, my market group ends up looking like: SoWd50Tr - 1 story – R-Single Family Detached – 1300-1599
Continue reading "The Zaio Chronicles - Part 3 - The Process Begins" » Posted by Greg Wood on January 25, 2008 | Permalink
The author, David Hintz, of Accurate Appraisals & Consulting of AZ is an active residential appraiser in Maricopa and Pinal Counties, AZ. David actively blogs on both on ActiveRain and Blogger.com.I did an appraisal recently on a new build in a new subdivision. The buyers (one real estate agent and one loan officer) that I have received business from (sporadicly) over the past two years, had the loan officer's company order an appraisal on the house they were buying. It was a RUSH order, that needed to close before Xmas.My research found five good comparable sales in the market area less than one mile from the subject property that has sold within the past two months. I also found three active listings and one pending sale that were good comps in the same area. I delivered my report with my value opinion . . . and everyone was happy! The next day I receive an email the from lender and started getting calls from borrowers! They need (lender words) a minor detail change. It seems the buyers will need to come up with an additional 5% down. Why? Because the box for declining market was checked instead of stable. "The report needs to be changed and all graphs included in the report removed."
My reply - Can't do that! My research data (documented in my work file - data, spreadsheets, graphs) and analysis of the market conditions of the subject's market area and surrounding area (for the past twelve months each), and city (for the past seven years) all indicate and support a declining market conclusion. Doing so would result in a misleading report and a violation of regulations. Lender says they can't use the report. One borrower is crying, screaming, and cussing me out over the phone for ruining their Christmas. The other borrower is claiming they recently closed two deals where the appraisals showed a stable market, by two other appraisers, and if I won't change the report, they will get one of the other appraisers "who will do it right" and not do business with me in the future! With all the dramatic changes in the Real Estate Market during 2007, it is still common practice for the appraiser to be blamed by everyone when a deal falls thru. Either by loosing clients and business, being black listed or added to a "Do Not Use List", having complaints filed against them, or threatened with lawsuits by everyone and their brother, it is quite clear that others in the real estate industry still do not understand the role of the appraiser. Click here to continue reading . . . Continue reading "Lost Another Client! - "The report needs to be changed and all graphs included in the report removed."" » Posted by Brian Davis on January 23, 2008 in Blacklisting / Exclusion Lists, Ethics, Mortgage Fraud, Residential Appraisal, Underwriting, USPAP | Permalink
Outside the Boxes: Part 8 - Segmentation & Conclusions - Sample Housing Market Analysis Addendum
In Part 8, Patrick Egger will wrap up this series with a presentation of his three-page Housing Market Anayisis addendum and a discussion of "Contrasting the Market to the Subject". Click here: Download HMA_scoopsample.xls
Analysis of supply and demand provides the client with perspective of general market conditions. However, how does the overall supply and demand, relate to and impact the subject property? To answer that question, you need to segment supply and demand to those properties that are “competitive to the subject”. While the overall market may have excess supply, or prices may be declining (as indicated by the Case-Shiller or OFHEO indexes) the neighborhood and or properties directly competitive to the subject may be performing differently. As such, segmenting supply and demand is critical to understanding the market and supporting your value opinion.
Provide an objective assessment of the primary indicators of market conditions in a given neighborhood whether they are increasing, stable, or declining … Describe the reasons for these trends and indicate what, if any, impacts these trends have on the opinion of the market value for the subject property. It is unacceptable for the appraiser to ignore these issues and not report the factual property value trends and market conditions. Supply, Demand and Segmentation … Identifying the overall and directly competitive supply is easy using the MLS. Estimating demand is a different story. There isn't an accurate way to quantify demand, though recent sales activity does provide a point of reference. Click here to continue reading . . .Author's Note: At a la mode's Regional Convention in Las Vegas (April 12-14, 2008) I will be presenting a Housing Market Analysis class that will cover market analysis and development of the HMA addendum. The class will include a workbook and CD with samples and worksheets. Hope to see you there. Continue reading "Outside the Boxes: Part 8 - Segmentation & Conclusions - Sample Housing Market Analysis Addendum" » Posted by Patrick Egger on January 21, 2008 in Appraisal, Appraisal Process, Market Statistics, Outside The Boxes, Residential Appraisal, Single-Family | Permalink
Do Not Use List - Chevy Chase Bank
Remember the Black List Series that Appraisal Scoop began this past Summer? Ken Verrett, aka Runt Rants, did a fantastic job of collecting blacklist stories from appraisers across the nation and presenting them here, in hopes of making a change. This is from Ken's first post in that series:
There is evidence that Do Not Use Lists are shared between lenders, presumably for the purpose of adding one lenders experiences to another. Such lists therefore have an exponential potential to shut out the offending appraiser from the market. The reason that I bring this up again is that I just happened to come across a publicly available Do Not Use or Mandatory Review list by Chevy Chase Bank's wholesale lending division. The list is available from their Documents page: GRF208 Appraisal Review Lists. According to their site, this list is effective 1/2/2008 and:
Applicability of this list is restricted to transactions involving loans that will be funded or purchased by Chevy Chase Bank, FSB or its affiliates. Inclusion in this list does not imply wrongdoing by, or claims against the individuals, companies, or entities named below. This list should not be relied upon as a determinant in any business transactions other than those within the scope of its intended use.
Posted by Brian Davis on January 17, 2008 in Blacklisting / Exclusion Lists | Permalink