Effective date of January 1, 2016, most recent version of this summary document is dated 3/5/15

The following changes were adopted by the Board in a public meeting on February 6, 2015, and will be incorporated in the 2016-17 edition of USPAP and associated guidance material with an

effective date of January 1, 2016:

* Revisions to the RECORD KEEPING RULE

* Revisions to STANDARD 3

* Revisions to the Definition of Assignment Results and Confidential Information and to the Confidentiality section of the ETHICS RULE (Note: this change included language that appeared in the Third Exposure Draft, but not in the Fourth Exposure Draft.)

* Revisions to Reporting Standards

* Other USPAP Edits

* Retirement of all STATEMENTS ON APPRAISAL STANDARDS

* ADVISORY OPINION 33: Discounted Cash Flow Analysis

* ADVISORY OPINION 34: Retrospective and Prospective Value Opinions

* ADVISORY OPINION 7: Marketing Time Opinions

* ADVISORY OPINION 35 Reasonable Exposure Time in Real and Personal Property Opinions of Value

* ADVISORY OPINION 36: Identification and Disclosure of Client, Intended Use, and Intended Users

This document has the new USPAP, changes with strikeouts, and rationale for the changes.

In the April paid Appraisal Today newsletter, I will go over the changes that are most important and relevant for practicing appraisers.

Click here to download

https://appraisalfoundation.sharefile.com/download.aspx?id=s2ee69286fc545069# 

--------------------------

from the March 2015 Appraisalport blog newsletter

By Steve Costello

Excerpts:

This month, I want to discuss some recent polls in which we asked some general questions of interest to appraisers.

First we asked: "How much time should clients give appraisers to deliver a 1004 report on a typical (not unique) property?" This was a popular poll with 4,206 responses and some of the results were very close. It was almost a dead heat between "7-8 business days" with 39 percent of the vote and "5-6 business days" with 38 percent of the vote. The number of people who think less time is appropriate, "3-4 business days," drops off quickly with only 14% of the vote. The least popular answer was "9 or more business days," capturing only 9% of the response. Time is one of the biggest issues in appraisal today. It is clear from this poll that most appraisers think they need at least five business days, and probably longer, to properly complete any assignment.

In the next poll we asked: "I think the business environment for appraisers in 2015 is going to be..." Of the total 3,392 responses, 41 percent feel the level of business is going to be "About the same as 2014." In second place was the response, "Worse than 2014" with 20% of the votes. The rest of the responses didn't individually pull a large number of votes. On the positive side, "Better than 2014" had 12 percent of the vote while "Much better than 2014" had a few takers with a solid 5 percent. Finally, 9 percent predict things to be "Much worse than 2014" and 13 percent feel it's "too early to tell." Overall, it seems most people think 2014 is going to be about the same for appraisers, with more than a quarter thinking the environment in 2015 is going to be somewhat worse. Since this poll was posted, interest rates have started falling. Maybe it will turn out to be a better year than many predict.

In the last poll, we asked: "How many appraisers and/or trainees currently work in your office including yourself?" From the total of 3,133 votes, a clear winner emerged. That winner was the expected answer of "1" with 65 percent of the vote. These days we expect that most appraisers are working on their own. This was followed by the response of "2-4" pulling in 28 percent of the vote. That doesn't leave many appraisers who work in larger offices. An additional 5 percent selected the answer "5-9" and finally only 2 percent work in an office of 10 or more appraisers. My guess is that most of those are part of a large lender or AMC. The large independent appraisal office seems to be a pretty rare animal these days.

Another topic in the newsletter

- Helpful Appraisal tips from the Seattle Chapter of the Appraisal Institute

http://blog.appraisalport.com/helpful-appraisal-tips-from-the-seattle-chapter-of-the-appraisal-institute/ 

My comment: nothing new, but is is good to get confirmation of what appraisers are saying. Many are very busy now due to low interest rates. No one knows what business will be like in 2014, but it is nice to know appraisers' forecasts. I keep getting emails from long time appraisers (30+ years) that are giving up their offices and going to a home office. Of course, many post-licensing appraisers have always had home offices for their businesses. I guess I am now really ancient - I still have a separate office, but it is only 2 blocks from my house. I downsized my home and there is no room for my office assistant and all my stuff ;>

From a very reliable source, there are under 12 names on Fannie's AQM list, not changed much since it first came out last year. Although many appraisers are worried about this, Fannie is definitely moving very slowly. This is a do  not use or  100% review list. 

--------------------------------

They have been sending out new warning letters, sent by postal mail, to warn appraisers about what they need to improve on. In the past it was about internal consistency on C and Q ratings. This can easily be avoided by checking each comp you use against your comp database. If your software vendor does not provide this database, contact them to see if they are planning one.

The newer letters relate to other factors. Sorry, I don't have confirmed details on the new warnings. They may have been about low GLA adjustments, which Fannie does not like. If you are using a low gla adjustment as compared with the sales price, be sure to explain in your appraisal how you determined it. For example, sales price is $500,000, GLA is 2,000 and your GLA adjustment is $25. Of course, it could be a very high land value. Just explain it. 

Per Fannie, "the warning letters are sent to "appraisers whose reports exhibit a pattern of minor inconsistencies, inaccuracies, or data anomalies" and the 100 percent review and "do not use" lists are reserved for appraisers whose reports exhibit egregious issues."

If you get a warning letter, don't panic. It is just a warning. As far as I know, no response is needed. FYI, this is completely separate from CU warnings, which are from CU results, not directly from Fannie. Just change what you are doing, if possible, so you don't get any more warning letters.

----------------------

Excerpt:

Mitchell Maxwell & Jackson, the real estate appraisal firm that was dragged through protracted litigation for allegedly affixing false signatures to appraisal documents before being vindicated last year, is now saying the state owes them $10 million as compensation for the ordeal and the havoc it caused.

Co-founder Steven Knobel claims that the state's case ravaged his company's reputation and was responsible for driving away most of its clients, including its biggest, Citibank. While the firm was once worth $9 million and had 30 employees, the complaint states, it has now lost the majority of its business and is down to a single employee.

Click here for more info:

http://therealdeal.com/blog/2015/03/09/mitchell-maxwell-jackson-sues-state-for-destroying-reputation/#sthash.H6sQujz0.dpuf 

----------------------

Note: I publish a graph of this data every month in my printed newsletter, Appraisal Today. For more information or get a FREE sample issue go to http://www.appraisaltoday.com/products.htm or send an email to mailto:info@appraisaltoday.com . Or call 800-839-0227, MTW 8AM to noon, Pacific time.

WASHINGTON, D.C. (March 11, 2015) - Mortgage applications decreased 1.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending March 6, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week to the lowest level since January 2015. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 2 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 60 percent of total applications from 62 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.6 percent of total applications. The average loan size for purchase applications increased to the highest level in the history of the survey at $294,900.

The FHA share of total applications decreased to 14.0 percent this week from 14.6 percent last week. The VA share of total applications increased to 10.8 percent this week from 9.8 percent last week. The USDA share of total applications remained unchanged from last week at 0.8 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.01 percent, the highest level since the week ending January 2, 2015, from 3.96 percent, with points increasing to 0.39 from 0.30 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.02 percent from 3.95 percent, with points remaining unchanged at 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.80 percent from 3.76 percent, with points decreasing to 0.20 from 0.21 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.29 percent, the highest level since the week ending December 26, 2014, from 3.27 percent, with points remaining unchanged at 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.18 percent from 3.05 percent, with points decreasing to 0.40 from 0.50 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.

###

The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, REITs, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site: www.mba.org  .