Appraisal Order Clarification

Payment Requirements


For all non-bill clients, a credit card authorization form signed by the borrower must be uploaded to the system when an appraisal product is ordered. Orders will NOT be placed without this signed authorization.


Please keep in mind that it is not SouthEastern's responsibility to facilitate completion of the credit card authorization form or explain product charges to your borrower. The process is quicker and more efficient when all documentation is uploaded when the order is placed. We would sincerely appreciate your assistance in this regard.


Turn Time Standards
Typical turn time expectation is 5 business days for full URAR/condo/2-4 family property appraisal reports. Please note that orders requiring a quicker turn time will need to be considered a RUSH order, with appropriate fee increase. Should you need a RUSH on an order, please make sure that this is documented in the notes section of the order itself and we will make every effort to find an appraiser who can accommodate your needs. We will alert you to the RUSH fee before final order placement for your approval. Please note that all orders not noting a RUSH requirement will be placed with a 5 business day turn time


Turn time is calculated from the point of receipt of completed and signed credit card authorization.

REASSIGNMENT OF APPRAISAL

Per USPAP, when an appraisal order is placed, a relationship is created between the parties involved. The client is identified by the appraiser in the appraisal report and is the party with whom the appraiser has an appraiser-client relationship in the related assignment. Once a report has been prepared for a named client, the appraiser cannot be “readdressed” to another party since the appraiser does not have a contractual relationship with this other party. However, an appraiser may complete a NEW assignment for this second party. This will then establish a relationship between appraiser and second lender providing all of the rights, obligations and liabilities such a relationship places on the parties involved. A new scope of work is required and an associated fee is determined.

Appraisal Portability

Appraisal portability provides that a lender may accept an appraisal prepared by an appraiser for a different lender provided the lender (1) obtains written assurances that such other lender follows appraiser independence guidelines in connection with the loan being originated and (2) determines that such appraisal conforms to its requirements for appraisals and is otherwise acceptable.  The originating lender is responsible for documenting the written assurance to the other lender.  The lender accepting the appraisal report completed for the originating lender must accept the report “as is.”  The appraiser has no contractual relationship with the second lender and is not responsible for changes requested by the second lender.

Round 2 Appraisal vs BPO's

On January, 16, 2009, we brought to you the valuation fight that is appraisals vs. broker price opinions (BPO).  Today we bring you Round 2 – and this time it’s personal.  Well, it’s not really personal but there is a clear difference of opinion.
Last week, the Appraisal Institute (AI) sent a letter to Treasury Secretary Geithner expressing concerns about the use of BPOs in the HAFA loan modification program.  In the letter to Treasury, AI states that BPOs are likely to exacerbate mortgage fraud.  Further, real estate agents who perform BPOs are not independent, not properly trained, have a bias towards quick results  for a fee, and have little or no regard for the other parties of a short sale transaction (lenders, servicers, investors, property owners, etc).
Within days, the National Association of REALTORS (NAR) responded to AI comments in letters to Secretary Geithner and Housing and Urban Development (HUD) Secretary Donovan.  In the letter, NAR recognizes the need for flexibility in any mortgage modification program and notes the importance of the appraisal for purchase money mortgage transactions. However, NAR believes an appraisal may not be the best tool for all real estate transactions.  BPOs are widely accepted in the real estate industry and there is no evidence that their use results in mortgage fraud.  NAR also argues that there is no evidence to support the idea that appraisers are more or less likely to engage in mortgage fraud than real estate agents

Greenspan Denies Causing the Housing Bubble

Former Federal Reserve Chair Alan Greenspan, whose policies have been blamed for the economic meltdown of 2008, will present a paper at the Brookings Institution today saying that the low interest rates during his tenure didn’t cause the housing bubble.

"To my knowledge, that lowering of the federal funds rate nearly a decade ago was not considered a key factor in the housing bubble," he wrote in a preliminary copy of the presentation.

"The global house price bubble was a consequence of lower interest rates, but it was long term interest rates that galvanized home asset prices, not the overnight rates of central banks," Greenspan continued.

What did cause the bubble, Greenspan argued, is the explosive growth of developing economies in Asia and other parts of the world.

Federal agents crack Upstate Mortgage fraud scheme

Columbia, South Carolina ---- Acting United States Attorney Kevin F. McDonald stated that five people and an upstate corporate builder of residential homes entered guilty pleas in federal court for their respective roles in a mortgage fraud scheme that involved false loan applications, kickbacks, and duping investors, many of whom were members of a Greenville church. Twin brothers Anthony B. Grant and Antonio B. Grant, age 43, both of Simpsonville, and their business partner Michael D. Holmes, age 37, of Lawrenceville, Georgia, pled guilty to conspiracy to commit bank fraud.  Also pleading guilty were Tower Homes, Inc., a South Carolina corporation, and its President Nathan Seppala, age 50, and Vice President Sandra Kinnunnen, age 59, both of Greer, South Carolina.  United States District Judge Henry F. Floyd accepted the pleas and will impose sentence after he has reviewed pre-sentence reports from the U.S. Probation Office. Beginning in 2007, Anthony and Antonio Grant, along with Holmes, operated South East Real Estate Solutions (SERES), which sought people interested in real estate investment and would locate property in upstate South Carolina for these investors to purchase. Many of these novice investors were recruited from the congregation of Redemption World Outreach Church of Greenville, South Carolina, after the Grant brothers and Holmes made presentations to members of the congregation on investment opportunities.  The men promised each investor that once an investment property was purchased, SERES would make all mortgage payments, would find individuals to rent the property, would manage the property, and that SERES would try to “flip” the property to earn a profit for themselves and the investor. Investors were asked to provide personal financial information to SERES so that financing could be sought by the Grant brothers and Holmes on their behalf for the real estate purchases.  However, the Grant brothers and Holmes falsified the investors’ financial information, preparing loan applications stating that the investors had substantial assets and income to qualify for higher mortgage loans, when in fact many did not.  The men also provided investors with money required by lenders to be paid at closing by the investors.  To deceive the lenders on the source of these funds, the men typically gave each investor a check prior to closing, instructing the investor to present it at closing as if it were from the investor’s personal account. Based on the false applications and the deceptive closing funds, mortgage lenders approved 33 loans in amounts far in excess of what would have been loaned had accurate information been presented.  Many of these loans are now delinquent and many of the homes are in foreclosure. Many of the properties that SERES arranged for its investors to purchase were small site-built homes constructed and sold by Tower Homes in the upstate.  The Grant brothers and Holmes entered into side contracts with Tower Homes to locate buyers, then arranged for a recruited investor to purchase one of the Tower Homes’ properties at a price far in excess of that typically charged by Tower Homes.  For arranging for the investor to purchase the Tower Homes property, Seppala and Kinnunnen authorized kickback payments to the Grant brothers and Holmes which were not disclosed to the lenders.  Representatives of Tower Homes provided sworn affidavits to the lenders that there were no oral or written contracts relating to or affecting the property purchased by the investor, when in fact, the representatives knew about the side contracts and the kickbacks authorized by Seppala and Kinnunnen. Secret Service agents began investigating the case after numerous victim investors contacted the U.S. Attorney’s Office to report the fraud in February 2009. Mr. McDonald stated the maximum penalty the individual defendants can receive is a fine of $1,000,000 and imprisonment for 30 years.  The corporate defendant Tower Homes faces a maximum possible fine of $1,000,000.

NAR Supports Use of BPOs in HAFA Program

The allowance of broker price opinions (BPOs) in the administration’s Home Affordable Foreclosure Alternatives (HAFA) program has created a major controversy.

As DSNews.com previously reported, four appraisal organizations recently wrote a letter to Treasury Secretary Timothy Geithner, voicing concerns over the use of BPOs for short sales under HAFA. In response to this opposition, Vicki Cox Golder, president of the National Association of Realtors (NAR), wrote her own letter, supporting HAFA and its allowance of BPOs.
The letter, which was addressed to both Treasury Secretary Geithner and HUD Secretary Shaun Donovan, was written on behalf of the 1.2 million members of NAR.
Golder said NAR recognizes the need for flexibility in any mortgage modification or short sale program to ensure all parties are treated fairly and appropriately. While an appraisal is a very important part of a purchase money mortgage transaction, it may not be the best tool for other real estate transactions, she said. NAR believes that in many cases, a more appropriate and cost-efficient measure is the BPO.
“BPOs are completed by licensed real estate agents with a detailed knowledge and understanding of real estate pricing and local market trends developed through active participation in the listing, negotiation, and sale of properties,” Golder wrote. “This perspective offers a unique viewpoint that supports sound real estate decisions with accurate estimates of the value of real estate.”
According to NAR, BPOs are widely accepted in the real estate industry, due to their established reliability and accuracy. Fannie Mae and Freddie Mac permit BPOs in certain circumstances, the FDIC and the Federal Reserve Board permit the use of BPOs in various programs, and BPOs are also accepted by banks, lenders, and all major loan servicers for a number of purposes.
Golder said the use of BPOs to analyze mortgage loan portfolios for risk management, due diligence, and fraud detection purposes is an important part of the mortgage

lending industry. BPOs are viewed as a valuable tool to assist lenders, loan servicers, and investors in making decisions related to refinances, home equity loans, and secondary market transactions related to loan portfolios, and the use of BPOs in these situations benefits borrowers through increased efficiencies and reduced servicing costs, she explained.
The appraisal organization’s letter noted that law enforcement officials have highlighted loan modification fraud-including fraud involving short sales-as a new form of mortgage fraud. To mitigate such conflicts, the coalition of appraisal organizations urged the department to reestablish independence in the valuation process.
“Generally speaking, real estate agents and brokers are not independent or properly trained valuation specialists,” the letter said. “They have an inherent bias towards quick results and actions which produce a fee for themselves, irrespective of whether the lender, servicer, investor, property owner, and/or borrower gets a fair return on the short sale.”
In her letter, Golder said there is no evidence to support the assertion that appraisers are more or less likely to engage in mortgage fraud than real estate agents. She said many of NAR’s members conduct BPOs, and to do so, they must adhere to a rigorous code of ethics.
This code requires a Realtor to complete a BPO within a specified framework. In addition, Realtors have a fiduciary responsibility to their clients and are required to perform their duties consistent with “the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage.”
Additionally, Golder said there is no evidence that a BPO exacerbates mortgage fraud or abuse. The appraisal organizations cited a recent study from Interthinx, which specifically mentioned property valuation fraud. According to the study, bank-owned fraud attributed directly to schemes involving shorts sales and REO inventories increased by nearly 50 percent over the past year and 100 percent over the past two years. However, Golder said the study did not consider the method of valuation used for transactions that may be fraudulent.
The coalition of appraisal organizations also claimed that in at least 23 states, the ability of a real estate agent or broker to perform a BPO is specifically limited to assisting a buyer or seller, or a potential buyer or seller, in establishing a listing or offering price for a property. Golder said this assertion is simply incorrect.
“We urge you to examine the relevant state statutes and not accept this argument at face value, as we believe the use of BPOs for short sales and other purposes is clearly permissiable in most, if not all, states,” Golder wrote.

Appraisal Institute Opposes Obama’s Promotion of BPOs for ‘Short Sales

Appraiser News Online Headlines
Last Updated: March 10, 2010
Vol. 11, No. 5/6
Stay up-to-date on current market trends! Click here to view the latest
Economic Indicators. Back to stories
Appraisal Institute Opposes Obama’s Promotion of BPOs for ‘Short
Sales’
Citing concerns about increased mortgage fraud, the Appraisal Institute this week spearheaded opposition
to changes to an Obama administration program that allows broker price opinions in determining the
minimum offer in “short sales” of homes.
The Appraisal Institute was joined by the American Society of Appraisers, the American Society of Farm
Managers and Rural Appraisers, and the National Association of Independent Fee Appraisers in sending a
March 8 letter to Treasury Secretary Timothy Geithner.
“We strongly believe continuing to allow ‘broker price opinions’ (BPOs) in the property valuation component
will not adequately protect the public interest (consumer, borrowers, etc.) or the interests of the various
parties to the loan (lenders, loan servicers, etc.) and is likely to exacerbate mortgage fraud,” the appraiser
organizations wrote.
“We urge the Department to reestablish independence in the valuation process to protect the safety and
soundness of financial institutions, improve transparency, and safeguard the public trust,” the appraiser
organizations’ letter said, later adding. “We urge the Administration to revise the (Home Affordable
Foreclosure Alternatives) HAFA guidelines to prohibit the use of BPOs for property valuation requirements
involving foreclosure alternatives, including short sales.”
The appraiser organizations’ letter notes that law enforcement officials have highlighted loan modification
fraud – including fraud involving short sales – as a new form of mortgage fraud. “We believe that such
conflicts can and should be mitigated by implementing basic requirements reestablishing independence
and competency in the valuation process,” the letter said.
Changes to expand the Home Affordable Foreclosure Alternatives program, set to take effect April 5, would
allow defaulting owners to sell their homes for less than they owe and would provide them $1,500 in
relocation assistance, according to The New York Times.
The Times referred to the plan as “one of the administration’s most aggressive attempts to grapple with a
problem that has defied solutions,” noting that 5 million households are behind on their mortgages and risk
foreclosure. The government’s $75 billion mortgage modification plan reportedly has helped few of them.
To read the appraiser coalition’s letter to Treasury Secretary Timothy Geithner, visit
www.appraisalinstitute.org/newsadvocacy/downloads/ltrs_tstmny/2010/AI-ASA-ASFMRANAIFA_
ShortSales.pdf .
To read The New York Times’ March 8 story on the Obama administration’s program, visit
www.nytimes.com/2010/03/08/business/08short.html.

Foreclosures slow in ཅ | Culpeper Star-Exponent

Foreclosures slow in ཅ | Culpeper Star-Exponent

Report reveals a mixed bag for job growth in area | Charlottesville Daily Progress

Report reveals a mixed bag for job growth in area | Charlottesville Daily Progress

Virginia Business - News: Virginia home sales increased in 2009’s fourth quarter

Virginia Business - News: Virginia home sales increased in 2009’s fourth quarter

Roanoke ranked 131st on housing affordability list

Virginia metro areas, Richmond ranked 106th on the affordability list, with 79 percent of homes qualifying as affordable to residents there. Roanoke ranked 131st, with 75.4 percent. Hampton Roads ranked 145th, at 72.9 percent.

GUIDANCE CONCERNING DESKTOP APPRAISAL ORDERS

A new desktop appraisal product was released in February 2010. The Appraisal Board has received numerous telephone calls and emails about this product and others that are similar. Although the Board does not approve or prohibit specific forms or software used to deliver appraisal results, the Board does have several concerns about this type of assignment.

An assignment is an agreement between an appraiser and a client for a valuation service. Once an appraiser accepts an assignment, USPAP applies to the appraiser’s actions. Even if an appraiser ends up not completing the assignment or does not get paid, the appraiser must still comply with USPAP. If an appraisal report is created and sent to the client, a workfile must be produced and maintained. USPAP requires that the work file must contain enough information to produce a summary appraisal report from the workfile contents. 

This is a valuation service regarding the subject property that would have to be disclosed under the 2010 change to the Conduct Section of the Ethics Rule of USPAP, even if no report was transmitted and/or no payment was received.  According to the instructions for this product, if an appraiser accepts an assignment to do this type of appraisal but subsequently discovers that the subject property does not meet minimum requirements, the appraiser will not get paid. This is referred to as a “no-hit”. Since an assignment that results in a  “no-hit” may not be tracked in invoicing software, the assignment would have to be entered into some other type of tracking software to make sure one complied with the new disclosure requirement in USPAP.
 

The Scope of Work Rule of USPAP states that the appraiser, not the client, must determine the scope of work necessary to develop credible assignment results. In addition, the Scope of Work rule states that “An appraiser must not allow assignment conditions to limit the scope of work to such a degree that the assignment results are not credible in the context of the intended use.”  There are several assignment conditions in this product that are referred to as “appraisal report minimum requirements”. Some may be unacceptable.

This product requires appraisers to use MLS as the primary data source. In many areas of our state, MLS is not available or is unreliable. A better source of data might be the county tax office or a private data collection system.  The product also requires that appraisers must use a minimum of three closed comparable sales and a comparable listing and/or pending sale.  At least two of the comparable sales must be less than 120 days old, and at least two must be located within one mile of the subject. The GLA of the comparable sales must be within 20% of the GLA of the subject. Appraisals of condominiums with more than 15 units must include at least two comparable sales from the development within the last 12 months and at least one comparable listing and/or pending sale from the development. Condominiums with 15 units or less must include at least one comparable sale from the development within the past 12 months and, when available, a comparable listing or pending sale from the development. This product does not allow the appraiser to use the best data available and may well limit the amount of work performed to such an extent as to violate the Scope of Work Rule.

Of major concern is the assignment condition that the appraiser will not receive a fee if the appraiser cannot meet all the product requirements. As noted above, this is referred to as a “no hit”.  “No-hits” are produced when the appraiser cannot produce a credible value due to insufficient subject data, the subject is an ineligible property type, the appraiser cannot meet all of the minimum report requirements, the subject is zoned commercial/industrial, or the subject is not at its highest and best use.    

It appears that the assignment conditions may violate the Management Section of the Ethics Rule. For example, if the appraiser searches for comps but discovers there have been none within the last 120 days, the appraiser will not get paid. If the subject is located in a transitional area and the highest and best use would be as an interim or commercial use, it is a “no-hit” and there is no fee. The fee for the assignment is contingent on a predetermined result - the reporting of comps that meet certain criteria, or a finding that the subject meets the product requirements.  This type of assignment may result in the loss of objectivity. An appraiser may be tempted to use sales that he or she would not otherwise use, or to simply concur that the current use is the highest and best use, in order to receive a fee. The fact that an appraisal may not be completed (a “no-hit”) is irrelevant. The Ethics Rule prohibits accepting such an assignment.

There are appraisal products on the market now that allow or even require the appraiser to choose comparable sales from a database maintained by the software vender or client. Most of the comps in those systems are datamined from other appraisal reports. These services are not connected directly to a local MLS system. Sometimes an employee of the software company may contact local real estate brokers to obtain comparable sales. If an appraiser uses this database for sales, the database must be listed as the source for comparable sales, with MLS or another source used for verification of those sales. In addition, if the appraiser is given comparable sales by the client or vendor, the appraiser must disclose that he or she received significant assistance in choosing comparable sales.

Some of these products give an appraiser a discount if the appraiser voluntarily “contributes” appraisal reports to the software database so that subject and comparable information can be mined. Keep in mind that doing so is a violation of the Confidentiality Section of the Ethics Rule of USPAP, as assignment results are also communicated to the database.

A final note – the low fee paid for this assignment does not in any way lessen the appraiser’s legal requirement to comply with USPAP.

 

Mindy Sealy North Carolina Appraisal Board

How Lenders Work Within New FHA Appraisal Rules

The Federal Housing Administration (FHA) implemented new appraisal rules yesterday.  Mortgagee Letter 2009-28 focuses on appraiser independence and Mortgagee Letter 2009-51 focuses on the Appraisal Update and/or Completion Report.  As AppraisalInsight reported, the rules were originally to be implemented on January 1, 2010.
Lenders will  secure a case number assignment in FHA
Connection via the Case Number Assignment Screen but will not input the
appraiser information. The Case Number Assignment Screen will no longer
capture the assignment choice, license ID and assignment date. Instead,
lenders will be required to enter all appraisal data, including the
appraiser ID, in the Appraisal Logging Screen once the completed appraisal
is received by the lender and prior to closing the loan.

FDIC Considers Principal Reduction Program

The Federal Deposit Insurance Corp. is experimenting with a plan to help underwater home owners by reducing principal as long as they continue to pay their mortgages for an as-yet-undetermined period of time.

"We're thinking about it in terms of earned principal forgiveness. If you stay current on your mortgage, you would earn a principal reduction. It would only be for loans significantly underwater," says FDIC Chair Sheila C. Bair.

The initiative would be very limited in scope and would be launched later this year.

Lender Wells Fargo also has been carefully experimenting with principal reductions on a limited basis. "I do not believe that you can do a programmatic-wide or country-wide principal forgiveness [program]. You end up with many problems if you try to do this across the board," says Mike Heid, co-president of Wells Fargo Home Mortgage.

Easley bank reports $18M loss

GSA Daily Staff Report Published March 1, 2010
CommunitySouth Financial Corp. on Friday reported a year-end loss for 2009 of $18.3 million, or $3.89 per share, compared to a $3.35 million loss in 2008, or 71 cents a share.
The 2009 figures include a fourth quarter loss of $15.32 million, or $3.26 per diluted share. CommunitySouth Financial Corp. is the parent company of CommunitySouth Bank & Trust, which has branches in Greenville, Spartanburg, Anderson, Greer, Mauldin and Easley.
"In this economy much of our industry, including our Bank, continues to be affected negatively by unemployment and the struggling real estate markets," said CEO Allan Ducker III. "Despite our efforts to reduce our concentration of commercial real estate loans, management and the board deemed it prudent to continue making significant provisions for loan losses. As such, we allocated $10.7 million in the fourth quarter to account for problem loans.”
CommunitySouth hired an independent firm to analyze its credit risk and to evaluate the bank’s exposure.
“Based upon their independent review, we are confident that we know our portfolio better than ever and we are recognizing potential problems expediently and in the bank's best interest,” Ducker said.
Among other results, the bank’s deposits grew nearly 27% last year to $376.6 million, and total assets were up 8.7% to $421.5 million. Total loans decreased 14.3% for the year to $275.1 million, and net interest income increased 4.9%.
"We have a proactive business plan and are measuring progress on a weekly basis," Ducker said. "Our core deposits have increased, we've enhanced our credit policies and procedures, decreased concentrations in our loan portfolio, and focused aggressively on managing and reducing problem assets. Additionally, we are working to steadily reduce our reliance on brokered deposits and other non-core sources of funding."
"We intend to emerge from this economy a viable institution well-positioned in the markets we serve,” he added.

REALTOR® Magazine-Daily News-Mortgage Windfall Misses Many

REALTOR® Magazine-Daily News-Mortgage Windfall Misses Many

REALTOR® Magazine-Daily News-It's Getting Easier to Get a Jumbo Loan

REALTOR® Magazine-Daily News-It's Getting Easier to Get a Jumbo Loan

Carolina First Name Interim president

Carolina First names interim president

Christopher S. Gompper has been promoted to interim president of bank operations for Carolina First bank in North Carolina and South Carolina, parent company The South Financial Group Inc. said today. He will take over responsibilities formerly held by Scott Frierson, who left the bank last September.

FHA Experiences High Defaults from Builder-Run Lenders

The Federal Housing Administration has implemented new policy changes designed to curb the losses the agency has suffered as a result of bad loans. As part of its new policy announced Jan. 20, the FHA’s overseer, the Department of Housing and Urban Development, will conduct reviews every three months of FHA loans originated over the preceding two years.

 

This could spell trouble for many of the FHA’s worst performing lenders, particularly for builder-run lenders.

 

According to a story in the Feb. 1 issue of American Banker, several builder-run lenders (owners or businesses that finance their own projects) rank among the 10 worst-performing lenders of the 50 highest-volume FHA originators. As the American Banker piece noted, part of the problem may be that being an in-house lender at a company whose main business is selling houses makes for loose underwriting.

 

With HUD turning a watchful eye to the performance and previous activities of FHA lenders, builder-run lenders with poor performance records may find themselves terminated from the FHA list of lenders or, worse in many cases, be forced to indemnify HUD for loan losses.

 

Under the new policy, HUD could terminate any lender whose default and claim rate was more than triple that of its region, if it also exceeded the national rate. According to American Banker, two builder-affiliated lenders already met that criteria and would have been in serious danger of being terminated — were it not for the fact that they had already ceased their loan departments. In Las Vegas, Centex's CTX Mortgage ran a 27 percent default rate in the two-year period, more than triple that of its peers. And in Los Angeles, loans by D.R. Horton's DHI Mortgage Co. have produced a 19 percent default rate, yielding an off-the-charts compare ratio of 572 percent, according to American Banker.

 

HUD is positioning itself to mitigate risk to the FHA by gradually making it tougher for any lender to stay on the FHA roster. The task ahead for HUD now, according to American Banker, is to determine a way to differentiate between lenders with high default rates that are due to mismanagement and those whose high default rates are attributable to other factors, such as the 2008 congressional ban on seller-funded down-payment assistance programs or broader fraud schemes.

Two-thirds of failed banks had problems with appraisals

An analysis conducted by the Appraisal Institute of failed banks shows that nearly two-thirds had been previously cited by federal bank examiners or had ongoing appraisal administration problems, highlighting a significant weakness in many struggling financial institutions.

 

Of the 35 Federal Deposit Insurance Corporation Inspector General Material Loss Reviews of failed banks nationwide, 22 contained concerns or unheeded recommendations from previous reviews, regarding the appraisal practices of the banks, according to the Appraisal Institute. These results were analyzed from Material Loss Reviews conducted by the FDIC Inspector General in 2009 and 2010. Examples of such concerns include: “Failure to obtain current appraisals or perform adequate appraisal reviews”; “Bank frequently relied on stale appraisals”; “Inadequate control of the lending function, including appraisals”; and “Poorly explained upward adjustments to the appraisal values.”

 

“The findings of the Material Loss Reviews illustrate that many institutions have not adequately invested in critical risk management functions like appraisal administration and oversight,” said Bill Garber, director of government and external relations of the Appraisal Institute. “Moving forward, if we are going to have any success in stabilizing mortgage markets, preventing mortgage fraud and kick-starting the secondary markets, bank examiners must place more emphasis on risk management, mitigation, meaningful oversight and enforcement of these critical issues.”

Greenville SC in top 5 retirement citys in the country

Boomers are willing to move farther than previous generations when they retire, and they are choosing places unlike stereotypical retirement hotspots, says Tom Brokaw in his report on Boomer retirement, airing on CNBC, Thursday, March 4 at 9 p.m. ET.

The top places listed by AARP and explored on the show are:

1. Loveland/Fort Collins, Colo.
2. Las Cruces, N.M
3. Rehoboth Beach, Del.
4. Portland, Ore.
5. Greenville, S.C.
6. Sarasota, Fla.
7. Ann Arbor, Mich.
8. Tucson, Ariz.
9. Montpelier, Vt.
10. Honolulu
11. Santa Fe, N.M
12. Atlanta
13. Charleston, S.C
14. Northampton, Mass.
15. San Diego, Calif.

Palmetto Bank hires new VP for Laurens County

Thomas Hardy has retired as The Palmetto Bank executive vice president, Laurens County, where the bank was founded and headquartered before relocating to downtown Greenville last year.
The Palmetto Bank today announced the appointment of Jeff Thompson to senior vice president, regional executive, Laurens County, as Hardy’s successor.
Hardy joined the bank in 1977. His retirement was effective Dec. 31.
He is a graduate of Lander College, Graduate School of Retail Bank Management at University of Virginia, South Carolina Bankers School, National Commercial Lending School at University of Oklahoma and Leadership Laurens County Class III.
Hardy currently serves as chairman of the Laurens Commission of Public Works. He also serves on the board of directors for the Laurens Chamber of Commerce and the Laurens County Development Corp. Along with his service as past chairman of United Way – Commercial Division, he served as a member of the Kiwanis Club and Palmetto Investment Club.
Hardy will assist Thompson and The Palmetto Bank with the leadership transition.
Thompson is a Laurens County native and graduate of Presbyterian College and the South Carolina Bankers School. Thompson has more than 17 years banking experience, the past five as a commercial banking executive.
He currently serves on the executive committee of the United Way of Laurens County and is a committee member of the SC Waterfowl Association. He is past chairman of the Laurens American Red Cross, served on the steering committee of Boy Scouts of America, and served as board member of Crime Stoppers of Laurens County.
“Jeff has strong ties to Laurens County and is an excellent addition to The Palmetto Bank,” said Mark Fox, executive vice president, Abbeville, Laurens and Greenwood Counties. “His high level of commercial banking experience, coupled with his demonstrated ability to build strong, lasting relationships with customers will be invaluable to our customers in Laurens County.”

Foreclosure Rate Dips in January

U.S. foreclosures declined 10 percent in January compared to December, but were still up 15 percent year over year, foreclosure marketer RealtyTrac reported Thursday.

RealtyTrac CEO James Saccacio predicted an increase on the horizon: “January foreclosure numbers are exhibiting a pattern very similar to a year ago: a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January, then a surge in foreclosures over the next few months.”

States with the top 10 foreclosure rates are:
1. Nevada
2. Arizona
3. California
4. Florida
5. Utah
6. Idaho
7. Michigan
8. Illinois
9. Oregon
10. Georgia

Six states account for nearly 60 percent of the national total: California, Florida, Arizona, Illinois and Michigan.

Bank of America Units File Suit Against MGIC for faulty review appraisals

A pair of Bank of America subsidiaries, Countrywide Home Loans, and BAC Home Loans Servicing, is suing Mortgage Guaranty Insurance Corp. (MGIC), seeking a declaratory judgment against the mortgage insurer.
The complaint states MGIC is denying paying Countrywide "millions of dollars in valid mortgage insurance claims."
In a Securities and Exchange Commission filing, MGIC Investment Corp. said it intends to defend the mortgage insurer against the allegations "vigorously," although it added a disclaimer stating it is unable to predict the outcome of the case or its effect on the company.
Countrywide had obtained mortgage insurance on the loans in question via a flow policy. According to the court filing, MGIC is denying claims based on allegations that misrepresented information was provided by or on behalf of the borrower. Countrywide counters in the filing that MGIC is basing its decisions on "second or third-hand accounts of one-sided, self-serving and/or unsubstantiated hearsay and would not be admissible."
The court filing does state a substantial number of loans involved are stated income loans and MGIC was aware of that fact.
The filing said MGIC did not demand income information for all loans, not just the stated income loans, which Countrywide submitted for insurance underwriting.
The suit also alleges MGIC is denying claims payments based on faulty review appraisals the mortgage insurer is conducting.

Lennar Corporation Purchased two loan portfolios from FDIC

One of America’s largest homebuilders is getting into the loan restructuring business. Lennar Corporation said Wednesday that it has purchased two loan portfolios from the FDIC with a combined unpaid balance of $3.05 billion.

Lennar paid $243 million for the portfolios, which include 5,500 distressed residential and commercial real estate loans from 22 failed bank receiverships. But the Miami-based builder says it’s no stranger to working with troubled mortgages.

“Acquiring and working out distressed real estate loans was a large and extremely profitable part of our business during the last major real estate down cycle in the early 1990s,” said Stuart Miller, president and CEO of  Lennar Corporation. 

“We are pleased to return to this business and honored to partner with the FDIC to manage, work through and add value to these portfolios of real estate loans.”
Miller says the company has been preparing to invest in the distressed loan space for the last two years and has been closely watching the market to identify “the opportune point of entry.”
As part of the deal with the FDIC, Lennar receives a 40 percent stake in the limited liability companies created to hold the loans. The FDIC will retain a 60 percent equity interest in the companies and will provide $627 million of nonrecourse financing at zero percent interest for seven years, Lennar explained.
Rialto Capital, a subsidiary of Lennar, will conduct the day-to-day management of the portfolios and the loan workouts, and will contribute up to $5 billion toward the acquisition, Lennar said. Rialto is a real estate investment management company focused on distressed real estate assets.

A Rialto related entity is also a sub-advisor to Alliance Bernstein in one of the eight Public Private Investment Program (PPIP) partnerships sponsored by the U.S. Treasury to purchase residential and commercial mortgage backed securities.

Video Marketing and Mortgage News Designed for Mortgage and Real Estate Sales

Video Marketing and Mortgage News Designed for Mortgage and Real Estate Sales

The February 15, 2010 Implementation Date Will NOT Change for Mortgagee Letters 2009-28 and 2009-51

Implementation Date for New Requirements in ML 2009-28:

As indicated in the industry email of December 22, 2009, enactment of ML 2009-28 (Appraiser Independence) WILL be implemented February 15, 2010. ML 2009-28 (originally planned for a January 1, 2010 implementation) has two parts: a) prohibition of mortgage brokers and commission-based lender staff from the appraisal process, and b) appraiser selection in FHA Connection.

The effective date for both sections of this guidance will take effect for all case numbers assigned on or after February 15, 2010. This extension has allowed FHA and lenders additional time to adjust systems to accommodate the changes. Detailed instructions on changes to FHA Connection will be issued in a new mortgagee letter, which was delayed due to federal offices being shut down the week of February the 8th and will be released the week of February 15th.

However, lenders will be able to secure a case number assignment in FHA Connection via the Case Number Assignment Screen without inputting the appraiser information. The Case Number Assignment Screen will no longer capture the assignment choice, license ID and assignment date. Instead, lenders will be required to enter all appraisal data, including the appraiser ID, in the Appraisal Logging Screen once the completed appraisal is received by the lender and prior to closing the loan.

Vacant Lots Hot Property

Vacant Lots Become Hot Property
Vacant residential lots are looking better and better to real estate investors.

The cost of a finished, ready to build lot, can cost a developer about 25 percent of the finished home price. There are a number of these ready-to-go lots on the market at about half what they actually cost to prepare. Investor groups are snapping them up, figuring that the time will come soon when they will be in demand.

"The country needs 1.2 million new units for the next 10 years just because of population growth," says Scott Clark, president of American Development Partners, which has bought thousands of vacant lots all over the West. "[U.S. builders] built about 500,000 units in 2009 and 600,000 units in 2008, so there eventually will be pent-up demand. We want to get as many of those finished lots as we can because as demand begins to rise, the need for housing will become painfully obvious. The delta (ratio of change to value of underlying asset) in this investment will be significant."

SC State Housing Approved Lending Partner

SouthEastern Evaluation is pleased to announce that The South Carolina State Housing Authority has selected SouthEastern Evaluation's ordering platform to place appraisal orders for loans with SC State Housing Authority.  SouthEastern Evaluation is headquartered in Greenville, SC.  Our appraisal management team consists of highly trained professionals. Our company culture is to create long term, lasting relationships with our clients and appraiser base.  We can create your profile over the phone.  Please contact us at 864-467-9511 or info@see-amc.com.  We look forward to working with you.

StellarOne Wholesale Lending News

FHA And USDA Appraisal Ordering

Effective February 15, 2010 StellarOne will start adhering to the new appraiser independence guidelines for FHA and USDA loans.

Please note that the appraisal ordering and rebuttal process will be the same for FHA and USDA loans, as it is currently for conventional loans with StellarOne. 

Effective with case numbers assigned on or after Monday February 15, 2010 brokers will be required to order appraisals through SouthEastern Evaluation (SEE) our preferred Appraisal Management Company (AMC).

SEE will upon receiving acceptance of the assignment from the selected appraiser provide StellarOne with the necessary information needed to order the case number.

StellarOne will then order the case number for you (in your company’s name) and provide you with the case number.  This will be done in an effort to insure that case number will be issued prior to the effective date of the appraisal which if not completed correctly would result in delays.

Please contact myself or your Account Executive with any questions. 

And as always thank you for your business!

StellarOne Excellence. Partnership. Service.

8 Parkway Commons Way

Greer, SC 29650

t  864-848-3608c  864-907-9688  f  864-848-3608

Welcome to SEE-AMC

SouthEastern Evaluation is an appraisal management company consisting of a highly trained team of real estate professionals. We excel by utilizing both our fee appraiser and corporate experience in the development of internal policies and procedures. Our company culture is to create long term lasting relationships with our customer and appraiser base. SEE believes in a common sense approach to the appraisal process, with appraisers being paid a fair fee for work completed and lenders being assured that their reports are accurate and independently completed by true appraisal professionals.

Our work ethic is reflected in our daily interaction with appraisers and lenders. At SEE, we understand the need for handling each file with professionalism and urgency. Since a good quality appraisal report takes time, we strive to get the assignment to the correct appraiser without delay. In return, we expect appraisers to meet their turn time commitments and to alert us to potential timing issues as they develop.