Regulation

The Definition For Value as Applied to Real Estate Offered as Security for Mortgage Investment and the Role of Fundamentals

I just returned from the AARO (Association of Appraiser Regulatory Officials) conference in Chicago. I spoke on a panel regarding Mandatory Reporting per Dodd Frank.

So there is no misunderstanding, going green does not mean that one needs to be an environmental wacko or a global 

warming nut. For an appraiser, trying to deal with building trends related to environmental concerns is important when deteremining the impact on the appraisal process. How will an appraiser know when they encounter something that is part of green technology, and if they do, how can that be measured as to market reaction?

Well, that’s how my 38-year-old son refers to it.  On the advice of his father, he has long since abandoned the art of appraisal, opting for architecture and engineering instead.   His dad, an appraiser for 40 years, told him in his diaper days (the son’s diaper days, not the father’s), “Son, an appraiser is just someone who didn’t have enough personality to become an accountant.”   (So the kid goes for engineering?  Hello?  Pocket protectors?)

The federal government has taken over large swaths of consumer lending, most notably the $10 trillion home mortgage and $1 trillion student lending markets. The government's share of new loans for each now approaches 100%.

Government monopolies in financial services pose risks to taxpayers as well as borrowers

The big thing on everyone’s mind this year is compliance. If you are an AMC, an appraiser, or a lender you have been focused on compliance. If this has not been your focus it is akin to running with scissors across a banana peel minefield.

If there is any lesson we may have learned over the past few years it is that denial only works for a while. Compliance is costly. Noncompliance is even costlier.

The Dodd-Frank Wall Street Reform and Consumer Protection Act has placed many new requirements on appraisal management companies (AMCs). This legislation mandated that AMCs register at a federal level in addition to with each state where the AMC operates.