Here are the latest updates for wseward@seward-realestate.com
Perhaps you remember the headlines?
California Appraiser Sues WAMU, First American, eAppraiseIT, and LSI - Refused to check "Stable"
It was about Jeniffer Wertz, a California licensed real estate appraiser, who filed a 12 count lawsuit against Washington Mutual Bank, First American Corp., eAppraiseIT, Lenders Services (LSI), FNIS, Inc, and Susan Richter.
Appraisal Scoop has learned from Jeniffer Wertz that . . .
"The case has been settled to mutual satisfaction of the parties."
As is usually the case in these instances, that's about ALL that any of the parties can say. I'm guessing that the amount of settlement and the terms of the agreement will be sealed by the court. Still, I view this as victory for the "little guy" (or girl) and offer my kudos to Jeniffer for standing up for ALL of us!
I've abstrated and edited portions of the original lawsuit for ease of reading on this blog. The complete, un-edited document, can be downloaded here: Download WertzPrimarySuit.pdf
Related News Stories:
Author: Brian J. Davis - Brian Davis & Associates - Brian has over 24 years of appraisal experience in Central, IL and hosts the Appraisal Scoop blog and the WinTOTAL Users Group an email forum for appraisers
I assume that many of you remember the lawsuit that was filed as a class action against FNC last summer? The judge has been considering the request of FNC to allow the parties to go into arbitration since December of 2007.
In summary from Judge Roger W. Titus: "The crux of Plaintiffs’ claims is that FNC induced them to convey their business proprietary appraisal information via AppraisalPort to their client mortgage lenders through false representations that such information would be transmitted securely and would not be viewed, intercepted, or stored by anyone—not even AppraisalPort—except the sending appraiser and the receiving client mortgage lender.
In contrast to these representations,
"Plaintiffs allege, FNC has acquired and compiled this proprietary appraisal data into a “National Collateral Database,” where it may be accessed by subscribing lenders and other market participants."
Today a little bird delivered to me a 25 page memorandum written on August 28, 2008 . .
The Judge, in a 25 page Memorandum, has denied their request and has decided to allow the plaintiffs to go into the next phase of the legal battle.
MUST READ! Download Titus_Opinion_of_Motion.pdf
I would love to write some great lines to enrapture the minds of you, the readers of my articles, but in this case I will let Roger W. Titus, United States District Judge tell his opinion of the matter at hand:
“In the end, it is important to keep in mind that FNC drafted the user agreements for AppraisalPort with its own pen (or keyboard, more likely) so as to give it, and it alone, the power to modify its terms. Although one might normally consider this a blessing, it can also be a curse. "While FNC was free to lay down the rules to govern its relationship with its users, it also took the risk that in doing so it would live to regret such rules when future circumstances proved them disadvantageous. The voluntary and knowing removal of the binding arbitration clause in the 2005Agreement is one such modification—or attempted modification—that FNC clearly grew to regret, but only after the filing of this case. Until this case, all actions by FNC indicated that it had wanted to effect the modification and believed it had done so successfully."
“In the end, it is important to keep in mind that FNC drafted the user agreements for AppraisalPort with its own pen (or keyboard, more likely) so as to give it, and it alone, the power to modify its terms. Although one might normally consider this a blessing, it can also be a curse.
"While FNC was free to lay down the rules to govern its relationship with its users, it also took the risk that in doing so it would live to regret such rules when future circumstances proved them disadvantageous. The voluntary and knowing removal of the binding arbitration clause in the 2005Agreement is one such modification—or attempted modification—that FNC clearly grew to regret, but only after the filing of this case. Until this case, all actions by FNC indicated that it had wanted to effect the modification and believed it had done so successfully."
Click here to continue reading . . .
"But what if FNC did not regret the 2005 Agreement and, because of some legal advantage it gave, instead sought to enforce it? Surely the Court would be hearing argument from FNC that the Arbitration Plaintiffs freely assented to the provisions giving FNC full power to modify their agreements unilaterally after posting them and that FNC complied with its obligations." "Again, the Court would be forced to parse ambiguous modification provisions, and again the Court would likely need to consider the equities inherent in the conduct of the parties."
"But what if FNC did not regret the 2005 Agreement and, because of some legal advantage it gave, instead sought to enforce it? Surely the Court would be hearing argument from FNC that the Arbitration Plaintiffs freely assented to the provisions giving FNC full power to modify their agreements unilaterally after posting them and that FNC complied with its obligations."
"Again, the Court would be forced to parse ambiguous modification provisions, and again the Court would likely need to consider the equities inherent in the conduct of the parties."
"In this manner, FNC’s actions are like a man standing with one foot on a dock and one foot on an untethered boat drifting away and unable to choose whether to stay on land or shove off to the sea. When this case was filed, FNC’s time to choose ran out and it ended up in the water. As FNC’s predicament is wholly of its own making, the Court will not now throw it a life preserver. "
"Accordingly, for the reasons stated above, the Court will enter an order denying the motion to compel”
I wonder what’s next. I am sure this will make for some interesting posts. Many of which have been some fascinating allegations that I am somehow the personal spokesperson for a la mode. I assure all of you that I am not, nor have I ever been a spokes person or endorser of a la mode. I am a paying customer of a la mode’s, and I work inside of the Labs project, but not as an employee.
The only vested interest that I have in this web portal battle is the same one that we all share in as appraisers. I want to see our industry be given the same credibility that CPAs and other similar industries get.
Click Here to Download Titus_Opinion_of_Motion.pdf
Author: Woody Fincham - http://www.fmava.com/ - Woody is one of the founders and managing appraiser for FM & Associates. He has recently become an instructor with a local real estate school, teaching broker pre-licensing and real estate agent pre-licensing. Woody is a Certified Residential Appraiser in Virginia, as well as North Carolina. Woody is also a Member of the a la mode labs project
Doesn't it seem like the lending underwriter is always out to get you?
At Seward Real Estate Services, we understand that sentiment and continually strive to produce appraisal reports that are not only 100% USPAP compliant, but that are also review-proof! We understand what the lender is looking for and we make sure to cater to them, so that you don't have to!
The foundation of our research is based on fourteen years of appraising experience and twenty-five years of housing market experience. With this background, we begin to compile the data for each individual report, carefully pouring over all relevant information in order to produce a list of the most comparable sales in the neighborhood.
We generally put a few extra comps into each report to ensure that the subject property is as adequately bracketed as possible. We make sure to bracket all aspects of the house from size, to year-built to number of bedrooms.
Once the report has been compiled, each and every report is reviewed to make certain that all the i's are dotted and that all the t's are crossed. That way, when you send the report to the underwriter, you have a greater chance of pushing it through without any "prior to funding conditions
I think new appraisal standards are going to lower home prices everywhere.
My last two listings appraised below their negotiated purchase price. Both listings sold quickly and had two offers. My most recent listing was a nicely updated 2,600 square foot 1944 Centerville Home priced at $239,000. Its assessed tax value in November was $247,000. My CMA going back with comparables sold during the last year easily supported $265,000. Our negotiated purchase price was $239,000 + closing costs. We also had an offer at $230,000, but my clients accepted the full price offer instead..... Then, a few days before closing the appraisal comes back with a value of $232,000.
The problem was that the VA appraisal was only able to use comparables going back three months. This winter, Real Estate was dead slow in Northern Utah. There were only a few moderately comparable comparables of houses that were substantially inferior, but that's all the appraiser was allowed to use to support a value for the lender. Now does a lender really care about a value created by three somewhat comparable sold properties, or do they want to know what a property is worth, what it will really sell for?
As it turned out, my client had to reduce the price a bit, we agents sacrificed our commissions a bit, and the buyer settled for a thousand less in closing costs to make make the deal work. After the concessions my clients would have been better off if they accepted the $230,000 cash offer. If only they knew their house wouldn't have appraised at $239,000.
If all appraisals can only go back three months, this could soon become a downward spiraling trend. Home sales are picking up in Utah, but are still much slower than last year. When the next nearby house sells, my clients home will be used as a comparable. Their appraisal won't be able to support their market value either because all the recent comparables were lower.
In my opinion, appraisers need to consider market value more when determining appraised value. Market value is not determined solely by how much three recently sold properties went for, market value is what an able buyer is willing to pay for a property. If several different people are willing to pay more than $232,000 for a house, then market value is probably more than $232,000.
Alen Barker
Your logic is slightly flawed. If the market in the past 3 months has been "dead" then only the most recent comparables and analysis of the market within the past 3 months would give you the true market value, but if the homes used were inferior appropriate adjustments should have been made. CMA's by Realtors, with all due respect, are not even slightly reflective of value (easily supporting $265 for a house selling for $239? If this is the case, and CMA's are even remotely relevant, your clients just gave away $26,000). Also, concessions and financing terms need to be considered (VA appraisers are some of the most conservative, due to the fact that a VA loan is so high risk). The fact that the clients would have netted more from the $230,000 due to concessions is a very telling piece of the puzzle. The most able buyer "the cash offer" would be the most indicative of the "true market value" would he not? Point being, the actions of a VA loan buyer within the marketplace is not going to reflect the actions of a typical "conventional loan" buyer, and the actions are not indicative of the true market.
This all being said, you are absolutely right. Lenders are dictating standards to appraisers that are affecting home values and it is not going to get better any time soon.
Utah Appraiser
Utah Appraiser,
Not to demean appraisers and the work they do, but the "adjustments" you refer too can't really be accurately made when the appraisal hasn't even seen the comparable properties. How can you adjust value for modern kitchen upgrades, when you don't know what ammenities the comparable kitchen had? Appraisers rarely spend more than 30 minutes examining the subject property, most of that time is spent merely measuring the property. Almost all their data used for the adjustments comes from the MLS data.... What measures does the appraiser use to determine that one of the comparables was purchased for $20,000 less than market value? What are accurate adjustments for a house built in 1944 when their aren't any comparables that were built within a ten year period?
Can't disagree. I guess using good, experienced, educated appraisers is the answer instead of just who can get it done "cheapest and fastest" as seems to be the case in most situations.
TIMELY. ACCURATE. APPRAISALS. It's my specialty. Give me a call!