APPRAISERS MAY SEE AN
INCREASE IN ASSIGNMENTS from subdivisions.
Developers will no longer be able
to complete a master appraisal
report to cover multiple units
in a proposed subdivision. Each
individual unit will need its own
appraisal for Federal Housing
Administration-insured mortgages, according to a Jan. 12
FHA Mortgagee Letter.
The Mortgagee Letter retires
forms HUD-91322, HUD-91322.1,
HUD-91322.2 and HUD-91322.3,
as well as HUD Handbook
THE SUM OF ITS PARTS
4115.3, Master Conditional
“As economic instability
continues to impact many
segments of the economy
and the housing market in
particular, the department has
determined that it is in the best
interest of the Insurance Fund
to prohibit the use of MARs
and to require an appraisal be
performed on each individual
unit within a larger housing
project to determine the maximum mortgage amount of the
property to be security for the
FHA to require individual appraisal of units within larger project
mortgage,” the letter said.
According to the letter,
lenders used master appraisal
reports to cut costs and loan
processing times, and to
ensure that similar units were
being consistently valued. However, the FHA cut the validity
period to four
master appraisal report.
To view the complete set of policy changes
introduced by the FHA, visit www.hud.
To view the report, visit www.
Appraisal-related mortgage fraud
remains at 6 percent
Mortgage loan fraud accounted for about 9 percent of all
suspicious activity reports from banks and thrifts in the
third quarter of 2010, the same percentage as the third
quarter of 2009, the Treasury Department’s Financial Crimes
Enforcement Network reported Jan. 6. Of those, 6 percent
were appraisal-related, also the same year-over-year.
Borrowers were identified in more than half (52 percent)
of the 16,693 third quarter mortgage-related SARs, followed
by brokers being identified in 9 percent, appraisers in
6 percent and customers in
5 percent. Other subjects —
including employees, agents
and attorneys — were each
identified in less than 1 percent of the filings.
Filers are also able to indicate
“other” activity characterizations in conjunction with
mortgage loan fraud, which they
did 2 percent of the time from
Oct. 1, 2009, through Sept. 30,
2010 — which constitutes fiscal
year 2010. On those 2,480 filings, appraisal fraud was listed
in 1 percent of instances.
FinCEN’s third quarter
2010 Mortgage Loan Fraud
update is available at www.
On Dec. 14, FinCEN
released its first quar-
ter 2010 ( www.fincen.gov/
pdf) and second quarter
2010 ( www.fincen.gov/
California-based research company IBISWorld named real estate appraisal among the top six industries poised to grow in 2011, with an 8. 8 percent revenue growth and a 3. 8 per- cent employment growth for the industry.Fo r the full criteria and list, visit www.inc. com/ss/6-top-performing-industries-for-2011. growth factor
Appraisal demand picks up in fourth quarter 2010
DEMAND FOR APPRAISER SERVICES IN THE FOURTH QUARTER was
stronger than in any of the prior three quarters, led by non-residential asset classes,
according to Zelman & Associates’ “Appraiser 4Q10 Survey,” released Jan. 12.
The survey found that on a 0 to 100 scale, with 100 equal to “rapidly increasing,”
the strongest demand for appraiser services was for multi-family buildings, posting
59.3 versus 53.9 in the third quarter. The industrial space exceeded 50 for the first
time in 2010, registering a score of 52.2 in the fourth quarter, up from 44. 2 in the third
quarter. Demand for all residential asset classes remain rated below 41, with season-ality being blamed for the relative weakness.
The survey also found that pricing trends in the fourth quarter improved across the
non-residential sector. Pricing for multi-family buildings was rated 58.3, compared to
56.1 in the third quarter. Health care and industrial ratings of 50 and 49.9, respectively, suggest that prices are relatively stable; however, minor deflation was reported
for retail (45.9), office (45.3) and lodging ( 44. 3). Still, the survey score was more favorable for all five of these sectors relative to the third quarter.
AI members can access the report at www.appraisalinstitute.org/myappraisal
institute/downloads/Zellman_4Q10.pdf (username and password required).