Recent RESPA Settlements Show HUD Means Business Against Markups

Recent opinions of the U.S. Court of Appeals regarding the fee-splitting prohibitions of the Real Estate Settlement Procedures Act have buoyed Department of Housing and Urban Development lawyers who maintain the cases have confirmed their long-held position that markups of appraisals and other settlement services provided by third-party vendors violate RESPA. Of the six U.S. appeals courts that have ruled on markups, the results have been split. The first three opinions went against HUD's position, with rulings that the statute prohibits fee-splitting between two parties, not markups by a single party. However, the three latest decisions have ruled against such markups. See my earlier series "Kickback or Markup" In remarks before attendees of a RESPA conference sponsored by the National Real Estate Development Center, HUD assistant general counsel Peter Race said, "The decisions in the recent cases have undercut the rationale in the earlier cases. It is hard to argue that the statutory language is clear on its face when three other circuit courts and HUD (the agency charged with enforcement of the statute) are taking a different position," he said. The Appraisal Institute has had a long-standing opposition to the mark-ups. Don Kelly, vice president of Public Affairs said, "Lenders jacking up appraisal fees while providing no additional service to borrowers is outrageous. We've fought against this practice for years now and it's good to see the courts are agreeing with us." In the past 18 months, HUD has been very aggressive in investigating and pursuing cases involving referral fees and sham affiliations. Of the 45 settlements in the history of RESPA, the department settled 14 cases last year. Race said, "HUD will continue to closely look at markups of third-party charges. And we will take action when there is no work done or little work done to justify a markup of charges." Source: Appraisal Institute News

Mortgage Fraud Ring Uses Rap Song For Marketing

Residential real estate loan fraud is a national epidemic, the FBI says, costing an estimated $1 billion in 2005. In the interests of self-promotion, a Southern California mortgage ring has written a rap song about its activities, to be released April 1

We're the mortgage fraudsters, we on the down low we be gonna tell ya where the money goes It's a way to make money that's really fly Just get an appraisal set too high Steal some sucka's identity and pretend he's buying the property Lender kicks through with a $300K loan that's $50K higher than what you paid for the home listen my dogs let me put you hip you just completed a property flip And don't worry, you won't do time Mortgage fraud is a white-collar crime Someone said, I don't know when Some rob you with a pistol, some with a fountain pen I hope this rap don't give you a shock But take it from us - mortgage fraud ROCKS!

--Happy April Fool's! --

BIG THANKS to Janis Mara, Inman News for this great song!

Jannis has another story about how a Realtor markets properties with rap song - Miami Beach Realtor Phyllis D. Huguenin is marketing developments she likes, Aqua, where she has sold two units, and Setai, a project she presents to many of her customers, via rap songs. In one song, she says, "It's an oasis of tranquillity ... get lost in serenity. Come on, buy with me. Don't miss this opportunity," while her dawgs chant, "Don't be shy. Come on and buy."

Click HERE to listen to a sample.

Flip This House Casting Call!!

Flip This Show? A&E Show Flip This House Needs New Cast, Fast! By HoustonRealNews Market Analyst - Full Story 813Casting.com is running out of time to find the next "hosts" for popular A&E show Flip This House. The deadline is Friday, March 24th, for applications to be filled out - a two-page questionnaire focusing on the story the new cast may provide. Several Houston real estate investors are already known to be applying for the roles. The casting agency is encouraging more applications before Friday's deadline. A&E Looking for Season 2 Cast - The original cast, including Richard Davis and his Trademark Properties team, will be a tough act to follow. (You can read our Five Questions with Richard and Ginger Alexander or a Deal Analysis.) Mr. Davis is "made for TV," drinking in a car with a shotgun, writing a six-figure check to his alma mater to watch football and even bleeding-heart property management.The

The casting consultants have one Texas-based replacement in mind already, but were actively seeking investors over the internet as late as today.

We have included:

• 1) the Casting Notice
• 2) the Questionnaire/Application
• 3) the video requirements if the application is accepted

According to the casting agency, compensation will be paid to the new hosts, although the sum is undisclosed.

A competing show "Flip That House" is ALSO looking for a cast for the 2nd season!

First 2006 AQB Exposure Draft on Real Property Appraiser Qualification Criteria

The Appraisal Foundation is a non-profit educational organization established in 1987 to foster professionalism in valuation through the establishment and promotion of professional appraisal standards and appraiser qualifications. The Foundation accomplishes its mission through the work of two independent boards, the Appraiser Qualifications Board (AQB) and the Appraisal Standards Board (ASB). The AQB establishes the minimum education, experience and examination criteria for appraisers and the ASB promulgates the generally accepted standards of the valuation profession. The AQB has just issued its first 2006 AQB Exposure Draft on Real Property Appraiser Qualification Criteria for public comment. The following is from the AQB letter: This Exposure Draft consists of five Interpretations and two Guide Notes applying to the Real Property Appraiser Qualification Criteria. Click here to view complete document. The intent of this document is to obtain comments from appraisers, users of appraisal services, regulators, academicians, and the public. This Exposure Draft includes material addressing issues in both the current and 2008 Real Property Appraiser Qualification Criteria (which become effective on January 1, 2008). Interpretations are essential to a proper understanding of the requirements set forth in the Criteria and as such, are binding upon users of the Criteria. Guide Notes are advisory in nature and are not binding upon users of the Criteria. We encourage all interested parties to respond in writing to the Appraiser Qualifications Board (AQB) of The Appraisal Foundation before the written comment deadline of April 25, 2006. Oral comments will also be accepted at the AQB’s public meeting in Fort Lauderdale, Florida, on May 5, 2006. Interested parties are invited to submit written comments on this Exposure Draft to: AQB Comments, The Appraisal Foundation, 1155 15th Street, NW, Suite 1111, Washington, DC 20005. Comments may also be submitted by facsimile to (202) 347-7727 or via e-mail to comments@appraisalfoundation.org. You can also add your comments online - click here. If you have any questions regarding this Exposure Draft, please contact The Appraisal Foundation at (202) 347-7722.

Read the latest Appraisal Foundation Newsletter.

It's All Going To Work Out - AMC and AVM Debate

On many Internet forums, it’s common to see appraisers posting about . . .

• AMCs forcing us to take lower fees
• Brokers pressuring us to “make values”
• Lenders side-stepping us by using AVM providers
• Underwriters making ridiculous demands for more comps

Is it REALLY as bad as we are making it out to be? Ken Verrett of Acorn Appraisal Associates, Houston, TX doesn’t think so.

Here’s what Ken had to say yesterday on the WinTOTAL Users Group forum about AMC's [Appraisal Management Company] , AAVMs [Appraisal Assisted Valuation Model] and Mortgage Brokers: Can we agree that the vast majority of folks are honest and try to do the right thing? Study after study concludes that is so. My disturbingly average experience tells me it is so. Your experience should tell you the same thing. I know you hate to say I'm right, but I'm right, right? So can't we assume that the vast majority of AMC employees, AAVM models and employees and yes, even mortgage brokers mirror the rest of the population? And can't we assume that those same populations are profit motivated, just as you and I? If we make those assumptions, isn't it reasonable to conclude that the employees, firms, and products they provide are generally legal, even ethical, and meet the needs of the market? And isn't it reasonable to assume that the purchases of the services of those AMC's, AAVMs, and even mortgage brokers, are in business to make a profit, and that profit is only assured if the loans they make are good decisions and secured by the proper amount of collateral commensurate with the risk the loans represent? Shouldn't we respect the right of those lenders to make their business decisions in the best long run interests of their stockholders? It's the American Way. The AMC's, AAVMs, and mortgage brokers are providing a service to the lender market. They are permanent players in the market. A provider of appraisal services to that market has to recognize that and accept the rules of the market. Appraisers who want to participate in that market must find a way to provide services to that market at a profit or leave the market. Fees have not increased in my market since I entered the business over twenty years ago. They have even decreased in some products. Yet my firm makes more profit today than it ever has. We serve a wide spectrum of the lending market, including significant AMC's and mortgage brokers. We have achieved that increased profit margin by learning be more productive. Our rate of productivity increase has been greater than the combined effects of fee decreases and inflation over those twenty years. We work constantly to achieve that result. We are not alone in that experience. The vast majority of businesses; local, national, and international, have done the same. Increases in productivity have fueled the growth of the national and world economies over the last twenty years. The vast majority of appraisers have done the same. [Snip] When dealing with an AMC, the price and turnaround are the key factors. Quality is assumed, even guaranteed, as it should be. The AMC has created a near perfect auction market, something all business folks should admire. It is an auction market for a generic product. The job goes to the most efficient producer. Appraisers [need to] accept the rules of that market or move on to another market. But they shouldn't waste time and energy resisting the evolution. [Snip] Relax. The world is peopled by mostly honest and ethical folks. It's all gonna work out.

Ken Verrett Acorn Appraisal Associates is a 20 year old firm offering a wide range of quality appraisal services to the Financial and Business Communities. Our market includes the greater Houston SMSA, including Harris, Montgomery, Fort Bend, Brazoria and Waller Counties.

Appraisal Institute Podcasting For Appraisers

Blogging and podcasting are the newest Internet technologies available to deliver information. Podcasts are very similar to blogs, only that the information that is presented is an audio file, which is downloaded and played with a software application called a podcatcher.

I use the free download of iTunes to listen to Podcasts and radio shows on my PC.

Blogs and podcasts are updated periodically with new posts that have a common theme. For instance, the blog and podcasts at AI Podcasts by Jim Amorin, MAI, SRA, cover different appraisal issues. AI Podcasts includes links, at the bottom of each Podcast, allowing iTunes to find and automatically load them. They're FREE! Some of the new Podcasts include :

• What is Podcasting?
• Doing More with PowerPoint
• Readdressing, Reassigning, and Reappraising Property

Blogs, on the other hand, are journals posted to the Internet, and are viewed with a standard Internet browser. Like mine (wink) If you don’t want to have to visit a blog on a regular basis to see if there are any new posts, then you can also download an RSS reader. An RSS reader will automatically download the latest blog posts for you once you “subscribe” to the blog, which is a one step process and doesn’t involve you filling out any forms or giving out your email address!

If you prefer to get daily updates of new posts from your favorite blogs as a single email you might consider FeedBlitz. You can subscribe to literally hundreds of blogs about an endless variety of topics. A podcatcher accomplishes the same thing for podcasts. Jim Amorin, MAI, SRA, can be contacted at http://www.aipodcasts.com/.

HP 12c Calculator Turns Twenty-Five!

I just learned from Jonathan Miller, CRP's blog Soapbox that . . . This year is the 25th anniversary of the launch of the HP 12c. Jonathan says, "I have had mine for about 20 years. The logo has been chipped off, two of the foot pads are missing, its scratched, dented and scuffed. But it still works like a charm." "I have purchased more powerful upgrades to the 12c by HP but I was soon back to my baby. " His full blog post is at A Badge Of Honor: My HP 12c And Reverse Polish Notation From the HP site we learn:

"In 1981, the world was obsessed by a little yellow "man" on a video screen and a fledgling cable network that played music on TV. And in an HP laboratory in Corvallis, Oregon, an Iowa farm-boy-turned-PhD was about to introduce a product that would literally turn the world on its side. That farm boy was HP Project Manager Dennis Harms and the product was the HP 12C Financial Calculator. The HP 12C was the world’s first horizontal financial calculator. Its innovative design and breakthrough Reverse Polish Notation (RPN) entry forever changed the way students and professionals reach their goals. After 25 years, this iconic calculator is still sold under its original name and model number and retains its world-famous horizontal design."

Have you ever wanted a "desktop" version of this famous calculator?

I've used the fully functional HP-12C Financial Calculator emulator from Telemark Software for years. They have a free download available on their web site. Click here.

Looking for even more fun? How about an HP-12C screensaver or wallpaper?

Find out a little more about the history of the HP-12C!

The New Rules of Real Estate - Wall Street Journal

The New Rules of Real Estate For a Cooling Housing Market by Ruth Simon From The Wall Street Journal Online The conventional wisdom that guided buyers and sellers: during the real-estate boom is being challenged. Pricing is becoming crucial and relocating is trickier as the number of homes for sale nears a 10-year high. As the spring selling season moves into high gear, the cooling housing market is upending the conventional wisdom that guided buyers and sellers during the housing boom. The changing dynamics have implications for a wide variety of players in the real-estate market. Some brokers are advising sellers to price their homes in the bottom 25% of comparable properties. People looking to enter the market for the first time are being told not to overly stretch their finances because rising home prices may no longer bail them out. Employees who are relocating are being advised to steer clear of new subdivisions where competition from brand new construction could make reselling soon difficult. For the full story click here.

Rough Time Ahead For People Who Bought Houses At Inflated Prices

The following is an exerpt from a blog post by Matt Norris at Mortgage Cents. Rough times ahead for people who bought houses at inflated prices: Matt Norris said, "This is a bit of an elaboration on the consequences that some individuals in certain sections of the nation are about to experience as the result of fraudulent loan activity and property values that are overly inflated". Matt says, Potential long-term implications of fraud:Part of the reason for the rapidly appreciating property values we have seen in the last few years have been historically low interest rates and loan programs that make it possible for people to purchase homes that they have no business purchasing, when taking their income into account. What do you all think is going to happen when easily defrauded loan programs start to disappear and interest rates continue to rise? First, houses are going to be a tough sell, because they are going to be unaffordable until prices adjust in a downward direction to a level that makes it realistic to buy them. Loan programs that allow easy approval of loans for people that otherwise should not be able to afford a house are about to disappear. Second, when the values shift downward, you are going to have these “home owners” who were put into incredibly bad loan programs, didn't make a down payment, and can't afford their house payment. When they try to sell the depreciating property, they aren't even going to be able to pay off their mortgage in its entirety. If they don't pay it off, then the next buyer can't finance the purchase. As a final slap in the face, people that are in terrible loan programs such as an adjustable-rate mortgage in which they lack equity to refinance will be faced with increasing payments that they cannot afford. Since they can't sell the house to get out from under the mortgage that they can’t pay, they will just foreclose. That translates into a massive loss for the banks, which means further evaporation of bad mortgage programs and tightening of requirements on existing programs (if we're lucky). In a strange sense of irony, all of the foreclosures will actually result in housing that may once again be affordable. It's an interesting cycle. For the full story click here.

Inflated Appraisals Put Homeowners, Lenders At Risk

This story from the Sunday, March 12, 2006 The Grand Rapids Press (Full Story): Not a week goes by that appraiser John Meyer does not get a request to "hit the number" on a home's value to ensure a loan goes through. "I had a guy from New Jersey last night call, and he wanted me to do the appraisal if I can assure him I would hit $800,000," Meyer said recently. "I told him I couldn't do that." Walker appraiser Fred Vander Wal has similar stories. "I had two last week screaming at me about what they wanted me to do," Vander Wal said. "It was a 7-year-old home, and it was just trashed -- holes in the walls, carpeting all ruined. They said, 'They're not going to loan on this if that's the real condition. Can't you tone it down a little bit?'" That would be appraisal fraud, and Meyer said it's "one of the primary problems out there." Read more . . .

Meebo IM - Don't Leave Home Without It!

You’re not using your own computer to use the Web, and downloading your favorite IM client is either impossible, or just very presumptuous. So, how can you text chat with your friends in that situation? Use Meebo. Meebo enables you to chat using AOL Messenger, ICQ, Yahoo! Messenger, MSN Messenger, Jabber, or GoogleTalk. You just sign in with your instant messenger user name and password; the latter is encrypted. It’s an easy and portable way to stay in touch, without having to install extra software on a computer. From Straight Out Of My Skull

FBI - The Rise of Mortgage Fraud And How It Impacts You

THE RISE OF MORTGAGE FRAUD And How It Impacts You - FBI 12/14/05

Believe it or not, this Detroit home sold for $25,000 one day...and $250,000 the next. An extreme makeover? No, an egregious case of mortgage fraud, where the property was illegally "flipped"—bought, falsely appraised at a much higher price, and quickly resold—by a crooked appraiser who's now in jail.

Why should you care?

Because these scams not only hurt lending institutions and real estate professionals—and ultimately the health of the U.S. economy—they con significant numbers of homeowners in the U.S. every year. If you're buying property, refinancing a mortgage, or looking for creative ways to eliminate home loans and other debts, you could be a target, too.

For example (and we've seen all this and more in recent cases):

• You could be offered what seems like an attractive deal—buy a rental property with no money down and get cash kickbacks after the loan closes—but later learn the properties are worthless and get stuck with loans you can't afford to pay.
• You could get an e-mail promising to eliminate your mortgage loans or credit card debt for an up-front fee, only to pay the money and get nothing in return.
• If you're having trouble paying your mortgage, you could be approached by scam artists who promise to save your home if you transfer the deed to them and/or pay thousands for a new loan, but they either pocket the fees or remortgage the property and keep the proceeds. You could unknowingly buy a home that's been flipped several times recently, artificially inflating its value.
• You could provide personal information in response to a "Help Wanted" ad, only to have your identity stolen and used to apply for mortgage loans in your name.

To help educate you on these scams and to outline the steps we're taking to address what has become one of the fastest growing white collar crimes in the nation, the FBI on 12/14 joined with the Department of Housing and Urban Development, the U.S. Postal Inspection Service, the Internal Revenue Service, and the Department of Justice in announcing "Operation Quick Flip."

Together, as part of this effort, we're providing the following resources:

A list of mortgage fraud prevention tips, including specifics on mortgage debt elimination schemes, foreclosure fraud, and predatory lending scams.

A complete description of the many kinds of mortgage fraud, from backward applications to silent seconds, as well as a rundown on what we're doing to combat the problem with statistics and major case summaries.

Additional information, including flow charts on how scams like property flipping, air loans, and double sold loans can work and maps showing the top ten "Hot Spots" for mortgage fraud in 2003 and 2004.

Also see some pictures from recent mortgage fraud cases around the country.

Our top Criminal Investigative Exec Chris Swecker said that many of the cases involve insiders.

“It’s either a corrupt appraiser, a corrupt mortgage broker, a corrupt lawyer, a corrupt banker—somebody inside the system has gone bad and is exploiting vulnerabilities in the mortgage application process,” he said.

He warned consumers to be alert and to be wary of so-called sure-fire investments.

Resources:

National Press Release - Recent California Foreclosure Scam Case

Trillian - Universal Instant Messenger

I’m getting into Instant Messaging (IM) as a means of collaboration with other appraisers on beta-testing and technology issues. We needed a way to share comments “real time”. IM seemed to be the ticket. However, It became immediately apparent many of us did not share the same IM server. What now? My "Web Mistress" Brooke Mitchell http://www.Cataluna.com tried to get me into IM and blogging a couple of years ago and I just didn't "get it". I’m now beginning to see the collaboration possibilities. When I told Brooke that I was going to give IM a try, she immediately suggested that I consider using Trillian™. I said, “Trillian? What's THAT?” Brooke explained that Trillian, developed by Cerulean Studios, is an application that consolidates in a single interface IM, contacts from a variety of IM services, such as America Online's AIM, Yahoo's Yahoo Messenger, and Microsoft's MSN Messenger. Sort of a "Universal Instant Messenger". Because most IM services don't interoperate with each other, it's necessary to log on separately to each IM network to communicate with its members. While Trillian™ doesn’t solve the interoperability problem, it does prevent users from having to keep an IM buddy-list interface open for each network. I’m now using the free Trillian™ Basic 3.1 version. There’s a Pro version ($25.00) but it seems that only adds a video capability and I’m not ready for that. I like the fact that it keeps things simple for me and it comes pre-loaded with tons of those little emoticons and emotisounds for jazzing up the conversation. From the Trillian™ web site:

“Trillian™ is a fully featured, stand-alone, skinnable chat client that supports AIM, ICQ, MSN, Yahoo Messenger, and IRC. It provides capabilities not possible with original network clients, while supporting standard features such as audio chat, file transfers, group chats, chat rooms, buddy icons, multiple simultaneous connections to the same network, server-side contact importing, typing notification, direct connection (AIM), proxy support, encrypted messaging (AIM/ICQ), SMS support, and privacy settings.” “Without stealing your home page and with no other included software, pop-ups, or spyware, Trillian provides unique functionality such as contact message history, a powerful skinning language, tabbed messaging, global status changes (set all networks away at once), Instant Lookup (automatic Wikipedia integration), contact alerts, an advanced automation system to trigger events based on anything happening in the client, docking, hundreds of emoticons, emotisounds, shell extensions for file transfers, and systray notifications.”

For a review of Trillian click here.

Size DOES Matter - In New Homes!

When it comes to new homes, size really does matter. The "growing trend shows houses have increased in square footage" according to a new article by Tom Kelly Inman News . For the full story click here. Here are some capsule highlights of the 2015 home, according to a new NAHB study:

• Homes will not shrink in total size. Today's average homes of 2,400 square feet are expected to be in the 2,300-2,500 square-foot range in 2015.
• Ceiling heights, which have been rising in the past 10 years, are expected to be 9 to 10 feet on the first floor while upscale homes will have a standard ceiling of at least 10 feet (10- to 12-foot range) on the first floor and a 9-foot standard ceiling on the second floor.
• Front doors will be single and wider. Standard homes will have at least one light above the door while upscale homes will have lights on each side of the door plus one above it.
• The living room will disappear and change function in homes of less than 3,000 square feet and will be replaced by a den, parlor, retreat, library or music room. Living rooms will remain in homes larger than 3,000 square feet.
• Stairs, which often are in the front of the home, will move to the middle or rear of the house.
• The master bedroom will have two walk-in closets and have areas of specific use (sleep, dress, sit, work).
• The master bath will have larger shower stalls, a compartmentalized toilet, and linen closet. Mid-to-upscale homes will have a shower and tub and multiple showerheads.
• Upscale homes will continue to have whirlpool tubs even though they are rarely used.
• Yards will shrink. Now averaging 9,000 square feet, the American yard is expected to decline to 7,000 or 8,000 square feet in the next few years.

The Paperless Appraisal Office - A Small Firm's Approach - Less Paper vs Paper-Less

Your appraisal firm is buried in paper. That's no surprise. That’s one of most common complaints among appraisers and their staff. From 6 tips for a "paperless" office By Joseph Anthony - "Paperless often really means less paper.” To paraphrase Mr. Anthony . . It's possible to scan your field notes, MLS sheets, and other paper into your computer, and to store all in-house documents in your system as well. You can even eliminate paper faxes, electronically sign documents, deliver PDF reports, and collect your field data on a PDA or tablet PC. "But you're still likely to have some paper floating through your office.” For the time being, I’ve learned to relax and accept that for a small office, it may be best to combine some use of paper alongside electronic or digital information systems. This approach can substantially reduce, although certainly not eradicate, the reliance on paper in your office. Some of the most effective paper-busting technologies that I’ll be discussing in this series include: • Computers: PCs, laptops, Tablets, and handhelds can be combined for document creation mobility and flexibility, stamping out rampant paper use. • Scanners: Scanners create digital images so that documents can be exchanged electronically and preserved easily. Make sure to choose a single, standardized electronic document format so that images can be indexed and searched easily. Most appraisers have adopted the universally accepted PDF (Portable Document Format) as their standard for delivering reports. • E-mail: E-mail is a great substitute for paper memos. Effective e-mail systems should allow users to filter content and file messages electronically by topic. They also should let workers combine e-mail with fax and voice-mail retrieval in a unified messaging system. • Storage systems: Affordable, robust storage technology is essential for high-speed, centralized electronic information management and for data backup. Check out low-cost systems built upon RAID (Redundant Array of Independent Disks) technology combined with off-site Internet storage solutions for appraisers like the Vault by a la mode.. • Fax over IP (Internet protocol): The boring old fax goes high-tech with a Web- or e-mail-based fax capability that eliminates the need to send hard copies. • Wireless local area networks: Wi-Fi LANs are spreading like wildfire, making electronic information mobile, portable and easily accessible to appraisers anywhere. • Secure remote access: Virtual private networks (VPNs) of products like GoToMyPC and LogMeIn ensure that “road warriors” get secure access to the office computer, abolishing the need to lug around a boxes full of workfiles, MLS books, or maps. • E-learning systems: Appraisers in training can say good-bye to books and binders when they use online or Web-based training and resource systems. Place shortcuts on your computer “desktop” with links to USPAP, Fannie Mae, and VA guidelines. • Advanced printers: Consider a multi-function printer-scanner with a sheet-feeder. In my small office I opted to add a low-end printer-scanner by Brother. It replaces a fax machine, a copier, a scanner, and even includes a built-in Ethernet port and media card readers. My choice can be purchased for under $100 (when rebates are on) at Staples or online. Naturally, each appraisal office’s needs vary. So companies are advised to take the following steps:

• Assess current paper usage,
• determine which electronic systems are most useful,
• get familiar with and read reviews of available products,
• and get the best price.

So be heartened. There are numerous ways to substantially slash the use of paper, while striving for the ultimate goal of a completely paperless office. I'd love to hear YOUR comments and suggestions! For more articles on this topic: Paperless Office - Ten Steps To Getting Started Paperless Office - Dual Monitors

The Paperless Appraisal Office - A Small Firm's Approach - Dual Monitors

The appraisal desk at the World HQ of Brian J. Davis and Associates includes a 4-in-1 printer-scanner, a framed picture of my wife, a MINI, two flat-panel computer monitors, a VoIP phone, and my PDA. Conspicuously missing from my desk are papers. You know, the piles of appraisal files, cost manuals, plat and census maps, MLS books and other documents you would expect to find in an appraisal office. Not there. You're also not going to see rows and rows of file cabinets storing the last five years of appraisal files and related workfiles, a requirement by state and USPAP. Instead, I store all of the documents related to my clients' appraisals, in a place where I know I can easily find, retrieve, copy and send those reports. That place is my computer and on an off-site Internet file storage server. The first part of this series discussed Ten Steps To Getting Started. If you’ve moved on to the "Implementation" stage you may be wondering . . . "What Do I Do FIRST?" My recommendation would be to get a second monitor.

When you have a single monitor you are usually opening up windows, resizing them, minimizing/ maximizing them, scrolling and clicking, etc. to get to the part you need to edit. This takes time and we all know what our "workaround" is . . .we make a printout of the data and work from the paper copy. Right? Consider what it would be like if you were to keep certain data windows always open for quick and easy reference. You will be amazed at how much more easier things will be to do AND how much less PRINTING you'll do! With your forms software open on one display, you can have your cost software, MLS, data provider, map, or even Outlook running on the second display. No more constant minimizing and maximizing. Simply cut and paste between the two screens.

The prices on flat panel display monitors have been steadily dropping but you don't HAVE to wait to buy a new monitor. I'm betting that you probably have an old CRT style monitor lying around the office. Click here for a link to Microsoft's multiple monitor set-up page. If you’re ready to buy an additional flat-panel display (or maybe a pair) here are a few things to consider:

• Can the monitor can be rotated. That feature may be enough to justify an increase in price, regardless of brand and other factors. A wide-aspect computer monitor is almost perfect for legal forms when rotated to portrait mode.
• Consider a wide-aspect and regular dual-monitor combination. One display rotated to “portrait” for forms work, and the standard display in “landscape” for other Internet and desktop application viewing.
• Looking for display suggestions? The Dell 2005FPW is one of the least expensive wide aspect monitors available suitable for appraisal work, and the 1905FP is certainly adequate for regular work. IF you are considering a dual monitor set-up, starting with something like the 2005FPW makes sense. You can always selecting a "matching" monitor later for a professional/finished look on your desktop.
• Some displays do not come with the software necessary to maximize their utility. You can download a free taskbar application called Multi-Monitor by clicking here. An application that I’ve used and can recommend is UltraMon. You can load the free demo and give it a try by clicking here.

The Paperless Appraisal Office - 10 Steps To Getting Started

Appraisers in firms of all sizes and types are fast overhauling their offices and their working procedures to cut down on paper and completley digital. The path to the elusive Paperless Office is fraught with complexity and hazards. But it's getting easier all the time. Appraisal software integration with sketching programs, data providers, mapping, and PDA-Tablet devices is now commonplace. Dual-display monitors, multi-function printer-scanners, digital cameras and new storage devices and media are packing more bang for the buck than ever! It's a myth that going paperless is just for the bigger firms. The fact is, anybody can do it, if they do it right. The trend to paperless is only accelerating. So what's the right way to do it? Here are ten steps to consider . . . 1. Gain the complete commitment of the entire office. The lives and working habits of every appraiser or staffer may change in some way. And any one of them can become a roadblock. 2. Break down and study current business processes. Going paperless requires a tough and honest self-appraisal of how your appraisal office works - and where it doesn't. Attack the task like a Business Process Improvement consulting project. 3. Plan, plan, plan. Allow a good six months to get fully informed about your internal processes and the hardware and software you'll need. You'll want to consider office, field, and remote solutions. 4. Implement in stages. Most appraisal firms start by switching from paper “True Copies” of their reports to PDF electronic versions, because the software they’re using is already largely digital. I've found that it's difficult, if not almost impossible, to implement more than one or two new technologies at the same time. For example, if you're just starting out with electonic property data collection on a PDA, that is NOT the time to also start trying to learn electronic sketching! 5. Change and communicate. In many cases, clients may notice the differences in your business . You're actually modernizing your business, and they usually appreciate that. But some clients my resist your efforts. Communication with your clients is especially important if you're switching from a fax or telephone based ordering system to an Internet based online system. Remind them of the benefits to THEM! Like - online status updates, the ability to download reports in a more secure manner, and faster and more accurate order processing. 6. Don't expect immediate success. Considering the first year is one of planning and implementation, and the second year is one of working out the kinks, you may not feel fully comfortable with the whole thing until the third year. I've had lots of stumbles along the path to going paperless. For my office I've adopted an attitude of "less-paper" more then "paperless". I try to eliminate much of my paper use (and waste) at the source. 7. Stay flexible and well informed. Paperless and mobile technologies are constantly changing. What was a good "Paperless Office Model" two or three years ago may not be the best model today. We're constantly seeing shifts in how we acquire data and integrate it into our forms software. For example: Maybe a PDA was the best (or only) option for field data collection in 2005-2006? Visionary appraisers are starting to look to future "tablet" style devices to replace their PDA (Pocket PC) and eventually the "clipboard". 9. Backup, Backup, Backup! Going paperless means that your office is going to HAVE to have a plan to backup all of that electronic data. A paperless office cannot afford to be sloppy about the storage of data. USPAP and State regulations require that we retain our records for a minimum of 5 years. 10. "Saving" is the biggest benefit. Appraisers will find that the biggest benefit to going paperless are the "savings" --- saving time in finding things, saving space in throwing out file cabinets, and maybe even saving rent with the need for less space, or the chance to add more staff. So it's worth it. And it's getting easier all the time. But it's still a shock to the office ecosystem. If your business is going to truly evolve into a totally paperless office, it's going to have to be part of your DNA! In future installments I'll be exploring some of the various hardware and software options that are available to appraisers in reaching their goal of a paperless office.

LOCAL - Downtown Bloomington - New Lease On Life?

New Face - By Scott Millerscottmiller@pantagraph.com Full Story in The Pantagraph - Click Here. BLOOMINGTON — In terms of image, downtown Bloomington has had a black eye in years past. But the U.S. Cellular Coliseum could be the icepack to ease the swelling.“Maybe (the Coliseum) will give downtown a new face. The more life and the more vibrancy you have, the more attractive downtown is going to be,” said Fred Wollrab, a Bloomington developer who owns about 30 buildings downtown. Downtown has struggled with problems real and perceived, ranging from a lack of tenants and building deterioration to concerns about safety and sparse parking. But Wollrab and other downtown leaders hope the Coliseum will attract a new audience, an audience that might not be as familiar with positive changes made to counteract those concerns. For example, the area has attracted new businesses, and developers have renovated buildings for commercial and residential use, said Catherine Dunlap, executive director of the Downtown Bloomington Association. Plus, “we are always looking to improve our streetscape, making it more pedestrian friendly and bicycle friendly,” she said.Developers also have begun an aggressive campaign to turn downtown into a residential community. Several residential units are under construction or renovation, including the Ensenberger building, the Paxton’s building, the Blackstone-Artonia building, the Bloomingtonian and the About Books building. Benefits for restaurantsThe $37 million Coliseum opens April 1, and those who’ve invested time, money and energy into downtown business and revitalization hope it raises the awareness of retailers and restaurants, at the very least. Don Larisey, managing partner of Boo Boo’s Dawghouse, 116 W. Washington St., likened the opening to a pub crawl or WGLT blues concert. “Anytime there’s more foot traffic, we’re going to have more business,” he said. “The more people down here, the more sales.” Larisey expects to stay open later and increase his staff on nights when the Coliseum has events. Other restaurant owners, meanwhile, remain cautiously optimistic. “We’re not sure what impact this will have because we’ve never had an arena crowd before.” said Molly Bradle, owner of Rosie’s, a restaurant and bar at 106 E. Front St. “Of course, we always hope it will be busy". And one business owner hopes shopping traffic increases, which would ultimately help her business. “There’s a lot of people, I have to assume, who just don’t venture downtown at all, so hopefully people going to the Coliseum will see what’s down here and come back during the day to shop. That’s what helps us,” said April Fritzen, who owns the Coffee Hound, 407 N. Main St., with her husband, Steve. Dunlap said the downtown is constantly changing, and the Coliseum could attract those sightseers. “A lot of the stores have changed and we want everybody to see that we do have a lot of beautiful boutiques with something to offer everyone,” Dunlap said. For example, A. Renee recently doubled its space at 306 N. Center St., and The Bead Parlor moved into a freshly renovated building at 318 N. Main St. that formerly housed Moberly & Klenner. Four businesses close - But while some are succeeding, others are still struggling — and four are in the midst of shuttering their downtown storefronts.Villa di Vino, 413 N. Main St., is going out of business, while down the block Main Street Jewelry, 403 N. Main St., and Artezen, 412 N. Main St., plan to work solely online. Around the corner, the bridal shop Enchantment, 109 W. Monroe St., also plans to close. Owner Adrianne Green plans to work from home, not waiting to see what impact the Coliseum may have. “I just don’t think (the Coliseum is) going to make downtown much busier. For the restaurant and bars, yes, but the retailers, probably not so much,” said Green. The closures can cast a negative shadow on the state of downtown Bloomington, but Dunlap said they also present a positive opportunity to attract businesses better suited to handle the needs of the typical downtown patron. Dunlap plans to conduct several market surveys to see what downtown patrons want and what would attract new customers. “The downtown has life cycles. Granted, we hate to lose these businesses, but this offers opportunities to better serve the changing downtown market,” she said. Other challenges remainAnd the downtown faces other challenges as well.The Bloomington City Council recently expressed concern over the area’s rising homeless population, but downtown business owners quickly said the problem was a misperception. And the perception of a dangerous downtown still exists.“Most people who don’t think the downtown is safe are people who don’t generally come downtown. It’s just a misconception,” Wollrab said. But the tide is gradually changing. Vicki Tilton, owner of Fox & Hounds Day Spa, 200 W. Monroe St., said that money invested by the city, building owners and store owners has already brought more business to the area. “It’s going to take a little while longer for us to create the awareness through advertising, but I can tell you there is much better awareness down here than there was 10 years ago,” she said. “Ten years ago the storefronts were empty. The upper floors were all empty.” As Dunlap noted, “Your downtown didn’t die overnight, so it’s not going to come back overnight.”

LOCAL - B-N / McLean Co - County Road Maintenance Burden

The roads more traveled By M.K. Guetersloh mkguetersloh@pantagraph.com Complete Story - Click Here. BLOOMINGTON - As the city of Bloomington continues to grow to the east, adjacent Old Town Township continues to shrink. With city subdivisions being planned and annexed east of Towanda Barnes Road, the township loses the land and the tax revenue tied to the property. While transferring the land jurisdiction to the city, township officials would like to see that responsibility for more of the associated roads go with it. They say they simply can't afford of the cost of maintaining township roads that are used more and more while their tax dollars shrink. "When they start building houses, I want out," said Phil Reynolds, Old Town Township road supervisor. A recent example is the roads around The Grove at Kickapoo Creek, a 450-acre subdivision near Ireland Grove and Towanda Barnes roads. The city and the township are trying to hammer out a deal as to when the city will take over McLean County roads 2100 East and 1300 North, which are township roads near the development. In the meantime, the city has agreed to take over Ireland Grove Road. Target traffic levels Bloomington is proposing that it take over 2100 East and 1300 North when traffic rates reach a daily average of 1,500 vehicles.Bloomington City Manager Tom Hamilton said 1,500 cars a day is a fair number to warrant the city picking up the roads. However, he said the roads should be fine structurally with 1,500 cars a day. Most of the traffic will be commuter traffic. "It's the heavy trucks in the springtime that really tear up the roads and cause the problems," Hamilton said. Reynolds said in the time it takes to get up to 1,500 cars, the roads will deteriorate to the point of being a safety issue. With a $354,000 budget to cover 50 miles of road, Reynolds adds there is not a lot of money for road maintenance. "It's about $10,000 a mile just to seal-coat a road," Reynolds said. "Then when you go to upgrade and widen, we are looking at my total budget to pay for one mile." But it's not just the large subdivisions. The township is seeing several road problems with the addition of rural subdivisions. County Road 2000 East, about a mile from Towanda Barnes Road, is another road that concerns township trustees. The hilly, narrow road is carrying more traffic with the addition of more houses. "These roads were not built for this kind of traffic," Old Town Township Supervisor Mark Lovelace said. "It's difficult to maintain access roads to those subdivisions." The township is levying at its maximum property tax rate and is limited in how much new tax money it can ask its 2,700 or so residents to pay. But even if the levy could be increased, Reynolds said it's unfair to ask the farmers in the township to pay for road upgrades to accommodate traffic for the new subdivisions. The trustees' efforts to slow growth by delaying approval for rural subdivisions may give the township board a reputation of being against new developments, trustee Tim Norman said. "I love the growth and expansion," Norman said. "What I don't want to see is more trees popping up in memory of someone (at an accident site). It gets dangerous when you try to put city traffic on a country road that amounts to a little more than a goat trail."

LOCAL - Special Census Says Bloomingon Is Growing

Bloomington Is Even Bigger By M.K. Guetersloh mkguetersloh@pantagraph.com BLOOMINGTON - Full Story Click Here: More people are coming to Bloomington, and the results of a special census may show the city's population is growing faster than city officials estimated. City Manager Tom Hamilton told the City Council during its budget work session this week that a preliminary count from a special census conducted in Bloomington is "significantly higher than anticipated. "The city paid $133,232 for the U.S. Census Bureau to conduct the special census, but officials hope to recoup more than that through higher population-based revenue from the state and federal governments. Bloomington's population listed in the 2000 Census was 64,808. When the City Council approved the study, the estimated population growth was about 7,000 people. Hamilton would not comment further on the preliminary estimate from the Census Bureau because he said the numbers could change when the city receives its final count. City Finance Director Brian Barnes said the special census concluded the first week of March. A final count from the Census Bureau is expected about 90 days after the count is completed. An increase of 7,000 people could yield an additional $700,000 for city coffers.The city receives some state and federal money on a per-capita basis. Right now that rate is about $111 per person. The special census in Bloomington started in February and concentrated on about 154 new subdivisions, mostly on the city's east side. The town of Normal completed a special census in 2005, and its population grew more than town officials estimated. Once the Census Bureau certified the count, Normal had grown by 5,100 people to a population of 50,485. Town officials had estimated the town grew by only 3,000 people in the five years since the 2000 Census.

Community Blogging Builds Community Ties and Awareness

RISMEDIA, March 24, 2006 Full Story — Blogging Systems announced today, the availability of its newest version of Community Publisher. "Blog use and creation is growing at a phenomenal rate."

According to Technorati, a leading weblog authority, the blogosphere doubles about every 5.5 months. Technorati points to March 2006 as a month in which they tracked over 27.2 million weblogs. This number is nearly double the number of blogs they were tracking 5 months prior. " “As blogs become an accepted communications medium, [appraisers] real estate agents and brokers are realizing they can capitalize on a tool that helps them increase community ties and build local brand recognition,” said Richard Nacht, CEO of Blogging Systems. A locally flavored blog, sponsored by a real estate professional, promotes:

• increased awareness via [potentially] thousands of visitors each month
• clear positioning as a key provider of local information
• increased “touch points” with local customers and prospects
• an additional revenue stream via community ads & sponsored links

Appraisal Fee - Markup or Kickback? - Part 3

Appraiser Question: "I received an order from an Appraisal Management Company (AMC) that requested I bill the client $75 more than my standard fee and return $75 to them. I've never heard of this before, but I haven't worked with many management companies. Is this common?" "Do I need to make a statement in the appraisal report that I have paid $75 to the AMC?" "Are there any other USPAP or legal concerns that I should consider to cover myself?" Appraisal Fee - Markup or Kickback? Part 1 Appraisal Fee - Markup or Kickback? Part 2 Part 2 of this series answered the our appraiser's question from the perspective of USPAP - The Uniform Standards of Professional Appraisal Practice - but left us with a question about whether a RESPA violation may come into play. Why? Because it "appears" the appraiser is involved with collecting or paying additional fees for which "appraisal services" have not been provided. Just What IS a "Markup"? Markups involve the practice of ordering services for a customer from a third-party vendor and then, without providing an additional service, adding an additional fee to the vendor's charge.

Money Magazine recently published a multi-part story about the "The Bunk Behind Junk Closing Fees" by Stephen Gandel where he says, "RESPA was also meant to stop realtors from taking kickbacks for steering customers to favored lenders, title companies, appraisers or home inspectors."

The Closing Cost Scams section asks "Ever bought a house? Then you know what it's like to be confronted, while making the biggest financial transaction of your life, with a bundle of fees you don't quite understand. They're enumerated on what's called your HUD-1 document, the mortgage settlement statement you get the day you close, as required by the Department of Housing and Urban Development."

"The charges listed include mysterious things like title insurance, settlement fees, appraisal fees, processing fees, document-preparation fees and others, as well as charges paid by the seller, like your broker's commission."

"Home buyers now pay eight times as much in closing costs as they did 40 years ago."

There is an excellent paper Pricing of Settlement-Related Services in Residential Mortage Transactions: Second Circuit Decision Threatens to Upset Widespread Industry Practices by James L. Thompson and Hanna L. Stotland. Click here for the full paper.

In their conclusion they recognize the confusion both by the mortgage industry and the conflicting court decisions with regards to RESPA. The Conclusion says:

"Where does this patchwork of rulings leave the mortgage professional, especially one with a nationwide customer base? First, lenders, brokers and anyone making assessments at a closing should play it safe. Given the current split, it will be impossible to predict how any new court will interpret Section 8(b) of RESPA."

"Second, mortgage professionals and their attorneys and compliance offers must keep a close watch on developments in RESPA interpretation.The Supreme Court may grant certiorari to resolve the obvious circuit split, and its decision will inevitably upset the standards in some part of the country. It is certainly possible that, if the split persists, Congress will intercede with clarifying legislation."

I agree. There does appear to be much confusion regarding regarding what constitutes a RESPA violation and how appraisers fit into the whole picture.

I personally feel that it's easy for appraisers to innocently get caught up in the "markup" game. Some appraisers feel that we're just collecting a fee on behalf of the client but would the borrower understand that? At what point does a minor $50-$75 per assignment become considered a "kickback" by a potential borrower?

The bottom line for me is at a minimum . . .comply with USPAP.

Management (ETHICS RULE)

The payment of undisclosed fees, commissions, or things of value in connection with the procurement of an assignment is unethical.

Comment: Disclosure of fees, commissions, or things of value connected to the procurement of an assignment must appear in the certification and in any transmittal letter in which conclusions are stated. .

FeedBlitz - Blog Updates In Your eMail

I'm just getting into blogging and already I'm finding that there are just too many sites to try to keep up with. Then I found FeedBlitz! Pretty much any and every blog has an RSS, Atom or RDF feed. And if you're thinking "A what? Feeds? Atoms? I didn't get past high school physics" don't worry - you don't need to know. FeedBlitz handles the complexities - once you've registered you just get a nicely formatted email every day for those blog URLs that you're intested in. Everyone has email. FeedBlitz monitors the information you care about and delivers it to your inbox. Simple. No popups - ever. No gurus required. No software to install. And because it's email, unlike typical web services, you can look at the content offline in your email software - on your laptop, phone, PDA, at the airport, wherever you can read your mail. Multiple Feeds, One Daily Email. Each night (US East Coast) the free service checks on your feeds, figures out the changes, and sends you a single, easy to read email with all the information at your fingertips. If there are no changes, you won't get a message, so FeedBlitz won't clutter up your email system with worthless emails. Even with an online aggregator having a daily digest backup is useful, as your email software has search, sort and indexing capabilities that many aggregators simply don't. You can register for a free FeedBlitz account here or scroll down and enter your email address in the "Subscribe Me" box on the right of this blog.

Appraiser Identity Theft

According to Brian Weaver, a practicing appraiser for over 25 years and investigator for the Office of Banks and Real Estate in Illinois, has recently researched Appraiser Identity Theft in Illinois and others states. Click here for the complete report: License To Steal The Illinois Coalition of Appraisal Professionals commissioned this study and resulting article. www.icapweb.org

Brian Weaver has suggested that there are three main scenarios of appraiser identity theft and forgery currently taking place.

• First, there is the appraiser-trainee who is fed up with splitting fees with their sponsor/ mentor and has decided to forge their mentor’s name and affix their mentor’s license number to reports without their mentor’s knowledge or permission.
• Second, there are appraisers who go phishing for license numbers. The term phishing refers to the current internet ploy by computer hackers to scour cyberspace for usable personal data that can be exploited.
• The third and most disturbing trend involves persons who never were licensed appraisers, yet find this to be their crime of choice. Like those who go phishing, they come up with almost random victims and prepare bogus reports for hefty fees.

"Mike Brown, Director of the Appraisal Division for the Illinois Department of Financial and Professional Regulation (IDFPR), has revealed that (currently) his office is aware of over $40 million worth of forged appraisals…and the number is climbing." "Forged appraisals? According to Mr. Brown and his investigator, Don Potter, between 20% and 30% of all complaints coming into the department have a forged appraisal document at the center." What Can Appraisers Do To Protect Themselves? The best one can do is reduce the opportunity for identity theft. The following fall under the category of common sense and nothing more:

• Remove your license number from your business card (if legally permissible).
• Remove your license number from your stationery (if legally permissible).
• Remove your license number(s) from your website and e-mail stamp (if legally permissible). This includes removing the actual image of your license.
• Remove your license number from websites that advertise your services (if legally permissible).
• Stop sharing your software signature codes with everyone in the office.
• Stop taping signature codes on the wall next to the computer at the office.
• Try using something a little more complex than “appraiser” for a password.
• Eliminate your E&O declaration page from your website.
• Be more circumspect about who has access to your license.

I have to admit that I had been guity of breakling almost ALL of those rules. After the article came out, I got a call from T. J. McCarthy at ICAP to advise me of the risks I was taking wih having my license, resume, and E&O certificate available from my web site.

After his call I took advantage of a "Password Protected Page" feature that my web host provides. This allows me to keep my private information private . . .but available to trusted clients and those that need to know. To see how that works on my site go to Licenses & Certificates .

Home Sales Post Unexpected Gain - National

By Martin Crutsinger Associated Press - Full Story . . . WASHINGTON, D.C. - "Sales of existing homes had fallen for five straight months before an unexpected increase in February, helped by unusually warm weather." "The National Association of Realtors reported Thursday that sales of existing single-family homes rose by 5.2 percent last month to a seasonally adjusted annual rate of 6.91 million units. " "Nationwide, the median sales price for an existing home - the point where half the homes sold for more and half for less - rose to $209,000 in February, an increase of 10.6 percent from February 2005." "Many economists believe that price appreciation will slow from double-digit increases to gains of about 5 percent this year with sales declining by about 5 percent, reflecting continued increases in mortgage rates. If that forecast comes true, then the housing boom of recent years will slow to a more sustainable pace." Patrick Newport, U.S. economist for Global Insight, a private forecasting firm, said all signs point to further declines in housing sales this year. He predicted the declines would be moderate. "The housing slowdown will be gradual and take place over the next three to four years," he said. He predicted that the housing slowdown would reduce overall economic growth by two-tenths of a percentage point this year and by one-half of a percentage point in 2007.