Featured news — posted March 29, 2005

Fannie Mae released the final versions of its revised appraisal forms Thursday, after two rounds of proposed revisions released last summer and last November. Our forms programmers are burning the midnight oil to get the new forms pushed out to WinTOTAL users — for free, as part of your support membership — as soon as possible. Look for the URAR next week.

Fannie's announcement introducing the final new forms can be found here. The announcement includes a link to the new forms. Here are some of the biggies: 1004, 2055, 1004D, 1073, 1004C.

Fannie said it "received hundreds of comments on how to further improve the quality of those forms" after the November release. "We would like to thank the many lenders, appraisers, and organizations that took the time to share their significant recommendations with us."

The new forms will not be mandatory until November 1, 2005. Either the previous iterations of the Fannie forms or the new ones may be used until that date.

Fannie Mae said it is especially concerned that appraisers report the following information on the new forms:

	Whether the subject property is currently offered for sale or if it was offered for sale in the 12 months prior to the effective date of the appraisal;
	That you analyzed the contract for sale for the subject property for a purchase money transaction;
	Whether the subject property has any adverse physical deficiencies or conditions such as (but not limited to) needed repairs, and whether such conditions affect the livability, soundness, or structural integrity of the property;
	That the subject property generally conforms to the neighborhood;
	That you researched, analyzed and reported on the sale (or transfer) history for the subject property and comparable sales.

One very positive change to the Intended Use and User sections: The Intended Use of the report as noted on the new 1004 specifies that the report is to be used by your client to evaluate the property for a mortgage finance transaction. Those five words did not appear in the last version of the forms. They make it clear that your transmission of the report is intended and authorized to be used in your client's lending decision and related to that loan only.

A new bill introduced in the House of Representatives would update the federal appraisal regulatory scheme to "enhance appraiser education and licensing, to improve Federal oversight of State appraisal programs, and to augment appraiser independence," according to a press release issued by Rep. Bob Ney (R-OH), Chairman of the Subcommittee on Housing and Community Development, and Rep. Paul E. Kanjorski (D-PA), senior Democrat on the House Financial Services Capital Markets Subcommittee.

Ney and Kanjorski introduced the Responsible Lending Act this month. The bill would require appraisals — with a physical inspection — on certain higher risk, subprime loans.

The bill would also beef up appraiser independence laws by prohibiting improper "influence, through coercion, extortion, or bribery, [of] the development, reporting, result, or review of a real estate appraisal sought in connection with a mortgage loan." The bill would make exceptions to this for asking for consideration of additional comparable sales, requests for further detail, or requests for correction of errors.

State-to-state reciprocity would be greatly streamlined. In continuing education, states would be required to accept courses and seminars approved by the Appraiser Qualifications Board (AQB).

Under the bill, the Comptroller General would be required to perform a comprehensive study of possible improvements to the appraisal process.

"We believe that the bill we have introduced provides the most comprehensive, balanced, and effective set of legislative solutions that any Federal or State bill has ever offered for protecting mortgage borrowers from abusive, deceptive, and unfair lending practices," Kanjorski said.

The Appraisal Institute endorses the bill, H.R. 1295. "For the appraisal community, this bill addresses the toughest issues we have raised over the last several years," Don Kelly, Vice President for Public Affairs for the Appraisal Institute, said. "We have been calling upon Congress to take up the serious problem of client pressure on appraisers and enhancement [of] state regulatory bodies; this bill goes right to the heart of the problem. This is a good bill for consumers and a good bill for appraisers."

Fannie Mae funds and guarantees mortgages. If a servicer of a mortgage Fannie has guaranteed has a foreclosure dropped in its lap, Fannie Mae will do most of the legwork when it comes to reselling the property. Now, it will use the XSites Network, and its appraisers will use XSites Order Manager, to more quickly and efficiently obtain valuations on repossessed, or Real Estate Owned (REO), properties.

We're all very excited about this, especially because it positions you as vendors of choice for a Fortune 20 company and the single largest player in the mortgage market. But it's doubly exciting because Fannie sought us — and you — out. "Our competitors would give anything if Fannie Mae would come to them asking for their help," Scott Kinnaird, our Chief Strategy Officer, said. "Fannie did their research. They looked all over for a solution that works like ours. But none of our competitors can provide anything like this to Fannie Mae."

Fannie Mae was primarily after instant interactivity with its appraiser vendors — a setup where appraisers wouldn't have to go to a website every day to check whether they had new work. The XSites Network's unique individual branding and built-in productivity tools sold them, as did the sheer number of appraisers on the Network. "Our customer base is so much larger than anyone else's, this sort of project with any other software company would never gain enough traction and would fail," Kinnaird said.

XSites Order Manager's desktop business rules, which check a report for errors on your end before you transmit it, are also a boon to an undertaking as big as Fannie Mae's REO disposition. Time is truly of the essence in REO disposal — it costs hundreds of dollars per an REO property remains in Fannie Mae's hands. “This is a cost-effective solution that alerts the appraiser to any problems before delivery, in time to correct them. As a result, we should receive more reliable appraisal reports faster, minimizing our disposition costs,” Larry Brown, Fannie Mae’s vice president for property disposition, said.

Fannie's National Property Disposition Center (NPDC) in Dallas coordinates its REO procedures. The servicer is responsible for things like conveying title to the property to Fannie Mae, filing mortgage insurance claims, and notifying the credit repositories. The NPDC and contracted property recovery firms handle outside vendors like appraisers on behalf of Fannie Mae.

In another deal to route more business to your Appraiser XSite, we announced this week an agreement to develop a custom plugin for users of MortageFlex's LoanQuest loan automation software. Users will have direct access to the many thousands of appraisers with XSites. Similar to the Fannie plugin, MortgageFlex customers will see the advantages of a desktop-side rules engine which checks reports for errors and omissions before they leave your hands.

Read our company news here.

If the response to our February Annual Convention is any indication, you've been eagerly awaiting news about our Technology Conference to be held this summer. The convention sold out in less than two months and we're anticipating an equally rapid response to this one. So make your plans to join us at the magical Walt Disney Contemporary Resort in Orlando, Florida on July 28th, 29th and 30th.

This three-day event is packed with training classes designed to help you maximize your efficiency with our products. All of the technology courses presented in Las Vegas will be reprised in Orlando, along with some great new content. Based on feedback from your colleagues, we've expanded the event to three full days of technology training and expanded the overall capacity to allow more attendees. We'll still have our popular cocktail reception, as well as our dinner event, plus a couple of other surprises. To keep your cost in line, we've arranged for a special room rate with Disney, plus great prices on park passes. Training classes are presented multiple times, so you can arrange your schedule to get in the classes you need, and still have time to enjoy the resort with your family.

We're working on additional details and information, and registration will begin on April 1. But start clearing your schedule now and plan on joining us for this premier appraiser technology event!