November 13, 2013 CAREA General Meeting
Appraisal Underwriting and Review
6:00 – 6:30 PM
Jo Stinett introduced the proposal to increase CAREA annual dues to $150 per year beginning 2014. It was voted on and passed with the majority.
6:30 PM
Jo Stinett introduced panel of underwriters/reviewers. Each panel member gave a brief summary of what they do. Panel members:
Gary Eisenbraun – HUD/FHA Staff Appraiser
Tommie Bishop – Underwriter at Air Academy Federal Credit Union
John Stevens – Senior underwriter with Peoples National Bank
Keko Fontana – Reviewer, Community Banks of Colorado
Jo went through a list of questions from members and asked each panel member to comment.
1 – What is the most crucial item on the report?
Gary – Credibility, consistency, support of value. Looking for repairs not mentioned, and fraud.
Tommie – Pictures. Making sure the pictures and the report tell the same story.
John – Marketability. Support marketability and tell an accurate story.
Keko – Compliance to USPAP, credibility.
2 – What are your guidelines for radius/distance?
Gary – HUD has no distance requirement. HUD looks for non-conformity, super adequacy, over improvement. Just explain why you went where you went.
Tommie – Have to follow a checklist from the investors. They want to know why you went over 1 mile or crossed a major street.
John – Investor requirement. Explain why you went where you did and don’t use canned comments.
Keko – We have no distance requirement. WE are looking for the best sales for the property.
3 – What are you looking for at the top of page 2?
Gary – In line with 1004 MC data.
Tommie/John – Comparable properties only. Not all sales.
Keko – Comparables used should be in the range above.
4 – What are you seeing for seller concessions?
Gary/Tommie/John – Appraisers should explain how the amount that was adjusted was reached. How the appraiser reached the market derived adjustment.
Keko – I see dollar for dollar adjustments or a %. Looking for the reasonableness of the adjustment.
5 – What are your thoughts on adjustments derived from multiple regression?
Gary – HUD does not use multiple regression. However multiple regression is probably the best/soundest way to determine adjustments.
Tommie/John/Keko – Unfamiliar with multiple regression and have heard no plans to integrate it.
6 – To what degree are AVM’s used?
Gary – We use them to get basic knowledge of the subject property.
Tommie/John – They are very much a part of what we do.
Keko – We do not use them.
7 – What do like to see for reconciliation of the sales comparison approach to value?
Gary – Certification 4 in the report tells reader that all sources/methods were used, so we don’t look for a comment regarding reconciliation.
Tommie/John/Keko – We look for comments on reconciliation and weighting of comparables.
8 – Is the adjusted sales price of the comparables important to you?
All – Huge ranges are issues and bring up red flags.
9 – How do you feel about underwriters asking appraiser to do non-appraiser items?
Gary – HUD encourages underwriters to not to do this because the appraiser is not qualified.
Tommie/John – Sometimes we ask appraisers because we can’t find anyone else to do it.
Keko – We encourage the underwriter to not do this and find the right person to do so.
10 – What do you look for in appraisals?
All – Consistency. Be consistent throughout the entire report. Scope of work explained. Explain why all 3 approaches to value were not used. Explain zoning.
8:30 Meeting concluded.