Appraiser Licensing:
Appraiser licensing varies from state to state. To participate in what is called a "federally-related transaction," which is, for example, a mortgage being underwritten by a national bank, an appraiser must be licensed or certified by his or her state. Rest assured, the appraisers at IRR-Residential Appraisers & Consulting are state licensed or certified appraisers. We do not employ appraiser trainees.
Prior to the Savings and Loan crisis of the 80s, which gave rise to appraiser licensing, appraisers had to market their expertise, service, professionalism and association designations. Many consider licensure a bare minimum of what you should expect from an appraiser. With a designation such as SRAfrom the Appraisal Institute being desireable.
We have worked hard to establish a reputation for quality and prompt work, performed professionally and ethically, with outstanding customer service. You should never just look for a licensed appraiser; you should be discriminating in choosing your service providers. Tour our website for valuable information on the experience we have and the service we provide.You should always be sure your appraisal service provider is licensed and in good standing. The Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) maintains a national database of appraisers and their license/certification status. It is available publicly at this link.
Among other things, this database, which relies on reports from each state appraisal board, will tell you if a service provider you are considering has had his or her license suspended, revoked, or whether the license has lapsed. You can rest assured that our license is current and in good standing!
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Who Owns the Appraisal?
The appraisal is "owned" by the client who ordered it (engaged the appraiser). If a lender ordered it, the lender owns it, even if you paid for it. If you ordered it for non- lending purposes, you own it. By federal law, you are entitled to receive a copy of the appraisal from your lender. Unfortunately, appraisers are not able to provide you a copy of the appraisal.
What is O.C.C. Compliance?
Our web-based IRR-Connections assignment management platform provides a one- stop third-party OCC/OTS compliant solution for a lender's national valuation needs with regard to appraiser engagement, oversight and independence. Client specific underwriting guidelines can even be integrated into the system to ensure consistent directions are sent to the assigned appraiser.
What is the Difference Between an Appraisal and a Home Inspection?
Real estate appraisers are trained in the valuation of real property and are not home inspectors. Generally, real estate appraisers do not climb on the roof, remove the cover from electrical boxes or examine the furnace and appliances as would a home inspector. Home inspectors are trained to be experts in all facets of construction and conduct an on-site inspection which may last up to four hours. Appraisers perform a different service with a different level of expertise than a professional home inspector.
What is PMI and How Can I Get Rid of It?
PMI or Private Mortgage Insurance is normally required when you buy a house with less than 20% down. Mortgage insurance is a type of guarantee that helps protect lenders against the costs of foreclosure. This insurance protection is provided by private mortgage-insurance companies. It enables lenders to accept lower down payments than they would normally accept. In effect, mortgage insurance provides what the equity of a higher down payment would provide to cover a lender's losses in the unfortunate event of foreclosure. Therefore, without mortgage insurance, you might not be able to buy a
home without a 20% down payment.
The cost of PMI increases as your down payment decreases. Example: The cost of PMI on a 10% down payment is less than the cost of PMI on a 5% down payment. Your PMI premium is normally added to your monthly mortgage payment.
The decision on when to cancel the private insurance coverage does not depend solely on the degree of your equity in the home. The final say on terminating a private mortgage-insurance policy is reserved jointly for the lender and any investor who may have purchased an interest in the mortgage. However, in most cases, the lender will allow cancellation of mortgage insurance when the loan is paid down to 80% of the original property value. Some lenders may require that you pay PMI for one or two years
before you may apply to remove it.
To cancel the PMI on your loan, contact your lender. In most cases, an appraisal will be required to determine the value of your property. You will probably also be required to pay for the cost of this appraisal.
Why Can't Appraisers Do Value/Comp Checks?
We receive many calls from mortgage brokers and borrowers for value checks. In most cases, these requests are related to a refinance, a purchase money loan or a construction loan. In each case, it is typically stated that the borrower would like a "feel" for the property's value before paying for a "full-blown appraisal." Further, there is usually the dangling carrot of an appraisal assignment (either implied, inferred, or stated) at the
end of the value check stick.
While we understand the desire to have a comfort level that the appraisal will "come-in" at a desired value, value checks are simply bad for all parties involved. The role of an appraiser is primarily that of an independent third party. But the concept of a value check fly's in the face of such independence and can cause far more harm than good. The laws of most states recognize this and have made value checks ostensibly illegal through the adoption of the Uniform Standards of Professional Practice (USPAP).
Such illegality comes into play in several ways: first, USPAP makes it illegal to provide a value for a subject property without having inspected the property; second, USPAP states clearly that an appraisal may not be based upon a predetermined value; third, USPAP makes clear that if an appraiser states, writes, or otherwise transmits a value to another party, the appraiser is, in fact, reporting findings of an appraisal; which takes us to the fourth problem with value checks, reporting a value without having done the analysis is clear ethics violation.
But what if the appraiser is just pulling comps for the client. The Appraisal Foundation, the authors of USPAP, has even clarified their position on this issue. If an appraiser has any input into the comps that are generated, he/she is guiding the results, which means that the appraiser is guiding the resulting value, or range of value, that his/her client will conclude to. Thus it is a violation of USPAP.
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