Anthony Vosilla's Blog

Notice to AMC appraisers

Anthony Vosilla (Tony's Appraisal Services) — Tue, 09 Feb 2010 15:09:58 -0800

This e-mail was recieved by appraisers working for Quantrix which is an Appraisal Management Company which does appraisals ordered by Chase.

I'm sharing this so other Real Estate Proffessionals can see what is happening to appraisers within the industry. This is a prime example as to why many good appraisers WILL NOT WORK FOR THESE AMC'S.

TO: Quantrix Valuation Chase Appraisers

FROM: Quantrix Valuation Panel Management

DATE: February 8, 2010

RE: Automated Telephone Order Notification

Starting Friday, February 12, 2010, Quantrix Valuation is providing a new opportunity to accept Chase orders via telephone.

Appraiser Receives Phone Call from Quantrix Valuation

Auto Call will notify Appraiser that there is an order available and will provide
Product
Property Address
Appraiser Fee
Appointment Date and Time
Auto Call will ask if Appraiser ACCEPTS or DECLINES the order
If the call is not answered or the call is dropped or disconnected, Auto Call will roll to next Appraiser - THERE WILL BE NO OPPORTUNITY TO RECOVER THE ORDER

To ACCEPT order, Say "YES"
Borrower's First and Last Name is provided as well as spelled out
Order information is also included in the Assignment Notification email like all other orders
Appointment Date and Time is included in Auto Call and in the Special Instructions in the Quantrix Order form
Appraiser is transferred directly to the Borrower's phone to confirm Appointment Date and Time
If Borrower or voicemail do not pick up, the call will be dropped and Appraiser must follow up with borrower to confirm Appointment Date and Time
If the call is dropped or disconnects AFTER the order is Accepted, or if the automated system is unable to reach the Borrower, Order and Borrower information may be obtained at www.QuantrixVendorServices.com.

To DECLINE order, Say "NO"
Auto Call disconnects
Order will be offered to next Appraiser
THERE WILL BE NO OPPORTUNITY TO RECOVER THE ORDER

*Calls may be recorded to help improve quality and service

They seem to want appraisers to just jump.

Chart: Performance by Mortgage Servicers Through December 2009

Anthony Vosilla (Tony's Appraisal Services) — Tue, 09 Feb 2010 11:29:57 -0800

From the below link a look at the current loan modifications thru 12/2009. What is interesting is One Bank Wests modification program, which purchased IndyMac has a low percentage rate, which plays into the TBWS video. ( http://www.thinkbigworksmall.com/mypage/archive/1/29027 )

http://www.propublica.org/special/chart-performance-by-mortgage-servicers-through-december-2009

Chart: Performance by Mortgage Servicers Through December 2009

by Paul Kiel and Dan Nguyen, ProPublica - January 15, 2010

On Jan. 15, 2010, the Treasury Department released data showing how the largest mortgage servicers participating in the administration's $75 billion foreclosure prevention program have been performing. You can see that breakdown below. The data show activity through Dec. 31, 2009.

To give an indication of each servicer's performance as a percentage of its loans eligible for modification, the Treasury listed the number of eligible loans that are more than 60 days delinquent (that's the "Est. Eligible Loans" listed below). Treasury only released data for servicers with over 5,000 eligible loans.

Under the program's guidelines, servicers initially approve borrowers for a three-month trial period. If the homeowner makes the payments on time, sends in the required documentation and meets the program's criteria for eligibility, the servicer is supposed to convert the modification to a permanent one at the end of that period. The data below show the number of loans that have moved to the permanent stage.

We've shown the number of permanent and failed mods as a percentage of the trial mods each servicer had begun as of Sept. 30. That's because the trial stage is supposed to last three months, so trials begun after that date are not expected to have a final outcome.

Note: The "Only GSE servicers" row below refers to companies that have not enrolled in the Treasury Department programs, but do service loans owned or guaranteed by Fannie Mae or Freddie Mac. "Smaller servicers" refers to servicers enrolled in the program with fewer than 5,000 eligible loans.

Trial Mods Started: 902,620

Total Permanent Mods: 66,465

NameEntered ProgramTrial Mods Started as
Share of Est. Eligible Loans Permanent ModsFailed Trial Mods

			As % of Trial Mods Started, as of September 30, 2009.
Saxon Mortgage Services	Apr 13, 2009	36406 : 72709 (50%)	2,497 7.6%	2,995 9.1%
CitiMortgage	Apr 13, 2009	119097 : 241981 (49%)	4,999 7.3%	6,099 8.9%
Aurora Loan Services	May 1, 2009	36618 : 78225 (47%)	4,682 19.6%	10,024 42.0%
GMAC Mortgage	Apr 13, 2009	32159 : 69281 (46%)	9,872 51.1%	1,615 8.4%
Select Portfolio Servicing	Apr 13, 2009	29280 : 63690 (46%)	4,675 29.8%	7,206 45.9%
JPMorgan Chase subsidiaries	Apr 13, 2009	156359 : 424965 (37%)	7,139 6.1%	2,392 2.0%
Wells Fargo Bank, NA	Apr 13, 2009	126413 : 350169 (36%)	8,424 13.4%	7,705 12.2%
Bayview Loan Servicing, LLC	Jul 1, 2009	3653 : 10183 (36%)	106 54.1%	149 76.0%
PNC Mortgage	Jun 26, 2009	13237 : 41136 (32%)	61 1.6%	1,023 26.6%
Green Tree Servicing	Apr 24, 2009	3455 : 10927 (32%)	87 18.4%	100 21.1%
Nationstar Mortgage	May 28, 2009	14588 : 49026 (30%)	1,277 15.2%	1,135 13.5%
U.S. Bank National Association	Sep 9, 2009	7404 : 28524 (26%)	418 48.4%	2 0.2%
OneWest Bank	Aug 28, 2009	24284 : 112846 (22%)	1,226 23.5%	46 0.9%
CCO Mortgage	Jun 17, 2009	1132 : 5304 (21%)	5 3.2%	0 0.0%
Ocwen Financial Corporation	Apr 16, 2009	12884 : 64797 (20%)	5,332 102.7%	125 2.4%
Bank of America subsidiaries (incl. Countrywide)	Apr 17, 2009	206775 : 1046008 (20%)	3,183 3.3%	3,305 3.4%
Litton Loan Servicing	Aug 12, 2009	21113 : 111260 (19%)	959 43.0%	2,777 124.6%
Only GSE servicers		39049 : 272365 (14%)	9,880 52.5%	2,031 10.8%
Bank United	Oct 23, 2009	685 : 5422 (13%)	2 N/A	0 N/A
American Home Mortgage Servicing, Inc	Jul 24, 2009	10918 : 124262 (9%)	232 52.7%	28 6.4%
Carrington Mortgage Services	Apr 27, 2009	1507 : 18937 (8%)	608 104.1%	0 0.0%
Smaller servicers		1414 : 20463 (7%)	457 95.4%	29 6.1%
HomEq Servicing	Aug 5, 2009	1753 : 41817 (4%)	0 N/A	91 N/A
Wachovia subsidiaries	Jul 1, 2009	2437 : 82990 (3%)	344 17.0%	47 2.3%
Franklin Credit Management Corporation	Sep 11, 2009	0 : 9557 (0%)	0 N/A	0 N/A

For our blog, resources and more, see our main bailout page.

AMC appraisals

Anthony Vosilla (Tony's Appraisal Services) — Tue, 02 Feb 2010 22:50:28 -0800

For those of you who have been wondering if the comments made by many real estate appraisers about the AMC's attempting to place orders with appraisers who will take the cheapest fees please check out this link to a job posting for a large national AMC firm.

http://jobs.firstam.com/jobs/205840-Appraisal-Coordinator.aspx

I do not know how long the link will stay active for as I am sure they will realize what they have put out into the publics hands.

Under essential functions there is a section titled fees. They state within this section that part of the job is to find the appraiser with the lowest fee. So much for quality of experience.

Appraisal Issues

Anthony Vosilla (Tony's Appraisal Services) — Wed, 27 Jan 2010 19:11:18 -0800

The following was written by Patrick Egger and reposted here with permission from the author. This article speaks for itself.

I am interested in any comments.

"Closing the gap between sales price and appraised value"

Lately, there have been more than a few "would be sales" that didn't close because of "low

values". Many are blaming the Home Valuation Code of Conduct (HVCC) and its "unintended

consequences" for the gap between contract price and appraised value.

The HVCC added a few twists to the appraisal process, mandating separation of those ordering

appraisals (lenders, mortgage brokers, etc.) from those completing them. It has been a catalyst for

increased reliance on AMCs (Appraisal Management Companies) and disconnection of traditional

lines of communication.

Often, the appraisal process leaves unanswered questions about low valuations. As a result, many

are calling the HVCC a "deal killer". Various housing related groups including Realtors®, home

builders, mortgage brokers and appraisers have called for its modification or repeal.

At question, is the HVCC the culprit or is something else causing or contributing to the value

problems? There's no doubt that the HVCC signaled a shift from business as usual. However, did it

cause a sudden rash of "low‐balls" or are other factors at work?

Failure to communicate

From the real estate agent's perspective, "if I have a buyer that's willing to pay $200,000 for a

property and a seller that's willing to sell it for $200,000, that meets the test of willing buyer and

willing seller and therefore market value".

Seems reasonable, but then again, the secondary market's or lender's definition of market value is

far more complex. Their definition requires "statistical probability", in essence "the value to the

many, not value to the one". From the lender's perspective, "if 100 potential buyers were

considering the subject property, what is "the most probable price" the majority would pay?"

Answering that question is no easy task in a normal market, let alone one that is impacted by

foreclosures, REOs and short‐sales. Today, you have a "good guess at best". More often than not,

it's the misunderstanding of the lender's market value definition that is responsible for the "value

gap".

While the definition recognizes "willing buyer and willing seller", there are many "market value

refinements" that must be factored into the appraiser's opinion. For example, the price of the

comparables can't be affected by "undue stimulus". Essentially, an isolated high sale (due to seller

contributions) or low sale (that was prompted by duress) wouldn't represent market value.

On the other hand, in areas dominated by REOs and short‐sales, those homes can become the

comparable sales and listings the appraiser is required to consider. Why, if they are similar in most

respects to the subject property (physically, condition, etc.), they represent "substitute

alternatives" an informed buyer would or should have considered. Even if only for a short‐term,

those sales affect the market value opinion at that point in time.

Another issue that impacts many transactions is the requirement that comparable sales must be

adjusted for "financing concessions". For example, an agent lists a property at market for

$300,000. After a reasonable time, the seller receives a "full price offer" with the buyer asking for

three points towards costs. The seller counters, agreeing to the points but increasing the price to

$309,000 to cover the cost. The sale closes and records.

In this case the three points "affected the price" when the seller opted to add the points to the

price. When appraisers verify the sale, they'll likely make a negative adjustment (up to the three

points) to the recorded sale price. Sometimes, the concession will not be disclosed in the MLS.

Another agent listing a similar property may use this sale in their CMA, unaware of the concession

and or not adjusting for it.

The new property gets listed for $309,000 and from the start, there could be a $9,000 difference

between the new listing and the appraiser's adjusted comparable. When the value comes in short,

the seller and agent don't understand. Why, because they don't understand the secondary

market's definition of market value and how it is applied to sales data.

It's no secret that prices have been declining in our market. A common issue over the past several

years has been time adjustments. Appraisers are required to make adjustments for declining

prices to the comparables based on the contract date, not the closing date.

If the market had been declining at 2% per month, a comparable that closed one month ago (but

entered contract 3 months ago), would be adjusted negatively for changing market conditions or

time. In this case the sale price would be adjusted downward for 3 months or 6%.

An agent developing a competitive market analysis for a client would need to make a similar

adjustment to the comparable sales used in their CMA to remain consistent with the market and

the appraiser.

Getting on the same page as the appraiser

What are the appraiser's motivations to come in low? They haven't any. In 35 years, I have never

had a lender call me up, ask me what my fee is for an appraisal, and then ask me how much I

would charge to bring it in low.

Lenders don't want low values because they want to make the deal. Appraisers don't want to

come in low because they don't want the complaints and they don't want to deal with the

problems. If anything, appraisers do extra work to make sure they didn't miss any data that would

support the contract price. Being embarrassed by missed sales doesn't sit well with clients and

doesn't score referral points with agents or lenders.

At the same time, appraisers have the obligation to follow the lender's appraisal guidelines and

supplemental appraisal guidelines from the secondary market, making the required adjustments,

even when there are multiple offers or someone willing to pay a higher price.

Market value is not about what someone is willing to pay. It's about what someone should pay, "if

they knew the market (and looked at all the available homes), were in a position to buy, but didn't

have to buy, were motivated, but not under the gun and not enticed by a financial gift from the

seller or anyone involved with the deal".

The definition of market value is based somewhat on theory and somewhat on fact. Much of the

criteria doesn't exist in pure form or isn't abundantly clear to market participants. Still, the

appraiser is required to adjust comparable sales as if those conditions and criteria exist and are

apparent to all participants in the market.

Improving the process?

If the agents' Competitive Market Analysis is based on sales that do not meet the "lender's market

value criteria", there will likely be a difference between the CMA and the subsequent appraisal,

it's that simple.

There are several steps we all can take to "close that gap".

1. Verify the comparables sales you are using for your CMA with the selling agent and make

the adjustments. It's easier to explain this to the seller prior to taking the listing than it is

to deal with the seller after the value comes in short of the contract price.

2. Make sure you adjust for market conditions or time. If neighborhood prices have been

going down 1% per month, adjust your comps from the contract date, not the closing date.

3. After the property is sold, update the listing (even before it closes) so that other agents

and appraisers know what transpired, including concessions and needed repair work.

4. Don't just tell us what sold and when; tell us why it sold for that price. Most buyers get a

home inspection and that will give all a good insight as to the condition of the property.

5. When the appraiser calls, take the call or return it. While some information cannot be

disclosed by the agent, work with the appraiser as much as you can so that they have the

best possible data. When possible, get permission from the seller and or buyer to release

the contract price (prior to closing) to licensed appraisers.

Incorporating a specific informational area or set of fields within the MLS to assist the appraiser

(and other agents) with respect to the listings and comparables to disclose key information would

go a long way to eliminating calls and e‐mails, while at the same time providing all that rely on the

MLS, with much needed information and observations.

Vague listings with limited data, comments or photos contribute to valuation problems. For

example, most listings don't state the property's condition until post closing. Often, the agent's

opinion of condition can vary substantially between agent to agent, since "condition" isn't defined

(and it should be).

Pending and contingent listings are a key to knowing which way the market is moving, yet agents

cannot disclose the contract price. Even so, simply having a field (or comments) that would

indicate the property is in contract above/below/at list price would be helpful when trying to

support market movement, shifting conditions and the need for (or no need for) time

adjustments.

We all drink from the same well, the MLS. Agents control that well. Appraisers rely on the listing

information and the agents to verify details, concessions and motivations. Improving the quality of

the data and verifying the details will improve the appraisal process.

Even though verifying a sale may take some of your time, for a deal you have nothing to do with, it

is likely that the appraiser is working on an appraisal that involves another agent. The outcome

affects the other agent and in turn, the market.

We're all part of the real estate transaction and we all have a vested interest in a healthy housing

market. There are some things we can't fix and some things we can. The more we understand the

appraisal process, the better we can work together to resolve the issues.

If we don't have confirmed sales and pending data to support a higher price or stable market

trends and we have current listings of similar properties at lower prices (many listings are underpriced),

we don't have the information we need to support different findings in the appraisal.

Therein is the problem.

About the author:

Patrick Egger
is a Certified General Appraiser with 35 years in valuation, consulting and real estate studies.

He is a former 2‐term Vice‐Chairman of the Advisory Committee to the Lied Institute for Real Estate Studies at UNLV; teaches continuing education classes on appraisal and housing market analysis, and writes for mortgage and valuation publications.

New FHA Update 12/19/2008

Anthony Vosilla (Tony's Appraisal Services) — Fri, 19 Dec 2008 12:10:23 -0800

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSINGFEDERAL

HOUSING COMMISSIONER

www.hud.gov espanol.hud.gov

December 17, 2008

MORTGAGEE LETTER 2008-39

TO: ALL APPROVED MORTGAGEES

ALL FHA ROSTER APPRAISERS

SUBJECT: Revised Eligibility Requirements for FHA Roster Appraisers

Section 1404 of the Housing and Economic Recovery Act of 2008 (HERA) (Public

Law 110-289, approved July 30, 2008) amended Section 202 of the National Housing Act

to revise qualification standards for Federal Housing Administration (FHA) approved

appraisers. This mortgagee letter sets forth the revised eligibility requirements for

appraisers to qualify for placement and retention on the FHA Appraiser Roster and provides

the timeline for implementation of those requirements.

Section 202(f) of the National Housing Act mandates that all appraisers chosen or

approved to conduct appraisals of properties that will be security for FHA-insured

mortgages must: (1) be "certified" by the State in which the property to be appraised is

located; or by a nationally recognized professional appraisal organization, and (2) have

demonstrated verifiable education in the appraisal requirements established by FHA. (Note

that the term "state" as used throughout this Mortgagee Letter includes U.S. Territories.)

IMPLEMENTATION DATES

Although Section 202(f) of the National Housing Act was made effective upon

enactment, FHA has determined that the loss of available FHA Roster appraisers in certain

locations will impede its ability to support affordable mortgage financing in those areas,

which would contravene the goals of the HOPE for Homeowners Program and hinder use of

other FHA single family programs at a time when use of those programs has increased

significantly. Therefore, in order to implement this change in appraiser eligibility

requirements in a manner that is not disruptive to the FHA mortgage lending process, the

requirement will be phased in as follows:

1. Effective October 1, 2008, FHA stopped accepting applications to the FHA

Appraiser Roster from licensed but uncertified appraisers. All applicants for the

FHA Appraiser Roster must be state certified (certified residential or certified

general) appraisers who meet the minimum certification criteria issued by the

Appraiser Qualifications Board (AQB) of the Appraisal Foundation. The

requirements that applicants not be listed on the General Service Administration

(GSA) Excluded Parties List System (EPLS), HUD's Limited Denial of

Participation List (LDP), or HUD's Credit Alert Interactive Voice Response System

(CAIVRS) remain unchanged.

2. No Later than October 1, 2009, all FHA Appraiser Roster appraisers in all states

and territories must be state certified in order to be eligible to conduct appraisals for

FHA-insured mortgages and remain on the FHA Appraiser Roster.

FHA MORTGAGEE INSTRUCTIONS:

Commencing October 1, 2009
, all FHA-approved lenders must use state certified

appraisers for FHA-insured mortgages. The appraiser assignment field within the Case

Number Assignment screen in FHA Connection must be input with an appraiser who is

listed as either certified residential or certified general on the FHA Roster for the state in

which the property is located. If, on or after October 1, 2009, an FHA-approved lender

enters an appraisal assignment into FHA Connection for a property from a FHA Roster

Appraiser who is licensed but not certified in accordance with this Mortgagee Letter, the

appraisal will be unacceptable for FHA-insured financing and a second appraisal, performed

by a state certified appraiser, must be completed at the lender's expense.

When appraisal assignments (case # assignments) are given to licensed appraisers

prior to October 1, 2009, but the appraisal is not completed until after that date, the appraisal

will be acceptable. However, the lender must assure that the appraisal assignment date is

entered accurately into FHA Connection which must be a date prior to October 1, 2009. In

these cases, the appraisal assignment must be submitted to the lender no later than October

30, 2009.

Appraisals that were completed by licensed appraisers prior to the deadline, which

are transferred to a new lender, may be used as long as the original assignment date occurred

prior to October 1, 2009.

ADDITIONAL INFORMATION - CERTIFICATION AND EDUCATION OF

APPRAISERS

Currently, FHA allows both licensed and certified appraisers to conduct appraisals

for FHA-insured mortgages as long as they qualify under the minimum criteria issued by the

Appraiser Qualifications Board (AQB) of the Appraisal Foundation as authorized under the

provisions of Title XI of the Financial Institutions, Reform, Recovery and Enforcement Act

of 1989 (FIRREA). (See the FHA Appraiser Roster regulations at 24 CFR 200.202.) Under

FIRREA, the AQB establishes the minimum education, experience and examination

requirements for real property appraisers to obtain a state certification. In addition, the AQB

performs a number of ancillary duties related to real property and personal property

appraiser qualifications.

To meet the new eligibility requirement, FHA appraisers must be certified by the

state in which the property to be appraised is located, or by a nationally recognized

professional organization. Under new section 202(f) of the National Housing Act, licensed

appraisers would no longer be authorized to conduct appraisals of properties securing an

FHA-insured mortgage.

Through FIRREA, Congress authorized the Appraisal Foundation to establish

minimum qualification requirements for state certification of appraisers as well as promote

minimum uniform appraisal standards. The Appraisal Foundation serves as the parent

organization to AQB and the Appraisal Standards Board (ASB) to accomplish this mission.

The AQB promulgates and maintains appraiser qualification criteria and the ASB

promulgates and maintains the Uniform Standards of Professional Appraisal Practice

(USPAP). The FHA Appraiser Roster regulations acknowledge this national role by

requiring that appraisers applying for placement on the roster meet the minimum AQB

education, examination, and training criteria. Given these unique responsibilities, FHA has

determined that the Appraisal Foundation is a "nationally recognized professional appraisal

organization" within the meaning of new section 202(f) of the National Housing Act.

Moreover, FHA has determined that appraisers meeting the AQB criteria, as required by the

FHA Appraiser Roster regulations, have "demonstrated verifiable education in the appraisal

requirements established by FHA" under the new law.

FHA recognizes that there may be other national professional organizations that

satisfy the requirements of section 202(f), and that there may be additional means of

demonstrating verifiable education in FHA appraisal requirements. HUD will publish a

notice in the Federal Register inviting the public to comment on nationally recognized

professional appraisal organizations that FHA should consider as meeting the new statutory

requirements.

Appraiser Qualification Criteria

Appraisers seeking to become state certified should review the 2008 Real

Property Appraiser Qualification Criteria at:

http://www.appraisalfoundation.org

Procedures to Obtain Placement on the FHA Appraiser Roster

Applicants who meet all eligibility criteria may apply on-line at:

http://www.hud.gov/appraisers

If you have any questions concerning this Mortgagee Letter, please call 1-800-

CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may access

this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).

Sincerely,

Brian D. Montgomery

Assistant Secretary for Housing-

Federal Housing Commissioner

FHA UPDATE AS OF 10/1/2008

Anthony Vosilla (Tony's Appraisal Services) — Wed, 01 Oct 2008 17:34:21 -0700

AS OF 10/1/2008 ONLY CERTIFIED APPRAISERS ARE ALLOWED TO APPLY TO PERFORM FHA APPRAISALS.....

This page is located on the U.S. Department of Housing and Urban Development's Homes and Communities

Web site at http://www.hud.gov/offices/hsg/sfh/appr/faqs_appraiser.cfm.

FAQs for Appraisers

Effective October 1, 2008, FHA will accept new applications only from state-certified appraisers. No new applications will be accepted from state-licensed appraisers as a result of the Housing and Economic Recovery Act of 2008, signed July 30, 2008. FHA will issue a mortgagee letter in the next couple of weeks that will address additional requirements mandated by the new law.

How do I know if an appraiser is on the FHA Roster?

You can check the FHA Appraiser Roster for his/her status to make sure they are on the approved list. At

https://entp.hud.gov/idapp/html/apprlook.cfm

HVCC Update 9/25/2008

Anthony Vosilla (Tony's Appraisal Services) — Fri, 26 Sep 2008 19:41:21 -0700

As of the September 25, 2008 the HVCC has been put into a holding pattern,. Below is the statement from the Director of the FHFI. It is suggested by many high ranking officials in various related fields that both appraisers and brokers/lenders still prepare for the implementation of this law as it will be put into effect at a point past 1/1/2009.

Statement of

The Honorable James B. Lockhart III, Director

Federal Housing Finance Agency

Before the House Committee on

Financial Services

on the Conservatorship of

Fannie Mae and Freddie Mac

September 25, 2008

Chairman Frank, Ranking Minority Member Bachus, and members of the Committee, thank you for the opportunity to testify on the Federal Housing Finance Agency's (FHFA) decision to place Fannie Mae and Freddie Mac into conservatorship and the plans of the conservator for the ongoing operations of these companies. But before doing so, I would like to thank this Committee in for its efforts to pass the government sponsored enterprise (GSE) reform legislation, the Housing and Economic Recovery Act of 2008 (HERA).

Fannie Mae and Freddie Mac share the critical mission of providing stability, liquidity, and affordability to the housing market. Between them, these Enterprises have $5.3 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Their market share of all new mortgages was 76 percent during the first half of this year. During the turmoil that started last year, they have played a very important role in providing liquidity to the conforming mortgage market. That required capital to support a careful and delicate balance of mission with safety and soundness. A key component of this balance has been their ability to raise and maintain capital. Because of recent market conditions, that balance was upset. Unfortunately, as house prices, earnings and capital have continued to deteriorate, their ability to fulfill their mission has deteriorated. In particular, the capacity to raise capital to absorb further losses without Treasury Department support vanished. That left both Enterprises unable to provide counter-cyclical market support. Worse, it threatened to further damage the mortgage and housing markets if they had to sell assets.

In retrospect and despite OFHEO's surplus capital requirements, the caps on the growth of their portfolios, and repeated warnings about credit risk, the credit profile at both Enterprises followed the market down in 2006 and 2007. They bought or guaranteed many more low documentation, low verification and non-standard ARM mortgages than they had in the past. For example, for the first half of 2007, roughly one-third of the Enterprises' new business was composed of Alt-A (less than standard documentation), interest-only, or Option ARM products, and mortgages with layered (multiple) risk characteristics versus 14 percent in 2005. For Fannie Mae, roughly 40 percent of new business in the first half of 2007 was in Alt-A and interest-only products versus 26 percent in 2005. The quality of their holdings of private-label mortgage securities (PLS) issued by others also deteriorated. The portfolio caps restrained the size of their PLS books, but maturing subprime and Alt-A PLS were replaced by PLS from the much riskier 2006 and 2007 origination years. As house prices turned down, delinquencies, foreclosures, losses on real-estate owned and reserves against future losses soared.

Over the last several years OFHEO, now FHFA, worked hard to encourage the Enterprises to rectify their accounting, internal controls systems and risk management issues. Both Enterprises and their dedicated managers and employees made good progress in many areas, but market 2

conditions overwhelmed that progress. Their antiquated capital structures even with the OFHEO additional requirement were not adequate for this market.

The result was that the Enterprises were unable to provide needed stability to the market. They also found themselves unable to meet their affordable housing mission.

Rather than letting these conditions worsen and put the markets in further jeopardy, FHFA decided to take action. The goal of these dual conservatorships is to help restore confidence in Fannie Mae and Freddie Mac, enhance their capacity to fulfill their mission, reduce the systemic risk and make more mortgages available at a lower cost for the American people.

The Determination to Appoint a Conservator

FHFA based its determination on five key areas, which worsened significantly over the past several months:

1. Accelerating safety and soundness weaknesses, especially with regard to credit risk, earnings outlook, and capitalization;

2. Continued and substantial deterioration in equity, debt, and MBS market conditions;

3. The current and projected financial performance and condition of each company as reflected in its second quarter financial reports and our ongoing examinations;

4. The inability of the companies to raise capital or to issue debt according to normal practices and prices; and

5. The critical importance of each company in supporting the country's residential mortgage market.

It became apparent during on intense supervisory review, beginning in July, that market conditions were deteriorating more quickly than the companies had anticipated. In anticipation of the late-July enactment of the Housing and Economic Recovery Act of 2008 (HERA), we supplemented our own examination activity with consultations with senior mortgage credit examiners from the Federal Reserve and the Office of the Comptroller of the Currency. These examiners corroborated our own analysis of the deteriorating credit environment and its threat to capital.

During the last part of July and in August, FHFA was completing its confidential semi-annual examination ratings. FHFA's rating system is called GSE Enterprise Risk or G-Seer. It stands for Governance, Solvency, Earnings and Enterprise Risk which includes credit, market and operational risk. There were significant and critical weaknesses across the board.

The Enterprises themselves disclosed in their second quarter filing how the rapidly changing credit environment in July was very negatively affecting their outlook and ability to raise capital. Freddie Mac reported losses of $4.7 billion over the last year and Fannie Mae reported losses of $9.7 billion.

The internal supervisory reviews and market evidence led us to conclude that the companies each presented critical safety and soundness concerns pertaining to credit risk and to continued deterioration in the market environment. Importantly, key developments in July and August demonstrated market recognition of these heightened credit concerns and the effect of the 3

deteriorating market environment on the Enterprises. New equity capital in any meaningful size became unavailable, and yields on Enterprise debt and MBS rose relative to other benchmarks. These developments convinced us that the time to act was now.

During the July and August period, there were a wide variety of published reports speculating on the Enterprises' solvency, the need to raise more capital, their accounting practices, their ability to continue to borrow and even government bailouts. The rating agencies continued to dramatically lower all ratings except the AAA senior debt ratings. Their stock prices fell rapidly and their borrowing costs increased. Conditions in the mortgage market continued to deteriorate with much higher delinquencies and foreclosures. Housing prices continued to fall.

Central banks ceased buying and began selling Enterprise securities. Relatively small sales triggered large price moves. Despite financing 30-year mortgages, the Enterprises had to rely on short-term discount notes, with only a few fixed-rate debt securities issued, none with maturity greater than three years. Yet they had $89 billion in long-term debt maturing in the second half of 2008.

After substantial effort and communication with market participants, each company reported to FHFA and to Treasury that it was unable to access capital markets to bolster its capital position without Treasury financing. FHFA's and Treasury's own discussions with investment bankers and investors corroborated this conclusion. In the absence of access to new capital, the only alternative left to the firms was to cease new business and shed assets in a weak market. That would have been disastrous for the mortgage markets as mortgage rates would have continued to move higher and, in turn, disastrous for the Enterprises as the prices of their securities would have fallen and credit losses would have increased.

Therefore, in order to restore the balance between safety and soundness and mission, FHFA placed Fannie Mae and Freddie Mac into conservatorship. That is a statutory process designed to stabilize a troubled institution with the objective of maintaining normal business operations and restoring its safety and soundness. It was the most prudent regulatory action to take.

FHFA did not undertake this action lightly. We consulted with the Chairman of the Board of Governors of the Federal Reserve System, Ben Bernanke, who was made a consultant to FHFA under the new legislation. We also consulted with the Secretary of the Treasury, not only as an FHFA Oversight Board member, but also in line with his ability under the law to provide financing to the GSEs. They both concurred with me that conservatorship needed to be undertaken.

FHFA will act as the conservator of the Enterprises until they are stabilized. The Treasury's financial commitments, authorized by the new law, were critical to creating a workable conservatorship structure.

Let me now turn to the conservatorships. First signs are that the conservatorships are positive. A lack of confidence had resulted in continued widening of the spread between yields of their MBS and yields of Treasury securities, which meant that virtually none of the large drop in Treasury interest rates over the past year had been passed on to the mortgage markets. On top of that, Freddie Mac and Fannie Mae, in order to try to build capital, may have raised prices and tightened credit standards beyond what was necessary for sound underwriting. I am pleased to 4

say that the Enterprises' funding costs and the spreads on MBS have declined. As denoted in the attached chart, yields on Freddie Mac guaranteed mortgage securities have declined relative to Treasury debt yields by a third of a percentage point since the Friday before the conservatorship. This lower cost has been passed on to homebuyers, with 30-year fixed-rate mortgage rates below 6 percent for the first time since January.

On the first day, businesses opened as normal, but with stronger backing for the holders of MBS, senior debt and subordinated debt. Consistent with the terms of the Treasury's financial assistance, over the next 15 months, we will allow each company to increase its portfolio, up to $850 billion, before requiring gradual declines in the portfolios of 10 percent per year. The Enterprises will also continue to grow their guarantee MBS books.

As the conservator, FHFA assumed the power of the board and management. Highly qualified, new Chief Executive Officers have been appointed. The new CEOs are Herb Allison of Fannie Mae and David Moffett of Freddie Mac. Herb has served as President and Chief Operating Officer of Merrill Lynch and for the last six years Chairman and CEO of TIAA-CREF. David had previously served as the Vice Chairman and CFO of US Bancorp. I appreciate the willingness of these two men to take on these tough jobs during these challenging times. In addition, their compensation will be significantly lower than the outgoing CEOs.

Although it is not necessary in a conservatorship, new boards are being formed as a matter of good governance. New non-executive Chairmen were announced last week. Philip Laskawy, former Chairman and CEO of Ernst and Young, has agreed to be the Chairman of Fannie Mae. John Koskinen, former President and CEO of Palmieri Company, a corporate turnaround management company, and former Deputy Director for Management at OMB, has agreed to be the Chairman of Freddie Mac.

As part of the conservatorship, the CEOs of Fannie Mae and Freddie Mac were asked to leave after a transition period. Under the new legislation's "golden parachute" language, and existing regulations, FHFA directed that severance payments not be made to the CEOs. As appropriate for senior executive officers, their pay over their years at the Enterprises was also at risk, as a major portion of their bonuses were in stock. Their actual pay based on today's stock price was about a third of what was reported in the press at the time.

FHFA worked with the new CEOs to establish employee retention programs. They agree with me that it is very important to work with the current management teams and employees to encourage them to stay and to continue to make important improvements to the Enterprises.

All political activities -- including all lobbying -- were halted immediately. We will review the charitable activities to ensure that these reflect their mission and their conservatorship status.

In order to conserve over $2 billion in annual capital, the common stock and preferred stock dividends were eliminated. I recognize that the loss of dividend income may have an adverse effect on some investors, including depository institutions. Before taking our action, we consulted with the bank regulators and I understand that they are working with individual institutions under their jurisdiction that may have capital invested in Enterprise preferred stock. As you know, any preferred stock is part of the issuing firm's equity account and is issued to 5

absorb losses ahead of debt holders. Subordinated debt interest and principal payments will continue to be made, even if the capital test is breached.

Finally and very importantly, the liquidity, MBS investment, and senior preferred stock facilities with the U.S. Treasury, are all in place. These facilities will provide critically needed support to Freddie Mac and Fannie Mae to fulfill their mission over the long term, while giving a potential upside for the taxpayer. The key facility is the senior preferred stock agreement, which ensures that each Enterprise maintains a positive net worth. This measure adds to market stability by providing additional security to GSE debt holders - senior and subordinated - and adds to mortgage affordability by providing additional confidence to investors in GSE MBS. The senior preferred facility supports all past and future debt and MBS issuances, until the terms of the facility are completely satisfied. In light of this facility the existing regulatory capital requirements will not be binding during the conservatorship. As SEC registrants, the Enterprises will continue to report their financial results quarterly.

The second facility is a secured credit facility that is not only for Fannie Mae and Freddie Mac, but also for the 12 Federal Home Loan Banks that FHFA also regulates. The Federal Home Loan Banks have performed remarkably well over the last year as they have a different business model than Fannie Mae and Freddie Mac and a different capital structure that grows as their lending activity grows. They are jointly and severally liable for the Bank System's debt obligations and all but one of the 12 are profitable. Therefore, it is very unlikely that they will use the facility.

Another element of Treasury's financing plan is to hire investment managers to purchase Fannie Mae and Freddie Mac MBS. The goal is to provide additional liquidity to the MBS and lower the costs of mortgages. FHFA helped originate this approach. As such, we are pleased that Treasury has decided to implement these purchases quickly and on a larger scale than originally planned.

We also support other recent actions and proposals of the Bush Administration, Secretary Paulson and Chairman Bernanke designed to take a comprehensive approach to relieving the stress on our financial institutions and markets. Among these actions are:

Requesting authority from Congress to purchase troubled mortgage assets from financial institutions; and
Protecting investors in money market funds.

These actions are designed to get at the root cause of financial market turmoil which is the liquidity in the nation's mortgage market.

Let me now bring you up-to-date on our actions since September 7. The new CEOs were introduced to Enterprise senior management at separate meetings at FHFA offices on Sunday, September 7.

To reassure financial counterparties, later that day FHFA posted a statement on its website emphasizing that all existing contracts with the Enterprises remain in effect, that the Enterprises have the authority to enter into new contracts, and that the enforceability of such new contracts is not affected by the appointment of the conservator. I also sent a statement to employees at both 6

Enterprises explaining the conservatorships, and that the purposes of the action are to help restore confidence in the Enterprises, enhance their ability to fulfill their mission, and mitigate systemic risk.

Since the Enterprises opened for business on September 8, FHFA personnel have been continuously on site, both at the Enterprises' headquarters and locations of other key operations to ensure a smooth transition and continued business operations. FHFA personnel include examiners, attorneys and other experts to provide for timely communications between the GSE, the conservator, and the examination team. As a conservatorship team, the FHFA representatives are there to reassure Enterprise employees about the continued business operations objective of the conservatorship, to support the needs of the new CEOs as they become familiar with their new organizations, and to act as a conduit and communicate any questions and issues that need resolution back to me.

FHFA will continue to work expeditiously on the many regulations needed to implement the new law. Some of the key regulations will be minimum capital standards, prudential safety and soundness standards and portfolio limits. Importantly, the new legislation adds affordable housing and mission enforcement to the responsibilities of the safety and soundness regulator.

While FHFA has had these responsibilities for only a matter of weeks, we are placing a high priority on them. A key reason for moving quickly to conservatorship was that the companies' abilities to serve their mission had been impaired.

As the companies operate in conservatorship, I have already instructed each new CEO to examine the underwriting standards and pricing. They have begun to do so, and I expect any changes to reflect both safe and sound business strategy and attentiveness to the Enterprise's mission.

Fannie Mae and Freddie Mac are important to the secondary market for multifamily loans, and multifamily lending is critical to the affordable housing mission of the Enterprises. I am determined to ensure that, in conservatorship, both Enterprises remain dedicated to, and actively involved in, multifamily lending. I released a statement to this effect so that market participants may have assurance that the Enterprises will continue to be a source of underwriting and financing for multifamily loans. That statement acknowledged the importance of all aspects of the Enterprises' multifamily businesses - including the LIHTC (low-income housing tax credit) area and liquidity facilities for remarketed mortgage revenue bonds.

Over the last year, we have actively challenged Fannie Mae and Freddie Mac to be more creative on foreclosure prevention. They have responded, but more has to be done. We have worked with them to publicly report their loan modification activities, but that work was slowed by the many other actions we were undertaking. Yesterday we did publish our first quarterly report on their foreclosure prevention activities. We will publish a second quarter update next week.

Going forward, we will work with the CEOs to modify business practices, such as the lengthy delay before pulling delinquent loans from securitized pools. Practices such as this were motivated by capital concerns, but undermined efforts to help distressed borrowers. If we are to address the problem of mortgage delinquencies, a systematic approach to loan modification is essential. Well before last week's actions, we had already asked the Enterprises to facilitate the 7

loan modification program the FDIC has undertaken with IndyMac Federal. I expect the ongoing work on loan modifications being done there, and with other seller servicers, to continue to be a high priority for the conservatorships, both as a matter of good business and as a matter of supporting the Enterprises' mission.

The new legislation established a Housing Trust Fund to increase and preserve the supply of rental housing for extremely low and very low income families, including homeless families, and to increase homeownership for extremely low and very low income families. I recognize the importance of the Housing Trust Fund to many members of Congress. Under the law, the principal duty of FHFA involves the approval of funds paid by each Enterprise equal to 4.2 basis points for each dollar of unpaid principal balance of its total new business purchases. In the near-term, these funds will be used to fund a key component of the new law, the FHA HOPE for Homeowners Program, which will be funded by Treasury if the Enterprises do not. Enterprise funds are to be used to reimburse Treasury for the cost of the Hope Bonds. My understanding is that Treasury has already issued $29.5 million in Hope Bonds to fund the program's start-up costs.

Congress also required that the FHFA Director consider circumstances in which such allocations would be suspended. The Director is required to temporarily suspend such allocations upon a finding that they are contributing, or would contribute, to the financial instability of the Enterprise, are causing, or would cause, the Enterprise to be classified as undercapitalized, or are preventing, or would prevent, an Enterprise from successfully completing a capital restoration plan described in the legislation. Accordingly, I intend to make that determination only after a careful and thorough review of existing conditions including their third quarter results. Treasury has provided assurances that a temporary suspension of Enterprise contributions would not impede issuance of Hope Bonds, so the Hope for Homeowners program will not be harmed, even if Enterprises contributions are temporarily suspended

Enforcement of the affordable housing goals established for the Enterprises by the Congress, once HUD's responsibility, is now up to FHFA. While ensuring liquidity in the mortgage marketplace has necessarily been a primary focus in recent weeks and months, ensuring that low and moderate income persons and underserved areas have ready access to affordable mortgage loans remains a critical responsibility of the Enterprises. In the near-term, the Enterprises are charged with meeting the very ambitious goals set by HUD back in 2004, a year in which the mortgage marketplace looked far different than it does today. In 2007, they missed two subgoals. Based on our discussions with the Enterprises, the miss will be larger in 2008.

The market turmoil of this year resulted in a tightening of underwriting criteria for the purchase of new, unseasoned loans used by individual lenders-the entities that actually originate loans sold to the GSEs-and private mortgage insurers, thereby reducing the availability of traditionally goal rich high loan-to-value home purchase loans. In addition, the collapse of the private label, secondary mortgage market further reduced the share of home purchase loans qualifying for goals. Finally, the rise of FHA as a market force means fewer high-LTV, goal-rich borrowers for Fannie Mae and Freddie Mac. Even if some or all of these goals are found to be unattainable, I will expect each Enterprise to develop and implement ambitious plans to support the borrowers and markets targeted by the goals.

We have begun to meet with affordable housing advocates, seeking their perspective on implementation of the new goals structure. 8

Finally, I am pleased to report that FHFA expects to have a regulation in place by October 1 to implement Section 1218 of HERA, which provides temporary authority for the Federal Home Loan Banks to use a portion of the subsidy money in Affordable Housing Program to refinance mortgages for families at or below 80 percent of area median income. In broad terms, we intend to issue a regulation implementing this program so that it supports the refinance program in HERA's Hope for Homeowners program by permitting AHP funding of additional principal write-downs or payment of closing costs. We've discussed this initiative with the FHA, which is very supportive of the prospect of added support on this initiative.

Conclusion

The decision to appoint a conservator for each Enterprise was a tough, but necessary one. They can now play their correct role of being part of the solution and not part of the problem. Unfortunately, all the good and hard work put in by the FHFA and the Enterprises was not sufficient to offset the consequences of the antiquated capital requirements and the turmoil in housing markets. Conservatorship will give the Enterprises time to restore the balances between safety and soundness and their missions. I want to thank the FHFA employees for their work during this intense regulatory process. They represent the best in public service.

I also recognize that many employees at each company have been working extremely hard through years of remediation and through the past year of market volatility. Employees have lost personal savings as a result of the plummet in their company's stock price and they have been working, and continue to work, long hours in the face of uncertainty. To them, I say thank you and pledge that, as conservator, we share the common goal of stabilizing your company while ensuring it continues to serve its public purpose of providing stability, liquidity, and affordability to the mortgage market.

Working together we can finish the job of restoring confidence in the Enterprises and with the new legislation you provided, build a stronger and safer future for the mortgage markets, homeowners and renters in America.

HVCC Information

Anthony Vosilla (Tony's Appraisal Services) — Sun, 07 Sep 2008 14:09:21 -0700

Important Information about Home Valuation Code of Conduct
March 3, 2008 Advisory E-mail Message to Seller/Servicers

On March 3, Freddie Mac announced that we would join with the New York State Attorney General and our regulator, the Office of Federal Housing Enterprise Oversight (OFHEO), to implement the Home Valuation Code of Conduct. We share the New York State Attorney General's goal of enhancing the independence of appraisers to protect the integrity of the appraisal process. To accomplish this on an industry-wide level, with the guidance and at the direction of our regulator, OFHEO, we joined with OFHEO and the New York Attorney General in this agreement to implement and require Freddie Mac Seller/Servicers to adopt the Home Valuation Code of Conduct.

In addition, we will be working with these and other industry participants, including Fannie Mae, to establish and fund the Independent Valuation Protection Institute, an independent entity that will be established to develop, implement, monitor and study the integrity of home valuation processes.

The agreement signed on March 3 includes terms that essentially require, among other things, that the appraisal process be independent from the lender in all respects. As a result:

A lender will no longer be allowed to sell Freddie Mac a loan if the appraisal was done by an in-house appraiser, a subsidiary or affiliate of the lender (except under certain conditions as noted below), ordered by a mortgage broker, or an entity that offers any other services other than appraisals.
Beginning January 1, 2009, Freddie Mac will require that lenders represent and warrant that appraisals prepared in connection with mortgages originated on and after January 1, 2009 conform to the Code, and that the appraisal report was obtained in a manner consistent with the Code.
After January 1, 2009 we will no longer purchase mortgages from originators that do not agree to adopt the Code with respect to loans that are delivered to Freddie Mac.

It is important that you review this document in full, as it includes additional details and responsibilities for lenders, including:

Prohibiting lenders and third parties from influencing the development or result of an appraisal.
Prohibiting the sale of mortgages to Freddie Mac where there is use of appraisal reports in underwriting prepared by the lender, an affiliate of the lender, a parent company or subsidiary company of the lender, an entity that is owned in whole or in part by the lender, a real estate settlement services provider or an entity owned in whole or part by a settlement services provider. Lenders may use in-house staff appraisers to order appraisals, conduct pre- and post-funding appraisal reviews and quality control, develop, deploy or use internal automated valuation models, and prepare appraisals for non-origination transactions, such as loan workouts. Lenders cannot use any appraisal report obtained through their own or affiliated appraisal management company, except where the lender:
- Has an ownership interest of 20% or less
- Has no involvement in the day-to-day operations of the appraisal management company, and the company operates independently
- Has no role in the selection of individual appraisers or panel of appraisers used by the appraisal management company
Requiring lenders to ensure that borrowers are provided a free copy of the appraisal report immediately upon completion, and no less than three days before the borrower's closing. Borrowers may waive this three-day requirement, and lenders may require borrowers to reimburse them for the cost of the appraisal.
Requiring lenders or a third-party specifically authorized by the lender (including appraisal management companies and correspondent lenders) to be responsible for selecting, retaining and providing for payment of all compensation to the appraiser. Lenders will be prohibited from accepting appraisal reports completed by an appraiser selected, retained or compensated by any other third party, including mortgage brokers and real estate agents.
Requiring absolute lines of independence within a lender's organization for the selection and management of appraisers for appraisal assignments and communication with the appraiser and:
- Requiring employees of appraisal management companies tasked with selecting appraisers to be appropriately trained and qualified in the area of real estate and appraisals*
- Requiring lenders to clearly demonstrate safeguards to isolate collateral evaluation from influencing loan production processes when absolute lines of independence cannot be achieved as a result of the lender's small size or limited staff
Requiring lenders to establish and distribute telephone hotlines and email addresses to receive any complaints from appraisers, individuals or any other entities related to improperly influencing appraisers or the appraisal process, and requiring a follow-up investigation of those hotline calls. This includes requiring lenders to notify borrowers of the telephone and email addresses as part of the cover letter of their appraisal. The hotline and email address shall be attended only by a member of the Office of the General Counsel, Chief Compliance Officer or other independent officer.
Requiring lenders to perform a quality control review of a randomly selected 10 percent (or other statistically significant percentage) of the appraisals, valuations or evaluations that are used by the lender, including the results of automated valuation models, brokers price opinions or "desktop" evaluations. Lenders must report the results of quality control testing to the Independent Valuation Protection Institute.
Requiring lenders to report illegal or unethical conduct by appraisers to the Independent Valuation Institute and state certifying and licensing agency.
Requiring lenders to warrant that the appraisal report was obtained in accordance with the Code of Conduct.

The agreement signed by Freddie Mac allows for the initiation of a comment period during which we will collect and report back to OFHEO information and comments submitted by Freddie Mac Seller/Servicers. We will notify you shortly on the specific details of this comment period, and how and when you should submit information to Freddie Mac.

We recognize that implementing the Home Valuation Code of Conduct will require significant changes in appraisal practices and operational requirements for Freddie Mac Seller/Servicers, and may require a change in some lenders' business models. We have not yet determined the operational, systems and applicable Single-Family Seller/Servicer Guide changes that will be necessary to implement the Code, but will work with you to do so as efficiently and with as little disruption as possible. We will communicate specific changes, and add greater clarity where needed, when available. In the meantime, should you have immediate questions, please contact your Freddie Mac Account Manager or representative.

View the current version of the Home Valuation Code of Conduct agreed to on March 3 [PDF 23K].

*In our March 3 Single-Family Advisory email to customers, we incorrectly stated that employees tasked with selecting appraisers were required to be licensed and certified appraisers.

These rules are meant for appraisals that are performed for lending purposes only. They have no effect on private use appraisals.

Also as of this date (9/7/2008) these rules have not yet been adopted.

Field and Desktop Appraisal Review Services

Anthony Vosilla (Tony's Appraisal Services) — Mon, 01 Sep 2008 20:50:51 -0700

Field and Desktop Appraisal Review Services

Have you just received a copy of your appraisal and you'd like to have a professional "double-check" it for accuracy or do you need a second opinion without the expense and delay of waiting for a whole new appraisal?

Appraisal Field Reviews: Well check your appraisal for accuracy and provide exterior "field inspections" of the subject and comparable properties for maximum appraisal certainty. Perfect for any situation demanding a second opinion on value.
Appraisal Desk Reviews: In a hurry and just want to "double-check" the facts? Well use our extensive Internet research capabilities and office files to deliver reviews with the highest degree of precision in the industry.

If you feel that you have been the victim of a faulty appraisal or a lending appraisal that was ""pushed for value"" getting a review performed is an important step. Many unscrupulous lenders and mortgage brokers have what is called in the industry, their go to guy to get inflated appraisals performed. The higher your appraisal comes in, the more commission they can make. This practice may seem like they are doing you a favor at the time, however a good percentage of these pushed value loans end up in default and foreclosure destroying your financial credit. A review of a pushed appraisal can help you take legal action against those who have caused this type of damage.

This does not mean that all brokers do this, however you should be aware of this type of practice.

Appraiser Ethics

Anthony Vosilla (Tony's Appraisal Services) — Mon, 01 Sep 2008 20:47:45 -0700

Appraiser Ethics

Appraisal is a profession, and appraisers are professionals. In our field as with any profession we are bound by ethical considerations.

An appraiser is required to function as an independent, disinterested third party who cannot act as a champion for any party of an appraisal. This means that the valuation services performed comes from an unbiased person who has no interest in the effects of the outcome of the report.

An appraiser's primary responsibility is to his or her client. Normally, in the lending practice, the appraiser's client is the lender ordering the appraisal to decide whether to make the mortgage loan. Appraisers have certain duties of confidentiality to their clients. As a property owner, if you want a copy of an appraisal report, you normally have to request it through your lender. The appraiser also has obligations of confidentiality, numerical accuracy depending on the assignment parameters, an obligation to attain and maintain a certain level of competency and education, and must generally conduct him or herself as a professional. Here, we take these ethical responsibilities very seriously.

Appraisers MAY also have fiduciary obligations to third parties, such as property owners, both buyers and sellers, or others. Those third parties normally are spelled out in the appraisal assignment itself. An appraiser's fiduciary duty is limited to those third parties who the appraiser knows, based on the scope of work or other written parameters of the assignment such as the disclosure, in the report, of the client, intended user and the intended use of the report.

We only perform to the highest ethical standards possible. We don't do assignments on contingency fees. That is, we don't agree to do an appraisal report and get paid only if the loan closes. We don't do assignments on percentage fees. That is probably one of the biggest appraisal profession's biggest no-no, because it would tend to make appraisers inflate the value of the appraised properties to increase their paycheck. State law or professional societies to which an appraiser belongs may define other unethical practices.

The Uniform Standards of Professional Appraisal Practice (USPAP) also defines as unethical the acceptance of an assignment that is contingent on "the reporting of a pre-determined result (e.g., opinion of value)," "a direction in assignment results that favors the cause of the client," "the amount of a value opinion," and other things. This means you can be assured we are working to objectively determine the property value.

You can be assured of 100 percent ethical and professional service!

Tax Grievance (Appeal) Appraisals

Anthony Vosilla (Tony's Appraisal Services) — Mon, 01 Sep 2008 19:42:32 -0700

Tax Grievance (Appeal) Appraisals

Property Tax Grievance Guidelines vary widely by State and sometimes even by municipalities within a state. A successful real estate tax appeal in most areas of the country is based upon first establishing the market value of your property. In order to reduce your property taxes you must prove that the value of your property is less than the valuation assigned by your assessing district (according to state law in most states, the assessment is deemed to be correct, and the burden of proof, falls on the petitioner-homeowner to prove otherwise). A recent bonafide arms length sale of the subject property is the best evidence. If the property was not recently purchased, or the purchase was not at arms length (as in an inter-family sale, foreclosure or other sale made under conditions of distress), an appraisal by a state certified appraiser is the next best type of evidence, which is typically used to prove value of your home throughout the process.

FROM THE NEW YORK STATE OFFICE OF REAL PROPERTY SERVICES;

http://www.orps.state.ny.us/

The Mission of the Office of Real Property Services is: "To lead the State's efforts to support local governments in their pursuit of real property tax equity." Appeals must be postmarked no later than 30 days after final assessment roll is filed... Dates vary see: Filing Dates. Initial grievance must be filed with the board of assessment review, upon notice of board of assessment review's determination an appeal can be filed with the small claim assessment review section of the NYS Supreme court. >A successful appeal is based upon first establishing the Market Value of your property. In order to reduce your property taxes you must prove that the value of your property is less than the valuation assigned by your assessing district (according to New York State Law, the Assessment is deemed to be correct, and the burden of proof, falls on the petitioner-homeowner to prove otherwise). A recent bonafide arms length sale of the subject property is the best evidence. If the property was not recently purchased, or the purchase was not at arms length (as in an inter-family sale, foreclosure or other sale made under conditions of distress), An Appraisal by a New York State Certified Appraiser is the next best type of evidence, which is typically used to prove value of your home throughout the process. To determine if you are over assessed, you can multiply the estimated market value of your property by the residential assessment ratio (RAR-see listings above) that has been established for your assessing district. If the result is lower than your property's current assessed value, you may reasonably expect that your assessment be reduced to that amount with proper proof and timely filing in accordance with the guidelines set forth by the New York State Office Of Real Property Services.

PMI Removal

Anthony Vosilla (Tony's Appraisal Services) — Mon, 01 Sep 2008 19:40:23 -0700

Also known as Private Mortgage Insurance Removal

PMI REMOVAL;

A popular money saver for homeowners in the last few years is to get the PMI removed from their mortgage loan, thus saving them money on their monthly payments. PMI stands for "Private Mortgage Insurance". Once your mortgage loan amount is down below 80% of the value of your home, in most cases you can apply to the lender to have the PMI removed from your loan, which will make your monthly payments go down. We are experienced in helping folks just like you rid themselves of unneeded and unwanted PMI insurance.

Addition links for information of PMI Removal;

Copy and paste the below links

http://www.frbsf.org/publications/consumer/pmi.html

http://www.privatemi.com/loanoptions/benefits/law.cfm

Appraisals for Marital Dissolution

Anthony Vosilla (Tony's Appraisal Services) — Mon, 01 Sep 2008 19:36:42 -0700

Marital Dissolution or Divorce Appraisals

Finalizing a divorce involves many decisions, including "Who gets the house"? There are generally two options regarding the house - it can be sold and the proceeds divided, or one party can "buy out" the other. In either case, one or both parties should order an appraisal of the residence. Divorce appraisals require a well-supported, professional appraisal that is defensible in court. When you order an appraisal from us, you are assured that you will get the best in professional service, courtesy, and the highest quality appraisal. We also know how to handle the sensitive needs of a divorce situation.

Attorneys and Accountants rely on our values when calculating real property values for estates, divorces, or other disputes requiring a value being placed on real property. We understand their needs and are used to dealing with all parties involved. We provide appraisal reports that meet the requirements of the courts and various agencies.

As an attorney handling a divorce, your needs oftentimes include an appraisal to establish fair market value for the residential real estate involved. Often the divorce date differs from the date you order the appraisal. We are familiar with the procedures and requirements necessary to perform a retroactive appraisal with an effective date and Fair Market Value estimate matching the date of divorce. The ethics provision within the Uniform Standards of Professional Appraisal Practice (USPAP) binds us with confidentiality, ensuring the fullest degree of discretion.

Sales Contracts

Anthony Vosilla (Tony's Appraisal Services) — Wed, 20 Aug 2008 00:01:21 -0700

Analyzing the Sales Contract

Within all lending appraisals performed for purchases the appraiser is required to "analyze" the sales contract. This means that the appraiser needs a signed, by both seller and buyer, and dated copy of the contract.

If this copy is not supplied the appraiser must check the DID NOT box and explain why it was not analyzed. The report ends up being finished and sent into the client.

The biggest issue with this is that down the road, the client suddenly comes running with a copy and needs the report to reflect that the contract was analyzed. This creates a problem. The report originally states that as of THE EFFECTIVE DATE OF THE APPRAISAL the contract was not analyzed on page one. It cannot be changed as changing it would be considered to be a violation of USPAP. USPAP states that an appraisal must not be misleading.

This truly becomes an issue when a copy of the contract is signed and dated after the effective date of the appraisal and the client still needs it to be analyzed as part of the original report. Basically asking the appraiser to state that a contract was in existence before it was executed.

In order to avoid this type of situation all selling brokers and mortgage brokers should do their best to get the appraiser a copy of the contract either at the time of ordering the appraisal or at the time of property observation. This will save all parties involved time and remove a stumbling block from the process.

Shelter Island

Anthony Vosilla (Tony's Appraisal Services) — Mon, 18 Aug 2008 12:50:26 -0700

Shelter Island

The Township of Shelter Island is geographically located in eastern Suffolk County between Long Island's north and south fork. The island comprises 12.1 square miles (around 8,000 acres) of land area including nearly one third of vacant land owned by The Nature Conservatory, which remains in its natural state.

The area has a year-round population of approximately 2,300 persons. The population swells in the summer months, however, since this is a summer resort area. As such, many homes are utilized as secondary residences. Shelter Island is accessed from mainland via private boat or either of the two drive-on ferry services, one at the north side of the island (from Greenport on the north fork of Long Island) and one at the south side (via North Haven on the south fork).

Shelter Island has one incorporated Village and five hamlets.

Homes (approximately 1,000 dwellings) are single-family styles ranging from smaller 1-bedroom cottages to 6,000+ square feet homes situated on multiple acre parcels. The older homes were constructed in the 1700's and 1800's and include traditional style Victorians, ranches, and cape cods, whereas newer homes are a mix of post-modern, contemporary, and traditional styles. As such, the area offers homes of diverse age and style. Waterfront and water view properties tend to command a premium in this area.

The combination of limited sales in an area of 1,000 dwellings (more or less) on a 12 square mile island surrounded by water causes appraisals to be complex. Using an experienced appraiser would be considered to be a wise decision to avoid issues down the road.

We have performed appraisals and bank reviews on both waterfront properties and estate type properties on this unique island.

Southampton

Anthony Vosilla (Tony's Appraisal Services) — Mon, 18 Aug 2008 12:48:28 -0700

Southampton

The Township of Southampton is located approximately eighty miles from New York City on the South Fork of Long Island. The Town encompasses an area of 140.2 square miles or 89,728 acres. Southampton is the largest and most populous of the five East End Towns of Suffolk County.

There are seven incorporated villages within Southampton's boundaries, each with its own village administration: Sag Harbor, North Haven, Quogue, Westhampton Beach, West Hampton Dunes, Southampton and Sagaponack.

Southampton is home to nearly 55,210 persons on a year-round basis. The summer population can swell to twice that number or more. The Town of Southampton is considered a popular seasonal resort area drawing thousands of visitors and seasonal residents. Tourism and the vacation home industry drives the economic development engine of the town.

Communities of this township include Remsenburg, Speonk, Hampton Bays, Westhampton, Quiogue, Flanders, Riverside, Northampton, East Quogue, a portion of Eastport, North Sea, Bridgehampton, Water Mill, Sagaponack, Noyac, Sag Harbor, Shinnecock Hills, Tuckahoe, and the unincorporated area of Southampton.

Along with the above communities The Shinnecock Nation reservation, which contains 750 acres of land, lies within the western section of the Township. The Shinnecock Nation is a self-governing, State-recognized Tribe. This special population of 375 persons is located in Shinnecock Hills.

Some of the most valuable land within the country is within this Township. Forbes Magazine's most expensive zip code articles consistently list the Hamlets of Bridgehampton and Water Mill as well as the Villages of Sagaponack within the top 25.

Many on these communities are home to dwellings, which have a minimum of 5 acre zoning (including several gated communities) and over 8,000 SF of gross living area with top of the line amenities. Within the township are newly constructed, amenity rich dwellings and historical homes which are over200 years old.

An EXPERIENCED, GEOGRAPHIClLY COMPENANT APPRAISER is needed for appraisals in this township.

We have prepared appraisal reports in many of these communities for all types of properties, including within the gated communities and waterfront dwellings for many purposes. We also have available to us, access to the Southampton GIS system.

Southold Township

Anthony Vosilla (Tony's Appraisal Services) — Mon, 18 Aug 2008 12:30:21 -0700

Southold

The Township of Southold is on the easternmost portion of Long Islands North Fork consisting of 53.7 square miles of land and 350.8 square miles of water. The township has waterfront properties along three of its four borders and features many creeks, inlets and harbors for small recreational boats. This allows residents to enjoy water related recreational activities. As with most of eastern Long Island, the area population swells in the summer months as some of the area is considered this is a summer resort area. Many homes are utilized as secondary residences.

The Township is a mix of residential and agricultural property types, with commercial districts interdispersed along Route 25 (also known as Main Road) and Sound Avenue. During the past 10-15 years, agricultural use has, in a large part, changed over from the traditional sod and potato farming to more lucrative wine production. As such, the north fork has evolved into a nationally recognized wine-producing region, a factor that has boosted tourism and generally had a positive impact on the local real estate.

Southold Township contains one Village and approximately 9 Hamlets. The eastern most Hamlet of Orient Point contains dwellings of historical significance with homes dating back to the 1600's.

Due to the diversity of the properties within the area, an experienced, highly geographically competent appraiser is your bet choice to appraise properties within this area.

We have performed appraisals of many waterfront and waterview properties within this Township.

East Hampton

Anthony Vosilla (Tony's Appraisal Services) — Mon, 18 Aug 2008 12:28:06 -0700

East Hampton

The Town is the easternmost town on Long Island (Suffolk County, New York State). It encompasses a land area of 70 square miles on Long Island's south fork and has almost 70 miles of waterfront on three sides. The Town of Southampton to the west, the Atlantic Ocean to the east and south, and Gardiner's Bay to the north borders the Town.

Communities within this township include Amagansett, Georgica, Montauk, Wainscott and the Village of East Hampton. The area known as Napeague has several Oceanfront condominiums along its south shore. Further Lane and The Lanes (in Amagansett ) contain many properties owned by celebrities and other prominate people.

The area is also a highly regarded summer vacation destination containing many summer residences and second homes featuring magnificent waterviews and waterfront properties. Homes can vary from 500 SF to 8,000+ SF featuring many high end amenities.

East Hampton provides many artistic, cultural and historic points of interest including the Montauk Indian Museum, the Deep Hollow Ranch in Montauk (the oldest cattle ranch in America) and the Montauk Lighthouse. The western section of East Hampton contains areas of one plus acre zoning allowing estate type settings.

This is nother area where An EXPERIENCED, GEOGRAPHICALLY COMPETENT APPRAISER is needed for appraisals wether the purpose of the report is for lending purposes or private reasons..

We have prepared appraisal reports in many of these communities, including The Lanes, Georgica, Montauk and the Village of East Hampton for all types of properties.

Experience should be a key factor in selecting an appraiser within this area..

Appraising on Fire Island

Anthony Vosilla (Tony's Appraisal Services) — Mon, 18 Aug 2008 08:54:35 -0700

Appraising Real Estate on Fire Island

Fire Island is a barrier island along the southern shore of Long Islands Suffolk County. The island is, approximately 31 miles long and varies between approximately 0.1 mile to 0.25 mile wide. Fire Island is separated from the main land by the Great South Bay resulting in waterfront properties on either side of the island. Part of the Island is within Islip Township while the remainder is within Brookhaven Township. The land area is approximately 8.687 sq mi and has permanent population of 491 people was reported as of the 2000 census. As this area is a highly desirable summertime destination there are hundreds of thousands of summertime residents, groupers and daytrippers.)

The island is comprised of 18 separate and distinct communities, including several Villages. Homes can range from 500 SF to 3000+ sf in gross living area and lot sizes can range from under 4,000 SF to over an acre of property. Each community has it's own unique characteristics and neighborhood amenities, such as Marinas, docking rights, beaches and Tennis Courts. One Village has it's own sewage treatment plant.

Doing appraisals within this area is a task which should not be left to inexperienced appraisers. Whether for a mortgage or for private needs, it should be obvious that an experienced, knowledgeable appraiser who understands this area should be used for your appraisal needs.

We have prepared appraisal reports in many of these communities for all types of properties, including both Oceanfront and Bayfront dwellings for many purposes including appraisals for Estates and Divorce cases.

Sellers Services

Anthony Vosilla (Tony's Appraisal Services) — Sat, 16 Aug 2008 11:17:37 -0700

Seller Services If you are going to sell your property it would be wise to invest in a professional appraisal. Professional appraisals do not cost money; they pay in the long run! Unless a property owner studies real estate values on a day-to-day basis, like a professional appraiser does, it's difficult for them to get a handle on real estate values. We are not talking about how much you have invested in your property, how much you paid for it, or how much you want for it. We are talking about the true market value of your property. Many people are surprised when they find out that the market value of their property is not what they thought. In today’s real estate market there have been many twists and turns, so investing in a professional appraisal actually allows sellers to receive several thousand more dollars than they thought they would when their property was sold. Others have an inflated opinion of their property's value and an appraisal helped them to realistically price their property in order for it to sell. An overpriced property will not attract buyers, which means no offers and no closing and that you have wasted valuable time, money, and efforts. In addition an appraisal will help you by pointing out needed repairs and visible deficiencies in the property, which will allow you to correct these items before placing it on the market. It is very hard to be objective about your own property because of your emotional attachment to it. A Professional Appraiser is objective and will tell you what you need to know, not just what you want to hear. For-Sale-By-Owner (FSBO) Properties that are listed for sale by the owner, without the assistance of a real estate agent, are known as FSBOs. Selling your property "on your own" will require a significant amount of "homework" if you're going to do it right. It's very hard to be objective about your own property because of your emotional attachment to it. One piece of advice that is consistently given by the experts in selling your property. Do NOT "Overprice" Your Property! In addition to helping you set a realistic selling price so your property will attract buyers, a professional appraisal is very valuable as a negotiating tool once you have a potential buyer. It gives you something concrete to show your buyer. It's an independent third party's opinion of your property's value, and not just you saying how much it is worth. Potential buyers know you have an emotional attachment to your property and will be far more likely to give credibility to a professional appraiser's value opinion than yours. Consultation Maybe you feel like you don't need an "appraisal" but you'd still like some help gathering local property and sales data. Our reports help you to make an informed buying decision. We understand the complexities of buying a property and know what you are going through and will do our best to make it easier for you by giving you a high quality, professional appraisal that you can depend on! By ordering an appraisal from us, you can expect . . .. · Prompt response to your initial inquiry: We will give you personalized information for your particular appraisal need. Just tell us your situation and we will make suggestions. Quick turnaround time: Typically one week or less from the date the request is received. If you've chosen to receive a copy of your appraisal or consulting report via the Internet (EDI), you'll receive it within MINUTES of its completion. · Appraisal and consulting reports formats to suit YOUR needs: When it comes to appraisal and consulting, "One size does NOT fit all!" We offer a variety of report types and delivery methods. Express mail too slow? We can deliver your report attached to a standard email the MINUTE it's completed! Quick response to follow-up questions: Our reports are clearly written, understandable, and meet or exceed the Uniform Standards of Professional Practice that governs the appraisal practice. If you have any questions regarding your appraisal, after you've read the report, we encourage you to email or call us!

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Shelter Island

Southampton

Southold Township

East Hampton

Appraising on Fire Island

Sellers Services

Important Information about Home Valuation Code of Conduct
March 3, 2008 Advisory E-mail Message to Seller/Servicers