This document provides an agenda and information for a webinar titled "Solving the Mystery of the Home Appraisal Valuation Process". The webinar will include introductions, etiquette, and three main presentations on interpreting home appraisals, including a regulatory overview, keys to appraisals, and how to talk to an appraiser. It lists the contact information for three presenters who will discuss different aspects of appraisals. The document provides an overview of the roles of consumers, lenders, agents, and appraisers in the appraisal process and discusses how to check an appraisal for accuracy. It aims to educate participants on interpreting and understanding the home appraisal process.

1. Interpreting
Home Appraisals
Solving the Mystery of the Home Appraisal
Valuation Process

2. Agenda:
 Welcome 1:00-1:02 p.m.
Introductions of Speakers 1:02-1:04 p.m.
Webinar Etiquette 1:04-1:08 p.m.
Interpreting Home Appraisals 1:08-1:55 p.m.
 Regulatory Overview (David)
 Appraisal Keys (Liz)
 Talking to the Appraiser (Peter)
Questions and Answers 1:55-2:25 p.m.
Webinar Closure 2:25-2:30 p.m.

4. ADOBE Connect
Please mute your phone by pressing *6
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Questions or comments, type them here

5. Presenters
David Berenbaum serves as National Community Reinvestment Coalition’s
Chief Program Officer. David is responsible for implementing NCRC’s
legislative, research, compliance, community lending, minority business and
civil rights programs.
CONTACT INFORMATION:
David Berenbaum
Chief Program Officer
National Community Reinvestment Center
TEL: (202) 628-8866
EMAIL: dberenbaum@ncrc.org

6. Presenters
Elizabeth Green, Principal Consultant with rel-e-vant Solutions, is a strategist,
solutions architect, speaker and valuation advocate. A recognized mortgage
technology veteran in software product leadership for solutions in residential
property valuation, loan origination, mortgage servicing and secondary
marketing, Green is helping to foster a new level of understanding in property
valuation and collateral risk assessment through the application of digital
intelligence. She is the third term chairperson of the MISMO Property and
Valuation Services Workgroup. Follow her on Twitter: @FreshRelevance.
CONTACT INFORMATION:
Elizabeth Green
Principal Consultant
Rel-e-vant
TEL: 888-804-7773
EMAIL: liz@rel-e-vant.com

7. Presenters
With 30 years of experience in real estate appraisals, Pete Vidi is a Certified
General Real Estate Appraiser specializing in forensic valuations for litigation
support in the Metro Washington DC, Maryland and Virginia areas. Mr. Vidi is
also a past President of the National Association of Independent Fee
Appraisers (NAFIA).
CONTACT INFORMATION:
Peter R. Vidi
National President
American Guild of Appraisers
Guild 44 OPEIU
TEL: 888-804-7773
EMAIL: liz@rel-e-vant.com

8. Regulatory Overview
David Berenbaum,
Chief Program Officer
NCRC

9. The Mission of the National
Community Reinvestment Coalition
To increase fair & equal access to credit, capital, and
banking services/products for low- and moderate-
income communities, because discrimination is
illegal, unjust and detrimental to the economic
growth of underserved communities in the United
States and around the world.

10. The CFPB and NCRC’s Comments
As it relates to appraisal/valuation issues, the CFPB
proposed several amendments to the Truth In
Lending Act (TILA)-Regulation Z, as well as, the Equal
Credit Opportunity Act (ECOA)-Regulation B. On
October 15, 2012, NCRC submitted comments
addressing the proposed amendments to these
regulations.

11. The CFPB and NCRC’s Comments
TILA-Regulation Z
In our comment, we argued that Congress did not intend that FIRREA Title XI
requirements would only apply to the subset of higher-risk mortgage loans that
are already covered by FIRREA. NCRC specifically called for the prudential
regulators to require full walk-through appraisals by licensed appraisal
professionals for all residential mortgages above $50,000 regardless if they are
originated or insured by the private sector, Fannie Mae and Freddie Mac, or the
Federal Housing Agency.

12. The CFPB and NCRC’s Comments
ECOA-Regulation B
In our comment, we argued that in order to prevent the problems
associated with the use of automated valuation models and creditors
reliability on them, it is essential that creditors disclose all forms of
appraisal and/or valuation at the time the application is received, not later
than the third business day after receiving a consumer’s written
application, to allow consumers to read all information and make
informed decisions relating to one of the biggest financial commitments of
their lifetime.

13. The CFPB and NCRC’s Comments
Integrated Mortgage Disclosures under Real Estate Settlement
Procedures Act (Reg X) and Truth In Lending Act (Reg Z)
On November 6, 2012, NCRC signed on to a comment letter prepared by the
Appraisal Institute, addressing the Integrated Mortgage Disclosures under the
Real Estate Settlement Procedures Act (RESPA)-Regulation X and the Truth In
Lending Act (TILA)-Regulation Z. In their letter, the Appraisal Institute noted
under the proposed rule, disclosure of AMC fees is optional, despite a clear
authorization under the Dodd-Frank Act to require such disclosure. Under the
proposed rule, lenders that do not want to report the fee paid to the AMC could
instruct the settlement agent to bundle the two fees under the Appraisal fees.
Among other things, this is likely to hasten the development of bank-owned or
“captive” AMCs .

14. The CFPB and NCRC’s Comments
Integrated Mortgage Disclosures under Real Estate Settlement
Procedures Act (Reg X) and Truth In Lending Act (Reg Z)
The Appraisal Institute argued that the decision to hide or disclose the AMC
fee should be left to the discretion of a party that may have a vested interest
in hiding this fee from consumers. The Institute explained that this practice is
likely to result in inconsistency in disclosure of AMC fees, with some lenders
listing only an appraisal fee and others listing both an appraisal and an AMC
fee without any explanation. The overarching concern expressed was that
the aforementioned practice would confuse consumers, not empower them
to rational and responsible decisions.
The Appraisal Institute and NCRC as a sign-on, asked the CFPB to establish
clear and understandable rules that consumers and others can rely on
commencing mortgage financing transactions.

15. NCRC’s Appraisal Recommendations
On June 28, 2012—NCRC testified before the US House of Representatives
Committee on Financial Services, Subcommittee on Insurance, Housing &
Community Opportunity on the subject of Appraisal Oversight: The Regulatory
Impact on Consumers and Businesses
In our testimony, NCRC made ten recommendations aimed to improve the
appraisal industry and help all Americans, particularly low to moderate income
communities, communities of color, and communities impacted by the
foreclosure crisis. These recommendations are as follows:
1. A call for Congress, the prudential regulators, etc. to review and define a more
modern and robust appraisal reporting process and not accept the Uniform
Residential Appraisal Report form by the GSEs
2.Require full appraisals by licensed appraisal professionals for all residential
mortgages above $50,000

16. NCRC’s Appraisal Recommendations
Recommendations continued:
3.The role and impact of Appraisal Management Companies (AMCs) must be critically reviewed by the
ASC to ensure that they are not negatively affecting appraisal quality
4.Appraisal professionals must be appropriately compensated under any usual and customary fee
standard that is developed
5.The banking regulators, Fannie Mae, Freddie Mac, and the FHA should not escape Appraisal
Subcommittee valuation safety and soundness review and enforcement
6.Automated Valuation Models (AVMs) should never replace the use of an appraisal by a licensed
appraiser for all mortgages that exceed $50,000
7.There is a need for more effective Consumer Protection, Transparency & Education
8.Responsible appraisal practices ensure and expand housing opportunities in an open society
9.Inappropriate appraisal undervaluation is equally damaging to homeowners, communities, the tax
base, investors and insurers
10. States must suspend directing funds intended for appraisal compliance, professional development
and licensing, to their general funds

17. Appraisal Keys
Elizabeth Green,
Principal Consultant
REL-E-VANT SOLUTIONS

18. Introduction
Knowledge of the home appraisal process -- and the differing credentials of
those who provide appraisal services -- benefits homebuyers and sellers
alike. This knowledge is a powerful information tool to help them make
wise real estate investment and sales decisions about what is for most
people, their single biggest asset.

19. The Appraisal
The appraisal process and written reporting formats vary, depending upon
the nature and purpose of the appraisal. But the appraisal’s fundamental
purpose is:
“To establish a well-researched, impartial and carefully documented
estimate of property value at a single point in time, And, in so doing,
protects the interests of buyers, sellers, mortgage lenders and other
involved parties regarding the corresponding event.”
Mortgage Financing/Refinancing and the Appraisal
Homebuyers seeking financing, and homeowners seeking refinancing, are
required by their mortgage lenders to underwrite the cost of an appraisal,
which typically ranges from $200 and $400. The appraisal is the essential
component in determining loan limits for the property in question.
Mortgage lenders typically select appraisers from “approved” lists they
compile and maintain. Consumers are entitled to copies of all valuations
used in conjunction with their loan as mandated by recent legislation.

20. Roles in the Appraisal Process
Consumer Responsibilities
• Know the approximate value of the home.
• If you can afford one, get your own appraisal from a
state licensed appraiser.
• Ask questions. Shop around. Get the best price from
your agent.
• Insist on a home inspection!
• Don’t rush into transactions. Don’t sign anything until
you read and understand it.
• Get a copy of all forms associated with the
transaction.
• Understand the meaning of buyer’s agent, seller’s
agent & dual agent.
• Ask how your agent is going to advertise your
property.

21. Roles in the Appraisal Process
Lender Responsibilities
• Describes the terms of the loan.
• Determines the monthly payments.
• Informs you of The Annual Percentage Rate/if it
changes/balloons/or increases in percentage over a
period of time.
• Describes the different forms involved in the loan
transaction.
• Acknowledges whether the loan will be sold by the
lending institution or mortgage company who is
lending and to whom it will be sold.
• Utilizes an appraisal to check comparison of the loan
value and the property value.

22. Roles in the Appraisal Process
Agent Responsibilities
• Provides and explains Agency Disclosure.
• Enters into a Listing Agreement & Negotiates a
commission.
• Discusses with you how your property will be
advertised if you are the seller.
• Doesn’t act as a Mortgage Broker. Your agent is
not responsible for the home inspection.
• Notifies the consumer of known physical defects
of the property.

23. Roles in the Appraisal Process
Agent Responsibilities
• Your agent is not responsible for finding you the
best financing.
• Your agent does not ensure that the title search is
done properly.
• Your agent is not responsible for providing a copy
of your deed.

24. Roles in the Appraisal Process
Appraiser Responsibilities
• Gathers data on market area, subject property &
comparable properties in market area.
• Reflects markets perception of value as of the
appraisal date.
• Examines the separate indications of value.
• Bases comparison of like properties to subject
property with adjustments made for differences.
• Analyzes evidence & draws conclusions.
• Does not advocate the needs or desires of the
client or lender.

25. Roles in the Appraisal Process
Appraiser Responsibilities
• Provides sufficient detail & information to lead
the reader of the report to a logical conclusion.
• Reports the highest best use of the property.
Does NOT take the place of a home inspector.
• Analyzes all sales of subject property for last 3
years.

26. About the Appraisal
The written appraisal contains valuable and often-revealing
information -- including the legal and physical description of the
property, square footage measurements, list of comparable
properties in the neighborhood, a neighborhood description, and a
narrative of current real-estate activity and/or market trends in the
vicinity.
Carefully review the details regarding the size, number of rooms,
features and condition as reported by the appraiser. The appraiser
will check all rooms for obvious damage that could affect the
overall value of the property.
Also review the information presented about the neighborhood as
well as the comparable sales that have been selected by the
appraiser to support his opinion of value.

27. Details About the Home
The Appraiser will account for permanent features to a home. For
example, in-ground pool, built-in appliances in the kitchen. Anything
removable is not included in the final value. For example: a Jacuzzi tub.
The appraiser will check that heating and air units are present and that
they are in good working condition.
Basements are not included in the square footage for the computation of
Gross Living Area (GLA). But, are considered in the valuation overall. The
appraiser will check the basement for upgrades and finishing which can
increase a property’s value, but it’s never included in the square footage.
Bedroom count is also a big part of the valuation. Appraiser will verify the
number of bedrooms. By definition, a bedroom is a room with at least one
closet and one window.

28. Checking the Appraisal
Common errors in appraisals include: misuse of adjustments to
comparables, disregarding special financing and concessions, or
miscalculation of gross living area.
Ask yourself:
•Do adjacent homes add or detract from the value of the subject property?
•Is the subject property equal to or lower in price than surrounding homes?
•Does the floor plan have any functional problems?
•Does the house (particularly the kitchen and bathrooms) require major
remodeling to make it comparable with similar homes in the same price
range?
•Is the number of bedrooms and baths in the home comparable to similar
homes in the same price range?
•Did the appraiser perform an adequate review?

29. Appraisal Facts
Assumption: Market value should approximate replacement cost.
Fact: Market value is based on what a willing buyer likely would pay a willing
seller for a particular property, with neither being under pressure to buy or
sell. Replacement cost is the dollar amount required to reconstruct a property
in-kind.
Assumption: Assessed value should equate to market value.
Fact: While most states support the concept that assessed value approximate
estimated market value, this often is not the case. Examples include when
interior remodeling has occurred and the assessor is unaware of the
improvements, or when properties in the vicinity have not been reassessed for
an extended period.
Assumption: Appraisers use a formula, such as a specific price per square foot,
to figure out the value of a home.
Fact: Appraisers make a detailed analysis of all factors pertaining to the value
of a home including its location, condition, size, proximity to facilities and
recent sale prices of comparable properties in the subject market area.

30. Appraisal Facts
Assumption: In a robust economy - when the sales prices of homes in a
given area are reported to be rising by a particular percentage - the value of
individual properties in the area can be expected to appreciate by that
same percentage.
Fact: Value appreciation of a specific property must be determined on an
individualized basis, factoring in data on comparable properties and other
relevant considerations. This is true in good times as well as bad.

31. Appraisal Facts
Assumption: Consumers need not be concerned with what is in the
appraisal document so long as it satisfies the needs of their lending
institution.
Fact: Only if consumers read a copy of their appraisal can they double-
check its accuracy and question the result. Also, it makes a valuable record
for future reference, containing useful and often-revealing information -
including the legal and physical description of the property, square footage
measurements, list of comparable properties in the neighborhood,
neighborhood description and a narrative of current real-estate activity
and/or market trends in the vicinity.

32. Appraisal Facts
Assumption: An Appraisal is the same as a home inspection.
Fact: An Appraisal does not serve the same purpose as an inspection. The
Appraiser forms an opinion of value in the Appraisal process and resulting
report. A home inspector determines the condition of the home and its
major components and reports these findings.
Assumption: You generally can tell what a property is worth simply by
looking at the outside.
Fact: Property value is determined by a number of factors, including
location, condition, improvements, amenities, and market trends.

33. Appraisers & Consumers
Appraisers provide an integral service as an unbiased, trusted advisor to the
process. Consumer education and advocacy regarding the appraisal
process has been improved as a result of recent legislation and the advent
of the Consumer Finance Protection Bureau.
The appraisal report is a critical tool to new homeowners to help them
understand their new home and the investment it represents.

34. How to work with the Professional Appraiser
“Understanding Real Estate Valuation”
Peter Vidi,
National President
American Guild of Appraisers
Guild 44 OPEIU

35. Understanding the Professional Appraiser
• Describe the certification/licensing
requirements, underwriting guidelines, and
appraisal laws in the jurisdiction.

36. Understanding the Professional Appraiser
• Describe the certification/licensing
requirements, underwriting guidelines, and
appraisal laws in the jurisdiction.
• Identify appraisal conditions and
requirements that professional real estate
appraisers are required to follow.

37. History of Real Estate Appraising
Prior to 1989 real estate appraisers were unlicensed. For
the most part “designations” were offered by
professional organizations as part of the effort to control
the education and practice.

38. History of Real Estate Appraising
Legislation and Regulations
FIRREA enacted mandating that appraisers who perform
valuations for Federally Related Transactions would need to be
licensed

39. History of Real Estate Appraising
Legislation and Regulations
FIRREA enacted mandating that appraisers who perform
valuations for Federally Related Transactions would need to be
licensed
USPAP annual guidelines & rules governing the professional real
estate appraiser and the appraisal reports for various
assignments.

40. History of Real Estate Appraising
Legislation and Regulations
Subsequent to Congress passing FIRREA regulators
reduced the “deMinimus” threshold to $500,000 to
ultimately $100,000. States were faced with
mandatory vs. voluntary licensing.

41. History of Real Estate Appraising
Legislation and Regulations
Subsequent to Congress passing FIRREA regulators
reduced the “deMinimus” threshold to $500,000 to
ultimately $100,000. States were faced with
mandatory vs. voluntary licensing.
Many States and jurisdictions areas are NOT mandatory
states. Appraisers who perform non-FRT assignments
may be exempt.

42. Licensing of Appraisers
Appraisal Trainee

43. Licensing of Appraisers
Appraisal Trainee
• 75 Hours of Approved Appraisal Education
including 15 Hours in USPAP

44. Licensing of Appraisers
Appraisal Trainee
• 75 Hours of Approved Appraisal Education
including 15 Hours in USPAP
• Within 4 years must pass test for Licensed or
Certified Residential Real Property Appraiser

45. Licensing of Appraisers
Appraisal Trainee
• 75 Hours of Approved Appraisal Education
including 15 Hours in USPAP
• Within 4 years must pass test for Licensed or
Certified Residential Real Property Appraiser
• Under direct supervision of Licensed or
Certified Real property appraiser

46. Licensing of Appraisers
Appraisal Trainee
• 75 Hours of Approved Appraisal Education
including 15 Hours in USPAP
• Within 4 years must pass test for Licensed or
Certified Residential Real Property Appraiser
• Under direct supervision of Licensed or
Certified Real property appraiser

47. Licensing of Appraisers
Licensed Residential Real Property Appraiser

48. Licensing of Appraisers
Licensed Residential Real Property Appraiser
• 150 hours of Approved Appraisal Courses

49. Licensing of Appraisers
Licensed Residential Real Property Appraiser
• 150 hours of Approved Appraisal Courses
• 2000 hours of field experience (max 1,000
hours per year)

50. Licensing of Appraisers
Licensed Residential Real Property Appraiser
• 150 hours of Approved Appraisal Courses
• 2000 hours of field experience (max 1,000
hours per year)
• Pass a Comprehensive Exam

51. Licensing of Appraisers
Certified Residential Real Estate Appraiser

52. Licensing of Appraisers
Certified Residential Real Estate Appraiser
• 175 Hours of Approved Appraisal Courses

53. Licensing of Appraisers
Certified Residential Real Estate Appraiser
• 175 Hours of Approved Appraisal Courses
• Minimum Associate degree in approved
subject matter

54. Licensing of Appraisers
Certified Residential Real Estate Appraiser
• 175 Hours of Approved Appraisal Courses
• Minimum Associate degree in approved
subject matter
• 2000 Hours of Field Experience (max 1,000 hours per
year)

55. Licensing of Appraisers
Certified Residential Real Estate Appraiser
• 175 Hours of Approved Appraisal Courses
• Minimum Associate degree in approved
subject matter
• 2000 Hours of Field Experience (max 1,000 hours per
year)
• Pass a Comprehensive Exam

56. Licensing of Appraisers
Certified General Real Estate Appraiser

57. Licensing of Appraisers
Certified General Real Estate Appraiser
• 300 hours of approved appraisal courses

58. Licensing of Appraisers
Certified General Real Estate Appraiser
• 300 hours of approved appraisal courses
• Minimum Bachelors in approved subject matter

59. Licensing of Appraisers
Certified General Real Estate Appraiser
• 300 hours of approved appraisal courses
• Minimum Bachelors in approved subject matter
• 3000 hours of field experience (max 1,000 hours per
year)

60. Licensing of Appraisers
Certified General Real Estate Appraiser
• 300 hours of approved appraisal courses
• Minimum Bachelors in approved subject matter
• 3000 hours of field experience (max 1,000 hours per
year)
• Pass a comprehensive exam

61. Appraisal vs. CMA
They are NOT the same!

62. Appraisal vs. CMA
They are NOT the same!
• An appraisal is an estimate of market value as of a
specific date by a professional real estate appraiser.

63. Appraisal vs. CMA
They are NOT the same!
• An appraisal is an estimate of market value as of a
specific date by a professional real estate appraiser.
• Term “appraisal” is a specific term only used in
connection with definition of market value.

64. Appraisal vs. CMA
They are NOT the same!
• An appraisal is an estimate of market value as of a
specific date by a professional real estate appraiser.
• Term “appraisal” is a specific term only used in
connection with definition of market value.
• CMA only for listing/sale purpose

65. What does this all mean to you and
the consumer?
• Appraisers have a fiduciary responsibility to the client”
• Appraiser is only an “advocate” for the appraisal report
and conclusion
• Impartial opinion to protect consumer
• Appraiser is controlled by USPAP
• Term “appraisal” is a specific term only used in
connection with definition of market value.

66. Violation of the Law!!!
Don’t go there!!!

67. Violation of the Law!!!
Don’t go there!!!
• Coercion of the appraiser

68. Violation of the Law!!!
Don’t go there!!!
• Coercion of the appraiser
• Manipulation of information or report

69. Violation of the Law!!!
Don’t go there!!!
• Coercion of the appraiser
• Manipulation of information or report
• Predatory Actions

70. What can I do…What can’t I do?
Know the professional boundaries

71. What can I do…What can’t I do?
Know the professional boundaries
• Do NOT pressure the appraiser to get a value or to
misrepresent.

72. What can I do…What can’t I do?
Know the professional boundaries
• Do NOT pressure the appraiser to get a value or to
misrepresent.
• Do encourage the appraiser to act independently.

73. What can I do…What can’t I do?
Know the professional boundaries
• Do NOT pressure the appraiser to get a value or to
misrepresent.
• Do encourage the appraiser to act independently.
• Do assist appraisers in disclosing “material”
information

74. Examples of issues with a professional
appraiser?
• Appraiser calls the client asking for them to provide
comparables.
• Appraiser uses comparables outside of market to
“push” or “lower” values
• Appraiser with geographic competency

75. What should the consumer know?
• Appraiser can be the “gate keeper” on a deal...treat
them with respect.
• Appraiser can provide invaluable information to assist
in a decision
• Ask the appraiser questions!!!

76. What can consumer do if they
disagree?
• Provide information on new comps
• Provide new perspective about things that appraiser
may have overlooked
• Get a copy of the appraisal report

77. Complaints
• Any person may file a complaint against a licensed or
certified appraiser. Complaints must be filed in
writing on forms provided by the Commissions.
• Follow the directions of providing the objective
evidence that can be used by the investigating body.

78. Contact Us