Real Estate Law & Practice Section MCLE Meeting Attorney Resource Center (ARC) 11/12/15

Transcription

1 Real Estate Law & Practice Section MCLE Meeting Attorney Resource Center (ARC) 11/12/15 11:45 AM Noon Welcome/Introductions Melanie Leonard, Section Chair Noon 1:00 PM Program Navigating Appraisals Roy Hughes Roy Hughes has worked for Wintrust Mortgage for the last 2 years as the Collateral Underwriting Manager. Roy brings with him eighteen years of experience in the Appraisal/Collateral Review field including running an independent appraisal practice, national appraisal audit/review, managing a nationwide appraisal help desk, and building the Collateral Review department for multiple lenders. The demands of a continually changing housing market, the issues of the past, and implementation of Dodd-Frank require everyone involved to have a thorough understanding of the appraisal process. This includes how to communicate with appraisers and remain compliant. We will cover the appraisal from the appraiser s view point including basic guidelines they must follow when choosing comparables, how to communicate with an appraiser while staying compliant, and the do s and don ts of contesting an appraisal report. Next Meeting: Save the Date for Mega Meeting 2016 January 29 th & 30 th Real Estate Law & Practice Presenting January 30th DCBA Events: 11/19/15 Happy Hour at D.O.C Wine Bar

2 The Appraisal Process Presented by Roy Hughes AVP Collateral Underwriting Manager Wintrust Mortgage

3 Topics Appraisal basics What to provide an appraiser Appraisal errors Rebuttal communicate with data Things to avoid Ounce of prevention Questions

4 Appraisal Basics from Appraiser's Perspective Review of PA Multiple Bid Environment Research and Data Sources Neighborhood Developing Comps Cost approach versus Sales Comparable Approach Bracketing Above Grade versus Below Grade

5 Items to Provide During the Appraisal Inspection MLS Comparable Sales Nearby Survey List of Recent Updates Permits / Final Inspections Zoning Compliance Certificate Inspection Copies Foundation Roof Mold Plumbing

6 Appraisal Errors Poor Subject Data: GLA, BR/BA, Updates, Acreage, Golf Course, Water Rights Gather Data: Survey / Sketch, Assessor Website, HOA Docs, Previous Appraisal Poor Comp Selection: Dated, Distant, Dissimilar Gather Free Data: Realtor, Borrower, Title Company, Trulia, Zillow, Realtor.com

7 Rebuttal - Communicate with Data Comparable sales not already in the appraisal which are: In the subject's subdivision / project Current, close clone Recent prior appraisal or survey Corrected information that is factual and verifiable

8 Things to Avoid Derogatory or coercive comments References to value or value range Sales already included in the appraisal Sales that closed after the appraisal effective date Sales that are Dated/Distant/Dissimilar Active listings, pending sales, non-mls sales Minor upgrades (new paint, updated fixtures) Corrected information that is not factual or verifiable Multiple rebuttals (perceived as influence.)

9 The saying is so true An ounce of prevention is worth a pound of cure. An Ounce of Prevention is Worth a Point of Cure Prepare your customers for what to expect A guest will be in their home: Prepare The appraiser's impression is worth money Act like you're trying to sell your home:you are. Explain to you customer what not to say Do not discuss value with the appraiser Do not attempt to influence Do not treat the appraiser as an inconvenience Explain to your customer how to say it They should point out upgrades to home since they purchased Be courteous about suggesting neighborhood amenities Suggest sales activity that may not be public (Builder, FSBO,etc.) Point out differences from what county records may have

10 Questions THANKYOU! Roy Hughes AVP Collateral Underwriting Manager Wintrust Mortgage