The purpose of this webinar is to provide guidance in regards to understanding appraisals from a consumers perspective. Effective January 18, 2014, a new regulation regarding disclosure and delivery requirements for copies of appraisals and other written valuations under the CFPB and the Equal Opportunity Act (Regulation B) was issued. With this new rule comes the responsibility of loan officers and mortgage brokers/bankers to provide explanation of the appraisal and valuations developed in connection with an application for a loan to be secured by a first lien on a dwelling to the consumer.

1. Top 10 tips
to helping your borrowers
understand appraisals
www.Nationwide–Appraisal.com
888-760-8899

2. Joni Pilgrim
Director of Sales & Business Development
JPilgrim@Nationwide-Appraisal.com
888-760-8899 x207

3. Kevin Johnson
National Sales Manager
Cristy Conolly
Director of Quality
Assurance & Compliance

4. Quick Poll
Who’s with us today?

5. What’s on the agenda?
• Introduce regulatory requirement
• Challenge for lenders:
• Technology
• Training
• Top 10 borrower questions about appraisals

6. Regulatory Requirement
Effective January 18, 2014
CFPB & Equal Credit Opportunity Act regulation requires disclosure and
delivery of copies of appraisals and other written valuations
Regulation

7. Challenges for Lenders
1. Technology
• To ensure complete audit trail delivery of documents with date/time stamps
• To make the process easy & cost effective
2. Training - is your team trained to answer questions about an appraisal?
Challenges

8. NAN’s Technology
Consent form
emailed to
borrower
Client is
notified
Consent form
has been sent
Borrower
enters info &
either
accepts/
declines
If they accept,
a pdf is
created &
saved to the
file
Pdf created
confirming
borrower
received
email
Once
accepted,
email sent to
borrower to
retrieve
appraisal
Client is
notified that
borrower was
sent retrieval
request
Once report is
retained,
notification
sent to client
& pdf is saved
to file
Delivery

9. Delivery

10. NAN’s Technology
Consent form
emailed to
borrower
Client is
notified
Consent form
has been sent
Borrower
enters info &
either
accepts/
declines
If they accept,
a pdf is
created &
saved to the
file
Pdf created
confirming
borrower
received
email
Once
accepted,
email sent to
borrower to
retrieve
appraisal
Client is
notified that
borrower was
sent retrieval
request
Once report is
retained,
notification
sent to client
& pdf is saved
to file
Delivery

11. NAN’s Technology
Consent form
emailed to
borrower
Client is
notified
Consent form
has been sent
Borrower
enters info &
either
accepts/
declines
If they accept,
a pdf is
created &
saved to the
file
Pdf created
confirming
borrower
received
email
Once
accepted,
email sent to
borrower to
retrieve
appraisal
Client is
notified that
borrower was
sent retrieval
request
Once report is
retained,
notification
sent to client
& pdf is saved
to file
Delivery

12. NAN’s Technology
Consent form
emailed to
borrower
Client is
notified
Consent form
has been sent
Borrower
enters info &
either
accepts/
declines
If they accept,
a pdf is
created &
saved to the
file
Pdf created
confirming
borrower
received
email
Once
accepted,
email sent to
borrower to
retrieve
appraisal
Client is
notified that
borrower was
sent retrieval
request
Once report is
retained,
notification
sent to client
& pdf is saved
to file
Delivery

13. Delivery

14. NAN’s Technology
Consent form
emailed to
borrower
Client is
notified
Consent form
has been sent
Borrower
enters info &
either
accepts/
declines
If they accept,
a pdf is
created &
saved to the
file
Pdf created
confirming
borrower
received
email
Once
accepted,
email sent to
borrower to
retrieve
appraisal
Client is
notified that
borrower was
sent retrieval
request
Once report is
retained,
notification
sent to client
& pdf is saved
to file
Delivery

15. Delivery

16. NAN’s Technology Reporting
Function:
oAll details logged in real time report
oApproved consents and received appraisals are tracked by
IP address
oDate & time stamped for auditing purposes
Reporting

17. Is your team confident in explaining appraisals to
borrowers?
Quick Poll

18. What is an appraisal?
oNot an exact science
oOpinion of value
Opinions

19. Stuck in
a
box

20. Understanding Appraisals
oIndustry requirements
oUAD (Uniform Appraisal Dataset)
o Condition
o Updates
o Quality
UAD

21. How is the value of my property determined?
Factors to consider:
1.Market Data
• Trends
• Inventory
2.Public Records
• zoning
3.Actual Inspection
• Physically measure property
• Materials in each room
• Condition
• Amenities
• External factors
4.Comparable properties
• Design
• GLA
• Room count
• Condition
• Amenities
5. Develop opinion of value
#10

22. Cost approach. What is it?
The cost approach is the appraiser’s opinion of the current replacement cost
of constructing a reproduction of the existing structure.
#9

23. Cost Approach
#9

24. What’s the difference
between
an
FHA appraisal
and a
Conventional appraisal?
#8

25. How are rural and/or unique properties appraised?
Comparable Sale Selection
• Limited market data
• Dated sales
• Sales are dissimilar
• Sales are too far
Large Adjustments
• Location
• Site Size
• Age
• Condition
• Other
#7

26. Why are adjustments made when appraiser selects
comparables?
oNo two properties are the same
oAppraiser must account for differences between comparable & subject
oThese differences are called “adjustments”
o GLA
o Garage
o Bathroom Count
o Quality
o Condition
#6

27. Grid
Example #6

28. Why is my assessed value and appraised value different?
oAssessment = value placed on a property by the town or city’s
assessor’s office to determine property tax due
o Typically no interior inspection
o Often times outdated, not done regularly
oAppraisal = report completed by licensed appraiser to determine current market value
o Property details
o Current market conditions
o Recent sales
o Assessed value not considered
#5

29. Perception
is a
funny thing!

30. How are my upgrades and improvements
valued in my appraisal?
Significant Improvements:
1.Bathroom additions
2.Bedroom additions
3.Replacement of worn roof
4.Fixing foundation issues
#4

31. How are my upgrades and improvements
valued in my appraisal?
Other Improvements:
#4

32. What is the difference between valuing
“above grade” vs “below grade” square footage?
o“above grade” = finished part of dwelling above ground line
o“below grade” = area of dwelling that is all or partly below ground line
o“above grade”/”below grade” are valued and reported seperately
Gross Living area does not include “below grade” area
#3

33. I’m going with a new lender, can you change the name of the
lender on my appraisal?
oUSPAP requires a new assignment
oAppraisals are confidential
oNeed lender permission
#2

34. What do I do if I find errors or have concerns?
oContact your lender
oProvide valid information to support concerns
oLender will provide info for appraiser to consider
oAsk for a review or second appraisal
o Appraiser Independence Requirements
o Flawed appraisal
o Lender QC process
o Required for loan product
o Required by law
#1

35. Dispute
form #1

36. Quick Poll
Would you like more information on
NAN’s Appraisal Delivery Program?

37. X-225
Kevin Johnson
National Sales Manager
X-202
Cristy Conolly
Director of Quality
Assurance & Compliance
888-760-8899
 Jpilgrim@Nationwide-Appraisal.com
Joni Pilgrim
Director of Sales & Business
Development
X-207