Foundation Appraisers Coalition of Texas Report 71409

1
Foundation Appraisers Coalition of Texas
Report7/14/09

• Greg Stephens, SRA
• Vice President, FACT
• Government Relations Chair, North Texas Chapter

2
TALCB UpdateBoard Meeting 4/24/09

• Loretta DeHay Interim Commissioner
• Board Members
• Robert D. Davis, Public Member
• Walker Beard, Appraiser Member
• Mark A. McAnally, Secretary, Designee Member
• Danny R. Perkins, Public Member
• James (Jamie) B. Ratliff, Vice Chair, Appraiser
  Member
• Clinton P. Sayers, Chair, Appraiser Member
• Bill F. Schneider, Public Member
• Donna L. Walz, Public Member

3
Staff Reports - Licensing

• Gwen Jackson, Director of Licensing Services
• Total Number of Licensees
• CG CR LIC PROV T
• 2,355 2,532 862 60 816
• Total 6,605 Change -42 L/C -18 Trainees
  -24
• Exams Total Passed Failed Pass
• CG 82 28 54 34.15
• CR 99 38 61 38.38
• LIC 91 41 50 45.05

4
Staff Reports- Enforcement

• Deloris Kraft-Longoria, Director. Enforcement
• 2009 Fiscal YTD Cases Summary
• Open as of 9/08 319
• New 150
• Closed 171
• 4/25 Open 298

5
Staff Reports - Enforcement

• Cases open 1 Yr as of 4/17/09 - 109
• 7 Presented 4/25
• 18 Set for Hearing
• 20 In Process for OSAH
• 22- Covert ( Fraud )
• 30 Regulatory Review
• 6 With Peer Investigative Committees
• 6 Conference Dates Set

6
TALCB Legislative Update

• Devon Bijansky, Counsel to TALCB
• TALCB LEGISLATIVE APPROPRIATIONS REQUEST
• Amendments to 22.T.A.C. 153.5,Fees
• Waives Licensing Certification fees for
  employees of TALCB who only use the license or
  certification for Board appraisal work.
• Amendments to 22.T.A.C. 153.20, Guidelines for
  Revocation, Suspension or Denial of Licensure or
  Certification
• Amendments clarify that a person seeking
  reinstatement must meet all requirements that
  would apply if the persons lic. / cert. was
  expired.

7
Appraisal Management Companies

• Requested by Appraiser Board Member Luis De La
  Garza Jr.
• Interim Director Loretta DeHay provided copy of
  NAR letter recommending regulation of AMCs
• Greg Stephens, Certified General Appraiser and
  employee of an AMC provided testimony
• HVCC provides oversight of AMCs
• Appraisal Institute Model AMC Legislation
• 10 States Introduced. That number is now up to
  14.
• 3 States passed and signed by Governors
• Illinois published Real Estate Board Findings
• FACT Advocate Roger Miller is evaluating need for
  AMC legislation in next session
• Recommended FACT working with TALCB on future
• recommendations

8
Enforcement Matters

• 4 Cases - State Office of Administrative Hearings
  
• 8 Agreed Final Orders
• 5 Requests for Extension to fulfill requirements
  of previous Agreed Orders
• All Approved as Presented.

9
Texas Legislative Update

• To Provide Perspective
• Over 7,000 Bills Introduced in the 81st
  Legislature Session
• Nearly 40 Bills Relating to Real Estate Appraisal
• Less Than Half Dozen Appraisal Bills Will
  Ultimately Be Signed Into Law

10
Texas Legislative Update

• Disclosure Bills
• Failed to make it out of Committee
• HB 133 by Villarreal
• HB 2257 by Giddings
• SB 444 by Wentworth

11
Disclosure Bills

• HB 133 - Relating to Mandatory Sales Price
  Disclosure in Real Property Sales, introduced by
  Villarreal / Castro
• HB 2257 Relating to Mandatory Sales Price
  Disclosure in Certain Real Property Sales,
  Providing a Civil Penalty, introduced by Giddings
  - Commercial, Multi-family and Vacant Land.
• SB 444 Relating to Mandatory Sales Price
  Disclosure in Real Property Sales Providing a
  Civil Penalty, introduced by Wentworth.

12
Disclosure Bills

• HB133- Villarreal -committee substitute
• completely changed the substance of the bill,
  removing residential, changing from sales price
  disclosure to a process by which commercial
  sellers would be required to complete a survey,
  mostly dealing with "cap rates" and submit the
  survey to the state comptroller who would then
  forward the information to the Texas AM Real
  Estate Center for compilation into a report
  detailing information for market areas and
  specific categories.
• Roger noted a great deal of opposition and the
  bill and it failed to make it out of committee.

13
Disclosure Bills

• HB 2257 Sales Price Disclosure
• HB 2257 was filed on 3//09 by Giddings relating
  to mandatory sales price disclosure indicating an
  estimated five year impact of 60,464,000 in
  additional General revenue Related Funds by 2014.
  On 3/24 testimony was taken in subcommittee
  hearing which FACT lobbyist Roger Miller attended
  and concluded the bill will most probably fail
  due to high opposition with minimal support
• Failed to make it out of committee.

14
Disclosure Bills

• SB 444 Sales Price Disclosure
• Was filed 1/9/09 by Wentworth, referred to
  Intergovernmental Relations Committee 2/17/09
  where it died at the closure of the session.

15
Ad Valorem

• HB 3454 , Property Interests - Real Property
  Taxation - Property Appraisals Appraisal
  Districts Home Sales Prices, introduced by Otto,
  filed 3/11/08.
• A committee substitute was adopted to preclude
  consideration of personal property if an income
  approach is used.
• Referred to Finance Committee 5/6/09

16
Mortgage Fraud

• HB 2840 by Solomons Relating to Mortgage Fraud
• Amends HB 716 2007 80th Legislature
• Passed House 4/29/09
• Referred to Business Commerce 5/6/09
• Public Hearing 5/14/09

17
Mortgage Fraud

• (b-1)A person commits an offense if the person
• intentionally or knowingly makes a materially
  false or misleading written statement in
  providing an appraisal of real property for
  compensation or in providing any other service
  related to the closing or settlement of a real
  property transaction.

18
HB716 - 2007

• Sec.A343.105. A NOTICE OF PENALTIES FOR MAKING
  FALSE OR MISLEADING WRITTEN STATEMENT.
• (a) A lender, mortgage banker, or licensed
  mortgage broker shall provide to each applicant
  for a home loan a written notice at closing.

19
HB 716 - 2007

• Language
• "Warning Intentionally or knowingly making a
  materially false or misleading written statement
  to obtain property or credit, including a
  mortgage loan, is a violation of Section 32.32,
  Texas Penal Code, and, depending on the amount of
  the loan or value of the property, is punishable
  by imprisonment for a term of 2 years to 99 years
  and a fine not to exceed 10,000.

20
Open Records

• HB 1813 - Relating to the exception from required
  public disclosure of certain records of an
  appraisal district.
• This is the bill that was supposed to correct the
  confusion created in the 2007 legislature by HB
  2188 which the appraisal districts are
  interpreting as a prohibition from providing
  sales data to appraisers.

21
Open Records

• There was a committee substitute to the bill
• ( CSSB 1813 ) which was presented to committee on
  4/16/09 that does restrict application to
  counties with populations under 20,000.

22
CSSB 1813 - Duncan

• AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
• The 80th Legislature, Regular Session, 2007,
  passed H.B. 2188, which made records submitted to
  an appraisal district by a private entity
  confidential. The intent behind H.B. 2188 was to
  protect information obtained by an appraisal
  district via subscription to a multiple listing
  service (MLS).

23
CSSB 1813 - Duncan

• However, this provision has proven to be a hurdle
  for appraisers in counties that do not have an
  MLS. In those small, rural counties, appraisers
  are unable to obtain the information needed to
  perform property appraisals.

24
HB 2188 History

• Original Text 2007 Bill
• Sec.552.148. EXCEPTION RECORDS OF APPRAISAL
  DISTRICT RECEIVED FROM PRIVATE ENTITY. (a)
  Information relating to real property sales
  prices, descriptions, characteristics, and other
  related information received from a private
  entity by the comptroller or the chief appraiser
  of an appraisal district under Chapter 6, Tax
  Code, is excepted from the requirements of
  Section 552.021.

25
HB 2188 - History

• Original Text 2007 Bill
• (b) Notwithstanding Subsection (a), before the
  14th day preceding the date of a hearing on a
  property owner s protest brought under Section
  41.41, Tax Code, the chief appraiser of the
  applicable appraisal district shall, on request,
  provide the property owner or owner s agent with
  a copy of each item of information described by
  Section 41.461(a)(2), Tax Code.

26
HB 2188 - History

• Enrolled Text 2007 Bill
• (b) Notwithstanding Subsection (a), the property
  owner or the owner s agent may, on request,
  obtain from the chief appraiser of the applicable
  appraisal district a copy of each item of
  information described by Section 41.461(a)(2),
  Tax Code, and a copy of each item of information
  that the chief appraiser took into consideration
  but does not plan to introduce at the hearing on
  the protest.

27
HB 2188 - History

• Enrolled Text 2007 Bill
• In addition, the property owner or agent may, on
  request, obtain from the chief appraiser
  comparable sales data from a reasonable number of
  sales that is relevant to any matter to be
  determined by the appraisal review board at the
  hearing on the property owner s protest.

28
HB 2188 - History

• Enrolled Text 2007 Bill
• Section Misinterpreted by the Appraisal Districts
• Information obtained under this subsection
• (1)remains confidential in the possession of the
  property owner or agent and
• (2)may not be disclosed or used for any purpose
  except as evidence or argument at the hearing on
  the protest.

29
Confidential Information, Cont

• Enrolled Text 2007 Bill
• Section Misinterpreted by the Appraisal Districts
• Confidential information obtained by a property
  owner, a school district, an appraisal district,
  or an agent of the owner or district under this
  subsection
• (1)remains confidential in the possession of the
• owner, district, or agent and
• (2)may not be disclosed to a person who is not
  authorized to receive or inspect the information.

30
Additional Bills

• 25 Additional Bills introduced relating to
  appraisal, ad valorem property taxation, etc.
• 1 Passed HJR 36- Otto
• Proposing a constitutional amendment authorizing
  the legislature to provide for the ad valorem
  taxation of a residence homestead solely on the
  basis of the propertys value as a residence
  homestead and authorizing the legislature to
  authorize a single board of equalization for two
  or more adjoining appraisal entities that elect
  to provide for consolidated equalizations. The
  Legislature, by general law, may authorize a
  single board of equalization for two or more
  adjoining appraisal entities.

31
Executive Session of TALCB6/24/09

• Attendees
• TALCB Members
• Clint Sayers, Chair
• Jamie Ratliff, Appraiser Member
• Mark McAnally, Appraiser Member
• TALCB Staff
• Loretta DeHay, Interim Commissioner
• Devon Bijansky, TALCB Deputy Counsel

32
TALCB Executive Session6/24/09

• FACT Attendees
• Terry Clark, President
• Greg Stephens, Vice President
• Roger Miller, FACT Advocate
• Lynda Vine, Former FACT Exec. Director
• Joe Woller, South Texas Chapter Representative

33
TALCB Executive Session6/24/09

• Three Exceptional Items Discussed
• 1)Work toward salary equity with other Article
  VIII agencies
• Currently the TALCB staff salaries are
  significantly below other agencies with similar
  responsibilities / job codes.
• The amount of this Exception Item Request is
  38,000 in FY 2010 and 38,000 in FY 2011

34
TALCB Executive Session6/24/09

• 2)Transition To Imaged Documents
• Currently everything is archived in hard copy and
  they have run out of storage capacity. TREC is
  moving imaging all documents including TALCB.
• The amount of this Exceptional item Request is
  50,000 in FY 2011. No cost in 2010 since the
  expenditure requirement will not take place until
  FY 2011

35
TALCB Executive Session6/24/09

• 3) Additional Enforcement Staff
• Exceptional Item 3 requests four additional full
  time investigators
• The amount of this Exceptional Item Request is
  176,190 in FT 2010 and 140,750 in FY 2011. The
  difference in the two years is the additional
  equipment cost estimated at 35,440 to get the
  investigators fully equipped in 2010, a cost that
  will not be incurred in 2011.

36
TALCB Executive Session6/24/09

• To fund all of the approved Exceptional Items
  will require an estimated 100 per new
  application and 50 / year for renewals for
  currently licensed or certified appraisers ( 100
  per two-year renewal cycle ) .
• FACT expressed disapproval of such an increase
  based upon feedback from the various member
  organization chapters.

37
TALCB Executive Session6/24/09

• Most of the meeting discussion centered around
  the additional staffing request /percentage of
  overall budget increase / FACT opposition since
  we all agreed to a 50 increase in the 80th
  Session that ultimately was increased to 60 when
  enacted and the TALCB remains delinquent in
  enforcement resolution.

38
TALCB Executive Session6/24/09

• Alternative Recommendation Outsourcing
• Rather than hiring four FTEs, an alternative
  being considered is to create a Contractor Fund
  and outsource the complaints to Texas Certified
  Appraisers. The EC appointed Clint Sayers to head
  an ad hoc committee to develop a recommendation
  to the Board at their 8/21/09 meeting.

39
State / National Appraisal Industry Update
40
Home Valuation Code of Conduct

• Private agreement between Fannie Mae/Freddie Mac,
  FHFA NYAG
• Entered into by GSEs to avoid investigation/ suit
  by NYAG
• Not in statute or regulation
• Entered into before FHFA Conservatorship
• FHFA now has regulatory authority

41
Home Valuation Code of Conduct

• Originally drafted 3/08
• Revised Version Published 12/08
• Effective May 1, 2009
• Bars mortgage broker ordered appraisals
• Holds lenders accountable for appraisals through
  reps. warrants skin in the game
• Promotes appraiser independence, but has some
  complications
• FHA / VA did not adopt.

42
Home Valuation Code of Conduct

• Will lead to increased use of (unregulated) AMCs
• Appraiser Problems with AMCs
• Cramdown of Appraisal Fees
• Appraisers want usual customary fee
• Impact on appraisal quality as less experienced,
  non-designated appraisers are the only ones
  willing to work for reduced fees
• Overall impact on safety soundness

43
Home Valuation Code of Conduct

• Myths and Realities
• AMCs are not required
• Banks can achieve compliance internally through
  firewalls
• Mortgage brokers vs. loan correspondents
• Does not prohibit communication by a realtor with
  an appraiser

44
Home Valuation Code of Conduct

• Updated FAQs MUST READ!
• Most recent FAQ provides opening for brokers
  allowed to initiate appraisal order through
  authorized agent of lender
• Can be appraisal company or AMC
• Broker can pay the agent of the lender

45
Home Valuation Code of Conduct

• NAM initiated lawsuit in early 2009
• Dropped because of immunity provision in law
• NAR and NAHB are blaming a number of issues with
  the Code
• Argue that geographic competency is resulting in
  low-ball appraisals, impacting recovery

46
Home Valuation Code of Conduct

• NAR instrumental in introduction of H.R. 3044
  (late June 2009)
• Would order an 18-month moratorium on the Code
• No action in Congress to date

47
Home Valuation Code of Conduct

• AI believes that there are some problems with the
  Codebut there are also some good points
• Impact on fees bad
• Business practices of AMCs Bad
• Appraiser independence good
• Moratorium is not going to change things
  overnight. AMCs probably here to stay.
• AIs approach has been solutions oriented

48
Home Valuation Code of Conduct

• AI approach
• Demand the use of qualified, competent appraisers
• Raise the bar on AMCs through registration/regulat
  ion
• Consider alternatives to bar on mortgage broker
  ordered appraisals (i.e., SAFE Act compliant
  states)
• Elements of H.R. 1728 (separate disclosure)
• Repeal FHA ML 97-46

49
Home Valuation Code of Conduct

• Alternative Assignment Options
• FHA now has 36 Market Share
• Up from 3 in 2006

50
A. I. AMC Legislation

• Defines what constitutes an AMC
• Administer a panel
• Recruit qualify appraisers
• 3rd party broker of appraisal services
• Quality control
• Appraisal Firm vs. AMC
• AMC 15 appraiser threshold
• Requires registration of AMCs
• Identification of owners, directors, managers

51
AMC Legislation

• No individual owner can have ever had license
  revoked, denied, refused, etc.
• No entity that owns an AMC can have an owner with
  a revoked, etc. license
• Exemptions from Registration
• AMCs with only employees
• Bank in-house appraisal depts.
• Less than 10 appraisal in a state in a year
• Panel has lt 15 appraisers
• Controlling party must be an licensed/certified
  appraiser

52
AMC Legislation

• Independent contractors to AMC cannot employ or
  contract with individuals who have had license
  action taken
• Controlling party can never have had license
  action
• Requires annual audit to ensure adherence to
  USPAP
• Prohibits AMCs from inappropriately influencing
  appraisers (ala HVCC)
• Prohibits alteration of reports by AMC

53
AMC Legislation

• Establishes a guaranty of payment
• Establishes a dispute resolution process for
  appraisers that are harmed by the actions of an
  AMC
• Grants states enforcement authority

54
AMC Legislation

• Five states have enacted AMC laws (AR, LA, NM,
  NV, UT)
• Utah now in effect (HB 152)
• New Mexico effective June 19, 2009 (SB 456)
• Arkansas effective January 1, 2010 (Act 628)
• Nevada effective January 1, 2010 (AB 287)
• Hawaii to study AMC reg. (SCR 53) with intent of
  legislating in 2010

55
AMC Legislation

• 4 other states (CT, MN, MS, MO) formally
  considered but did not enact AMC legislation in
  2009
• 2 states currently have legislation under
  consideration (CA, NC)
• 7 other states are in various stages of planning
  state legislation for 2010

56
AMC Legislation

• Support
• Real estate agents and brokers
• NAR supports AMC registration/regulation
• Opposition
• AMC themselves (TAVMA)
• Banks feel that AMCs are already regulated
  (bankers association lukewarm)

57
Appraiser Independence

• Appraiser Independence
• 34 states currently have laws in place
• State appraiser Independence laws
• Many other states currently considering appraiser
  independence laws

58
Appraiser Independence

• Language varies by state, but typically
• Real estate professionals, mortgage brokers,
  bankers, and lenders are prohibited from
  improperly influencing, through coercion,
  extortion, or bribery, the development,
  reporting, result, or review of a real estate
  appraisal sought in connection with a mortgage
  loan

59
Appraiser Independence

• Latest consideration being driven by federal SAFE
  Act (Title V of HR 3221)
• Requires registration/licensing of mortgage loan
  originators
• CSBS Model SAFE Act for states
• Includes favorable appraiser independence
  provision

60
Broker Price Opinions

• Proliferation in the use of BPOs as valuation
  tools for foreclosures, short sales, loan
  modifications
• Our analysis - In at least 23 states, the ability
  of a broker or salesperson to perform a BPO may
  be limited to the real estate listing or purchase
  process (State BPO Laws)
• Not illegal to order a BPO, but it may be illegal
  for the broker to complete the assignment

61
Broker Price Opinions

• HB 1015 BPO Language
• Nothing in this Act shall prohibit a person who
  holds a valid license under the Real Estate
  License Act of 2000 from performing a comparative
  market analysis or broker price opinion for
  compensation, provided that the person does not
  hold himself out as being a licensed real estate
  appraiser. Nothing in this Act shall prohibit a
  person who holds a valid license under the Real
  Estate License Act of 2000 from performing a
  comparative market analysis or broker price
  opinion for compensation, provided that the
  person does not hold himself out as being a
  licensed real estate appraiser.
• Regulations are going to be key definition of
  BPO/CMA Listing only?

62
Broker Price Opinions

• Were making progress!
• Change to Freddie Mac Single-Family Selling Guide
  Change (3/30/09)
• Seller may not use tax-assessed valuations or
  Broker Price Opinions (BPOs) to determine value
• Written guidance in Georgia, Nebraska, Nevada,
  Pennsylvania, West Virginia

63
2009 Initiatives- Obama

• Stress Tests
• - Worst case scenario of 19 largest banks
• - Projecting losses of 12 on Commercial Real
  Estate over next two years
• - Tests dont include more than 500 banks with
  less than 1 Billion with heavy exposure in CRE
• - Secretary Geithner reassured
• - Other considerations Since 2007 58 banks
  savings institutions have failed with assets
  totaling 400 billion
• From Jan-Feb the FDIC sold about 1.18 billion of
  distressed real estate and other commercial loans
  for about 59 cents on the dollar.-

64
2009 Initiatives Financial Regulatory Reform

• Financial Regulatory Reform
• Virtually all players under review
• Investment banks
• Hedge Funds
• Ratings Agencies
• Non-bank mortgage lenders
• Mortgage brokers
• Agencies
• Securities and Exchange Commission
• OCC, OTS, FRB, NCUA, FDIC

65
Federal Agency Update

• 2009 Stimulus Bill (American Recovery
  Reinvestment Act)
• 20.1 Billion in Housing
• 1Billion for rural housing
• 3 Billion for New Markets Tax Credit
• 2 Billion for Neighborhood Stabilization Program
• 27 Billion for Highways
• 4.6 Billion for Corps of Engineers
• Homeowners Assistance Program
• Greening of the Federal Government
• General Services Administration
• DOE Building Technologies Program
• DOE Net Zero Energy Commercial Building Initiative

66
Small Business Administration

• Standard Operating Procedure 50-10, Real Estate
  Appraisal Policy
• Updated in August 2008 and March 2009
• New Construction Issues
• Requires lenders to obtain from an appraiser
• Appraisal with prospective future value
  forecasted
• An inspection confirming the construction was
  completed in accordance with plans and specs and
• An analysis of market conditions
• If upon subsequent inspection and analysis
  findings fall outside of SBA parameters, the
  appraiser shall contact the lender and develop a
  new assignment to analyze an updated market value

67
Interior Department

• Appraisal Services Directorate
• - 2008 Congressional criticism
• - In response, ASD has committed to reduce
  backlog and promoting faster turnaround times
• FY 2010 budget strives for full funding (900M)
  for Land and Water Conservation Fund by 2014

68
Internal Revenue Service

• NPR on Substantiation and Reporting Requirements
  for Cash and Noncash Charitable Contribution
  Deductions
• - Implements requirements of the Pension
  Protection Act of 2006
• - Definition of Qualified Appraiser
• - Professional appraisal designations
• - Demonstrated competency
• - Substance and principles of USPAP

69
Recent Tax Court Decisions

• Whitehouse v. Commissioner
• - Façade easement donation in New Orleans
• 7.4 million donation
• IRS audit determined value only 1.15 million
• Court rejected Income and Cost Approaches
• Determined value of 1.792 using Market Approach
• Industry Comments
• Different rules apply to IRS and taxpayers
• Confidence in local expert witness
• USPAP applicability

70
Recent Tax Court Decisions

• Hughes v. Commissioner
• Tried in U.S. Tax Court in Colorado in 2007
• Facts are complex, but case touches on valuation
• Taxpayer appraisals claim easement value between
  2.9-3.1 M
• IRS appraisal claim easement value between
• 0-238,000
• Judge dismissed IRS contention that the easements
  had no value
• Dismissed opinion of private appraiser

71
Department of Agriculture

• 2008 Farm Bill
• 4 billion increase for conservation and working
  lands programs
• Farm and Ranchland Protection Program
• Grassland Reserve Program
• Wetlands Reserve Program
• Appraisals and area Wide Surveys
• Section 1619, USDA/FSA Geospatial Information
• Restricts access to geospatial data known as the
  Common Land Unit (CLU)
• Complications

72
Federal Housing Administration

• FHA market share has increased substantially
  (36)
• Doubled from FY 2007 to FY 2008 ( 1.2 million
  loans)
• Expected to exceed 2 million in 2009
• Very active on appraisal issues
• Manufactured Housing (Itemized Value)
• Market Conditions Form Adoption
• ( 2nd appraisal requirements)
• Hope for Homeowners Program
• Limits on Cash-Out Refinancings (85 LTV)
• FHA Appraiser Roster Certified Appraisers

73
Veterans Administration

• VA is also very active in the market today
• Circular 26-09-3
• A copy of the agreement of sale or sales contract
  be provided to the fee appraiser by the requester
  of the VA appraisal immediately upon assignment
• http//www.homeloans.va.gov/circulars/26_09_3.pdf

74
111th Congress Appraisal Regulatory
Modernization

• H.R. 1728 Mortgage Reform and Anti-Predatory
  Lending Act
• Major Provisions
• Modernization of Title XI
• Appraisal Subcommittee regulatory authority and
  accountability
• New Issues
• Appraisal Management Companies Registration
• National Appraisal Independence
• Limitation of BPOs in Mortgage Origination
• Required Separation of Appraisal and
  Administration Fees

75
H.R. 1728

• Requires written appraisal on all subprime
  mortgages
• Clarifies that licensing and certification are
  minimum requirements and clients can consider
  professional designations
• Establishes federal appraisal independence
  standards with penalties 20,000 per day
• De minimis under review with consumer protection
  consideration
• Authorizes grants to state appraisal boards for
  enforcement
• Authorizes intermediate sanctioning authority to
  ASC
• Bans BPOs for mortgage origination
• Requires state AMC registration within 3 years

76
H.R. 1728

• Prospects in the Senate
• Senate version is likely to be introduced in
  early summer
• Bill has bipartisan support and there has been
  bipartisan cooperation in the Senate on appraisal
  issues
• There are several competing issues, but there is
  a lot of momentum to address appraisal issues

77
Other Issues

• H.R. 436, Certain Estate Tax Relief Act of 2009
• Departs from long-established fair market value
  guidelines and prohibit minority discounts on
  transfer of nonbusiness assets to family
  members
• Value of nonbusiness assets would be removed
  from the valuation of an entity, leaving the
  nonbusiness assets to be treated as gifts.

78
Industry Initiatives

• Valuation for Financial Reporting
• FASB 157, Mark to Market
• FASB ruling grants greater discretion on
  illiquid markets
• GASB Statement 52
• Endowments Land and Real Estate Held as
  Investments
• Global Investment Performance Standards (GIPS)
  CFA Institute
• 2005 version requires regular evaluations of real
  estate investments by designated/certified/license
  d appraisers
• 2010 Revisions Public Comment

79
Q A