ANEVAR International Conference

The Role of Appraisal Reviewers in the U.S.

M. Lance Coyle, MAI, SRAAppraisal Institute President

Sept. 9, 2015

Dodd-Frank Legislation

Massive financial system reform legislation passed in

2010 / response to financial crisis of 2008

Institutionalized Appraisal Management Companies

Established requirements for review of all appraisals

prepared for regulated lending activities

Value Added

• Value of the appraisal review function

• Subject of the review

• Work file

Value Added

• Purpose of reviews

• U.S. lending institutions

• Mortgage insurers

Value Added

• Common issues

• Successful reviewers

• Quality control

• Eligible to prepare reviews

Credibility Added

• Reinforce confidence

• Appraisal process vs. the appraisal review process

• Competency issues• Geographic

• Sector

• Technical

• Effective date issues• Time of report

• Time of review

The Reviewer’s Toolbox

• IAG, FDIL, ECOA, Reg B, FNMA, ALLL, FASB

• Yellow Book and Just Compensation

• IRS

• Other standards

• Green construction

• LEEDS

• Historic preservation & easements

• TIF & Abatement

• Litigation precedents

Multi-faceted Thinker

• The review appraiser excels:oMental math

oCustom analysis

oReasonableness tests

o Technology

• Working parts of real estate sectors

• Urban economist

Inner Conflicts

• Balance vs. bias

• New and unfamiliar methods

• Collaboration vs. intimidation

• The challenge of 2n

ASC and Reviewers

• Who are they?

• ASC Statement 5

• Reciprocity and limitations

• State enforcement• Consistency vs. arbitrariness

• Local appraiser culture

• Impact on banks• Challenges

• Work-arounds

Technical Talk – Transaction Control

• The moment of maximum control• Before you place the order• Establishing appraisal parameters

• The pre-flight• Clear understanding• Setting expectations• Structural problems

Technical Talk – Reviews

• Tests of ReasonablenessoComparable salesoBracketingoThe best metrics

• ErrorsoMagnitudeoCounterpoint

Appraisal Institute Review Designations

ANEVAR International Conference

The Role of Appraisal Reviewers in the U.S.

M. Lance Coyle, MAI, SRAAppraisal Institute President

Sept. 9, 2015