Posted by Jonathan J. Miller -Wednesday, May 16, 2012, 5:36 PM
Tomorrow I’ll be a featured speaker at The Northeast New Jersey Chapter of the Appraisal Institute’s 6th Annual Meadowlands Conference in Teaneck, NJ.
My presentation is called:
The Intersection of Housing and Credit in 2012, How This Cycle Ends.
Always great to hang out with valuation professionals who care about their profession.
Posted by Jonathan J. Miller -Thursday, March 15, 2012, 6:00 AM
The Appraisal Institute sends out a press release today recommending that the U.S. Sentencing Commission require appraisals instead of relying on tax assessment values in mortgage fraud cases.
In other words…
Tax Assessments Should Not Be Relied On For Determining Market Value
Speaking at a hearing in Washington, D.C., the Appraisal Institute today urged a federal judicial agency to require the use of real estate appraisals when calculating loss in mortgage fraud cases.
(The Commission is charged with the ongoing responsibilities of evaluating the effects of the sentencing guidelines on the criminal justice system, recommending to Congress appropriate modifications of substantive criminal law and sentencing procedures.)
Amazingly there are…
proposed amendments to the federal Mortgage Fraud Sentencing Guidelines because the amendments propose using tax assessments, and not real estate appraisals, to determine fair market value when the property in question has not been sold.
While I’m not on board with requiring the use of designated appraiser infused in this release even though they are often more qualified (I have always had a problem with mandating the use of a private organization by a government entity), the very idea of using a tax assessment as a basis for any type of value is a terrible mistake.
Assessment values vary significantly across the country:
- they usually do not include an interior inspection.
- they rely on public records data, which can be inaccurate.
- usually not correlated to market value (just take a look at NYC’s tax assessment method).
- increases can be subject to restrictions and phase-ins.
Simply put, tax assessment values are not usually the same as market value. If value is to be used as a basis for determining value, then the damages to the victim should be fair.
Posted by Jonathan J. Miller -Thursday, February 16, 2012, 8:30 AM
I was invited to keynote the February 2012 dinner meeting for the Appraisal Institute: Long Island Chapter in Westbury, Long Island to talk about the Long Island, regional and US housing markets, the problem with housing finance, misdirection in the market etc. with an extended Q&A session. …90 minutes of valuation discussion bliss.
It was great to see friends and acquaintances, let alone be invited to speak on issues I am so passionate about. I generally rail quite a bit about our profession, but I am speaking about the 80%, largely enabled by the AMC industry. The 20% was represented by the meeting attendees who have local market knowledge and are striving to improve their craft.
It became apparent to me from attendee feedback that:
- AMCs account for most residential mortgage lending
- AMCs provide terrible quality valuations but bank staff are mandated to use them from above
- The industry is aging – not much new blood is entering the profession (of course I am excluding AMC “form-filler” types called “appraisers” in name only but don’t actually appraise in my view
- The expectation of 3-5 more years of current conditions was consensus
- Banks are looking to expand but are not going to be easing credit anytime soon
- Many appraisers there were busy working on distressed and refinance property assignments, not sales
All in all, a great time. I avoided sharing my lobster story again but obliged them about turtle litigation.