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By John A. Meyer, SRA, 2007 MiCREA Chairman
What is good news? The fact the business cycle is alive and well, and this present situation will pass. In the meantime, what can we do as appraisers? One of my favorite lines is “Just say no.” I think this could apply to many appraisal requests I receive. For example, when a lender calls and says they need $150,000 to make the deal work and can I guarantee that I will appraise the property for that amount - just say no. When a lender calls and wants you to change a rural rating to suburban so the deal will work better, just say no! Or presently, is your market in balance, or is there an over supply? What are you putting in your reports? We all have stories like this. If we tell it like it is, this will help to restore some integrity to the appraisal profession, and lenders and the public might get the idea that performing an appraisal actually does require some analysis and is not just about “making the deal.” Too many times in the past, appraisals have been inflated to make it easy for a borrower to put themselves in an over leveraged position just to make a deal, so that they can pay off credit cards, buy boats, cars, etc… using the house like a bank account that they have overdrawn. The current economy is showing the folly of that mentality. We can help the current situation by giving honest valuations and not being afraid to do so! We need to take control of our profession, and one of the avenues currently available to us is MiCREA. MAR has proven to be successful in serving the real estate community, and we now have their expertise available to us as appraisers. I am asking you all to join in making this the year we come together and have our voices heard. There is strength in numbers, and there is strength with MAR. We are currently working on a format to bring up dialogues everyone can participate in, so that we as a MiCREA Board can bring your concerns to MAR, who in turn can help to get things done. I trust this will be an exciting year, and as business picks up and the warm air arrives, we have a lot to look forward to, and will have even more to be thankful for. Have you participated in the MAR/MiCREA Sales Tax on Services Call to Action? Governor Granholm’s 2% tax increase plan has been introduced in the State Senate and State House. Senate Bill 307 and House Bill 4368 includes taxing your appraisal fees and other industry-related services! If the 2% tax on services were to pass, Michigan would be the only state to have an income tax, transfer tax and service tax. MAR has launched two Calls to Action regarding Governor Granholm's 2% tax on services. While over 10,000 members have participated, your opinion is still critical. Contact your State Representative and State Senator today. Tell them to Oppose House Bill 4368. Please contact your State Representative and urge them to Oppose House Bill 4368! Please contact your State Senator and urge them to Oppose Senate Bill 307! Appraisal Public Policy Update Real Estate Enforcement Fund – Support Passed legislation for the expansion of the Real Estate Enforcement Fund (REEF), which will allow funding to investigate and prosecute those engaged in mortgage fraud activity in Michigan (P.A. 645 of 2006). Mortgage Fraud Protection – HB 4054, 4055, 4083 – Support Reintroduction of last session’s legislation dealing with conversations between appraisers and mortgage brokers which was part of the larger package. The bills provide for enhanced penalties and prohibit threats of withholding business or payment by either a mortgage broker or appraiser. Update: Introduced and referred to the Banking and Financial Services Committee in the House. Companion bills SB 342 and 343 introduced in the Senate. HB 4409, 4410, and 4411 were introduced in the house and referred to the Banking and Financial Services Committee. Recently, a bipartisan group of legislators in the Michigan House of Representatives introduced a series of bills that aim to protect real estate practitioners and consumers alike. House Bills 4054, 4055, 4083, 4409, 4410 and 4411 make up the package of legislation that seeks to clamp down on the growing problem of mortgage and appraisal fraud in Michigan. The bills are a reintroduction of legislation that passed out of the Michigan House last session but failed to win approval in the Michigan Senate due to time constraints. The Michigan Association of Realtors supported this legislation in concept last year and is continuing to work out a few minor details in the bill language. Please find a brief description of each bill here: Bed and Breakfast Homestead Exemption This legislation would provide a formula to calculate the portion of a bed and breakfast which is entitled to a Homestead Exemption. The formula will be: (square footage of exclusive residence + square footage of common areas) / total square footage. A similar calculation would be made for those residences that only operate as B&Bs for part of the year. Update: Governor signed the bill into law on 1/8/07. DLEG/PSI Launch Exam Development Survey Input from appraisers imperative in development of future licensing exams Currently, the state of Michigan is in the process of conducting a job analysis survey in order to quantify the professional activities that are an important part of the Real Estate Appraiser occupation as it is practiced today. The main goals of conducting this survey include measuring the professional activities of a Real Estate Appraiser, quantifying knowledge statements used on the job, and obtain suggestions for the creation of new content that accurately reflects the changing practice of the Real Estate Appraiser occupation. Ultimately, the survey responses will ensure that future licensure testing fairly reflects what Real Estate Appraisers need to know in order to serve the public in an effective manner. Psychological Services, Inc. (PSI) of Burbank, California, has been contracted by the State of Michigan to develop and administer this survey. It is presented in an electronic, Web based format, and can be expected to take approximately 20 minutes to complete. The survey will be active on the PSI Web site from March 1 through March 26, 2007. You can link to it directly by going to www.psionline.com/miappraiser.htm. Should you have any questions, please e-mail PSI at JAS@psionline.com. MiCREA strongly encourages all members to participate in this survey, as it will be used to effectively re-structure licensure examination test specifications. The more participants, the more comprehensive and complete the data will be. Please take a few moments to give your input! Appraisal Subcommittee (ASC) Updates, Enhances Web site The Appraisal Subcommittee of the Federal Financial Institutions Examination Council has added several new features to its Web site www.asc.gov. Formed after the Savings and Loan Crisis in the 1980’s, the ASC’s mission is to ensure that real estate appraisers, who perform appraisals in real estate transactions that could expose the United States government to financial loss, are sufficiently trained and tested to assure competency and independent judgment according to uniform high professional standards and ethics. The Web site was created in October 1997. Its purpose is to make certain information regarding the ASC, Title XI of 1989 of the Financial Institutions Reform, Recovery, and Enforcement Act, the National Registry of State Certified and Licensed Appraisers, and other related information available to the public. The site contains information about each State's agency operations, appraiser qualifications and practice standards, interstate practice requirements, State agency Internet links, and other information. New features on the site include:
The Web site also includes a National Registry database, including 5,900 active and inactive licensed real estate appraisers with searchable by residential and general appraisers by city, county or state. Note the National Registry does NOT contain information on ALL appraisers. It only contains information about appraisers who currently are, or have been, certified or licensed by a U.S. State, Territory or possession to perform appraisals in connection with Federally-related real estate transactions. Only State certified or licensed appraisers who are listed on this National Registry as having currently valid certifications or licenses are authorized under Federal law to perform appraisals in connection with federally related transactions. |
MiCREA Monthly • Chairman's Letter |
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For those of you that don’t know, MiCREA is a recently formed committee within MAR, established to serve the Real Estate Appraisers in Michigan. Who is a MiCREA member? You are, if you are an appraiser and belong to MAR. As of 2007, I have become the Chairman of the committee. I would like to thank John Collison, Chairman for the past two years, who was instrumental in MiCREA’s development. One of my goals for this year is to create more of a unified voice for appraisers around the state, and have a central point to begin dialogues about issues that concern us. And the issues that concern us are many. Michigan has been noted lately as the only state where home values have dropped (Grand Rapids Press 3/11/07). It was also noted that Michigan was second in the nation in the rate of new foreclosure filings in January 2007. None of this is good news. 
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