10/26/2010 12:30:00 PM EST
Exciting Time in Real Estate Appraisal Law
Does your law practice have anything to do with the value of real estate?
For example, real estate closings, land use approvals and development (strike
all that: I meant workouts, foreclosure defense and mortgage modifications).
Maybe you practice family law and need appraisals for property settlements. Or,
you are a tax lawyer and represent clients before the IRS, or federal or state
tax courts? Insurance, M&A lawyers, gather 'round. Are you a proud
tree-hugging environmental lawyer, an energy company attorney, a construction
mediator or do you represent a union looking at sustainable development as a
job creator? Who you gonna' call to determine the legal issues in the valuation
of projects like Las Vegas City Center, the largest LEED project in the world?
If your law practice has anything at all to do with real property value, you
will want to pay attention to what is happening right now in real estate
appraisal law. It's big. Very big. It will affect your
clients. It will affect your practice. It will affect your billings and
Here are some highlights from this year so far:
The biggie: The Mortgage Reform and
Anti-Predatory Lending Act (MRAPLA) has just brought about the greatest changes in real estate
appraisal regulation in twenty years.
In 2010, boththe Appraisal Institute and
the National Association of Realtors® held Appraisal Summits in the nation's
Several class action law suits have been filed
challenging single family mortgage modifications that were denied due to use of
Automated Valuation models and Broker Price Opinions (BPOs).
The AFL-CIO actively embarked on a plan for a
national campaign to organize real estate appraisers.
The Appraisal Qualifications Board started the
process of increasing the minimum requirements for appraiser qualifications.
Federal financial institution regulators and the
appraiser's regulatory cousins at FASB are creating a shift in CRE workout
Here's the finale. We'll have more appraisal
regulation but reportedly 50% of the valuations in the U.S. are BPOs. While thoseunregulatedvaluations
may be the tool of choice for many lenders, BPOs give agita to Real Estate
Appraisal regulators, not to mention real estate appraisers. If you don't know
what a BPO is, and what it is not, stay tuned. I will cover it in a future
What a great year for Real Estate Appraisal Law! It's just
too much for one blog post. So stay tuned for future blogs on this exciting
topic. Did I say "exciting"? Yes. I'm one of the few
attorneys in the U.S. who is also an MAI (member of the Appraisal Institute)
and an Appraisal Qualifications Board Certified instructor for the Uniform
Standards of Professional Appraisal Practice (USPAP). I'll make it easy
and break down all of this exciting news in the weeks leading up to
LexisNexis's release of my special alert - The Mortgage Reform and Anti-Predatory Lending Act (MRAPLA) of 2010
Creates the Most Significant Changes in Appraisal Law in More than Two Decades in Real
Estate Financing (LexisNexis