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 your income.

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 capital.
  • 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 paradigms.
  • 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 blog.

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 Matthew Bender).