Academic journal article ABA Banking Journal

New World of Appraisals: What Are the Options?

Academic journal article ABA Banking Journal

New World of Appraisals: What Are the Options?

Article excerpt

Toward the end of ABA Banking Journal's sponsored roundtable on appraisal trends, one of the bankers participating turned and asked the four appraiser panelists: "I just have to ask: Did you come here thinking it was going to be 'Us versus Them?'"

Actually, the appraisers had wondered the same thing. But after two hours of intensive discussion, both sides ended up not only knowing a lot more about their respective businesses and the role that appraisals play in real estate-related lending transactions, but had an enhanced respect for each other's expertise and professional commitment.

The four appraisers participating were all officers of the Chicago-based Appraisal Institute, the worldwide professional association that was sponsor of the event. Two of the bankers were commercial real estate lenders and two were from the residential side.

Ten years ago, such a gathering would have had a different focus. Back then, virtually all aspects of real estate finance--commercial and residential--were still in boom times when the actions of a few tarnished the reputations of all. These participants are all survivors of that era and of the major correction that followed. Now, however, they all must abide by the truckloads of new rules and regulations for appraisers and bankers alike. The eight participants are all experienced players. They are more than survivors--they are the cream of the crop. Thus, they were an ideal group to explore three main themes:

* Appraiser independence--foundational changes resulting from the 2009 Home Valuation Code of Conduct (HVCC), now incorporated into the Dodd-Frank Act;

* Examination issues--the ongoing effects of overzealous examiners calling for reappraisals of properties; and

* Appraisal options and services--when to use automated valuation models and broker price opinions versus full appraisals.

Following are brief descriptions of the participants and their institutions.

Richard L. (Rick) Borges II, MAI, SRA, is 2013 president of the Appraisal Institute, an organization with 23,000 members in 60 countries worldwide. Borges has 40 years experience in the real estate business. He runs a full-service appraisal firm in Indiana with his wife, LaVonne, doing appraisals, property development and management, as well as mediation and arbitration of real estate value disputes around the country.

John P. Brodrick, senior vice-president, Eastern Bank, Boston, Mass. Brodrick oversees mortgage and consumer financing areas of the $8 billion-assets mutual savings bank, and is responsible for business development and revenue for mortgage, indirect auto, credit cards, and home equity.

M. Lance Coyle, MAI, SPA, vice-president, Appraisal Institute. Based in Dallas, Tex., Coyle is an appraiser who has a small litigation support practice providing expert witness testimony in commercial property litigation cases.

Jay Forrester, group vice-president and senior loan officer, Georgia Bank & Trust Co., Augusta, Ga. The bank is part of a $1.7 billion-assets, two-bank holding company that straddles the border with South Carolina.

Cynthia (Cindy) Lowman, president, Mortgage Corporation, United Bank of Michigan, Grand Rapids, Mich. The mortgage corporation is a wholly owned subsidiary of the $448 million-assets family-owned bank.

Elizabeth (Liz) Magennis, executive vice-president and chief lending officer, ConnectOne Bank, Englewood Cliffs, N.J. The $929 million-assets bank, formerly North Jersey Community Bank, focuses on commercial real estate lending.

Sara W. Stephens, MAI, immediate past president, Appraisal Institute, Little Rock, Ark. Stephens and her husband, Richard, have a diverse practice, including litigation support, easement work for acquisitions, and commercial property appraisals. They had a large residential practice for many years, but now focus on commercial work.

Ken P. …

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