Join ICAP for an evening of networking.
All real estate appraisers are invited to attend ICAP’s Job fair to explore part-time and full-time opportunities.
Network with hiring representatives, learn about and full-time opportunities & receive a legislative update from Marcus C. Evans Jr., State Representative of Illinois 33rd Legislative District.
November 10, 2016
5:00 – 7:00 p.m.
205 West Wacker, #202 Chicago, IL
Food, drinks and giveaways will be provided.
Registration Is Limited!
Appraisers Register For Free Here
Employers Register Here
If you have any questions please contact email@example.com
August 1, 2016, Sheraton Hotel, Lisle, Illinois
2016 Illinois Appraisers Update Seminar
ICAP Reporter, Karen Emerle, SRA
ICAPs third and final 2016 Appraiser Update Seminar was held on August 1, 2016 at the Lisle, Illinois Sheraton Hotel. Opening the day’s event to more than 250 appraisers ICAP’s Immediate Past President Rick Hiton, IFAS introduced ICAPs current President Mike Morris, ARA, MAI. Rick presented Mike an award acknowledging his many years of volunteer service to ICAP, and his faithful and strong leadership during Mike’s presidency.
President Morris introduced Mary Jane Lukas, ICAP’s administrative assistant. Mary Jane keeps the ICAP office organized and running smoothly. President Morris, on behalf of the ICAP Board of Directors, thanked Mary Jane for her professionalism and hard work in whatever task needs attention, and for attending to our memberships phone calls and inquiries. Mike extended a heartfelt thank you to the ICAP membership for attending ICAPs seminars and faithful contributions, and to the many Board members and committee members who volunteer their time working hard on behalf of the appraisal profession.
Now on the governors desk for signature, ICAP’s Bill (HB3333) amends the Illinois Appraisal Management Company Registration Act to create an Appraisal Management Company Recovery Fund. President Morris stated the process for this bill began in 2015 under Rick Hiton’s presidency. Mike touched on other issues ICAP has addressed during the past year and reminded everyone that our website and exclusive membership ICAP Advantage Newsletter contain information about the issues ICAP continues to work on. ICAP membership includes appraisers in a variety of disciplines. ICAP wishes to thank all of our speakers for their participation in ICAPs Lisle 2016 Illinois Appraisers Update Seminar and for providing an exceptionally good day of education, in a variety of topics, to all in attendance. All speakers provided time for Q & As at the end of their presentations. Many seminar attendees took advantage of the opportunity to ask these experts some insightful and pertinent questions. Thank you. Session highlights from the day follow.
Scott DiBiasio, Appraisal Institute Manager, State & Industry Affairs, presented the opening session Federal & State Legislative Update. Representing 90 chapters and sponsor chapters of the Appraisal Institute, the 4-person Government Relations Office is based in Washington, D.C. Scott can be contacted via phone at 202-298-5593 or via email at firstname.lastname@example.org.
The presentation discussed the state of the Appraisal Profession, the decline in mostly residential appraisers, especially in rural areas, and the factors, such as uncertain business climate, economics, over‑regulation, alternative evaluations, and industry demographics, impacting on the Profession. The AF’s (Appraisal Foundation) current approach to appraising is their effort to turn appraising into a “cookbook type of science” rather than the art it is and has been.
Mr. DiBiasio discussed the four major statutes specific to appraisers amended by the implementation six years ago of Dodd‑Frank. They include: TILA (Truth in Lending Act), FIRREA (Financial Institutions Reform, Recovery and Enforcement Act), ECOA (Equal Credit Opportunity Act), and RESPA (Real Estate Settlement Procedures Act). TILA topics included appraiser independence, reasonable C & R fees, HPMLs (High Priced Mortgage Loans) requirements, and qualified mandatory reporting. FIRREA addressed the Appraiser National Registry fees, AMC minimum requirements and State rules, and ASC policy regarding license reciprocity between States. ECOA includes a provision for the consumer to receive a copy of appraisals and other valuations three days prior to closing.
Mr. DiBiasio also touched on the AMC registry fee for AMC appraiser panels, ICAPs submitted comment letter, appraisal De Minimis threshold levels currently under review, the bank regulators requirement to review regulations every ten (10) years, AVM quality control standard, OCC third party oversight, and the FHA Handbook 4000.1. Additional topics Mr. DiBiaso highlighted are key principles for modernization, federal regulation, State by State portability, uneven playing field, the joint letter by AVOA, AI, NAHB, TAF asking for oversight hearing, SAVE Act and Energy Bill issues, and State issues including evaluations and AO‑13, BPOs, appraisal review, and AMC related issues including background checks, recovery funds, and registry fees.
Ray Brownfield ALC AFM, presented Agricultural Land Trends. Contact information for Mr. Brownfield of Land Pro LLC located in Oswego, Illinois is either by phone 630-258-4800 or email at email@example.com.
Focused on agricultural and recreational land values, Mr. Brownfield asked the opening question, Where are we now? AG appraisers are needed. AG client types include estate planning, lawyers, farmers, not necessarily purchasers, litigation, right of way, and development planners.
Land values increased 5 to 10 percent between the years 2000 to 2008. Ethanol standards were introduced. Ethanol is used in 40% of the U.S. oil. China entered the market. Good appreciation was seen in land. The 2012 drought was net in Illinois. Farmers had good insurance. A tremendous demand was seen in 2012-2013 with 15 to 20% increase in land values. In Illinois, the 2014 to 2015 period saw a drop depending on land quality. Land quality classes include Class A, Class B and Class C.
Included in the What we need to be watching discussion were commodity prices, demand, weather, domestic and global politics, interest rates and volatility. There is a big demand from China for ethanol; 40% of all corn produced goes to ethanol. Weather is something that cannot be controlled and will always be an issue in AG values. Low interest rates encourage land purchase and trade agreements, export policy and rates also affect AG values.
Where are we going addressed current facts and market pressures. Typically, land investment is long term and can be a great investment. Investors purchasing land lease it back to farmers. Illinois is best suited for soy beans. Linkage includes two rivers, interstate transportation, and railroads. Rental markets capitalize land values and will decline in the future. As commodity prices improve, appreciation prices will decline. A 3.5% net, net, net after taxes NOI is desired. Investors real estate taxes have an impact. Mr. Brownfield advised appraisers to attend and observe auctions. Referred to as the appraisal of the day, they provide a great opportunity to see who the buyers are.
A variety of audience questions included: Who are the investors, difference between AG and residential LTV ratios, the impact of wind farms on land value, types of approach used in land appraisals, and what is considered recreational land.
Closing out the morning sessions John Urubek, MAI, CCIM presented Statistics & the Appraisal Process.
Mr. Urubek commented that the “internet is here to stay. Click on it and someone is collecting your data. Sooner or later it becomes a statistic.” The purpose of the presentation is to encourage more use of statistics in your day to day appraisal practice, to expand your skill sets and experience by applying what you learn, and how to use examples of creative ways to create more credible reports.
To solve the problem with confidence one needs a larger sample size. The focus of the talk is the applications of statistics in real world appraisal problems. Mr Urubek asked the question, “should I use statistics in my appraisal?” Appraisals refer to probability. USPAP SR1‑1(a) states an appraiser must: “be aware of, understand, and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal.” Through the use of four examples, Mr. Urubek provided creative and practical ways to use to statistics in the appraisal process. Definitions of “descriptive” and “inferential” statistics were presented.
Mr. Urubek closed his presentation by reminding attendees that an appraisal must adhere to accepted appraisal principles, USPAP, laws and regulations, and assignment conditions. Mr. Urubek can be reached at phone 708‑557‑3662 or by email at firstname.lastname@example.org. For those in attendance expressing further interest in learning more about statistics and using them in their appraisal reports, Mr. Urubek teaches the class, Interpretation and Application of Simple Linear Regression. Contact Mr. Urubeck directly at email@example.com if you would like further information.
ICAPs emcee for the day was Randy Barcella, Real Estate Revealed. Randy’s show can be heard Sundays on Wealth Essentials Radio, AM560 the Answer. Thank you Randy for graciously hosting the day’s events. Randy closed the morning session asking a representative from each vendor to introduce themselves and invite seminar attendees to visit their booth. A special thank you to all the participants in the Vendor Showcase:
Prior to the start of the afternoon sessions, an attendance optional panel discussion was presented by the American Society of Appraisers (ASA), one of ICAP’s four sponsor organizations. The topic: How to Expand your Appraisal Practice. Alternatives to mortgage appraisal assignments were highlighted and included the following disciplines: Gift and estate planning, litigation, property tax appeals, personal property appraisal of machinery and equipment, and corporate valuation services for financial reporting, intellectual property financing, transaction advisory, corporate tax and risk management.
Andrew M. Raucci of Raucci & Sullivan Strategies, LLC was presented an award recognizing his long relationship with ICAP and the many years he spent lobbying the State Legislature on behalf ICAP sponsored bills and issues impacting the appraisal profession. Appropriately, James R. Blaydes, SRA presented Andy the award. Jim, an ICAP past President and Legislative Chair, coordinated with Andy on ICAP legislative issues. Jim donated many years of volunteer service to ICAP diligently working on behalf of Illinois appraisers and the issues impacting the profession. ICAP extends a heartfelt thank’s to both men.
Kicking off the afternoon, Jack Friedman, PhD presented Advertising and Promotion of Expert Witness Services from an Expert’s Perspective. Mr. Friedman holds BBA, MBA, and PhD degrees and CPA, ABV, MAI, ASA, CRE designations. His company, Jack P. Friedman & Associates, is located in River Forest, Illinois. He can be contacted through his website http://www.realexperts.com. Mr. Friedman provided a wealth of information in a short period of time as to professionally managing your business.
Mr. Friedman posed the question, Of the three things (sell the work, do the work, get paid) to do in your business, which is the easiest? Whether one is an expert witness or promoting professional services in general, Mr. Friedman stated it is necessary to gain visibility, be prepared to respond to any initial engagement request, and anticipate future events which could or does impact your service performance. It is important during the initial conversation to obtain details and resources pertaining to the case at hand including information about the attorney, and be fluent in describing your expert witness experiences. The appraiser must exercise due diligence in a number of areas, including but not limited to: Checking sources, establishing customer terms, availability, fees, inquire what sources referred them to you, resume content, Rule 26, engagement letters, rate sheets for a variety of circumstances, hourly rates based on your experience and education, reducing liability exposure, and the content and information one should include in their business cards, website, et cetera.
Craig Capilla, Attorney with the Franklin Law Group presented “Lessons from Llano ‑ a Review and Reflection on Mass Litigation in the Appraisal Industry. Attorney Capilla’s contact information is via phone at 847‑716‑2380 or via email at firstname.lastname@example.org.
In 2010 Llano, Texas had a population of 3,232. In 2015 the number of suits filed by Llano exceeds more than the City of Llano’s population. So far multiple lawsuits have been filed in ten States, including Illinois. Forty claims were filed in Cook County, eight remain, in the U.S. Northern District, eight claims were filed, two remain, and in the U.S. Central District 100 claims were filed by First Mutual/Mutual First and 300 were filed by Llano/Carrington.
There is a long string of entities involved in this litigation. They include: PayDirtReit, Heritage Pacific Financial, SAVANT Claims Management (SAVANTLG), Mutual First LLC/First Mutual Group LP, Llano Financing Group, and Impac Funding. Foreclosed properties were purchased for pennies on the dollar and resold at profit, charged off second mortgage loans were bought for pennies on the dollar and collecting on the debts was attempted. Attorney Capilla provided an in‑depth look at the history of the brothers Ganter, who are behind these lawsuits, and the entities involved in the various litigations across the States.
Additionally, Attorney Capilla discussed the Discovery Rule. Illinois is a Discovery Rule state. He offered some answers and guidance to the questions, “How do you attack this problem?” and “What should you do?” Appraisers were strongly urged to contact their insurance company, call an attorney, and if you belong to a professional organization, contact them too.
Presented by Brian Weaver, the “Regulatory Update” session closed ICAPs Lisle 2016 Illinois Appraisers Update Seminar. Mr. Weaver is the Appraisal Coordinator and AMC Coordinator for the Illinois Department of Professional & Financial Regulation.
Illinois is going paperless. Springfield needs an official email address from everyone. They would like two: a personal email and a business email address. A word of caution: Don’t let the State’s emails end up in your spam folder. Eventually every Illinois Appraiser License issued will include your photo on the card. Additional information can be found on the IDFPR website. The online Paperless Licensing Frequently Asked Questions can be found at the following link: http://www.idfpr.com/About/PaperlessFAQ.asp. A new issue of the IDFPR Illinois Appraisal newsletter is scheduled to be published in the fall. Read the most recent newsletter published in June, 2016, and check out previous newsletters online at: http://www.idfpr.com/DRE/ApprNewsletter.asp.
Coordinator Weaver reminded the appraisers in attendance of two mandatory certifications required in appraisal reports. Effective as of June 1, 2015 per Section 1455.245 Scope of Property Conditions Inspections by Real Estate Appraisers requires the following statement, “The comments by the licensed real estate appraiser contained within this appraisal report on the condition of the property do not address “standards of practice” as defined in the Home Inspector License Act [225 ILCS 441] and 68 Ill. Adm. Code 1410 and are not to be considered a home inspection or home inspection report.” Effective April 1, 2013, Section 1455.250 Appraiser Responsibilities as relating to Appraisal Management Companies Section 15‑10 (a) fee disclosure requirement ONLY applies to the AMC client. Read the entire Section 1455.250 online at the following link: http://www.idfpr.com/profs/appraisal.asp.
Coordinator Weaver provided a peek into future of AMCs and what it means for appraisers. The ASC Federal Registry Committee issued potential rules for $25 per panel member registry fee if the panel member completed a covered transaction within the previous 12 months. Coordinator Weaver mentioned there is one AMC which has 66,000 panel members nationwide, 55 jurisdictions will have to send checks to the federal registry, and States will be in a perpetual state of audit. Potential results is the AMCs will be forced to trim their panels, increase their fees to appraisers in order to cover the national registry fee, break up into smaller entities, sell themselves to a bank, or go out of business. The comments ASC received regarding AMC registry fees are posted and can be read at the following website: https://www.regulations.gov/docket?D=ASC‑2016‑0004. The states with AMC enforcement cases include New Mexico, Minnesota, and North Carolina. A word of caution to be informed about your client.
Coordinator Weaver posed the question, What will Illinois need to do to comply with federal AMC regulations? Some things considered are: The need to rewrite the entire Act and Administrative Rules, register every AMC in order to identify who does not fit the federal definition, build or contract to have real-time panel uploads from AMCs, create an audit and compliance team just for AMCs, increase AMC application and renewal fees to cover costs, create a termination bond for the orderly liquidation of an AMCs wanting to close their business, and write an escape clause incase Dodd-Frank is repealed.
Coordinator Weaver implored appraisers to stop signing indemnity clause statements. These are not for appraisers to sign, but for the vendor to sign. It is a prohibited activity under the Appraisal Management Company Act. Read the entire Prohibited Activities Section. See 225 ILCS 459/165, Section 165 Prohibited Activities (a) (7) (8). The Act can be found at the following link: http://ilga.gov/legislation/ilcs/ilcs2.asp?ChapterID=24 Refresh your memory, review the Appraisal Management Company Rules, specifically the sections covering payment policies and assignment guidelines. The link for these Sections (Sec. 1452.100 and Sec. 1452.120), the entire AMC Act and Rules can be located at: http://www.idfpr.com/profs/apprmanagement.asp. Coordinator Weaver reiterated troublesome issues in his “Stuff I Can’t Believe Still Goes On” portion of his presentation.
For licensing questions contact Mary Bates:
Phone: 317‑785‑9643 or
For any other question contact Brian Weaver, preferably via email:
ICAPs wishes to thank all the participants who attended our three Summer Update Seminars held in Collinsville, Springfield, and Lisle, Illinois. This year ICAP rolled out a new on-line survey, we thank all of you who took the time to complete the survey. Your feedback is important to us, and provides feedback as to how we can better serve you, our fellow appraiser professionals. We look forward to continuing to serve you and our collective profession in the years to come.
Hope to see you all next year!
The ICAP Board of Directors
July 18, 2016, Abraham Lincoln Doubletree Hotel, Springfield, IL
2016 Illinois Appraisers Update Seminar
by Karen Emerle, SRA
ICAP Reporter & Photographer
Opening the ICAP Springfield 2016 Illinois Appraisers Update Seminar, ICAP President Mike Morris, ARA, MAI, welcomed all attendees. Mike extended a heartfelt thank you for their continued support, attending ICAPs seminars, and for their faithful contributions enabling ICAP to continue its work on behalf of Illinois appraisers and the profession. President Morris presented a brief synopsis of the Coalition’s various accomplishments, the progress made on various legislative bills affecting Illinois appraisers, and provided an overview of ICAPs participation in various local, state, and national issues affecting the Appraisal Profession. The ICAP Advantage newsletter is an exclusive benefit of ICAP membership. The newsletter provides its membership up-to-date status reports on the various issues affecting Illinois appraisers and projects ICAP is working on. ICAP wishes to thank all of our speakers for their participation in ICAPs Springfield 2016 Illinois Appraisers Update Seminar and for providing an exceptionally good day of education to all in attendance. Session highlights from the day follow.
Scott DiBiasio, Appraisal Institute Manager, State & Industry Affairs, presented the opening session Federal & State Legislative Update. The presentation discussed the state of the Appraisal Profession, the decline in mostly residential appraisers, especially in rural areas, and the factors, such as uncertain business climate, economics, over-regulation, alternative evaluations, and industry demographics, impacting the Profession. The current approach to appraising is the AF’s (Appraisal Foundation) effort to turn appraising into a “cookbook type of science” rather than the art it is and has been.
Mr. DiBiasio discussed the four major statutes specific to appraisers amended by the implementation six years ago of Dodd-Frank. They include: TILA (Truth in Lending Act), FIRREA (Financial Institutions Reform, Recovery and Enforcement Act), ECOA (Equal Credit Opportunity Act), and RESPA (Real Estate Settlement Procedures Act). TILA topics included appraiser independence, reasonable C & R fees, HPMLs (High Priced Mortgage Loans) requirements, and qualified mandatory reporting. FIRREA addressed the Appraiser National Registry fees, AMC minimum requirements and State rules, and ASC policy regarding license reciprocity between States. ECOA includes a provision for the consumer to receive a copy of appraisals and other valuations three days prior to closing.
Mr. DiBiasio also touched on the AMC registry fee for AMC appraiser panels, ICAPs submitted comment letter, appraisal De Minimis threshold levels currently under review, the bank regulators requirement to review regulations every ten (10) years, AVM quality control standard, OCC third party oversight, and the FHA Handbook 4000.1. Additional topics Mr. DiBiaso highlighted are key principles for modernization, federal regulation, State by State portability, uneven playing field, the joint letter by AVOA, AI, NAHB, TAF asking for oversight hearing, SAVE Act and Energy Bill issues, and State issues including evaluations and AO-13, BPOs, appraisal review, and AMC related issues including background checks, recovery funds, and registry fees.
Paul Stoddard presented “Agricultural Land Trends.” Mr. Stoddard is the Lecturer in AGBUS with the Agriculture and Consumer Economics Department at the University of Illinois. Mr. Stoddard can be reached at: email@example.com. The TIAA-CREF Center of Farmland Research, the research unit at University of Illinois, Department of Agriculture and Consumer Economics website is: http://farmlandillinois.edu. The University of Illinois Farmdoc website is: http://www.farmdoc.Illinois.edu and the Farmdoc daily website is: http://www.farmdocdaily.Illinois.edu
Characteristics of Farmland as an Investment were outlined. They include, but are not limited to: Relatively expensive, illiquid, and difficult to estimate value. It is location specific and there is very low turnover. The two components of return include cash return and appreciation, which is often the bigger part. Farmers, institutional investors and private parties are the major players in the farmland market. Factors that drive land sales were discussed, including supply and demand expectations, supply factors, demand factors, cash rents, and produce profitability. Mr. Stoddard answered the question, “Why does farmland have value?” An overview of prior years’ as compared to today’s market, and the “normal” relationship between the cap rate and the 10-year T-Note rate were presented.
“Is there a bubble?” Mr. Stoddard compared the common loan terms for a borrower in 1980 to the 2014 terms. Today, many farmers convert variable rate real estate loans to fixed rate loans and crop insurance for farmers/owners can insure both yield and revenues. This has been a game changer in their risk profile of product agriculture. Risks in the agriculture market include major changes in ethanol and energy, cropping patterns, and potential increase in interest rates.
There are two farm bureaus in Illinois, Farm Credit Illinois and 1st Farm Credit. The Farm Credit Illinois covers the southern 60 counties of Illinois, and 1st Farm Credit covers the northern 42 counties of Illinois.
Closing out the morning was “Putting the MLS to work for you with Kristie DeBrun and Cathy Wagner. Mrs. DeBrun is the President of Capital Area Realtors, and Cathy Wagner is the Director of Capital Area REALTORS Multiple Listing Service.
Capital CAR was founded in 1921. It is one of the most progressive in the State of Illinois. Today it covers an eleven (11) county area, including three (3) counties in Galesburg. Membership includes 650 area Realtors and 75 affiliate members. Approximately eleven (11) percent of the members are affiliates. It provides a variety of services including the MLS, and a core benefit feature is the transactions management program. NAR (National Association of Realtors) established that every state and association must meet core standards, and must demonstrate compliance to those standards. CAR merged with Jacksonville and West Central Area. Since June 30, 2015, one-tenth of 157 have been involved in mergers, and consolidation trends will continue in order to compete and keep up with technology. An established agreement with Showing Time is another feature and an efficient way to schedule appointments.
CAR partnered with Clarity Security providing detailed log-in data information and data accuracy. While the MLS facilitates flow of the data, the managing broker has control of their data. Currently sold and closed data to any public portals is not syndicated. RESO (Real Estate Standards Organization) and their Data Dictionary will make use and transmission easier for anybody. According to the RESO website, it is not part of NAR, and was incorporated in 2011. The RETS (Real Standard Transaction Specifications) is “a framework used by real estate industry to facilitate the exchange of data.”
The transaction list, which rolled out six years ago, is offered to all brokers. It developed into digital signature program. One feature or service offered is the auto population of information into forms. The MLS compilation and copyright rules and regulations prohibit providing information to a non-member. Appraisers are provided a 1004MC reporting tool through INNO Via. Additionally, a feature for the appraisal addendum allows the download of MLS data into an Excel spreadsheet. Map based searches enable the user to draw multiple areas on the map at the same time. The transaction desk program allows one to store all one’s documents on line; the storage is unlimited. Any files can then be accessed on one’s phone. DocBox/DocBox2Go. The Authentisign E Signature Tool is not just for brokers; it can be used to sign any document. InfoSparks is a feature of Showing Time 10K Reports. It is inter-active and considered “market trends statistic on steroids.” FastStats, which is not interactive, provides local market updates by region, county, city or tract. And last but not least, RPR for appraisers was highlighted. RPR is a vehicle that allows one to share data with other MLS databases. The advanced feature is a sales comparison analysis. RPR offers online training videos and an RPR Mobile application.
Opening the afternoon sessions was “National Appraisal Issues & Updates” presented by Dennis Badger, Farm Credit Mid-America. Mr. Badger provided attendees with updates on the ASC (Appraisal SubCommittee), AQB (Appraisal Qualifications Board), ASB (Appraisal Standards Board) and the APB (Appraisal Practices Board).
On the pinnacle of this federal pyramid is the ASC, which is the “oversight mechanism” for Appraisal Foundation activities. It has federal oversight of the various State appraiser regulatory agencies. Their current “hot topic” is the perceived shortage of appraisers. Mr. Badger provided a look at the licensee trends from 1992 (65,716) to 2015 (98,351). The highest number (121,407) of licensed appraisers was in 2008. A category comparison between the total number (111,434 vs 97,521) of appraisers for the years 2006 and 2016, respectively, was provided indicating the number of certified general (34,812 vs 39,335), certified residential (46,701 vs 49,995), and licensed (29,921 vs 8,191) appraisers. The FHA and VA require a certified appraiser and they must be certified for three years. Additional topics the ASC is addressing include a unique identifier program, one is being “tested” by several states, the continuity of appraisers’ information, either by different states or appraiser registry, improving information sharing, development of the AMC national registry, the collection and transmission of AMC fees, and the appraisal complaint national hotline. The hotline is meant to be an information resource to help complainants determine the appropriate authority to file their complaint. It is meant for allegations of non-compliance with USPAP and appraiser independence requirements. The hotline does not investigate complaints. A statistical overview of the 2015 hotline contacts received and the identity type (i.e. appraiser, AMC, banker, mortgage broker, real estate agent or consumer) of the person making the contact was presented.
The AQB made changes, effective July 1, 2016, to the Real Property Appraiser Qualifications Criteria. The 3-year supervisory residency requirement was changed and actually reduced the minimum standards. This requirement was amended as it was problematic to appraisers living near state borders or in metropolitan areas covering multiple jurisdictions. The Competency Rule in USPAP already covers geographical area issues. Other areas of the AQB focus are alternative track for licensed residential to become certified, enhanced practicum curriculum, documentation of alternative experience, and the “trainee” nomenclature. In the Springfield geographical area the AQB and ASB will be holding meetings in the next twelve months. The meeting include public comment periods and are free to attend. The next public meeting is scheduled for November 18th in St. Louis. On August 25th a virtual public meeting is scheduled between 1 and 3 PM EST.
ASB issued a new fact sheet “Yes, I can accept that assignment.” It is USPAP flexibility at a glance and helps addresses the question, “What is necessary to help the client achieve their goal.” The document can be found on the AF website under the Appraisal Standards section titled “What are Appraisal Standards?” under the Standards & Qualifications tab. The ASB and IVSC have collaborated on the “draft” or “preliminary” report issue linking the definition of report to when a report is communicated with a signed signature. Caution is in order on this item: beware of State Statutes. The most recent USPAP Q & A was released on July 7th and deals with subject sales history. The two most previous 2016 Q & As issued deal with public trust and appraising two lots as one (March 17th), and the question: “Is turn-around time an assignment condition?” (February 10th).
Craig Capilla, Attorney with the Franklin Law Group presented “Lessons from Llano – a Review and Reflection on Mass Litigation in the Appraisal Industry. Attorney Capilla’s contact information is via phone at 847-716-2380 or via email at firstname.lastname@example.org.
In 2010 Llano, Texas had a population of 3,232. In 2015 the number of suits filed by Llano exceeds more than the City of Llano’s population. So far multiple lawsuits have been filed in ten States, including Illinois. There is a long string of entities involved in this litigation. They include: PayDirtReit, Heritage Pacific Financial, SAVANT Claims Management (SAVANTLG), Mutual First LLC/First Mutual Group LP, Llano Financing Group, and Impac Funding. Foreclosed properties were purchased for pennies on the dollar and resold at profit, charged off second mortgage loans were bought for pennies on the dollar and collecting on the debts was attempted. Attorney Capilla provided an in-depth look at the history of the brothers Ganter, who are behind these lawsuits, and the entities involved in the various litigations across the States. Additionally, Attorney Capilla discussed the Discovery Rule, Illinois is a Discovery Rule state, and offered some answers and guidance to the questions, “How do you attack this problem? and “What should you do?” Appraisers were strongly urged to contact their insurance company, call an attorney and if you belong to a professional organization, contact them too.
Closing out the seminar, Brian Weaver presented, the “Regulatory Update,” Springfield Edition. Mr. Weaver is the Appraisal Coordinator and AMC Coordinator for the Illinois Department of Professional & Financial Regulation.
Illinois is going paperless. Future license renewals will be only available on-line. Be sure the State has a current email address; they would prefer two, a business and a personal address. Additional information can be found on the IDFPR website. The online Paperless Licensing Frequently Asked Questions can be found at the following link: http://www.idfpr.com/About/PaperlessFAQ.asp.
Coordinator Weaver provided information regarding current Illinois licensees by category and the in-class and on-line education offerings approved by the State. Education providers who do not update the course IDEC number are pulled from the list until their certificates are updated. The latest newsletter has been published. There to help you in your day to day business, the June 2016 IDFPR Illinois Appraisal newsletter issue include the following topics: Paperless in Illinois, There Go My Brackets, To Eval or Not to Eval, Form Reports Q & A, AMC Fair Housing Mythology, and Experience Log & the Matrix. Read the June 2016 newsletter and check out previous newsletters online at: http://www.idfpr.com/DRE/ApprNewsletter.asp.
Section 1455.245 is one year old. Coordinator Weaver reminded appraisers in attendance that this is a mandatory certification that must be included in all 1-4 family appraisal reports. The certification must be “word for word” as stated in Section 1455.245, effective June 1, 2015, Scope of Property Conditions Inspections by Real Estate Appraisers. The second mandatory certification, which became effective April 1, 2013, addresses the appraiser’s responsibility relating to AMC fee disclosures. This certification ONLY applies to the AMC client and is found in Section 1455.250 Appraiser Responsibilities as relating to Appraisal Management Companies Section 15-10(a). Read both mandatory sections in their entirety, online at the following link, under the Laws & Rules tab: http://www.idfpr.com/profs/appraisal.asp.
Coordinator Weaver’s presentation included his “Stuff I Can’t Believe Still Goes On.” Always entertaining, this section of the presentation is a reminder of troublesome issues still being seen in appraisal reports. A cautionary warning to all appraisers to review their own business practices for any compliance issues to current USPAP and regulations. Some, but not all, issues discussed include: The use of vacant land forms for farms and hunting land, rent forecasting in empty buildings, digital signature caveats, and grammatical vagueness.
ICAPs final 2016 Illinois Appraisers Update Seminar will be held in Lisle, Illinois on August 1, 2016. This year, attending any or all ICAP seminars earns an appraiser 7 hours of CE for each seminar they attend. Follow the link to register for the Lisle seminar: https://icapweb.org/seminars/2016-Lisle.php
Mid-Year President’s Message
July 12th, 2016
Mike Morris, ARA, MAI, 2016 ICAP President
Dear Members of ICAP:
It seems like only yesterday that I took over as President of ICAP. Thankfully, I followed several outstanding leaders that continue to guide and counsel me as we serve the appraisers of Illinois.
The year began with some immediate challenges including budget challenges and our push to get HB 3333 (passed 57-0 in the Senate) through the house and to the Governor’s desk.
- HB 3333 – We began work on this bill in early 2015 and made it a major focus of our 2015 Lobby Day in Springfield. It easily passed the Senate, but the House was unable to act on it during 2015. The bill establishes an Appraisal Management Company Recovery Fund, which is designed to provide restitution to “each state-certified general real estate appraiser or residential real estate appraiser who has suffered pecuniary loss, and to award to the Department of Financial and Professional Regulation expenses, fines or fees that have gone unpaid to the Department in certain circumstances.”
Currently, AMC’s are required to post a bond to the State that only provides protection to the State and not to appraisers who have unpaid fees. Our bill benefits both the AMC’s and the appraisal profession since once the recovery fund reaches a certain level, AMC’s will no longer be assessed fees until the fund falls below that level. For our profession, we now have a level of protection if an AMC client goes out of business. The final bill passed the Illinois Senate on May 31, 2016 and was sent to the Governor on June 27, 2016. The Governor has 60 calendars day to sign or veto the bill.
Moving into 2016 we hired a new lobbyist, had our 2nd annual Lobby Day, introduced two additional bills, planned three educational seminars, and provided response letters on pending national issues.
- ICAP’s bill – HB 5880 prohibits the deduction of any amount from the reasonable and customary fee paid to an appraiser for any costs, fees or other expenses incurred solely by the appraisal management company. The bill passed the House Business & Occupational Licenses Committee with a vote of 10-0 on April 5, 2016 and had a second reading on April 15, 2016 before being sent to the rules committee on April 22, 2016
- ICAP drafted HB 5881 to ensure that the fee paid to an appraiser is reported separately from the fee paid to the AMC. The purpose of this bill is to require the separation of appraisal and AMC fees on Illinois disclosures to alleviate consumer confusion and increase transparency. The last action on this bill was April 8, 2016 when it was returned to the Rules Committee.
- IDFPR Turnaround Town Hall Meeting – ICAP was invited, along with other professions, to send two representatives to this meeting. Prior to the meeting, we collected your feedback with a membership survey for discussion at the meeting. The issues of appraiser independence and customary and reasonable fees were clearly on the mind of our membership. Our formal questions to the Department were: “What steps has it taken (or is planning to take) to ensure that appraisal management companies comply with the appraisal independence standards?” and “What steps had the Department taken (or is it planning to take) to conduct a survey of fees for appraisal services?” We are continuing to work with the Department to ensure appraiser independence and to complete a fee study for appraisers in Illinois.
- 2016 Lobby Day – On May 4, 2016 a group of ICAP members and board members made the trek to Springfield for our 2nd annual Lobby Day. We kicked off the day with a legislative briefing and met with the new IDFPR Director, Kreg Allison, as well as Kari Selinger (IDFPR – Director’s Office), Brian Weaver and Mary Bates. After our meeting, we spent the afternoon on a Capitol tour and meetings with individual senators and representatives to promote our legislation.
- 1st Annual Golf Outing – On May 19th ICAP held our inaugural golf outing at the Gleneagles Country Club in Lemont. The outing drew over 50 golfers for an outstanding day of golf, food and fun.
- Appraisal Threshold Issue – We provided written comments to the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation stating, “there is no evidence that raising the appraisal threshold would increase the safety and soundness of real estate lending practices.” ICAP recommended that the Agencies “continue to operate with consumer protection as its prime directive and urged the agencies to resist any calls to increase the appraisal threshold.”
- Potential Changes to the Appraisal Qualifications Board (AQB) Criteria – ICAP surveyed our membership, developed a position paper and provided a formal written response to the AQB. Members can view our response to the AQB on the ICAP website.
- USPAP 2018-2019 1st Exposure Draft – As with the AQB criteria, we studied the proposed changes to the next version of USPAP and provided a formal written response.
- Changes to the FHA Handbook – During our June 9 ICAP board meeting, we met with Heidi Henning, Managing Director – Business Specialties, for the National Association of Realtors (NAR) to foster and promote our profession. NAR is reporting that recent changes to the FHA handbook on appraisals (requiring appraisers to take on home inspection-type duties) is leading some consumers to mistake the role of appraisers with that of home inspectors. ICAP completed a survey prior to the meeting, receiving over 1,000 responses on the topic. We reported our survey results and recommendations to Ms. Henning and will continue to work with NAR to ensure these issues are addressed and clarified.
- Seminars – As of this writing, we have completed one of the three, scheduled seminars. We had a record turnout for the Collinsville seminar on June 13 to hear an outstanding group of speakers. The Springfield and Lisle seminars are coming up, and we have an outstanding group of speakers lined up for those events.
So far 2016 has been a very busy year for ICAP, and I appreciate the support of our members, the feedback on the surveys and the outstanding board of directors. Working with incredible people who are not afraid of a challenge has made my job as president very rewarding.
Mike Morris, ARA, MAI
2016 ICAP President
Non-Member pricing includes a pro-rated ICAP membership for the remainder of 2016.
August 1, 2016
Lisle Sheraton Hotel
3000 Warrenville Road
8:00am-8:30am – Registration and Continental Breakfast
Includes a continental breakfast during the morning exhibitor hour and a hot lunch featuring a salad, entrée, and dessert lunch during the afternoon exhibitor hour.
Crowd raffles and giveaways.
Welcome & Introduction from 2016 ICAP President, Mike Morris, ARA, MAI and an afternoon ice-cream networking break.
8:00am-8:30am – Registration and Continental Breakfast
Includes a continental breakfast during the morning exhibitor hour and a hot lunch featuring a salad, entrée, and dessert lunch during the afternoon exhibitor hour.
Crowd raffles and giveaways.
Welcome & Introduction from 2016 ICAP President, Mike Morris, ARA, MAI and an afternoon ice-cream networking break.