HUD-FHA New Handbook 4000.1 (FHAHB4000.1) and FHA Single Family Housing Appraisal Report and Data Delivery Guide (SFHAP&DDG)

It took the FHA 16 years to replace the long ago outdated FHA Handbook 4155.2 and 4150 (Chapter #4). At that time I wrote a book “How to Make An FHA Single Family Appraisal.” All of that is now history as HUD-FHA has issued two new books that make the old ones and most of the Mortgage Letters obsolete. This is not surprising since a lot has changed in 16 years. Unfortunately, these two new books do not clearly indicate what is new and what is unchanged. This is the first of several articles that will point out some of these changes.

These two handbooks were released on March 18, 2015 to be effective June 15, 2015. Late in April in response to many complaints the effective dates were advanced to September 14, 2015.


Many of the changes are covered in the new FHA Single Family Housing Appraisal Report and Data Delivery Guide (SFHAP&DDG). However, FHA HB 4000.1 covers most of the other types of property that are insured by the FHA.

Environmental (page 391):
The Mortgagee must require corrective work to mitigate any condition that arises during construction that may affect the health and safety of the occupants, the Property’s ability to serve as collateral, or the structural soundness of the improvements.

Comment: The Lender cannot do this unless that appraiser supplies this information in the Site section of the URAR among other options.

Lead-Based Paint (page 71):
Comment: There is new emphasis on what steps lenders must take when a building is built before 1978. However, the appraiser should keep in mind that some houses built after 1978 still might contain lead paint as paint that was stored (often for many years) containing led was used after 1978. Therefore the appraiser should consider using a standard comment in their appraisals that the appraiser did not inspect the property for lead paint contamination

Pre-Foreclosure Sales (Short Sales) – Definition (Page 121):
Pre-Foreclosure Sales, also known as Short Sales, refer to the sales of real estate that generate proceeds that are less than the amount owed on the Property and the lien holders agree to release their liens and forgive the deficiency balance on the real estate.

Stationary Storage Tanks (Page 431):
The Appraiser must notify the Mortgagee of the deficiency of MPR or MPS if the subject property line is located within 300 feet of an aboveground or subsurface stationary storage tank with a capacity of 1,000 gallons or more of flammable or explosive material. This includes domestic and commercial uses as well as automotive service station tanks.

Proximity to High Pressure Gas Lines (Page 430):
The Appraiser must identify if the dwelling or related property improvement is near high-pressure gas or liquid petroleum pipelines or other volatile and explosive products, both aboveground and subsurface. The Appraiser must determine and report the marketability of the Property based on this analysis. The Appraiser must notify the Mortgagee of the deficiency of MPR or MPS if the Property is not located more than 10 feet from the nearest boundary of the pipeline Easement.


The Apple Watch

by Henry S. Harrison

On April 10th, the first day the Apple Watch was available for preorder, my son H Alex (REV’s Editor) ordered one for me. It arrived about a month later and I have worn it daily since then. I believe that it has features that will be especially useful for appraisers.

Text Messaging: What makes this feature unique is that you never have to turn this feature off, even when you are at a symphony, movie, lecture, etc. It will notify you with a vibration when you have received a text from selected family members, your office, friends, etc. (limit 12). You can do the same with email.

Monitoring your health: This is the feature that Apple plugs the most. The watch has sensors on its back that monitor your motion and heart rate. It is very sophisticated. Its GPS system will keep track of how far you walk or run, and as you exercise you can glance at you heart rate.

Locating your iPhone (if you forget where you’ve left it!) The Apple Watch is right out of Dick Tracy. It has a microphone and a speaker. You can make or answer calls while driving without taking your hands off the steering wheel or glancing down.

Siri is more amazing than ever. You can say “call my wife”, “call the office”, “turn on the alarm system”, or TV., etc. — and she does your bidding.

Watch Faces: Of the nine available, highly customizable watch faces, my favorites are "Mickey Mouse" (who moves his arms and taps his feet) and "Extra Large," which just shows the time in very large bright digital numbers. Other watch faces include a chronograph, stopwatch, alarm, Astronomy, motion butterflies. This is just the beginning — because you can add more features to each face “called complications.”

Complications include a world clock, solar system, calendar, weather, stock prices, alarms, timer, battery charge %, activity summary, and so much more.

Does all this sound complicated? Yes. it is — and isn’t. For example, you can take the watch out of an attractive box, charge it up, and go through a simple procedure that gets you started. It will do a lot of things without any more fussing. But you do have to learn how to use the digital crown by turning it, pushing it down, double clicking it and holding it down. Using a finger, you can swipe the face up, down, and to either side. You can also tap it or hold it down.

The watch comes with printed instructions and a lot of tutorials you can watch on your iPhone. The internet is also full of instructions, including complete videos. What they don’t tell you is that there is a very good Apple Watch User Guide, which I found very helpful and I still refer to it regularly.

As if all this were not enough, there are already over 3,500 Apple Watch Apps that you can download from the Apple Watch App store. Many of them are free.

When you Google Apple Watch, there are many sites with app information. This is one of the best I have found so far:

Article – FHA

FHA Bailout Imminent?
by Henry S. Harrison

The FHA was founded as a government agency as part of the National Housing Act in 1934. For the first time since its creation, it may require a financial bailout from the U.S. Treasury (a.k.a. the U.S. tax payers) so I thought it would be worthwhile sharing my understanding of the FHA and shedding some light on the looming bailout.

The tow major goals of the FHA is to (1) improve housing standards and conditions and (2) provide an adequate home financing system through insurance of mortgage loans. Another goal stated in the National Housing Act of 1934 was for the FHA to help stabilize the mortgage market. The Commissioner of the FHA is Carol Galante.


Historically, the FHA has done much more than insure single family houses. In 1935, Colonial Village in Arlington, Virginia was the first large-scale, rental housing project erected in the United States that was Federal Housing Administration-insured.[During World War II, the FHA financed a number of workers housing projects including the Kensington Gardens Apartment Complex in Buffalo, New York]. It also insured nursing homes. Currently, the FHA has about 4.8 million insured single family mortgages and 13,000 insured multifamily projects in its portfolio.

While a government agency seeking more funding isn’t exactly unheard of, the FHA is required by Congress to keep enough cash on-hand to cover expenses at all times. The initial estimates as to how much the FHA might require in taxpayer assistance are said to be around $943 million, according to the Boston Herald. The nearly-$1 billion dollar bailout would be for loans insured by the FHA that were posted as losses. Sen. Susan Collins (R-ME) stated, “It's of great concern to us.”

The FHA has until Sept. 30 to make a decisions as to whether or not they’ll actually require the money in order to continue operation. The Treasury, which does not require Congressional approval, would be providing the bailout which means it would be paid for by the taxpayers.

There has been suggestions that the FHA take over the running of Fannie Mae and Freddie Mac. Can you imagine what it will be like if that happened?


The Foreclosure Crisis Revisited
by Henry S. Harrison

It has been over 5 years since the housing bubble burst dragging down the whole economy with it. Those of you who are long time readers of Real Estate Valuation Magazine (we have been continuously published for over 20 years) will remember that we saw the bubble burst coming and predicted it would take 10 years for a full recovery. Sadly, it looks like that prediction is coming true. Since that time the Government has taken over Fannie Mae and Freddie Mac and the housing crisis is far from over.

Five years later here is where we are and nationally (the are local exceptions): housing prices are no where near where they were five years ago. The good news is that appraisers were again busy, and the volume of resales is recovering so that many of the Realtors and appraisers are doing O.K. The bad news is that this does not do much to help the overall the economy. What helps the general economy is the construction of new houses. Also it has been reported in many areas the volume.

In spite of the large inventory of foreclosed houses for sale the annual rate of new housing units has risen to about 600,000 units which is about half of the rate of new house construction prior to the bubble bursting. Many of these reported new construction units include units in multifamily buildings.

Many of these new units reflect a growing trend to move into the cities. Toll Brothers has been a large developer of suburban mega-homes. According to an article in Fortune magazine they are now putting up luxury condo in places like Manhattan and the hippest neighborhoods in Brooklyn.

In March 2013, Realty Trac — an online marketplace for foreclosed property — published a foreclosure inventory analysis showing nearly 1.5 million U.S. properties still actively in the foreclosure process or bank-owned (REO). This is up from the same period a year ago. These figures peaked in 2010 at over two million.

Many foreclosures are “Zombie Foreclosures” – houses that are vacant because the homeowner moved. Florida leads the pack with 90,566 zombie foreclosures, Illinois with 31,668 zombies, California 28,821 houses.



Simple Spelling Errors, Grammar Traps and Confusions
by Dr. Poly Syllabic

Below are the most common errors we see in text from all sources, especially in the hasty emails, on blogs, and in twitter feeds. Note that often it's a single vowel that changes the entire meaning of a word.

WRONG: That sweater really
compliments your hair color.
RIGHT: That sweater really
complements your hair color.
WHY: Compliment means "to appreciate (verbally)." Complement means "to enhance."

WRONG: The tickets to the show were
RIGHT: The tickets to the show were
WHY: Complementary means "in addition to." Complimentary means "without payment needed."

WRONG: I was just
laying around doing nothing.
RIGHT: I was just
lying around doing nothing.
WHY: Laying is what a hen does to an egg! Lying is from the root "to lie down". (It also means "not telling the truth.")

WRONG: There are no
acceptions to that rule.
RIGHT: There are no
exceptions to that rule.
WHY: Acceptions is simply incorrect spelling; there is no such word. Exceptions is properly spelled.

WRONG: You must
except what they are saying.
RIGHT: You must
accept what they are saying.
WHY: Except means "all but this one" and accept means "to admit or include."

affect of the storm will be significant.
effect of the storm will be significant.
WHY: Affect is a verb meaning the "action" of something. Effect means the "result or outcome."
Note one exception: in Psychology, "affect" is a noun that means one's emotional state.

The above mistakes are minor on their own, but if you make too many of them it creates a negative impression on your education, professionalism, and overall expertise.

Dr. Poly Syllabic

Editor’s Note: Are there other grammar or spelling issues that grind your gears? Send them to


Homonyms to Worry About
by Dr. Poly Syllabic

A major challenge for foreign speakers of English is that it is replete with homonyms: words that sound alike, but have entirely different meanings. In fact, homonyms plague nearly everyone who tries to write coherently in English. They are easy to confuse, and hard to spot when proofreading.

The worst examples are shown below. It behooves you to print this list out and keep it close, especially for the person who is your designated office proofreader. Don't have one? Get one! Like a designated driver, a designated proofreader will keep you from making the grammar errors that reduce your credibility and lower client confidence.

Please feel free to send in other examples of homonyms or other annoying grammar errors that confuse appraisers and the public, for us to publish!

Dr. Poly Syllabic


THEY’RE = They are | THEIR = belonging to them | THERE = in a location
Their house is over there; they're replanting the garden.

YOU’RE = you are | YOUR = belonging to you
You're in a great market; it may be time to sell your house!

IT’S = It is | ITS = belonging to it
It's time for the league to change pitchers. Its best new starter is Andrews.

WE’RE = we are | WERE = happening in the past | WHERE = a place/location
We're all going to Disney, where we met last year. When we were there, we stayed in a super hotel.

COULD’VE = could have | COULD OF = simply incorrect. Use “could've,” but only if you really must!
We could've won the lottery, but missed by one number.

LOOSE = not tight | LOSE = not winning
His tie was loose and his hair was mussed, but he still didn't lose the poker hand.

EFFECT = result | AFFECT = act upon
The effect of the recession was to affect all the prices in the neighborhood.*

* Exception, in Psychology, when it is a noun, synonymous with "emotional state": His affect was troubling as it was very flat and unresponsive.


No Spellchecker Will Help You:
How You Can Avoid Text Disasters

by Dr. Poly Syllabic

Dear Friends,
As an editor and technical advisor for the past 30+ years — both for my husband, real estate appraisal author Henry S. Harrison; and our daughter, Kate Lambert Harrison, CEO of — I feel uniquely qualified to report on the state of written materials in our ever-more complex computerized era.

It's simple: much of the text material I read each day is incredibly, egregiously, annoyingly flawed!

In this age of spellcheckers and auto-fill, Siri and sexting, writing often becomes a process of "
guesstimation" on the part of our computer helpers, and a current lack of skill on the part of many younger assistants and clerks.

I'm here to tell you that there are moments every day — in your correspondence, preparation of slides and PowerPoint presentations, and that press release your company wants sent out immediately to 2,000 reporters online — when no spellchecker can help you.

Reed this send tense and you'll sea rite of way what I mean.

In short, so many words in English are homonyms that a spellchecker can easily be fooled into misspelling a common word, and the only way I know to catch these errors is a very old trick:

Yes: after you've written and polished that excellent p.r. release,
read it aloud. Read it to a colleague, read it to your six year old daughter, or even to your Golden Retriever -- but do not fail to read it out loud. Hearing what you've written is one tried and true method for catching those "idiot mistakes" that make your company look sloppy.

Bottom line: If you don't think spelling and grammar errors can damage your image, think again.

Dr. Poly Syllabic

Editor’s Note: Dr. Poly Syllabic is a new blog that REV will publish on a semi-annual basis written by our former editor, Ruth Lambert. For grammar or writing questions, feel free to contact Ruth at


Number of Certified Appraisers on the Rise
Source: Appraisal Buzz

Excerpt: “Even with the myriad challenges in today's residential and commercial real estate markets, the percentage of appraisers with a certification is at an all-time high, according to Appraisal Institute research. However, because more than half of appraisers in the U.S. are age 51-65, and since many have left the industry in recent times, there needs to be a concerted and strategic effort to attract younger individuals into the profession.

The Appraisal Institute has analyzed the Appraisal Subcommittee National Registry data since 2006 using a consistent methodology, and the long-term trend is now clearer:

The number of appraisers continues to decrease at a rate of about 3 percent per year; Appraisal firms decreased the number of trainees dramatically over past two to three years; and The appraiser population could decrease 25 to 35 percent over the next 10 years due to age attrition and fewer new entrants....While the overall number of appraisers is decreasing, the number of certified general and residential appraisers is on the upswing.”

Comment: Interesting analysis. Well worth reading. Don't be “put off" by the AI promoting itself towards the end of the article. To read the article in full, click here.


New USPAP Frequently Asked Questions & Answers
Effective Date: January 1st, 2012 - December 31st, 2013

If you look carefully at the 2012-2013 Uniform Standards of Appraisal Practice you find a separate section of 159 pages answering 321 questions. It reminds me of when I walk into an attorney’s office and looked at their book shelves. The number of books that interpret the Connecticut statutes were far greater then the number of books that contain the statutes.

When I receive an “Ask Henry” question the first thing I do is look up the subject it covers in this FAQ section of the current USPAP. Often I am able to use what I find as the basis for my answer. (If you have the electronic version of the USPAP it is easy to look for a subject by using the search function).

After publishing the current USPAP (2012-2013), the Appraisal Foundation continues to publish answers to frequently asked questions. You can see these questions and all the 2011 questions at (On the right side of their home page click on the “Appraisal Standards Board (ASB) – USPAP Q&As” tab which will take you to eight new 2012 questions and seven 2011 questions.)

Below is a list of the 2012 USPAP Questions and my summary of these questions and answers:



Citing Flawed Valuations, Bank of America Repurchases
$330 Million in Freddie Mortgages

Bank of America will pay Freddie Mac $330 million dollars to buy back allegedly flawed home loans, Bloomberg reported on May 23.

Dan Frahm, a spokesman for the Charlotte, N.C.-based Bank of America, told Bloomberg that the bank has agreed to the repurchase “
because the valuation method used at origination did not meet the investor’s technical requirements.” Frahm noted the flaws have since been repaired.

Bank of America CEO Brian T. Moynihan is looking to mitigate further losses after incurring more than $42 billion dollars in costs related to defective home loans, Bloomberg reported. Buyers and insurers of mortgage securities have insisted on compensation for faulty debt created by Countrywide Financial Corp., which the bank purchased in 2008, at a time when the institution was the nation’s largest residential lender.

Freddie Mac and Bank of America announced a $1.28 billion settlement in January 2011 resulting from bad loans sold through 2008 by Countrywide. Other transactions between the entities were not included in the deal, and a portion of the loans covered by Freddie’s latest announcement had more recent origination dates.

Bank of America’s backlog of pending requests for
refunds on shoddy loans reached a record $16.1 billion in the first quarter 2012 as the dispute widened between BOA and Fannie Mae, which ceased accepting new loans from Bank of America in January, according to the Bloomberg report.

“It is also unclear if this is a one-time issue or a process that will be revisited at some regular interval,” the Barclays analysts told Bloomberg. “Another concern would be whether similar buyouts are being considered or being implemented at Fannie Mae.”

Nationally Recognized Appraisal Leader Ann O'Rourke is a featured speaker!


How to Appraise in a Declining Market
An Analysis by Henry S. Harrison, MAI, SRPA, ASA of
APB Valuation Advisory #3: Residential Appraising in a Declining Market

The Appraisal Practices Board (APB) of the Appraisal Foundation has just released “APB Valuation Advisory #3 – Residential Appraising in a Declining Market” dated May 7, 2012. This 33 page document is available at the Appraisal Foundation Website: (When you land on their Homepage, single click on the left side column “Appraisal Practices Board (APB)” ; and then single click on “APB Valuation Advisory” and then on “APB Valuation Advisory #3.”)

The most frequent question I’ve received in my “Ask Henry” mailbox over the past few years is “How does an appraiser make an appraisal of a property in a declining market?” The majority of these questions come from residential appraisers and express their confusion as to how to include (or not include) consideration of distressed sales, short sales, foreclosure sales, etc. — and if such comps are to be used, how they should be adjusted. I will address these problems in more detail as I summarize and comment on the eight subjects that make up the Valuation Advisory #3.

I. How Should an Appraiser Define a Declining Market?
Since there is no universally accepted definition of a declining market, it is incumbent upon the appraiser, when they report that the subject property is in a declining market, to include in the appraisal a definition of the term “Declining Market.” Support must be presented that demonstrates that the subject market area fits the provided definition.

For example, you might say: “A declining market is one where the median house prices go down for two consecutive 3-month periods.” To use this definition, you would then have to supply the necessary data about median sale prices in the subject market, showing that they have gone down during the past two 3-month periods. Keep in mind that an appraisal is based on historic information and is not a forecast of future conditions. It is not good appraisal practice to forecast the market direction or trend for the subject market into the future.



Push for National Flood Insurance Extension — with Reforms
Based on material provided by

As of Valentine's Day, Feb. 14th, 41 signatures had been secured on a letter from senators to the Senate leadership urging prompt action on legislation reauthorizing the National Flood Insurance Program.

At a press conference at the new Capitol Visitors’ Center, Senators John Tester (D-MT) and David Vitter (R-LA), the primary sponsors of the letter, said they would use the letter to persuade Senator Harry Reid (D-NV), the Majority Leader, and Sen. Mitch McConnell (R-KY) the Minority Leader, to put the NFIP long-term extension bill on the floor as soon as possible. Prompt action is needed because the current extension for the program ends May 31.

The current program has been operating on last minute extensions (with some breaks in the program) since September, 2008. As noted at the press conference by Charles Chamness, president and CEO of the National Association of Mutual Insurance Companies, the new flood season begins June 1, the day after the program expires.

Senator Tester acknowledges that support for the bill is not the holdup; the holdup is that Senator Reid is concerned that Senator McConnell will seek to use the "must-do bill" to push through controversial provisions opposed by Senate Democrats.

“Senator Vitter and I are very well aware that that this possibility exists on all bills, and we will have to work hard to ensure that the bill remains as narrow as possible,” Tester explained. Vitter added: “For no good reason, the NFIP was shut down for 53 days in 2010” because an extension to the program ran out. As a result, over 1,400 home closings were either cancelled or postponed. (He was citing data provided by the Property Casualty Insurers Association of America.) According to officials, in 2010, the NFIP lapsed four times and flood coverage could not be purchased or renewed for a total of 53 days.

Senator Vitter says Congress “must take the next step and pass legislation providing a long-term reauthorization of the program” before May 31. Also attending the meeting were officials of the Heartland Institute, the National Wildlife Federation, American Insurance Association, Taxpayers for Common Sense, American Rivers, NAMIC and RAA. All are supporting the effort to have the Senate act promptly on reauthorization legislation.

The Senate bill has no name. The House bill, H.R. 1309, the “Flood Insurance Reform Act of 2011,” passed last July by an overwhelming majority. The bill, sponsored by Representative Judy Biggert, (R-IL), would, among other provisions, extend the NFIP until Sept. 30, 2016. The Senate Banking Committee moved a similar bill "to the floor" in early September 2011. However, floor action has been pending since then. The letter was written to encourage movement on the reauthorization prior to the May 31st deadline.


Choosing Comps in a Declining Market

Newly published guidance from the Appraisal Institute helps appraisers know when and how to use distressed sales, such as foreclosures, as comparable sales. Such knowledge is crucial in the current market where distressed sales are common, creating complex valuation challenges.

AI’s Guide Note 11: Comparable Selection in a Declining Market notes: "transactions used in an appraisal assignment require adjustments for changes in market conditions."

The Appraisal Institute’s Guide Note 11 says: “A declining market will likely exhibit very little sales activity. When the sales comparison approach is necessary, but there are virtually no current sales in the market area to analyze as comps, the appraiser must: (1.) Expand the geographic area for comp search, then adjust for location as appropriate, and/or (2.) Use less recent sales, then adjust for market conditions as appropriate.”

It continues: “Appraisers cannot categorically discount foreclosures and short sales as potential comps in the sales comparison approach.” However, due to differences between their conditions of sale and the conditions outlined in the market value definition, these might not be usable as comps.

Further, foreclosures and short sales usually do not meet the conditions outlined in the definition of market value, the Guide Note says. A short sale or a sale of a property that occurred prior to a foreclosure might have involved atypical seller motivations (e.g., a highly motivated seller.) A sale of a bank-owned property might have involved typical motivations, so the fact that it was a foreclosed property would not render it ineligible as a comp. However, the Guide Note also points out, if the foreclosed property was sold without a typical marketing program, or if it had become stigmatized as a foreclosure, it might need to be adjusted if used as a comp. Also, some foreclosed properties are in inferior condition, so adjustments for physical condition may be needed.

this link to download the free PDF: “Guide Note 11: Comparable Selection in a Declining Market


2012-13 Edition of USPAP Released
Effective Date: January 1st, 2012 - December 31st, 2013

The Appraisal Foundation, a congressionally-authorized nonprofit organization dedicated to the advancement of professional valuation, announced that the 2012-13 edition of the Uniform Standards of Professional Appraisal Practice (USPAP) has been released. USPAP is the generally accepted standards of practice for the appraisal profession in the USA.
The 2012-13 edition of USPAP will be valid for two years, from January 1, 2012 through December 31, 2013. As with the prior edition, the new edition
includes the standards of professional practice for all appraisal disciplines as well as guidance from the Appraisal Standards Board (ASB) in the form of USPAP Advisory Opinions and USPAP Frequently Asked Questions (FAQs).  
Changes to the document include:
• Revisions to DEFINITIONS of “Client,” “Extraordinary Assumptions,” and “Hypothetical Condition,” as well as a new definition of “Exposure Time”;
• Creation of a new RECORD KEEPING RULE and related edits to the Conduct Section of the ETHICS RULE; 
• Revisions to Advisory Opinion 21, USPAP Compliance; and, 


Copies of the 2012-13 edition of USPAP are now available for purchase from the Appraisal Foundation Store at The 2012-13 edition of USPAP is available in printed spiral bound copy for $75 or as an electronic PDF download for $60.
In the coming weeks, USPAP will also be available in Flipbook format and for eReaders including the iPad, Kindle, Nook and the Sony Reader.


by Tom Kirchmeyer, SRA of Kirchmeyer Klips

As of August 1, 2011, we will be delivering UAD compliant appraisal reports to some of our lender clients that have requested an early start in order to get used to the new format. Appraisers are REQUIRED to submit UAD compliant appraisal reports on inspections effective September 1, 2011.

Here are a few more UAD FAQs:

Question: Where is the name of an AMC involved in an appraisal assignment reported?

Answer: The AMC name must be reported on Page 6 of the appraisal report in the “Name” field under “Lender/Client”. The “Lender/Client” field on Page 1 of the appraisal report should be used for the lender only.

My take: We will no longer require that this statement be included on the report: “This appraisal was completed for KA on behalf of [lender]”.

Question: The UAD requires the distance between the subject property and the comparable properties to be reported in miles with a directional indicator. How does this apply to properties that are located in the same building or in very close proximity to each other (i.e., the subject and the comparable property are condominium units located within the same building)?

Answer: In cases where the subject property and comparable property are located in the same building, the distance is to be reported in miles. However, in such cases a directional indicator is not required. For example, for condominium units located in the same building, the required distance for this field could be reported as “0 miles”, “0.0 miles” or “0.00 miles.” For properties that are located in very close proximity to each other, but not in the same building (such as adjoining properties or properties located across the street from each other), the distance is reported in miles with a directional indicator. For adjoining properties, a correct entry for the required distance and a directional indicator could be similar to the following examples: "0.01 mile W" or "0.04 mile NE."

My take: You will no longer see “same street” or “3 blocks north”.

Question: Can the UAD be applied to the other GSE appraisal report forms?

Answer: Yes. The UAD specifications may be applied to the other GSE appraisal forms, where applicable, if required by the client. However, an explanation of any standardized ratings/definitions, abbreviations, and formatting must be included in the appraisal report or an addendum.

My take: I think it’s a great idea to have the appraiser continue using the UAD Quality and Condition ratings on other non-UAD compliant forms such as the 2-4 family, co-op, and  manufactured home forms. As long as the appraiser includes the rating descriptions in the report, the lender and borrower will understand. I do think the new rating system for Q and C is better than the existing (old) system of average, average(+), fair, etc. And let's face facts: nobody ever truly understood what average meant!

Thomas J. Kirchmeyer, SRA is President of Kirchmeyer and Associates of Buffalo, NY. His Kirchmeyer Klips are popular with real estate professionals throughout the country. Click here for more information:
Email Tom directly at:


Back Pain
Health Tip: Save Your Back at Work
Suggestions to minimize back pain from DailyHealthNews

After a long day at work, your back may be chock full of aches and pains from standing on your feet or sitting at a desk.

The University of Maryland Medical Center offers these suggestions to help alleviate back pain while you're at work:
  • Pay attention to your posture, whether you're standing or sitting. Make sure your ears, shoulders and hips all line up.
  • Avoid standing for long periods. If you must stand, use a stool and alternate resting each foot on it.
  • Wear comfortable, cushioned shoes without heels if you walk a lot.
  • Choose a straight-backed, adjustable chair with armrests and a swivel seat for your desk chair.
  • Prop your feet up below your desk, so your knees are elevated above your hips.
  • Roll up a towel or place a pillow at your lower back while sitting at your desk.


Just The Facts, Ma'am

You knew it was bad. But did you know just how bad?

As of June 30th, the data from the Lender Processing Services Mortgage Monitor Report shows the numbers behind the misery:

1) The number of mortgages that are 90 days or more delinquent, combined with the foreclosure inventory at the end of May, totaled 4,084,557!

2) The number of foreclosure sales reached 78,600 at the end of June.

3) In fact, LPS stated that there are "still significantly fewer foreclosure sales" than earlier this year, or last year, and the numbers are actually declining! That means more foreclosure market glut.

4) The May data shows the biggest drop in foreclosure sales is in the East Coast states, with a decline of 96 percent in Washington, D.C., 80 percent in Maryland, 79 percent in New York, and 75 percent in New Jersey.

5) The average time spent in foreclosure continues to extend, with more than 33 percent of borrowers in foreclosure not having made a payment in over two years.

6) Nearly 30% of "current loans" - those not in foreclosure - are "under water", i.e., the mortgage is higher than the value of the collateral property.

7) The loan delinquency rate for the entire country is nearing 8%!

8) Many Americans are just one uninsured illness or one job loss away from losing their homes.

For more details, click here:


GAO Report Criticizes FEMA’s Management Of NFIP

According to an article published by Property Casualty 360, the Government Accountability Office has issued a scathing report on the management of the National Flood Insurance Program (NFIP). "There is no way the program will ever be “financially sound”, according to GAO. The report warns that unless FEMA - the Federal Emergency Management Agency, which administers the program, cleans up its act, it will be limited in its ability to manage NFIP’s operations or better ensure program effectiveness.

The report was issued in conjunction with a Senate Banking Committee hearing on the NFIP. The GAO report says that "the pressure on the NFIP to provide services for everyone limits FEMA’s ability to keep the program financially sound." Under present circumstances, “NFIP’s long-term financial solvency will remain in doubt.” The report points out weaknesses in the NFIP’s insurance policy and claims management systems, noting that FEMA cancelled a modernization initiative called “NextGen” in November 2009 -- because the system failed to meet “user expectations"
despite seven years of effort and the expenditure of $40 million dollars! (emphasis added)

FEMA "faces significant management challenges in areas that affect the NFIP, including strategic and human capital planning; collaboration among offices; and records, financial, and acquisition management. FEMA has not developed goals, objectives, or performance measures for the NFIP, and that the program faces high turnover and weaknesses in the oversight of its many contractors." Furthermore, “FEMA needs a plan that would ensure consistent day-to-day operations when it deploys staff to federal disasters.”

FEMA lacks a comprehensive set of processes and systems to guide its operations, in particular
"a records-management policy and an electronic document management system.” While FEMA has begun to address some of these challenges, including acquisition management, “...unless it takes further steps to address these management challenges, FEMA will be limited in its ability to manage NFIP’s operations or better ensure program effectiveness."


House Committee Approves Flood Program Extension; Bill Goes To House Floor, from

The House Financial Services Committee reported to the House floor legislation reauthorizing the National Flood Insurance Program for five years. The vote was unanimous. The bill is H.R. 1309, the Flood Insurance Reform Act of 2011.

A key component of the bill is a provision that, for the first time since the program was launched in the 1950s, opens the door for the private market to play a strong role in insuring against flood, primarily through reinsurance...

Industry and House leadership want the bill out the door promptly in order to give the Senate as much time as possible to deal with the issue before the current extension of the program runs out Sept. 30th. The program has been extended 10 times on a short-term basis since the original reauthorization ran out Sept. 30, 2008. The program lapsed for a total of 53 days last year because Congress was unable to pass short-term extensions on time.

Following a lengthy debate, the full committee decided to add business interruption insurance to the program. A subcommittee had passed a provision adding the coverage earlier, and the full committee rejected an amendment sponsored by Rep. Jeb Hensarling, R-Texas, that would have removed that provision... Read More...


The NEW Vocabulary Test

Part I

The computer world is moving so swiftly that it's hard to keep up with all the esoteric terms, acronyms and short-names in use. Below is the first part of a new lexicon of words about computers, computing, and the Internet we will be publishing during the next few weeks and months that may help orient some of our readers to this "new world order." For those of us in the 5th, 6th, 7th (or 8th!) decades, these terms can be a challenge!  ...The Editor

Note: This lexicon was compiled using definitions acquired through Google, Wikipedia, and other internet search engines.

404 - an HTTP standard response code meaning that the requested Web page could not be located. Also: Clueless about technology. As in "Joe walked out of that meeting looking completely 404."

Bandwidth - is a bit rate measure of available or consumed data communications resources expressed in bits-per-second or multiples (kilobits-per-second, megabits-per-second, etc.). The rate by which data is transmitted or received dramatically affects the utility of the Internet for users. A "slow" connection can make working on the Internet nearly unendurable.

Bandwidth hog – a derogatory term for a user of an internet connection who uses more bandwith than other users on the network.

Broadband refers to a telecommunications signal of greater bandwidth, in some sense, than another standard or usual signal. The "broader"  the band, the greater the capacity for traffic. Different criteria for "broad" have been applied in different contexts and at different times. 
History: The term's origin is in radio systems engineering, but became popularized after MediaOne adopted it as part of a marketing campaign in 1996 to sell their high speed data access. The slogan was "This is Broadband. This is the Way”. The term has never been formally defined, even though it is widely used, and has been the subject of many policy debates, including in the FCC's  controversial "National Broadband Plan."