[StBernard] Appraisal to carry more weight in Road Home applications

[Westley Annis]

In a concession to homeowners who fear the Road Home grant program will
underestimate the pre-storm value of their properties, officials said they
will give more weight to values provided by certified appraisers hired by
homeowners since hurricanes Katrina and Rita. 

Road Home officials said they will continue to give top consideration to a
pre-storm appraisal that was ordered before the storms by a third party,
such as a lender. But for people who don't have one, officials weeks ago
dropped their opposition to using a new appraisal ordered by the owner after
the storm - setting aside fears that a rash of new appraisals may lead to
abuses. 

And now Office of Community Development officials say the newly-commissioned
appraisals will trump other, older appraisal reports on the same property
that Road Home administrators obtain from government agencies or from
private appraisers. That reverses the state office's earlier position that
older appraisals dug up from government or appraiser files would be given
more weight in the $7.5 billion grant program. 

Tinkering with the policy on how pre-storm home values will be set was
revealed Thursday, reflecting continuing public anxiety about the issue.
Pre-storm property values are a critical piece of the Road Home grant
process because they set a ceiling from which deductions for insurance and
FEMA real estate grants are made. The Road Home program offers grants of up
to $150,000 to cover homeowners' uninsured losses from the hurricanes. 

"Our goal is to make sure everybody has the accurate pre-storm value," said
Suzie Elkins, director of the Office of Community Development. 

It remains to be seen if rule changes will add to delays in processing Road
Home awards. Elkins said she is optimistic the transition will go smoothly. 
The state's previous position was to disallow appraisals ordered by
homeowners since the storm, fearing abuses that skewed the appraisals in
favor of the applicant. But professional appraisers loudly challenged such
speculation and called the risk of misconduct minimal. 

In recent days appraisers have been peppered with questions about whether an
owner would be wise to invest roughly $350 in one of the appraisals. 

"If the individual has an appraisal available, I think it would speed up the
process," said Kenneth Kuebel, a veteran New Orleans member of the Appraisal
Institute, a professional group. "That gives the Road Home program knowledge
to either review or refute." 

Elkins and Mike Spletto, a senior housing manager for the state office,
didn't take a position on whether ordering a private appraisal would help,
saying the state may be able to retrieve an appraisal from another source -
and save the owner money. "The same appraisers that people are going to be
calling in their area may be the people that we're going to call" to check
their records for an appraisal on the same parcel, Elkins said. 

Spletto conceded that many owners may opt to hire an appraiser to gain more
control over when the document is delivered. "Is it going to speed up their
getting an (award) option letter? It might by a little bit," he said. 

Federal housing programs will be consulted for appraisal reports on
properties if the owner doesn't have one from before the storm and chooses
not to order one. And if none of those sources produces a certified
appraisal, Road Home officials will try to obtain one from private
appraisals' files, or, as a last resort, hire an appraiser to analyze the
home's market value before the storm, using less data than that cited in a
traditional appraisal. 

An appraisal even can be done when a home has been demolished or washed
away, although they acknowledge it is more difficult, state officials said. 

Kuebel said remnants of a foundation and other details of the missing home -
such as the number of bathrooms and size of the kitchen - can be obtained
through past construction plans or other documents and used in preparing a
"competent" appraisal. 

In all cases, Road Home officials plan to use, as a reference point, a
Broker Price Opinion, in which a Realtor weighs characteristics of the home
and surrounding neighborhood in estimating pre-storm value. Methods used in
the BPOs are being improved by requiring that the agent go to the property
to take a look, and that the agent use an exact square-footage figure for
the home - a detail sometimes missing an earlier Road Home procedures,
according to Carl Bauchle, a First American Title official working for the
program. Also, a $25 fee paid to a Realtor for each BPO has been nearly
doubled, he said. 

As the Office of Community Development finalizes text of its new procedures,
Road Home spokeswoman Gentry Brann conceded there was work to be done in
cleaning up conflicting information on the program's Web site. 

While one "Myth Busters" entry on the Web sit this week reflected policy
revisions, saying homeowners may now provide a post-storm appraisal of the
property's pre-storm value, anothr entry under "Frequently Asked Questions"
said, "Homeowners are not allowed to provide appraisals that were completed
post-Katrina or post-Rita." 

Coleman Warner can be reached at cwarner at timespicayune.com or at (504)
826-3311.