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HVCC allows appraisal transfer- does USPAP? I know.

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by Pat Butler, Feb 17, 2009.

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  1. Pat Butler

    Pat Butler Senior Member

    10
    Jan 17, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    I can see the hassles that are coming. This is from the January 2009 Q&A-

    Sure the Code allows it, but there are USPAP issues. Just another ignorant law that ignores existing laws and practices. Get ready for the phone calls.
     
  2. Dennis J. Black ASA IFAS

    Dennis J. Black ASA IFAS Senior Member

    0
    Mar 5, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    There are no USPAP issues. The update is just a new assignment.
     
  3. George Hatch

    George Hatch Elite Member

    114
    Jan 15, 2002
    Professional Status:
    Certified General Appraiser
    State:
    California
    The HVCC isn't a law or a regulation and it's not in conflict with existing laws and regulations. Or USPAP.

    I believe that you may be equating "transfer" with "readdress", but the two are different.

    If a loan originator submits an appraisal performed for Lender A to Lender B the new lender is allowed to use the original appraisal in its original form, and without having their name on it. The HVCC stipulates that the have to ascertain whether the appraisal was properly engaged with respect to the requirements of the HVCC and otherwise conforms to their internal requirements.

    There's nothing new about allowing lenders to use appraisals engaged by other lenders. They've been allowed to use appraisals that don't have their name on them, subject to their internal review, since the inception of FIRREA 20 years ago. They generally haven't taken advantage of that latitude in the past because it's cheaper/easier to get the appraiser to readdress so they don't have to do the review and so they'll have the direct relationship with the appraiser.

    Anyways, there's no conflict and it shouldn't cause any new problems. Lenders and loan originators have already had it drilled into their heads that most appraisers know better than to readdress appraisals, and they already know that some of those appraisers will actually say "no" when asked.
     
  4. Pat Butler

    Pat Butler Senior Member

    10
    Jan 17, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    I realize USPAP has no affect on HVCC but my concern is with lenders wanting appraisers to do things that violate USPAP. It would be clearer if they would have used the word "new assignment" when talking about this situation. The word 'update' is what I have a problem with.

    I fully realize that this 'update' can, and should, take place without the appraiser's involvement. But I still can foresee many situations whereby the lender does it the easier way by calling the appraiser and asking for the 'updated' or 'readdressed' appraisal. That gets us back to the old arguments about it being a new assignment. Would be much easier to explain to lenders if the HVCC used our terminology to start with.
     
  5. George Hatch

    George Hatch Elite Member

    114
    Jan 15, 2002
    Professional Status:
    Certified General Appraiser
    State:
    California
    The "update" term is a nuisance no matter who is using it. Unfortunately, even the ASB uses the term. That being the case it's tough to hassle Fannie for it.
     
  6. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    15
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    I cannot, for the life of me, understand why this is so confusing.

    You do an appraisal and company A is your client. A doesn't do the loan and the borrower goes to company B. Company B wants to use the appraisal. They use the original appraisal.

    If they want an appraisal with their name on it they will have to order one. It becomes a new assignment. Company B is now your client and you do an appraisal for them. It is a NEW ASSIGNMENT!

    YOU CANNOT JUST CHANGE THE NAME ON THE APPRAISAL!!!

    HVCC has no authority over USPAP. If your client adopts HVCC they can make the assignment subject to HVCC and then you, as the appraiser, are obligated to follow your client's instructions. You are still required to complete the appraisal in compliance with USPAP.

    It would be a violation of USPAP to perform an appraisal and not follow the conditions of engagement. Those conditions cannot be such that would cause you to deviate from USPAP Rules, Standards, and Standards Rules.

    Does that make it more clear?
     
  7. Mr Rex

    Mr Rex Elite Member

    140
    Jan 12, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    Yeah Mike, now walk us line by line through AO-3. Particularly sections 3 & 4.:unsure:
     
  8. Pat Butler

    Pat Butler Senior Member

    10
    Jan 17, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    Mike- it's very clear to me. My whole point is that the term 'new assignment' is not part of the HVCC language while the term "update" is. Why don't they adopt our terminology considering that we will sometimes be involved in the transfer process?

    We shouldn't have to be involved, but there will invariably be lenders who don't understand the process and will opt for ordering a 'new' appraisal from the original appraiser.
     
  9. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    15
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    Update is in our vocabulary! There is an update and there is a "new assignment". Too different things.
     
  10. Pat Butler

    Pat Butler Senior Member

    10
    Jan 17, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    Of course 'update' is part of our vocabulary- but that's not what they mean when talking about transferring the appraisal to a new lender. They're really hinting at re-addressing an appraisal which is not allowed. AO-3 mentions that confusion can take place when terms such as 'updates' or 'recertification' are used. It says it is simply 'a new assignment'.

    If they go the route of having the original appraiser do it then they will eventually need a 'new assignment' and that's not the terminology they are using. Why doesn't the term 'new assignment' appear in the HVCC? I realize they can do as they darn well please with their terminology, but it would be nice if they adopted our language so long as we will occasionally be involved in the process.

    We will be getting phone calls from lenders asking for an update when they really need a new assignment. Wouldn't it be nice if the HVCC told them that what they need is a new assignment/appraisal?
     
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