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New USPAP Q & A October 2009

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by timd354, Oct 29, 2009.

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  1. timd354

    timd354 Elite Member

    92
    Jan 11, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    A new USPAP Q & A was just released. The first and most interesting Q & A (in my opinion) is:


    Client Request to Limit Scope of Work to New Client Name
    Question:
    [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]An appraiser completed an appraisal for Client A. Client B received a copy of the appraisal from Client A and finds it acceptable for their purposes, but wants to be identified as the client in the appraisal report. Client B is aware that appraisers are prohibited from readdressing (or transferring) a completed report to a different client’s name. As a result, Client B would like to engage the appraiser in a new assignment, limiting the appraiser’s scope of work to only identifying them as the new client. Can the appraiser complete the assignment from Client B under these terms?
    [/FONT]
    [/FONT]Response:
    [FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]No. USPAP requires the scope of work performed to produce credible assignment results. USPAP clearly establishes that the scope of work is determined by the appraiser. If a client’s instructions (i.e. assignment conditions) limit the appraiser’s scope of work in a new assignment to simply identifying a new client, the client, not the appraiser, has made the scope of work decision.

    The entire document can be found here: http://www.appraisalfoundation.org/s_appraisal/bin.asp?CID=12&DID=1391&DOC=FILE.PDF
    [/FONT]
    [/FONT]
     
  2. William K

    William K Senior Member

    0
    Sep 21, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    AND THEN THERE IS......

    MORTGAGEE LETTER 2009-29

    "Appraisal Transfer and Change of Client Name in Appraisal Report
    In cases where a borrower has switched lenders, the first lender must, at the borrower’s request, transfer the case to the second lender. FHA does not require that the client name on the appraisal be changed when it is transferred to another lender.
    In accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), the lender is not permitted to request that the appraiser change the name of the client within the appraisal report unless it is a new appraisal assignment. To effect a client name change, the second lender and the original appraiser may engage in a new appraisal
    assignment wherein the scope of work is limited to the client name change. A new client name should include the name of the client (lender) and HUD."

    In the Blue corner weighing in at 500 pounds the current Champion--HUD!
    In the RED corner weighing in at a svelte 100 pounds (dripping wet)--- USPAP Q&A!
    The Judges for the event are ,The State Appraisal Board, THE Mortgage Bankers, AND THE Mortgage Underwriters......................

    and again the battle is for the "CONTROL THE APPRAISERS BELT":icon_mrgreen:
     
  3. Denis DeSaix

    Denis DeSaix Elite Member

    142
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    This is a conflict that will have to be resolved.

    In a not-too-old post, Incognito posted some direct information from FHA regarding its regulations. One specific comment by FHA was that none of its guidelines require an assertion of the Jurisdictional Exception Rule. Without that assertion, it would appear to me that Mortgage Letter 2009-29 contradicts USPAP. :shrug:
     
  4. Ken B

    Ken B Elite Member

    82
    Feb 18, 2004
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    So one appraiser looks outside and says "My, the sky is a pretty shade of blue."

    Another appraiser looks outside and says "Don't be silly, those clouds are white."
     
    Last edited: Oct 29, 2009
  5. Randolph Kinney

    Randolph Kinney Elite Member
    Gold Supporting Member

    53
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    So as long as the appraiser determines a two month old appraisal is sufficient to narrow the SOW to a client name change, even if it is used for a mortgage lending / FHA lending decision in a declining market, that's okay? :shrug:
     
  6. Denis DeSaix

    Denis DeSaix Elite Member

    142
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    Ken-

    I'm not sure I follow your argument. Isn't the following the thrust of the issue:
    I also think it is relevant that the Q&A came out immediately following the ML2009-29.
    It seems to me both parties (HUD and AF) are talking about a client name change: HUD said "you can do it" and the AF said "no you cannot".:shrug:
     
  7. Tom Watson

    Tom Watson Sophomore Member

    0
    Oct 11, 2009
    Professional Status:
    Appraiser Trainee
    State:
    Oregon
    SOW applies to the subject, not the client. New assignment imo. It's obvious that the lender that wants to limit the scope of work to a name change has no right to do that in both instances.
     
  8. TJSum

    TJSum Elite Member

    3
    Nov 12, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    SOW includes Intended User and Intended Use, so yes, it does apply to the client.

    Per USPAP Q & A and FHA, imo the statements are in direct conflict.
     
  9. Denis DeSaix

    Denis DeSaix Elite Member

    142
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    From USPAP (P. U-12):
    "An appraiser must gather and analyze information about those assignment elements that are necessary to properly identify the appraisal, appraisal review or appraisal consulting problem to be solved" (374-375).


    "Comment: The assignment elements necessary for problem identification are addressed in the applicable Standards Rules... In an appraisal assignment, for example, identification of the problem to be solved requires the appraiser to identify the following assignment elements:
    • Client and any other intended users;" (376-380)
    (My bold above)

    I think SOW does concern the client as well as the subject (and a lot of other things), no? It is a fundamental element of the assignment that must be identified (and considered) as part of the SOW development process. :)
     
  10. BRCJR

    BRCJR Senior Member

    8
    Sep 20, 2005
    Professional Status:
    Licensed Appraiser
    State:
    Virginia
    I may be incorrect, but I believe this is to be addressed in the 2010-2011 USPAP, in which the SOW may be limited to this very issue.

    Do not remember where I read such, but do believe I did read such.
     
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