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  #1  
Old 03-16-2006, 12:19 PM
Chris Johnson 1 Chris Johnson 1 is offline
 
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Default Supervisor Inspection of Trainee Appraisal - Federal Law?

I was just told by an investor that it is federal law that a supervisor inspect the property on a trainee's appraisal if it is A paper. I am in California and the investor is Wells Fargo.

Now I understand that it is some banks' policies that the supervisor inspect, as I know Wells Fargo has that policy so I am not fighting that.

Where can I find the law or other information that verify or discredit that statement?
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  #2  
Old 03-16-2006, 12:36 PM
Jo Ann Meyer Stratton's Avatar
Jo Ann Meyer Stratton Jo Ann Meyer Stratton is online now
 
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If the appraisal report is being requested on the 1004--it is written on page 5 of 6, #2 of the Appraiser's Certification. The person signing the report on the left is the one certifying that is what they did. If your state or the client requires the licensed/certified appraiser to complete the report, that licensed/certified appraiser has to see the exterior and interior of the subject and all comparables. Looking at photos, reading a trainees notes, etc, etc is not sufficient. #25 on page 6 of 6 is the consequences of not being truthful regarding #2. A paragraph in the addendum regarding what the trainee did is required but is not a substitute for the licensed/certified appraiser physically looking at the property and all comparables.
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  #3  
Old 03-16-2006, 01:35 PM
Brad Ellis Brad Ellis is offline
 
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Chris,

Federal law does not require this.

Why not ask THEM to provide a copy?

Brad
  #4  
Old 03-16-2006, 08:03 PM
jonathan asbury jonathan asbury is offline
 
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Brads right. I've never heard that is a federal law. Its a lenders requirement.

Ask them to see it in writing!!!

jonathan
  #5  
Old 03-16-2006, 10:34 PM
kim grant kim grant is offline
 
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Chris, why do you want to challenge a good client like Wells Fargo?

Does it really matter if you can prove them wrong? They want it that way. I work with them also, I don't like having to see properties that a trainee is working on but I understand why they request it and I understand they have a right to request it. I am here to tell you they will not change their mind no matter what "evidence" you provide them. If you are a trainee and do not have a supervisory appraiser they will simply order a new appraisal from someone else who will adhere to the requirement.

You have to be realistic in this business because there is so much competition for the work. If you are the trainee, you are s.o.l. just live with it and find a supervisor on your subsequent work, if you are the supervising appraiser, go look at the property and sign off on the appraisal. It's that simple. And btw, I do work for about 10 "A" paper clients and NONE of them will accept an AT without the supervising appraiser inspecting with them. NONE of them will accept anything less than a certified appraiser if the property is estimated over 1 million in value. It's becoming an industry standard
  #6  
Old 03-16-2006, 10:45 PM
jonathan asbury jonathan asbury is offline
 
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kim,

I agree that it doesnt really matter....except that they are claiming its a federal law. Its not, its just a case of someone not knowing what they are talking about and using incorrect statements to push their agenda. Will they change? No, but I do think they need to be set straight.

"NONE of them will accept anything less than a certified appraiser if the property is estimated over 1 million in value. It's becoming an industry standard "

its not becoming an industry standard... its the law...unless the loan is under 1 mil. I appraise 1mil-2mil properties all the time and i am a lowely AL, but the loan is under 1 mil.

jonathan
  #7  
Old 03-16-2006, 10:52 PM
kim grant kim grant is offline
 
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But law or not, the clients are predicating the industry rules. You can correct them if you wish but I think it's a non-issue and in the spirit of customer service ( you are an appraiser but this is a business!) I would not challenge them.

Just my thoughts, what the heck do I know after 20 years in this business anyways???

I do wish you luck!

Kim
  #8  
Old 03-17-2006, 04:25 AM
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Richard Carlsen Richard Carlsen is offline
 
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Michigan law forbids a Limited License Appraiser from signing any report that is prepared for a Federally regulated client for lending consideration. That means banks, credit unions, etc. A limited license appraiser can inspect but they cannot sign the report.

Lenders will have their own minimum requirements that go with each assignment. Ask your client but you should have known this before completing any assignment for them.
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  #9  
Old 03-17-2006, 05:13 AM
Denis DeSaix Denis DeSaix is offline
 
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Chris-

I am aware of no federal law that mandates what your client is telling you.

Kimís advice is well given, and Jo Ann nails the issue in regards to the new formís certification.

What I have experienced with larger clients (multi-state lenders) is that a guideline is established somewhere at the top, and by the time it filters down to the people on the front line, its purpose/reasoning is twisted. A lender certainly has the right to have contractual stipulations in their assignments that exceed USPAP, but not contradict USPAP; the requirement for the supervisor to accompany a trainee would be a good example of this.

The real PIA is when you find this out after the fact. In our office, we always ask two questions: Will their lender accept a trainee appraiser with Supervisor, did not inspect? And, does the lender require the Cost Approach (for which we will charge extra if we do not think it is applicable for the assignment)? A good habit to get into (but a hard one to do consistently) is to interview the client about these matters before hand (Essentially, Richard's advice!).

Good Luck!
  #10  
Old 03-17-2006, 06:00 AM
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Michael Tipton Michael Tipton is offline
 
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Attached info from the online FNMA sellers guide.

XI, 101.01: Licensing and Certification Requirements (06/30/02)

We require a lender to use appraisers that are state-licensed or state-certified (in accordance with the provisions of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989) to appraise the properties that secure mortgages it intends to deliver to us. The lender (and any third-party originators it uses) must be aware of, and in full compliance with, state laws for licensing and certification of real estate appraisers. The lender must document that the appraisers it uses are licensed or certified as appropriate under the applicable state law, either by including the license or certification number with the appraiser's list of qualifications that the lender has on file or by retaining a copy of the license or certification in the file the lender maintains for the appraiser. The appraiser must note his or her license or certification number on the individual appraisal report forms.

Link to Title XI

http://www.appraisalfoundation.org/s...7&DOC=FILE.PDF

When a new appraisal is required for a mortgage that a lender delivers to us, the lender warrants that the property has been appraised by a state-licensed or state-certified appraiser. Our appraisal report forms define the appraiser as the individual who personally inspected the property being appraised, inspected the exterior of the comparables, performed the analysis, and prepared and signed the appraisal report as the appraiser. This definition does not preclude an appraiser from relying on individuals who are not state-licensed or state-certified to provide significant professional assistance (such as an appraiser trainee or an employee of the appraiser doing market data research or data verification) in the development of the appraisal. The state-licensed or state-certified appraiser who signs the appraisal report must acknowledge in the report the extent of the professional assistance provided by others and the specific tasks performed by each such individual and must certify that the named individual(s) are qualified to perform the tasks. Under some state laws, a lender's use of an unlicensed or uncertified appraiser who is working as an employee or sub-contractor of a licensed or certified appraiser will satisfy the state's licensing and certification requirement, as long as the appraisal report is signed by a state-licensed or state-certified "supervisory" or "review" appraiser.

If a lender is unable to make the required warranty regarding the use of a state-licensed or state-certified appraiser because it is experiencing significant delays in obtaining appraisals as the result of a scarcity of state-licensed or state-certified appraisers in the state or locality, it must document the individual mortgage file with a copy of an authorized temporary waiver of the appraiser licensing and certification requirements (or a copy of its letter requesting such a waiver). Requests for these temporary waivers should be directed to the Appraisal Subcommittee of the Federal Financial Institutions Examination Council.

Last edited by Michael Tipton : 03-17-2006 at 07:10 AM.
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