Real Estate Appraisal Forum

appraisersforum.com logo
The Premiere Online Community for Real Estate Appraisers!
 Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
 
 
Go Back   Appraisers Forum > Real Estate Appraisal Forums > Fannie Mae, Freddie Mac, USPAP
Register Help Our Rules Calendar Archives Mark Forums Read


Closed Thread
 
Thread Tools
  #1  
Old 06-05-2007, 09:06 PM
stefan olafson stefan olafson is offline
 
Join Date: Apr 2003
Location: Grand Forks, ND
State: North Dakota
Professional Status: Certified General Appraiser
Posts: 2,148
Default Validity of a Complaint?

A theoretical problem which needs an answer!

After 2006 USPAP became effective Lender A requests an appraisal from Appraiser R. Appraiser R completes 2055 appraisal after communications with Lender A informing them of limitations on available data because of remote location and poor public records. Lender A accepts completed appraisal and funds loan for Buyer L.

Fast forward about seven months to Buyer L filing complaints with Real Estate Commission and Appraiser. Seems Buyer L purchased the property sight unseen, never even knew where it really was prior to picking up keys with directions to the house. After living in the home they realized that because of a high water table (seasonal, based on rainfall) the basement had some small water problems. When their sump pump quit working they just let the basement fill with water? When they purchased the property the sellers disclosure stated the presence of a well and an underground storage tank. Apparently the ust was a gas tank with the pump assembly enclosed in a planter in the yard.

After about seven months of no complaints or phone calls the complaints went out.

Now the question for my fellow appraisers.

USPAP requires us to name the intended user (in this case the lender) and the intended use (the financing a purchase transaction) which both occcured. There was never a question from Lender A to anyone.

Now, if a borrower (not an intended user) files a complaint with a state regulatory body, what is their duty? To investigate the complaint even though the complainant is not the intended user? To investigate even though there has been no complaint from the intended user?

I'm really confused on this one? If the state regulatory body was to follow through on a complaint from and unintended user, what is the good of USPAP?

I really would like to read some well thought out responses to this one?
Sponsored Links

  #2  
Old 06-05-2007, 09:17 PM
DB's Avatar
DB DB is offline
 
Join Date: Apr 2003
Location: The Great State of Tennessee (Mid-TN)
State: Tennessee
Professional Status: Certified Residential Appraiser
Posts: 11,204
Default

In my opinion ... and experience .. anyone can file a complaint, any time, any where and for any reason. What the board does with it is up to them. If all that you say is true ... I wouldn't lose any sleep over it ... unless you are seeing the commissioner's wife on the side ...
  #3  
Old 06-05-2007, 09:44 PM
stefan olafson stefan olafson is offline
 
Join Date: Apr 2003
Location: Grand Forks, ND
State: North Dakota
Professional Status: Certified General Appraiser
Posts: 2,148
Default

DB, this is all hypothetical, I am aware any one can file a complaint. My question is USPAP requires us to state intended use and user as well as other info. If the intended user is satisfied with the work product then why would an unintended user have the ability to entirely screw up ones life?

If a teacher gives a student a C, the intended user of that information is the school district. If an unintended user of the information on a grade, then complains to the school board, does the school board feel it necessary to investigate the teacher?

If the state regulatory agencies in charge of licensing were to deal with only intended users, wouldn't the process be a lot cleaner???

Just wondering what others are thinking
  #4  
Old 06-05-2007, 09:47 PM
DB's Avatar
DB DB is offline
 
Join Date: Apr 2003
Location: The Great State of Tennessee (Mid-TN)
State: Tennessee
Professional Status: Certified Residential Appraiser
Posts: 11,204
Default

My thinking is that, if the report is accurate and the buyer is just looking for a scapegoat, they would look to the realtor and the home inspector first ... I don't believe that any state board would entertain such a complaint, but if they did investigate, would likely clear the appraiser of any mis-doing, within minutes of reading such a complaint ... JMO ...
  #5  
Old 06-05-2007, 10:10 PM
Mr Rex's Avatar
Mr Rex Mr Rex is online now
 
Join Date: Jan 2004
Location: X Marks the spot
State: North Carolina
Professional Status: Certified Residential Appraiser
Posts: 26,373
Default

I think I would seek legal counsel with someone who understood the Intended Use/User arrangement. The borrower has a beef with the seller first, then maybe the lender. The Appraiser has a relationship with the lender, and its based on inspection from tho street. No one in this arrangement was able to make any representations to the buyer except the seller. The lender agreed to loan based on the data they had, the appraiser valued based on the data they had, and that data was provided to the client, the lender. The borrower accepts all the risk, and needs to seek relief from the party they have most direct contract with, the seller. Of course I'm not an attorney, but I did spend a night in a Holiday Express with a JD.
__________________
You talking to me?
  #6  
Old 06-05-2007, 11:00 PM
Terrel L. Shields's Avatar
Terrel L. Shields Terrel L. Shields is offline
 
Join Date: May 2002
Location: Springtown, AmeRica
State: Arkansas
Professional Status: Certified General Appraiser
Posts: 40,692
Default

Quote:
files a complaint with a state regulatory body, what is their duty? To investigate the complaint even though the complainant is not the intended user?
That depends upon the state and its procedure. In our state, the board has to accept the complaint but to pursue anything they have guidelines
Quote:
To investigate even though there has been no complaint from the intended user?
As I recall there has been a case or two where the courts ruled that unnamed parties do not have a stake in these appraisals unless the appraiser was aware that they would possibly use it.
Quote:
...what is the good of USPAP?
I am assuming you mean narrowly in the context of Std 9 and the intended user provision..If that board ignores the implications of the above, and the courts follow suit..then, Std 9 is meaningless piffle.

Quote:
I did spend a night in a Holiday Express with a JD
All I ever did was file my briefs with a paralegal...
__________________
"Bigamy is having one wife too many. Monogamy is much the same." Oscar Wilde
  #7  
Old 06-05-2007, 11:01 PM
George Hatch's Avatar
George Hatch George Hatch is offline
 
Join Date: Jan 2002
Location: Carlsbad, California
State: California
Professional Status: Certified General Appraiser
Posts: 16,801
Default

What about if there was no complainant other than the state?

The question here is not who has the legal standing to complain about your work; the three questions that are relevant are:

- Was the SOW used reasonable for the intended use/users as identified?

- Did the appraiser do what they said they did for that SOW?

- Did the report adequately disclose the assumptions and limitations used in the appraisal?

If so, then nobody has any recourse against the appraiser for any reason. Credibilty is defined within the context of the intended use, not against a standard of absolute and pure knowledge. It says so right in the book:

"The Credibility of the assignment results is always measured in the context of the intended use." (SOWR, lines 399-400)

Moreover, we are not required to be omniscient:

"Perfection is impossible to attain, and competence does not require perfection." (SR1-1.c)

The intended users could have requested and received a more comprehensive inspection process had they asked for it. They didn't ask for it and the appraiser had no reasonable way of knowing that one or more of the assumptions used for the exterior-only inspection process was incorrect.

An appraisal is not a home inspection and we don't warranty condition for buyers. If this buyer wanted an idea of the condition of the home they should have hired a home inspector to go through it.

Last edited by George Hatch : 06-05-2007 at 11:04 PM.
  #8  
Old 06-05-2007, 11:07 PM
Michigan CG's Avatar
Michigan CG Michigan CG is offline
 
Join Date: Nov 2006
State: Michigan
Professional Status: Certified General Appraiser
Posts: 17,743
Default

Quote:
Originally Posted by Mr Rex View Post
I think I would seek legal counsel with someone who understood the Intended Use/User arrangement. The borrower has a beef with the seller first, then maybe the lender. The Appraiser has a relationship with the lender, and its based on inspection from tho street. No one in this arrangement was able to make any representations to the buyer except the seller. The lender agreed to loan based on the data they had, the appraiser valued based on the data they had, and that data was provided to the client, the lender. The borrower accepts all the risk, and needs to seek relief from the party they have most direct contract with, the seller. Of course I'm not an attorney, but I did spend a night in a Holiday Express with a JD.
Another reason to insist on an interior inspection?

2055 -- $350
1004 -- $300
__________________
You do not know what you do not know.
  #9  
Old 06-05-2007, 11:35 PM
Otis Key's Avatar
Otis Key Otis Key is offline
 
Join Date: May 2004
Location: Mile High
State: New Mexico
Professional Status: Certified Residential Appraiser
Posts: 15,970
Default

Quote:
Originally Posted by stefan olafson View Post
<snip>USPAP requires us to name the intended user (in this case the lender) and the intended use (the financing a purchase transaction) which both occcured. There was never a question from Lender A to anyone.

Now, if a borrower (not an intended user) files a complaint with a state regulatory body, what is their duty?
I believe, and I don't speak for my state board or any other, that it is their obligation to investigate any and all complaints - much the same as the police do about a neighbor who complains at unusual noises next door or down the road. (Just my mind set - right or wrong).
Quote:
To investigate the complaint even though the complainant is not the intended user?
Yes - same reason as above.
Quote:
To investigate even though there has been no complaint from the intended user?
Yes again, unfortunately for this theoretical situation. There needs to be an investigation. That also means the good/honest in all aspects of life and work will also suffer some............Unfortunately!

Quote:
I'm really confused on this one? If the state regulatory body was to follow through on a complaint from and unintended user, what is the good of USPAP?
USPAP does not govern complaints or the public - that is a real shame - but the court systems do. IMHO, USPAP is like the lock on a door - it's only there to assist/demand/help keep the honest ones honest and to be used for those that are NOT. Right or wrong.

And I truely hope, believe, that this is a true theoretical situation. Unfortunately, I've read too many articles about somewhat similar situations that were not.

BTW Timothy Evans, I charge more for a 2055 (which might be why I haven't done one in years) than a full access appraisal. It's a liability factor that I put into place years ago.
  #10  
Old 06-06-2007, 12:09 AM
Brian Weaver Brian Weaver is offline
 
Join Date: Apr 2005
Location: Chicago area
State: Illinois
Professional Status: Gvmt Agency, FNMA, HUD, VA etc.
Posts: 2,516
Default

In Illinois we take ALL complaints. My job is to sort out what IS and what ISN'T a complaint.

Intended use and user is not a gate that locks out all other complainers.

Don't forget, states aren't disciplining licensees on BEHALF of anyone other than the state. Period.

If Illinois issues a discipline its not coming from the Intended User, Joe Homeowner or me or even the Appraisal Board...its coming from the Illinois Program. That's why the ASC reviews each state's program rather than fret over what party is in power or what person occupies the governor's mansion.

That's the real answer.
Sponsored Links

Closed Thread


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump




Copyright © 2000-, AppraisersForum.com, All Rights Reserved
     Terms of Use  Privacy Policy
AppraisersForum.com is proudly hosted by the folks at AppraiserSites.com

Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
Partner Sites:
AppraiserUSA.com - National Appraiser Directory AllDomainsUSA.com - Domain Name Registration
DeadbeatListings.com - Deadbeat ListingsAppraiserSites.com - Web Hosting for the Professional Real Estate Appraiser
Find FHA Appraisers - FHA Appraiser Search Commercial Appraisers - Commercial Appraiser Search
Relocation Appraisal - Find Relocation Appraisers Domain Reseller - Business Opportunity
Home Security Buzz - Home Security Info Radon Testing - Radon Gas Info
My Medicare Forum - Medicare Info Stop Smoking Help - Help Quitting Smoking
CordlessPhoneStore.com - Great Cordless Phones AndroidTabletCity.com - Android Tablet Computers

Follow AppraisersForum.com:          Find us on Facebook            Follow us on Twitter


All times are GMT -5. The time now is 10:46 AM.

SiteMap: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93