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Old 10-29-2009, 04:00 PM
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timd354 timd354 is offline
 
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Default New USPAP Q & A October 2009

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:
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?
Response:
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...1&DOC=FILE.PDF
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Old 10-29-2009, 04:24 PM
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William K William K is offline
 
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Quote:
Originally Posted by timd354 View Post
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:
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?
Response:
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.

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"
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  #3  
Old 10-29-2009, 04:32 PM
Denis DeSaix Denis DeSaix is offline
 
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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.
  #4  
Old 10-29-2009, 04:43 PM
Ken B Ken B is offline
 
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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."
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Last edited by Ken B : 10-29-2009 at 05:26 PM. Reason: Conceding the point.
  #5  
Old 10-29-2009, 04:52 PM
Randolph Kinney Randolph Kinney is offline
 
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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?
  #6  
Old 10-29-2009, 04:52 PM
Denis DeSaix Denis DeSaix is offline
 
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Quote:
Originally Posted by Ken B View Post
There is only a contradiction if one wants to read into the information presented.

One document says that the scope MAY be limited to a name change. The other document says that the client can not limit the scope to the name change.

The first document says nothing about the client limiting the scope. It says the client and appraiser may engage in a service where the scope is limited to the name change. In other words, the client can ask if that service can be provided and the appraiser agrees to it. The client does not limit the scope, the appraiser limits the scope.
Ken-

I'm not sure I follow your argument. Isn't the following the thrust of the issue:
Quote:
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.
Quote:
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.
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".
  #7  
Old 10-29-2009, 04:56 PM
Tom Watson Tom Watson is offline
 
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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  
Old 10-29-2009, 05:03 PM
TJSum TJSum is offline
 
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Quote:
Originally Posted by Tom Watson View Post
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.
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.
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Old 10-29-2009, 05:04 PM
Denis DeSaix Denis DeSaix is offline
 
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Quote:
Originally Posted by Tom Watson View Post
SOW applies to the subject, not the client.
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  
Old 10-29-2009, 05:12 PM
BRCJR BRCJR is offline
 
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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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