Supplemental Standards Rule Elimination

[CANative]

What happens when a user not identified by the appraiser's client has requirements which exceed the published requirements of the presumed target (GSE's, FHA, etc.)? With SSR there was no USPAP issue because only the GSE's (etc) could make SSR's. If we report 12 month sales history of the comps (because we have defaulted to GSE requirements) but the user that the appraisal ended up at has a 48 month requirement have we violated the SOWR?

 

[Don Clark]

What happens when a user not identified by the appraiser's client has requirements which exceed the published requirements of the presumed target (GSE's, FHA, etc.)? With SSR there was no USPAP issue because only the GSE's (etc) could make SSR's. If we report 12 month sales history of the comps (because we have defaulted to GSE requirements) but the user that the appraisal ended up at has a 48 month requirement have we violated the SOWR?

It would be a moot subject as they are not an intended user. remeber, the client and intended user(s) are those identified by the appraiser at the time of the assignment. What you describe is an unintended user and whatever they may or may not require is irelevant as they have no standing as to work you completed for someone else. This is well covered in USPAP, several FAQ's, and AO-25.

 

[CANative]

Fannie Mae (et al) are not listed as intended users yet their supplementals would apply until the end of the year and be included in the SOW afterwards.

 

[Marcia Langley]

Greg,

The GSE's guidelines/requirements have always been what they require from the lenders. They go into detail about what they expect from appraisals but they don't actually require anything directly from the appraiser.

It is the lender/client who is required to satisfy Freddie/Fannie. Then the lender/client turns around and makes compliance a requirement for the appraisal assignment.

This is true even now while the SS Rule is still in effect. When our clients do not require GSE compliance, we don't do it.

The SS Rule did emphasize the fact that the appraiser had to "babysit" the lender/clients and make sure they got the appraisal they needed even when their appraisal ordering personel were dumbed down to the point that they had no clue what they needed.

The appraisal ordering personel were just told what form to order. That's the main reason that some of us think it is misleading to do a non-GSE compliant appraisal on the GSE form. Because the market participants think they are synonymous, even though appraisers understand that they are not.

We really can't afford to continue to let our clients depend on us to give them GSE compliant appraisals without forcing them to recognize the fact that it is an assignment condition that they are, themselves, placing on the appraiser.

 

[George Hatch]

If an assignment involves a GSE their guidelines and policies are already part of your SOW.

 

[Carnivore]

The appraisal ordering personel were just told what form to order. That's the main reason that some of us think it is misleading to do a non-GSE compliant appraisal on the GSE form. Because the market participants think they are synonymous, even though appraisers understand that they are not.

I really agree with your statement.


Don,

Maybe "relevent" is not a good way to explain the indifference the NCAB and other boards have about USPAP. For example, we have over the years many many case of Appaisers MAKING UP COMPS or CHANGEING COMP DATA.

Did this result in revocation or even suspension? No, it always was just a slap on the wrist by making them take a silly class. Those offenses are serious and were committed deliberately!!

 

[Carnivore]

It used to be everyone. With bolding by me, up until around 2000, it said:

"The purpose of the Supplemental Standards section is to provide a reasonable means to augment USPAP with additional requirements set by clients, employers, governmental entities and/or professional appraisal organizations."

Does that leave anyone out?

Steven,

As usual this is one of the most interesting post in this thread. As of(My) 2001 USPAP still had what you said above(Supplemental Standard Rule) It also included Financial Institutions. USPAP 2001 was indeed Redundant with todays standards!

I lost my USPAP 2002, so I dont know what it said. It may be the issue the rule was actually changed. Interestingly, USPAP 2003 SSR verbiage is different. The TAF took away the Financial Institutions right to create SS Rules. It left everyone else. Clearly the SSR rule in 2003 had more meaning because of the exclusion. I dont think it would be wrong to draw that conclusion. I believe the TAF intended to grant special rights to the groups listed and exclude lenders and other types of clients.

This has been my point all along. The 2003-2006(and year 2007) SSR gave special rights to the entities indicated. It specifically excluded financial institutions.

USPAP 2008 changed all that. What changed is one or more of the following:

1. It revoked the special rights of certain entities issued from 2003-2006

2. It moved or reduced the special rights of certain entities to the SOW and in that move added financial institutions. This essentially returned to what the 2001 USPAP SSR stated. That was ALL clients and entities could establish added requirements, rules, regulations with the caveat that these PUBLISHED items could not diminish USPAP.


This is what has confused me all along. The transition back to the 'Free-for-All' mode simply said the reason for it; "SSR was Redundant".

So which TAF/ASB was remiss or misguided? Was it 2001 and earlier or the 2002-2006 TAF/ASB?

 

[Fred]

Marcia

Steve, I'm not sure I grasp the nuances of your question

That’s OK. I am resigned to my fate.

As long as client requirements are published in

The situation I addressed is when they are not published and don’t exist.

Don

"This appraisal report is intended to comply with and meet the requirements of_________________________________________, contained in such laws, regulations and guidelines as may be applicable at the time of the assignment".

Same thing, Referencing a document is easy. What if the client doesn’t have specific “laws, regulations and guidelines” governing their activities?

 

[Fred]

George

The whole reason the SSR is being removed is because it is obsolete, redundant and it adds nothing to USPAP

That’s the STATED reason. That doesn’t mean it was really obsolete, redundant and added nothing to USPAP. How about an acid test?

If an enforceability question arises, it is likely going to turn on whether the person doing the judging adopts the attitude I mentioned before, that is: the rule is gone, but you still have to comply with it. However, I think you get different restuls if a person just reads what the new document, by itself, actually says.

The larger theme here is that I think some are slow to recognize that as requirements are stripped down nothing but “necessary to produce credible results,” it becomes to difficult to establish triggers that make anything not necessary into a requirement, perhaps to do things that were explicitly required by older editions of USPAP whose purpose was to “establish the highest level of practice” not just the “minimum” for all practice.

In 2006 edition of USPAP, the SSR is an explicit trigger mechanism that creates a requirement to do the unnecessary. The only provision within the SSR that provides a way out of complying with everything “published” by a covered group is if the supplemental requirement is a “diminishment” of USPAP. In the 2006, the SSR contains no departure mechanism (so to speak) that by which an appraiser could say that the scope performed was limited (so to speak) to applying only those supplemental guidelines that are necessary to produce a credible appraisal.

Looking at the 2008 edition, only for what it says, and without applying the retired SSR, the position that the scope was limited to only those supplemental guidelines that were “necessary to produce credible results” is a sound and tenable position. The only thing in the new edition that I see that can compel an appraiser to anything above the minimum necessary is “law” and “regulations…having legal force.”

Take any stupid supplemental guideline for example. I believe under the SSR (2006 edition), the appraiser has to comply with it. However, in the 2008 edition, you can tell them to go fish. The market can stop hiring you because of this, but since there is no “law” or “regulation…having legal force” to compel the appraiser to exceed the scope necessary and perform the unnecessary as well, there is no USPAP violation.

 

[Marcia Langley]

The situation I addressed is when they are not published and don’t exist.

Steven,

So you don't think a client condition carries any weight unless it is published? When a client puts even a verbal condition on an assignment the appraiser either agrees to it or not. If the appraiser does not agree to do it and can't talk the client out of it, then the assignment will be cancelled by one party or the other.

If the appraiser does agree to the condition, then he is obligated to comply with it.

Unless you are saying that it would be ethical to agree to it and then simply not do it.

I don't see how a verbal client condition carries and less weight than a published one.

... do what you say and say what you do.

---

Appraisers have always been able to tell clients they refuse to comply with their requirements whether published or not. The old SS Rule did not require that appraisers accept assignments that had the GSE-compliance condition on them. But if the appraiser agreed to do it, then they had to comply.