Just what is an FRT and when does your appraisal Fall under Designation ?

[Wayne Tomlinson]

The real problem with thise discussion and some of the quoted items from the many banking regulations is that the banking regulations are a lot different from appraisers regulations, also different states have different regulations.

The GSEs technically are not FRTs. That said, the GSEs have elected to be treated as FRTs. Therefor if it is for a GSE; Freddie, Fannie, VA FHA Rural Development etc, then as far as the appraiser is concerned, all those are in fact FRTs.

If the appraisal you are working on is going into the secondary market and will be sold into the investor market, those are not FRTs, but often the person ordering the appraisal does not just where the appraisal will end up, so they really want the appraisal to comply so as to not screw up any possible final investor.

With the current climate, I suspect more and more of the loans will likely be among those guarantees, (not Jumbos larger than $750,000) so a larger fraction of the appraisals will essentially be FRTs or considered to be FRTs.

I know that is almost as clear as the USPAP, but that is the way it is in my understanding.

Wayne Tomlinson

 

[Ray Miller]

Ken... the scope of practice descrptions are essentially the same as in California. But in the CA laws and regulations all of the definitions and requirements are predicated on Federal Regulated Transactions, Agencies, Insitutiions, etc.,etc.

Just read most of the DLR Rules and Regs for appraisers. All of the data of the definitions and requirements it appears to me being predicated on FRTs.

No where could I find where it says a license or certified appraiser can not preform work that is not FRT related or that the State Appraisal Board has any say over those appraisals.

 

[Ray Miller]

The GSEs technically are not FRTs. That said, the GSEs have elected to be treated as FRTs. Therefor if it is for a GSE; Freddie, Fannie, VA FHA Rural Development etc, then as far as the appraiser is concerned, all those are in fact FRTs.

Wayne,

Over the yeas in courses for my license: Licensed, Certified Res, and Certified General. I have had it drilled into my brain that these never can be FRT appraisals.

In the last few years in CE I have ask the same question and gotten the same answer from many different teachers.

Who is right and why??

I guess I should ask where is it written and when was it passed that these are FRTs?

 

[Blue1]

Just read most of the DLR Rules and Regs for appraisers. All of the data of the definitions and requirements it appears to me being predicated on FRTs.

No where could I find where it says a license or certified appraiser can not preform work that is not FRT related or that the State Appraisal Board has any say over those appraisals.

Right...You can perform an appraisal for 'private money'....Just don't use the Fannie form. Since you are a licensed appraiser you still have to comply with USPAP which would, I think, give the State board some jurisdiction.

 

[Couch Potato]

Not.

The GSEs technically are not FRTs. That said, the GSEs have elected to be treated as FRTs. Therefor if it is for a GSE; Freddie, Fannie, VA FHA Rural Development etc, then as far as the appraiser is concerned, all those are in fact FRTs.

That is simply not correct. While they require appraisers to be Certified or Licensed, that is different from choosing to be a FRT. It is required that an appraiser be aware of the regulations and guidelines that apply to each assignment. Just as regulations for the various bank types are similar, appraisal regulations are similar; but they are not exactly the same. Approaching a given job with a "they are all alike" attitude can lead to problems.

 

[CANative]

Ken...

http://www.orea.ca.gov/pdf/Statute_2000.pdf

The short title of this document is Real Estate Appraiser's Licensing and Certfication Law

Start on page 5 of 21. All laws apparently pertain to FRTs.

 

[Couch Potato]

California operates under a different definition of FRT from what is listed in FIRREA

(h) "Federally related transaction" means any real estate-related financial transaction which a federal financial institutions regulatory agency engages in, contracts for or regulates and which requires the services of a state licensed real estate appraiser regulated by this part. This term also includes any transaction identified as such by a federal financial institutions regulatory agency.

which has a broader scope than the federal law. The differences are subtle, but substantial, IMHO.

 

[KenRossman]

I give up.

In voluntary states there are two separate and distinct thresholds.

The 1st requires a license or certification for FRT's.

This has absolutely nothing to do with the 2nd, which mandates license level required for different types of property appraisals.

Once you voluntarily become licensed/certified you must follow USPAP and All your work can be scrutinized by your state regulatory agency.

You two are both reading what you want it to be, not what it is.

Proceed at your own peril if you intend to exceed your license/certification limits.

Don't believe me? Call your state regulatory agency and ask them.

 

[CANative]

I'm not trying to be arguementative Ken. It's just not really clear to me. And yes, I will ask someone at OREA. I've been meaning to for a long time but it's not easy to get a live person there and I keep putting it off or forgetting.

This thread seems to be mixing apples and oranges or getting sidetracked on two separate issues (scope of practice and USPAP).

Does it seem logical that ANYONE can sell an opinion of value on anything from a trailer on a lot to a regional airport as long as they don't have a license but as soon as they get a license they can't?

In the FAQ section at OREA it states that an unlicensed person can obtain experience credits by completing appraisals on their own for private parties because they are not federally related.

 

[Couch Potato]

Government.

Does it seem logical that ANYONE can sell an opinion of value on anything from a trailer on a lot to a regional airport as long as they don't have a license but as soon as they get a license they can't?

We are talking about government, and California government in your case. Logic has no place in the discussion.