Interagency Guidelines, FDIC and AS IS Values

[George Hatch]

Please excuse my limited participation lately. I'm trying to finish up a report draft that's due to the client tomorrow. Since I am sitting in one of those thrill a minute AI USPAP update courses tomorrow, I'm hoping it will be out of review by noon tomorrow so I can email it to the client during lunch break...assuming we get one.

I do hope the quality of the student in this cycle's USPAP update course is better than the last one. I was severely disappointed by the questions being asked last time. It opened my eyes to the watering down of the membership that occurred when AI went on its last recruiting spree...something which they recognized afterwards as a problem and which they have taken steps to resolve.

There, that should be fodder for the next couple of threads.

(laughs) I submitted a written response to the last ASB Exposure Draft. I hope you did, too.

 

[George Hatch]

Where does it say appraisers must educate bank employees?

Again,I consider this an exceedingly clumsy attempt on your part to mischaracterize my comments. If this is your plan then you're going to need to improve your level of play at it, 'cause I'm way ahead of you. This ain't checkers, it's chess.


Here's what I actually wrote that apparently set you off on on this Easter Egg hunt:

IMO appraisers should be teaching their clients about appraisals, not the other way around.

Since it apparently escaped your attention, please take note that I was expressing my own opinion on the matter and did not reference the minimums in USPAP (aka the "it" to which you are apparently referring) as its source.


RIF, 'Cuz. I think that you should perhaps consider the possibility that I generally mean what I say in the manner in which I say it. I sometimes make mistakes and express myself poorly, but that's not real common.

 

[mark hurlock]

Again,I consider this an exceedingly clumsy attempt on your part to mischaracterize my comments. If this is your plan then you're going to need to improve your level of play at it, 'cause I'm way ahead of you. This ain't checkers, it's chess.


Here's what I actually wrote that apparently set you off on on this Easter Egg hunt:



Since it apparently escaped your attention, please take note that I was expressing my own opinion on the matter and did not reference the minimums in USPAP (aka the "it" to which you are apparently referring) as its source.


RIF, 'Cuz. I think that you should perhaps consider the possibility that I generally mean what I say in the manner in which I say it. I sometimes make mistakes and express myself poorly, but that's not real common.

The clumsy attempt is by you, George. I told you when you started this, I will accommodate you. I will get as ridiculous as you.

 

[CANative]

Mark... just get out an old USPAP and turn to Statement 10, specifically Part D - Using Hypothetical Conditions.

Paragraph D.2 is titled "Failing to indicate the "as is" value of the property as of the date of the report and how the "as is" value differs from the value conclusion under a hypothetical condition."

When a property is appraised for market value as of a current date based on a hypothetical condition, an appraiser must ensure that the appraisal report contains appropriate disclosure of the hypothetical condition, including that its use might have affected the assignment results (SR 2-1(c) and SR 2-2(a, b or c)(viii).

SUPPLEMENTAL STANDARDS RULE: The agencies' appraisal regulations require sufficient information and analysis to support the regulated institution's decision to engage in the transaction. The agencies' guidelines state that for federally related transactions, "an appraisal is to include the current market value of the property in its actual physical condition and subject to the zoning in effect as of the date of the appraisal" (current date of value). If, by failing to provide this opinion, when possible, an appraiser violates the agencies' appraisla regulation and guidelines, the appraiser violates the SUPPLEMENTAL STANDARDS RULE.

This requirement did not go away with the retirement of the SSR, it just became part of the Scope of Work Rule. So the difference is that instead of violating the SSR you're now violating the SOWR.

 

[Ken B]

Most residential appraisals are exempt from the agencies guidelines, as specified in Interagency Guidelines, but must conform, instead, with the guidelines of the those entities to which the lender may sell the loan, as specified in the Interagency Guidelines.

If the guidelines specifically exempt an appraisal from those guidelines, one cannot insist that they must conform to the guidelines, absent any requirement, outside of those guidelines, to do so.

That said, if the client tells an appraiser the appraisal must conform with the Interagency Guidelines, then the appraiser must conform with the Interagency Guidlines. That would be an example of the a requirement, outside of the guidelines, to comply with the guidelines, even if the guidelines might otherwise not require compliance.

Simple, no?

 

[CANative]

The old "if it's good enough for Fannie it's good enough for us" argument?

I'd still ask the question if the client was a Bank or CU. If for nothing else than to have an opportunity to sell additional services.

 

[Ken B]

No, its the old "don't assemble a GM transmission using a Toyota transmission instruction manual" argument.

A professional would use the right manual and tools and not insist that all transmissions must be assembled in accordance with a GM manual and with standard size tools.

 

[mark hurlock]

Mark... just get out an old USPAP and turn to Statement 10, specifically Part D - Using Hypothetical Conditions.

Paragraph D.2 is titled "Failing to indicate the "as is" value of the property as of the date of the report and how the "as is" value differs from the value conclusion under a hypothetical condition."

When a property is appraised for market value as of a current date based on a hypothetical condition, an appraiser must ensure that the appraisal report contains appropriate disclosure of the hypothetical condition, including that its use might have affected the assignment results (SR 2-1(c) and SR 2-2(a, b or c)(viii).

SUPPLEMENTAL STANDARDS RULE: The agencies' appraisal regulations require sufficient information and analysis to support the regulated institution's decision to engage in the transaction. The agencies' guidelines state that for federally related transactions, "an appraisal is to include the current market value of the property in its actual physical condition and subject to the zoning in effect as of the date of the appraisal" (current date of value). If, by failing to provide this opinion, when possible, an appraiser violates the agencies' appraisla regulation and guidelines, the appraiser violates the SUPPLEMENTAL STANDARDS RULE.

This requirement did not go away with the retirement of the SSR, it just became part of the Scope of Work Rule. So the difference is that instead of violating the SSR you're now violating the SOWR.

Please indicate where anything was violated in this thread. Thanks.

 

[mark hurlock]

The old "if it's good enough for Fannie it's good enough for us" argument?

I'd still ask the question if the client was a Bank or CU. If for nothing else than to have an opportunity to sell additional services.

What question, if they want you to educate them?

 

[CANative]

If it's a client that is subject to agency rules and the transaction amount is going to be above the de minimis and they don't request an "as is" value as well as a hypothetical "as proposed" value then I would ask them if they want the as is.

That's what the SSR used to require which is now covered by the SOWR.

Why aren't you getting this?