Evaluation Liability

[SpartanAG]

Hey Spartan,

Not to pick on you personally,

But you seem like a curious guy, so, let me play Andy Rooney here.


Did you ever wonder why.............................????????

The IAEG is 7 years old and this "evaluation" thing only now comes to the forefront?


Wouldn't have anything at all to do with the GSEs releasing the reps and warrants for below threashold loans, leaving only appraisers to hang when the loans go bad,

Would it?


Oh darn,

Smoke blown away.


.

I'm not sure what this has to do with the current topic...aren't we still debating whether or not appraisers can do evaluations? I still say they can.

 

[Meandering]

And USPAP still says appraisals must comply with USPAP even if you call them evaluations.

And Appraisers are still held to USPAP.

And the IAEG is 7 years old,
3 USPAP changes without the ASB releasing their definition of appraisal practice.

Ghee,

And 4 years ago, there weren't any issues with AMCs looking for appraisers to do evaluations. But now there are.

and of course none of it has anything to do with this......

https://insight.factset.com/expanding-the-availability-of-mortgage-credit

Sorry, my memory is not so bad that I don't remember FDIC going after appraisers for 10 year old appraisals that sat in lending files for a decade without anything wrong, until the loan went belly up, then it was up to appraisers to defend their work.

Now lets see.

Appraisers doing evaluations today, that are Appraisals, and get shoved into loan files until the next crash, and then the loan files are opened, seeing reps and warrants releases, and nifty appraisals, that are mislabeled, will be "reviewed" by USPAP standards current as of the day the appraisals were written,
and not,
against any guidance or state law that says,
Sure you can do this.



More headline news how bad appraisers ruined the economy, and headaches for appraisers, all so you and your ilk can get $100 appraisals today without any liability.

BS.

.

.

 

[Meandering]

I got places to go.

Have fun trying to wiggle your way around history, like it never happened, and won't happen again,

until I get back, which will probably be late tonight.

.

 

[SpartanAG]

And USPAP still says appraisals must comply with USPAP even if you call them evaluations..

No one is arguing otherwise.

And Appraisers are still held to USPAP.

No one is arguing otherwise.

And the IAEG is 7 years old,
3 USPAP changes without the ASB releasing their definition of appraisal practice.

So?

Ghee,

And 4 years ago, there weren't any issues with AMCs looking for appraisers to do evaluations. But now there are.

Are there?

and of course none of it has anything to do with this......

https://insight.factset.com/expanding-the-availability-of-mortgage-credit

It doesn't. Loans sold to GSE's are considered federally related transactions. Those require appraisals. Evaluations are for non-federally related transactions only.

Sorry, my memory is not so bad that I don't remember FDIC going after appraisers for 10 year old appraisals that sat in lending files for a decade without anything wrong, until the loan went belly up, then it was up to appraisers to defend their work.

The FDIC won't be coming after appraisers for doing evaluations. They are non-federally related transactions.

Now lets see.

Appraisers doing evaluations today, that are Appraisals, and get shoved into loan files until the next crash, and then the loan files are opened,

Since the loan files with the evaluations typically mature every 3-7 years, they are opened when its time to reevaluate the loan.

seeing reps and warrants releases,

Those are GSE terms. Those loans require appraisals. The can't have evaluations.

and nifty appraisals, that are mislabeled, will be "reviewed" by USPAP standards current as of the day the appraisals were written,

You are jumping to the conclusion that something will happen with no evidence.

and not,
against any guidance or state law that says,
Sure you can do this.

This doesn't make any sense.

More headline news how bad appraisers ruined the economy, and headaches for appraisers, all so you and your ilk can get $100 appraisals today without any liability.

I can assure you, the headlines won't include anything regarding evaluations that appraisers did for non-federally related transactions. That won't be what causes the next crash.

Evaluations are getting done everyday for non-federally related transactions. They have been for decades. No one has gone to appraiser jail over an evaluation. The lenders (not AMC's) that I know that order evaluations pay around $200 a pop for a residential or small land eval. Commercial evals pay quite a bit more.

BS.

Indeed.
.

 

[Terrel L. Shields]

And the IAEG is 7 years old,

Same as it was nigh 20 years earlier. The latest version was 2010 but that's pretty much the same as 94.

The FDIC won't be coming after appraisers for doing evaluations. They are non-federally related transactions.

Not true. The FDIC examines all loans when they want to. I've had old ones pulled by them and bank required to update. I've had evals done by a loan officer years earler and sent to revalue them with an appraisal despite being <$250k.

Evaluations are getting done everyday for non-federally related transactions.

But they are an appraisal when done by an appraiser. I assure you the bank examiners do look at evaluations both FDIC examiners and FED examiners.

You know Reinhold or Stephens? or, call Lee.

 

[Deleted member 134708]

Right or wrong. Couldn't care less. The way I am going to tell the Judge, Jury and executioner is:

E/O: I agree you are not going to cover my claim on the case of my Evaluation. You cover appraisers, I wasn't acting as an appraiser.

Judge: I performed an Evalution meeting the bare minimum of the evaluation request. I did not go 1 step further. I was hired as a dwelling opinion originator. I was never hired as an appraiser. I have Emails and engagement letters acknowledging this xyz hired me as a dwelling opinion originator due to my past appraisal experience but acknowledge I am in no way representing myself as an appraiser. I then completed a minimum evaluation.

I'll sleep just fine at night.

If I represented myself as an appraiser and completed a minmum evaluation. I'd be tossing and turning.

Disclosure: I may or may not be an investor with an insurance company that is going to bring to market a $250 add on insurance of persons doing an evaluation holding an appraisal license.

 

[Meandering]

And so, when the Appraisal has been performed for a loan secured by a principal dwelling, it is subject to both Regulations X and Z, hence,

[Spartan] No. If an evaluation is being used, the transaction is not federally related, so the appraisal requirements in those regulations do not apply.

[Marion] That is absolutely incorrect,

Within the IAEG (2010) Section VI. Selection of Appraisers or Persons Who Perform
Evaluations in part states; For certain transactions, an institution also must comply with the
provisions addressing valuation independence in Regulation Z (Truth in Lending). [32] Foot note
32 states; See 12 CFR 226.42.


12 CFR 226.42 states; “(a) Scope. This section applies to any consumer credit transaction

secured by the consumer’s principal dwelling” (ibid).
It is not limited to only FRTs.


12 CFR 226.42 sections (c) though (g) contain the Appraiser Independence Requirements from
Dodd Frank, as interpreted by the Federal Reserve Board’s Interim Final Rule and specifically
contains section (f), commonly called the customary and reasonable Appraisal Fee section.

[Spartan] Customary and reasonable for an evaluation product is different than that of a traditional appraisal. Evals probably pay better on an hourly basis.

[Marion] No, they are not different, because as we have already established, the appraiser can only produce an APPRAISAL, not an evaluation, hence I suggest you review 12 CFR 226.42 and 12 CFR 1026.42, along with the interim final rule.

[Spartan] Two points here:

[Spartan] 1. If an evaluation is being used, the transaction is not federally related, so the appraisal requirements in those regulations do not apply.

[Marion] That is incorrect, because the Truth in Lending Act, and Appraiser Independence are not limited to FRTs. See the 12 CFR 1026 - Rules of construction.

[Spartan] 2. All the lenders that I know of that use an evaluation product order that product in-house. They do not use AMC's. However, even if they did...see point 1 above.

[Marion] None of that matters. What matters is when the evaluation is ordered from a fee appraiser.
That's when it all matters.

 

[SpartanAG]

Not true. The FDIC examines all loans when they want to. I've had old ones pulled by them and bank required to update. I've had evals done by a loan officer years earler and sent to revalue them with an appraisal despite being <$250k.

They examine the loan file to ensure it is in compliance. If they identify a deficiency, the lender is given guidance and an opportunity to correct it. The reason they had the loan revalued was to get an updated value in the file, not because they reviewed the old eval and found something wrong with it.

But they are an appraisal when done by an appraiser. I assure you the bank examiners do look at evaluations both FDIC examiners and FED examiners.

The examiners look at the file. The evals are part of the file, but they aren't reviewed like what appraisers think of when we think of reviews. It's a compliance check. No one is going to appraiser jail. The examiners just require that any deficencies in the file be corrected.

You know Reinhold or Stephens? or, call Lee.

I know Reinold and Stephens. I've even taken Reinolds class where he covers evaluations.

The bottom line is, no one is going to appraiser jail for doing evaluations as long as they meet the standard. I understand some people aren't comfortable with the evaluation product. Great, don't do them. But that doesn't change the fact that they have been done for decades and will continue to be done in the future. And no one has been sent to appraiser jail for doing an evaluation, but plenty of appraisers have gotten in trouble for doing appraisals.

 

[Meandering]

Just to save you some time, Spartan...
View attachment 31917
https://www.FDIC.gov/regulations/laws/rules/2000-4300.html


"and" is different than "or".

Nice Denis,

But TILA and Appraiser Independence are not limited to only FRTs.

Darn.

 

[DWiley]

according to USPAP, when preforming appraisal practice, adherence to USPAP is REQUIRED.

.

Not so. This is addressed in the PREAMBLE in USPAP.d USPAP.

USPAP is NOT regulation. This is a fundamental concept, and no matter how many time you post otherwise, that will not change the fact that USPAP is promulgated by the ASB - a private group that has no authority to promulgate regulations. USPAP gains authority via adoption or citation by applicable laws or regulations, but USPAP itself is not regulation.

Compliance with USPAP is required when either the party or the assignment is governed by law or regulation requiring USPAP compliance. USPAP says that appraisers SHOULD comply with USPAP anytime they are performing as an appraiser. It does not say MUST. USPAP compliance becomes a MUST when required by applicable law or regulation (that is state appraisal law in most cases).

This is all very fundamental stuff that is covered in both the 15 hr and 7 hr USPAP courses. In fact, it is all so fundamental that I can only conclude that you must just be intentionally ignoring the fundamentals for the sole purpose of being argumentative. The ONLY reason I am posting is to address the misinformation that is being presented.

A person who hold appraiser credenetials may perform an evaluation. In most jurisdictions, applicable law will require that an appraiser performing such a service must treat it as an appraisal and must comply with USPAP. There are some jurisdictions that allow (not require, allow) the party to produce an evaluation that meets the IAG, but does not meet USPAP. Even if it is allowed, and appraiser could opt to "upgrade" the service to an appraisal report. In fact, that is the safest course of action, lest the poor appraiser face a state board with members who, like some in this thread, do not understand the rules.