Evaluation Liability

[Meandering]

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.

Doesn't matter that as far as you/we know, no one has been prosecuted over an eval.

What does matter is that USPAP claims them to be appraisal practice, and that compliance with USPAP is required for appraisal practice.

And it matters that the TILA is not limited to FRTs.

But it doesn't matter if you want to engage anyone who isn't an appraiser to do evals.

Go for it.

Otherwise, it is just more Kool aid to take advantage of appraisers, who will become the scape goats down the road.


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[George Hatch]

There's only one poster in this thread who keeps referring to fees. Which makes that issue a one-sided conversation.

 

[Meandering]

Oh please Danny.

How many times do we have to go over the states adopting USPAP into law, makes it state law, the states adopting it into regulations makes it state regulations, and Congress adopting it into Federal Law, makes it part of Federal law. Really? Take notes if that helps.

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[Meandering]

There's only one poster in this thread who keeps referring to fees. Which makes that issue a one-sided conversation.

Oh I don't know, I remember multiple posters referring to fees early on. And the statement that fees were a primary concern of appraisers. But I know, youse guys are old and need everything repeated every couple of hours in order to remember it all.

Take notes already.

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[Meandering]

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)..

APPRAISAL PRACTICE: valuation services performed by an individual acting as an appraiser, including but
not limited to appraisal and appraisal review.

Comment: Appraisal practice is provided only by appraisers, while valuation services are
provided by a variety of professionals and others. The terms appraisal and appraisal review
are intentionally generic and are not mutually exclusive. For example, an opinion of value
may be required as part of an appraisal review assignment. The use of other nomenclature for
an appraisal or appraisal review assignment (e.g., analysis, counseling, evaluation, study,
submission, or valuation) does not exempt an appraiser from adherence to the Uniform Standards of Professional Appraisal Practice.

Yup, that's as good as "must".

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..

Yeah, didn't you have an issue with USPAP definitions previously? Humm, that exposure time was defined as the appraiser's opinion, in the USPAP at the time, as I recall.

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.

Still trying to wiggle out $100 appraisals Dan?

Appraisers can opt to upgrade a service? Really? Assignment conditions no longer matter? Or they only matter when an appraisal is ordered, and not an eval that an appraiser is going to opt to upgrade?

Yeah, but don't be late on that report in Oregon, by golly.

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[Terrel L. Shields]

Certainly it's fee that drives the report. Not the report driving the fee like it should be. The Q is akin to the guy asking a girl if she would sleep with him for a million dollars, she agrees & he says how about $10? She says Do you think I'm a **ore? He replies, We've established that, just haggling over price now.

Since the appraiser is (apparently is supposed to be) working for a low low fee, pick a number between $45-200, why not scrub the "restricted" from title and originate loans off an "enhanced evaluation appraisal"? Same low cost report, minimal presentation, just call it an appraisal tailored (agreed scope of work) for minimum... The E&O providers will be happy to cut your cost of insurance, right? Bend over, it is going to get worse and call it an evaluation and pretend your liability is reduced because it's labeled an "Evaluation".

 

[Meandering]

4. Section 34.211(h): Covered Transaction

The Agencies are adopting it in the final rule as proposed. As such, a covered transaction is defined to mean any consumer credit transaction secured by the consumer's principal dwelling. For the reasons discussed above in describing the proposed definition, the Agencies have determined the final rule should not limit the definition of “covered transaction” to consumer credit transactions secured by the consumer's principal dwelling that are Federally related transactions.
http://files.consumerfinance.gov/f/...ements-for-appraisal-management-companies.pdf

Dang,

Looks like that FRT argument goes out the window.

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[Dale Floyd]

I don't know Marion. I keep reading your commentaries, and it seems there is an impossibility that anybody else has made a point for consideration in the discussion. I do believe you've made some good points, although we disagree about many of your interpretations.

From my banking days until now, I have always known the differences between evaluations and appraisals. That's even discussed in our banking schools. One of my tasks in the day, was to deal with the examiners. (Don't call them auditors, by the way - It's offensive to them..) In those instances when they were suspect of a loan with an evaluation, they required a full appraisal to be obtained during their examination. (Of course, they knew things from other banks we did not, so loans were sometimes pulled for reasons we could not know.) I've never EVER had a single examiner treat an evaluation as an appraisal. I've spoken with past members of our appraiser commission, and many performed/perform evaluations. I've read the Interagency Guidelines, USPAP, T.C.A. and the TN AG's opinion of Evaluations, and all agree that evals are not appraisals. The very fact that an advisory opinion was given, tells us that the ASB recognized there was a difference between the two products. My E&O provider says they aren't the same things, which is why this thread was started in the first place.

Bottom line - An evaluation is not an appraisal. It is the more modern reference to a "Collateral Review" and they've been around long before FIRREA. SpartanAG is also from banking, and will know exactly what I'm referring to. An evaluation has no teeth, nor is it designed to do anything other than fill in the gap for banking files where appraisals are not required. If appraisers don't do evaluations, then insurance agents, realtors, bank employees, or somebody will. If appraisers refuse to do them, then that business WILL go to non-appraisers. I honestly think we have a few out here who would be glad to see that happen, which is just foolish. That business belongs to appraisers because they are perfectly suited for it.

An appraiser's E&O insurance will only cover appraisals and will not cover evaluations. Why? Because evaluations are NOT appraisals. Business risk management is a business decision, and appraisers should always be aware of risks. (I've never heard of an evaluation being the subject of a lawsuit, but a few people have sued over bathrooms these days.)

Whether or not evaluations must conform to USPAP is something we can debate, but until there is the finality of a judges hammer about that, then everything is nothing more than an opinion or interpretation.

 

[Meandering]

Thank you Dale.

Although, I'm not offering my interpretations, nor opinions.

I'm copying and pasting the regulations, and as Denis noted, they are written in the "Queen's English",

Hence, they don't need any interpretation, as they are plainly written, and are the "rules" we must follow.

The only issue is that many people don't read the rules, or don't know how to find them, or can't be bothered, and just rely on what other people tell them.

That's why I copy and paste the regulations, so that you can read them for yourself, if you don't know how to find them, or even, if you didn't know they existed, or perhaps have forgotten them.

I already know most don't care, or won't read them. But I do know that among the ones who will read them, are the contingency that wants to spread the kool aid, to line their own pockets.

So I have no hidden agenda, nor delusion about any of it. Appraisers will do what they want, and then cry later. The profession will be blamed for everything. Been there, seen that, someone mailed me the T shirt.


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[Meandering]

Although Dale,

While I can appreciate, you and other posters here, sharing your experience with the rest of us.....

And that you do know that things change............

You may want to take a gander at this article from an Attorney, written in 2015.

Expanding FIRREA Liability for Financial Institutions: Recent Second Circuit Developments

It's an interesting read and full of "interpretations" by people licensed to do so.

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