When is a Review Required to meet Std 3?

[djd09]

defining when a standard 3 review has taken place is not within the 600 FAQ's in USPAP.

 

[Eli]

defining when a standard 3 review has taken place is not within the 600 FAQ's in USPAP.

This is std 3. It could have been done. Idk. The chain of emails is not right. Is this an AMC or in-house appraiser, independent contractor sending the emails? Big key. I prolly read it and forgot it. If the appraiser is in-house? Still std 3 applies. Easier to fix. LOL See, if it comes from an in-house appraiser of the client?, it's different. Still std 3 applies in this case.

 

[Eli]

We just sent somebody to Florida. We did a std 3 review. They are licensed. Idk? Lol

 

[djd09]

i cannot comprehend reviews. nothing personal, but why doesn't the reviewer just develop and report their own appraisal. must be another controlling mechanism.

 

[J Grant]

i cannot comprehend reviews. nothing personal, but why doesn't the reviewer just develop and report their own appraisal. must be another controlling mechanism.

Sometimes a reviewer does develop and report their own appraisal as part of the review assignment

You never did a review? Most appraisers have at one time or another., A lot can be learned from doing one,

 

[Stone]

i cannot comprehend reviews. nothing personal, but why doesn't the reviewer just develop and report their own appraisal. must be another controlling mechanism.

Reviews aren't just about agreeing/disagreeing with the opinion of value.

 

[glenn walker]

Agree with the priorities of reviewer. Just surprised to see it performed via email rather than the reviewer presenting their findings to client and then client shares with the appraiser if appropriate.

But if a client prefers it to occur via email between reviewer and appraiser instead...their option. Just never see it often...whenever I get feedback on an appraisal which I assume came from some type of review it came via a request from the client rather than an email from the person reviewing.

The E-mail is indicative that there never was any serious review nor-any chance the lender was going to file any complaints with a State Board or SBA. If you get a letter like the one below then you know trouble is coming and they typically do not send the original appraiser a copy of the review- You will also note the communication between the lenders Investor or other agency not only talks about the appraisal but also invokes what and what not the appraiser did or did not do. The typical review never mentions the appraiser because we review the appraisal and not the appraiser. At Big Bank or GSE internal reviews it would be impossible to not form some bias' because its kinda like going to a crime scene and the evidence can be over-whelming. Also you will notice that they do not call out USPAP violations on a loan buy back due to a poor quality appraisal, that's up to the lender who originally funded and sold the loan, whether to file a complaint against the appraiser with his/her State Board. ( Note: These post closing buy back reviews are often months after a loan has been funded and sold to a larger bank or GSE. The post closing reviewers do not opine a new or different value, they just reject the original appraisers value due to blah, blah , blah. And they are also not under Standard-3 and I assume it's because they are regulated by a Federal Institution and many in those departments are not even licensed appraisers BUT I really don't know for sure because they do not have any certifications or license numbers on them . They are careful to not deal with the original appraiser and it all ends up in the lap of the original lender that funded and sold them the loan and then the original lender can go after their appraiser. Probably a guy like D-Wiley could answer some of these questions.

INVESTOR-FINDINGS LOAN BUY BACK DUE TO APPRAISAL ISSUES IN POST CLOSING REVIEW

-Eligibility violation : The origination appraisal did not adequately support the value stated and consequently does not allow us to confirm eligibility with respect to mortgage insurance and or the maximum loan-to value ratio for the loan.

Appraisal data Integrity-Misrepresentation of Physical Characteristics and Unsupported Adjustments
-The lender is responsible for the accuracy and completeness of the appraisal and it's assessment of the marketability of the property and must take appropriate action to ensure that appraisers do not engage in unacceptable appraisal practices , including misrepresentation of the physical characteristics of the subject property , improvements, or comparable sales used.

Comparable Sale's-Physical Features Reported Inaccurately
-The appraisal did not accurately reflect the physical features of the comparable sale's.
The appraiser failed to report that sale seven had a casita ( guesthouse) when evidence obtained from the appraisers MLS service indicated that sale seven had a casita

Selection of Sales
- Selection and use of inappropriate comparable sales and failure to use comparable sales that are the most location-ally and physically similar to the subject property are each considered an-unacceptable appraisal practice. The lender must ensure that the appraisers analyze listings and contract sales, closed or settled sales and the most recent and similar sales available as part of the sales comparison approach.

Use of Dissimilar Comparable Sales ( s )
-Comparable sale seven was dissimilar to the subject property in appeal and without adequate explanation as to why the sale was used. Comparable sale (s ) seven had a casita ( guesthouse) while alternate sales were available without the guesthouse amenity.

Use of Comparable sale ( s ) with Dissimilar Site Characteristics without adequate Explanation
-Use of Comparable Sales four and six were significantly different in site size than the subject property . The subject property was located on a site that was indicated to be 10,213 square feet while comparable sales four and six were on sites that were 15,300 and 18,422 square feet. The appraiser did not provide an adequate explanation for why no adjustments had been made.

Inappropriate Sales ( s ) Selection Due to Location
-Inappropriate Sale ( s ) one, two, three, four, five , six and seven were considered inappropriate as they were distant and located in gated communities without adequate explanation as to why the comparable ( s ) were used. when similar , more proximate sales were available.

The Value Opinion Stated In the Report Under Review And Final Comments On Errors & Omissions
-The value opinion stated in the report under review was not developed in compliance with applicable standards and requirements and we have rejected the value conclusion as being unreliable to to numerous errors and inconsistencies found, and there was a significant math error in the Sales comparison approach-if calculated properly, the value conclusion would change the value by approximately $55,000 and would have resulted in a lower final opinion of market value. The cost approach was developed and the results were exactly the same as the sales comparison approach. The appraiser provided no explanation on how he developed the cost approach or site value and had indicated his cost source was Marshall & Swift but it was unable to be replicated by using that data source and was not even similar. On other adjustments he had stated he had used paired sales analyses where possible and a reasonable ( appraisers -judgement ) and that " Marshall & Swift " home repair and remodel cost guide was used as a reference for his condition adjustments. Together and cumulatively we reject the value conclusion and the quality of the report and there is also evidence that not just poor quality appraisal but that calculated deceit may have been involved in order to inflate the properties value. Regarding USPAP violations there appear to be numerous ones but the appraisers State Board would have to make that determination.

Thanks You : Gorden Gecko -Bigger Bank USA Post Closing Review.
P.S Please wire $800,000 to us within the next 30 days because you now own this loan.

 

[Eli]

Still not kosher with USPAP the way it was handled by the reviewers. The only way I can see it being kosher is if the reviewers were in-house. Std 3 would still apply as well as competency, confidentiality, etc. etc. When you touch value as an appraiser, you better know USPAP. There is good reason for Std 3. Imagine the possibilities and risks for undue influence. I know we are used to influence that is not right, but not usually without reason and not from appraisers. Std 3 requires reason. If they did it better than me and call me, I'll listen........which I doubt. It's lame the way it was handled and the boss knows it.

Don't worry Joyce. I have a feeling your way too skilled to worry about anybody.

 

[Eli]

Your AI too. So, a kind email to AI might be in order. Maybe a kind email to your State board and their state board.

It's risky, but USPAP is USPAP. We don't know if a std 3 review was done. It still doesn't matter. It was out of order coming from an appraiser the way it came.

 

[George Hatch]

I've written way more reviews that *added support* to the original conclusions than I have written reviews that significant;y disagreed.