IVS (International Valuation Standard) vs USPAP

[George Hatch]

Personally, I don't think it matters which particular standard everyone is tasked with using. The primary utility in a common standard is the "common" part, not necessarily the details of the requirements themselves. If the standard had been the IVS most of us would have become conversant in those requirements instead of an otherwise irrelevant alternate standard. If it had been Fannie's internal policies then that could just as easily have worked to keep everyone on more/less the same page.

Uniformity > ideological purity

Regardless of what the label is or which parties are charged with promulgating it, it is the role of the appraiser which naturally triggers the need for appraisers to assert impartiality, objectivity and technical competency and all the associated tangents it takes to get that. The importance of consistency will naturally result in those standards being tweaked based on the underlying fundamentals and not on rote habit or "the client says". Practices which are dependent on inconsistent applications of the fundamentals will naturally be phased out. The logical progression can ensue in no other manner.

USPAP is just the current iteration of these fundamentals, which existed prior to the inception of USPAP and will continue - as a direct result of the role of the appraiser - long after USPAP is retired or replaced with a parallel standard that has the same fundamental requirements. It's the very concept of appraisal standards that we should take seriously, regardless of which publisher or label is on the cover.

 

[RCA]

wow, you have a very negative opinion of something you admit to have not read.

are these your opinions, or opinions of others you are repeating?

Seems you are begging an excuse to defend your love affair with USPAP.

 

[RCA]

I think happens when these issues are argued poorly in the courts. The AO publication itself includes 1/2 page of explanation of the point that this isn't new material and that these suggested solutions may not be the only solutions. The ASB's *advice* is based on the fundamentals of USPAP itself but that's the extent of it.

Every AO starts off with a summary of those disclosures.

View attachment 45868

It's a wierd standard. Look at AO-28 which is referenced by the SOW Rule. Most of AO-28 is just repeating statements from the SOW and other parts of the USPAP standard. Why do they do this? They could simply refer to the the SOW rule in AO-28 and cut out a ton of verbiage.

The heart of AO-28 is the application of the SOW Rule to specific examples. But notice that there are plenty of "musts" in this AO. - Yes, as an application of the "musts" in the standard; but, nonetheless, the AO winds up being something other than advice. It is an application of the AO-28 "MUSTs" to specific examples. Better would be simply to have a separate publication titled "Examples of the Application of USPAP".

AO-29 is a better example of an AO that actually gives advice - relating the SOW Rule to external guidelines and so on. It does give examples as well. AO-29 also repeats a lot of the standard and that should not be necessary.

One would think they are like a student writing a theme paper that the prof says must be so many pages long. So, they repeat as much as they can to make the document as long as needed o satisfy the size requirement.

A good standard should be tight and well-defined. Whatever has to be said, it should be said in one and only one place. Why? For one thing, it is more work to keep the different copies of a statement in synch. For another, it is just a lot messier to read. If a group is discussing USPAP and want to reference some statement, it is a lot better if they are all referencing the same line in the publication, not 5 different places. This sort of thing is common sense to the kind of people that typically write standards.

 

[RCA]

Personally, I don't think it matters which particular standard everyone is tasked with using.

Yes and no. Appraisers could use different standards and simply say they are using Standard X, Y or Z. There are unfortunately only so many really smart people in the world to write good standards. As a consequence, the more standards you have, the lower the quality. Also, throw in the fact that users and clients don't want to really have to deal with multiple standards for a given application.

So, the situation we have here is: Winner Take All. USPAP will loose because it is too far gone to be saved. IVS will incorporate what it needs from local standards like USPAP. Local standards, such as USPAP, will live under the umbrage of IVS, serving only as an interface between IVS and national and other local regulations.

The primary utility in a common standard is the "common" part, not necessarily the details of the requirements themselves.

I don't know what you mean by "requirements".

If the standard had been the IVS most of us would have become conversant in those requirements instead of an otherwise irrelevant alternate standard. If it had been Fannie's internal policies then that could just as easily have worked to keep everyone on more/less the same page.

Fannie Mae is a national standard, which IVS will not deal with.

Uniformity > ideological purity
Regardless of what the label is or which parties are charged with promulgating it, it is the role of the appraiser which naturally triggers the need for appraisers to assert impartiality, objectivity and technical competency and all the associated tangents it takes to get that.

Standards are definitions and rules that are to be agreed where agreement is needed for society to function efficiently. They are a social contract. Social contracts are usually imperfect and don't do fair just to everyone all the time.

So, naturally, those who are affected by such definitions and rules argue over them - at length. It is a very serious fight, a very serious struggle. More serious than you seem to realize.

The rules behind these standards affect decision making and we are now forming standards that are the bases for what is to proceed from here to eternity for mankind.

It should be no surprise, that the Chinese, Russians and others are pushing on these standards. USPAP will NOT survive as the dominant standard. It is a national standard that will be shrunk by IVS, given time. US appraisers need to start thinking about IVS. That standard is what is important.

The importance of consistency will naturally result in those standards being tweaked based on the underlying fundamentals and not on rote habit or "the client says". Practices which are dependent on inconsistent applications of the fundamentals will naturally be phased out. The logical progression can ensue in no other manner.

Wishful thinking. Tweaking will not save USPAP, if that is what you are referring to. It is dying as a dominant standard.

USPAP is just the current iteration of these fundamentals, which existed prior to the inception of USPAP and will continue - as a direct result of the role of the appraiser - long after USPAP is retired or replaced with a parallel standard that has the same fundamental requirements. It's the very concept of appraisal standards that we should take seriously, regardless of which publisher or label is on the cover.

I don't agree of course. Perhaps you understand why I am not at all interested in participating in making USPAP "better". It is a long lost battle to keep USPAP the dominant valuation standard in the US for more than another 15-20 years. It will lose the battle for domination. At most it becomes an intermediate standard between IVS and our local regulations and guidelines.

TAF already has a book on converting from USPAP to IVS. Yep. Already.

 

[DWiley]

Fannie Mae is a national standard, which IVS will not deal with.

Fannie Mae and Freddie Mac do not write, nor do they publish appraisal standards. What they publish are their policies regarding loans that they will purchase. BIG difference.

BTW, having served on both the ASB and the IVS Standards Board, I found your comments on the memberships of those two bodies, and their relative intelligence, quite amusing

 

[Joe Flacco]

Fannie Mae and Freddie Mac do not write, nor do they publish appraisal standards. What they publish are their policies regarding loans that they will purchase. BIG difference.

BTW, having served on both the ASB and the IVS Standards Board, I found your comments on the memberships of those two bodies, and their relative intelligence, quite amusing

What are some of your opinions comparing the two standards?

 

[Joe Flacco]

Much of the GSE appraisal guidelines unnecessary IMO. It has been a very negative influence on the profession.

 

[Joe Flacco]

And then the lender overlays on top of that. It is too much guidance and influence on comparable selection.

 

[DWiley]

Much of the GSE appraisal guidelines unnecessary IMO. It has been a very negative influence on the profession.

Again, the GSE do not publish appraisal standards. What they publish are policies for loans that they will purchase, and the GSE policies are about their risk management policies.

For example, that is why the GSEs will not purchase a loan where the appraiser did not have competency at the beginning of the assignment. USPAP only requires one to be competent by the end of the assignment, but for risk management reasons, the GSEs require competency prior to accepting the assignment.

 

[Joe Flacco]

Again, the GSE do not publish appraisal standards. What they publish are policies for loans that they will purchase, and the GSE policies are about their risk management policies.

For example, that is why the GSEs will not purchase a loan where the appraiser did not have competency at the beginning of the assignment. USPAP only requires one to be competent by the end of the assignment, but for risk management reasons, the GSEs require competency prior to accepting the assignment.

I know that they don't publish standards. That kind of stuff is fine but the guidance (maybe unintentionally) influencing comparable selection should not be there. Just my opinion.