Unintended consequence of reviews

[timd354]

Oh... I agree. It's not going to become general practice. However, there are lenders and AMCs that use credentialed appraisers for reviews.

While some lenders may have a chief appraiser or a small number of appraisers avaialble for second or third level reviews, 99% of all appraisals sent to lenders are assessed by underwriters without any review by an appraiser.

 

[J Grant]

This is yet another failing of USPAP. A stand 2 review done by an appraiser should be called a review

A quallty QC check done by an UW or non apprasier needs a different name. It is more of a clerical function , like proof reading or the like.

 

[sputnam]

While some lenders may have a chief appraiser or a small number of appraisers avaialble for second or third level reviews, 99% of all appraisals sent to lenders are assessed by underwriters without any review by an appraiser.

There is at least one AMC that has every appraisal report reviewed by a certiifed appraiser prior to releasing it to the Lender/Client. I don't know if it's their internal policy or if there is some regulation they have to meet.

I said there is least one. That's what I know of for sure. I suspect there are others.

This is yet another failing of USPAP. A stand 2 review done by an appraiser should be called a review

A quallty QC check done by an UW or non apprasier needs a different name. It is more of a clerical function , like proof reading or the like.

It's not a failing. Standard 2 reviews are governed by the scope of work in the same way that appraisals are. It is a failing in the way people use the word 'review'. It can mean everything from a cursory check to see of all the pages are there to a thorough and rigorous evaluation of the work being reviewed.

 

[J Grant]

There is at least one AMC that has every appraisal report reviewed by a certiifed appraiser prior to releasing it to the Lender/Client. I don't know if it's their internal policy or if there is some regulation they have to meet.

I said there is least one. That's what I know of for sure. I suspect there are others.

It's not a failing. Standard 2 reviews are governed by the scope of work in the same way that appraisals are. It is a failing in the way people use the word 'review'. It can mean everything from a cursory check to see of all the pages are there to a thorough and rigorous evaluation of the work being reviewed.

IMO, it is a massive failure of USPAP, just as their massive failure to state that any inspection, even an inspection without an opinion, done for the purpose of an appraisal ( which will need an opinion) is part of appraisal practice. If USPAP said that our profession would not be in the place where the GSEs greenlighted accepting appraisals, where a PDC collector goes and inspects. Right now, inspection is a grey area, with it needing the opinion of analysts to be part of appraisal practice.

USPAP should state that only standard 2 reviews can be called a review, and a QC check not stnd 2 needs a different name. Or at least call it a clerical review (which includes a cursory check ). There can be requirements that appraisals be reviewed, and most ( clients, the public, investors )assume that it was a review for content, and likely they assume the review was done by an appraiser, taht it was not a minimum wage clerk or machine checking for rote errors.

 

[DWiley]

This is yet another failing of USPAP. A stand 2 review done by an appraiser should be called a review

A quallty QC check done by an UW or non apprasier needs a different name. It is more of a clerical function , like proof reading or the like.

That is actually a feature, not a bug. As Sputnam points out, USPAP provides for options on the depth (aka Scope of Work) of an Appraisal Review (that is the actual USPAP term) conducted in accordance with STD 3 and STD 4 (not STD 2)

I think that I have stated this before, but when I was in AMCland, it was usually easier to train non-appraisers to examine appraisal reports; appraisers were prone to wanting to re-appraise the property rather than review the report we already had, and it was very difficult to change that mentality.

 

[DWiley]

USPAP should state that only standard 2 reviews can be called a review, and a QC check not stnd 2 needs a different name. Or at least call it a clerical review (which includes a cursory check ). There can be requirements that appraisals be reviewed, and most ( clients, the public, investors )assume that it was a review for content, and likely they assume the review was done by an appraiser, taht it was not a minimum wage clerk or machine checking for rote errors.

If you are going to be critical of USPAP, you could at least refer to the proper Standard. I would hope that all here know that STD 2 addresses appraisal reporting, not appraisal review

And, what if USPAP did contain such a provision? It would only apply to those who had to comply with USPAP, leaving lenders and AMCs to use whatever terminology they wanted to use.

 

[sputnam]

IMO, it is a massive failure of USPAP, just as their massive failure to state that any inspection, even an inspection without an opinion, done for the purpose of an appraisal ( which will need an opinion) is part of appraisal practice. If USPAP said that our profession would not be in the place where the GSEs greenlighted accepting appraisals, where a PDC collector goes and inspects. Right now, inspection is a grey area, with it needing the opinion of analysts to be part of appraisal practice.

USPAP should state that only standard 2 reviews can be called a review, and a QC check not stnd 2 needs a different name. Or at least call it a clerical review (which includes a cursory check ). There can be requirements that appraisals be reviewed, and most ( clients, the public, investors )assume that it was a review for content, and likely they assume the review was done by an appraiser, taht it was not a minimum wage clerk or machine checking for rote errors.

The multiple uses of the word 'review' has nothing to do with USPAP. USPAP is the minimum standard for APPRAISERS. Only credentialed appraisers are require to comply with USPAP. AMCs and Lenders aren't.

BTW... Standard 2 is about appraisal reports. Standards 3 & 4 address appraisal reviews.

If there is no opinion of value, in one form or another, it's not an appraisal.

 

[J Grant]

That is actually a feature, not a bug. As Sputnam points out, USPAP provides for options on the depth (aka Scope of Work) of an Appraisal Review (that is the actual USPAP term) conducted in accordance with STD 3 and STD 4 (not STD 2)

I think that I have stated this before, but when I was in AMCland, it was usually easier to train non-appraisers to examine appraisal reports; appraisers were prone to wanting to re-appraise the property rather than review the report we already had, and it was very difficult to change that mentality.

USPAP has options for the depth and SOW, and those options can remain. However, they should call only standard where a review addresses value and opinions a review because the QC checks are a much lower benchmark, and can be done by a non-appraiser (which is why it is easier to train those folks for the rote work that entails. Non-appraisers can still do a QC check of a report, but stop calling it a review (or call it a clerical review)

 

[J Grant]

The multiple uses of the word 'review' has nothing to do with USPAP. USPAP is the minimum standard for APPRAISERS. Only credentialed appraisers are require to comply with USPAP. AMCs and Lenders aren't.

BTW... Standard 2 is about appraisal reports. Standards 3 & 4 address appraisal reviews.

USPAP is the minimum standard for appraisers, however, it also delineates what is and what is not part of appraisal practice. Since a non appraiser can do a QC check, it should not be part of appraisal practice and needs a different name. An appraiser of course could still do those rote QC checks if they want to.

 

[timd354]

IMO, it is a massive failure of USPAP, just as their massive failure to state that any inspection, even an inspection without an opinion, done for the purpose of an appraisal ( which will need an opinion) is part of appraisal practice. If USPAP said that our profession would not be in the place where the GSEs greenlighted accepting appraisals, where a PDC collector goes and inspects. Right now, inspection is a grey area, with it needing the opinion of analysts to be part of appraisal practice.

USPAP should state that only standard 2 reviews can be called a review, and a QC check not stnd 2 needs a different name. Or at least call it a clerical review (which includes a cursory check ). There can be requirements that appraisals be reviewed, and most ( clients, the public, investors )assume that it was a review for content, and likely they assume the review was done by an appraiser, taht it was not a minimum wage clerk or machine checking for rote errors.

LOL, USPAP only applies to the conduct of appraisers so even if USPAP stated that only a review done by an appraiser could be called a review or that a property inspection done by a non-appraiser was part of appraisal practice, that would change absolutely nothing as non-appraisers would simply not be bound to follow it. It is beyond silly to think that a professional standard for appraisers can be used to govern the activities or language used by non-appraisers.