A Little Weekend MB Entertainment

[Alison Swain]

Because I love you all so much (and I do), I thought I'd share this with you. My current pizzing match is over changing the name of the Client.

Background: I did this appraisal about 2 1/2 months ago on a GPAR for a woman wanting to list her house. There's been no sale, so now she's decided to refinance. She's been told by the MB to just have me "transfer" the report to her company.

I explained this was a violation of USPAP and attached a PDF of AO26. The MB wrote back that she thinks the problem was that she used the wrong terminology. What she really needed for me to do was just change the names on the appraisal. She said she hadn't read the AO26 as she wasn't interested in learning a whole new job beyond the one she already has. I wrote back that if she'd take the 2 minutes to read the AO, she'd see what I meant. Hadn't heard anything since for about two weeks.

Today, the homeowner/borrower emails me to say "just do whatever you need to do to get me an appraisal and I'm happy to have your help." This is what the MB sent tonight:

Hi Alison. I wasn't simply informed by other Appraisers in the market, I actually forwarded your attachment and your original Appraisal to the Underwriting Manager the other day. She was the one who instructed me to have you just complete a name change...which by the way is typically $75.00 to $125.00. The only Appraisals that are being scrutinized right now are ones that appear fraudulent. Fortunately none of the ones that I have submitted by the Appraiser I've used for the past decade have been. I don't claim to know the USPAP by ANY means, however I'm certain the Underwriter does. I will have our Processor submit a formal Appraisal Request to your office on Monday. Thank you!!

BTW, I bolded that howler --- that really stood out. I'm glad I wasn't drinking anything when I read that!

 

[RSW]

Man I really hate when MBs do that! By the way Allison, what form did you us for the home owner's appraisal?

 

[PropertyEconomics]

Could easily be that her appraiser has never prepared a fradulent appraisal. Do you have evidence to the contrary?

 

[bart nathan]

I have never really understood the whole name change thing. Its a appraisal as of a specific date and you have a copy. Just because it has a different clients name on it makes no good?

If they want the same effective date I would put it on a Fannie form for 150.00 with a name change.

 

[Alison Swain]

In a general sense, yes. I have courted this particular mortgage company in the past. They've invited me to "train" their LO's in FHA appraisal procedure and reporting and have readily accepted lunch on my dime when I've asked to sit down with the processors. I never got any orders though. Finally, a very good friend of mine who works with a local title company told me to save my time and money --- she knows for a fact that they only use vendors who kick back $$$ to them.

 

[Alison Swain]

I have never really understood the whole name change thing. Its a appraisal as of a specific date and you have a copy. Just because it has a different clients name on it makes no good?

If they want the same effective date I would put it on a Fannie form for 150.00 with a name change.

Ever read Advisory Opinion 26???

 

[jay trotta]

Alison

you noted it's almost 2.5 months old already and on a GPAR - I would think it would be a whole new report, as it will more than likely exceed the 90 day typical limit. 1st they want the name change, then they'll call you back and want it on a FNMA form, then they'll want some UW stips......eye can see it all now - ya right on the $150....ROFL

double your pleasure and double your fun

 

[AppraizinAZ]

Nah, they'll find someone who would do it for $125!

 

[Michael Tipton]

Bankin regulations don't permit use of owner ordered appraisals for lending purposes

I would reference federal banking regulations, not USPAP. Federal banking regulations does not permit a financial institution to utilize an appraisal report ordered by the owner/borrower.
​

2231.0.3 OBTAINING AN APPRAISAL​

​

The banking organization or its agent is responsible for engaging the appraiser and must have sufficient time to analyze the appraisal as part of
its decision process to enter into the transaction. (See the discussion below on the selection of an appraiser.) A banking organization may not accept an appraisal prepared for a potential borrower as the appraisal for a federally related transaction. An appraisal obtained by a financial services institution may be used by a federally regulated institution so long as procedures have
been established for reviewing appraisals, the review indicates that the appraisal meets the regulation’s requirements, and the review is documented in writing.​

2231.0.17 APPENDIX B—INTERAGENCY STATEMENT ON INDEPENDENT​

APPRAISAL AND EVALUATION FUNCTIONS

The agencies’ appraisal regulations address appraiser independence and require that an institution, or its agent, directly engage the appraiser.
The only exception to this requirement is that an institution may use an appraisal prepared for another financial services institution, provided
that the institution determines that the appraisal conforms to the agencies’ appraisal regulations and is otherwise acceptable. Independence is
compromised when an institution uses an appraiser who is recommended by the borrower or allows the borrower to select the appraiser from the institution’s list of approved appraisers.​

Institutions may not use an appraisal prepared by an individual who was selected or engaged by a borrower. An institution’s use of a borrower-ordered appraisal violates the agencies’ appraisal regulations. Likewise, institutions
may not use ‘‘readdressed appraisals’’—appraisal reports that are altered by the appraiser to replace any references to the original client with the institution’s name. Altering an appraisal report in a manner that conceals the
original client or intended users of the appraisal is misleading and violates the agencies’ appraisal regulations and the Uniform Standards of Professional Appraisal Practice (USPAP).​

http://www.federalreserve.gov/boarddocs/supmanual/bhc/200701/2000p7.pdf​

 

[c w d]

Allison, I'm not sure why you can't create a new work file for a new client, change the client name and make an additional fee? I understand what USPAP requires. You can base the new appraisal off the inspection and all the data of the original. Or am I missing something?

So the appraisal is on a GPAR, explain that to the client and let them determine if they are willing to pay more in order for you to do the appraisal on a 1004. And as long as they're willing to accept an effective date the same as the original appraisal you can make a bit larger fee to do the the additional work. If they're not willing to pay for a "conversion" then send them a new appraisal on a GPAR. Afterall, they are the client. It is not our job to make them accept an appraisal on a 1004 once we have informed them that it is in their best interest. They have their own requirements to meet and if the GPAR meets that for them, great. If not, who cares! You informed your client. It's not your responsibility if they're stupid.