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AMC's, USPAP Confidentiality & Graham Leach

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Carnivore

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Appraisers are classified as Lenders under Graham Leach in regards to confidentiality.

Appraisers are regulated by USPAP via Individual State Law.


Question!

Under what authority or rule may an appraiser discuss, reveal, provide appraisal assignment results on an individual assignment basis or a continueing on-going basis with an Appraisal Management Company(AMC)?


I intend to send this question(or one modified, refined by forum members as a result of this thread) simultaneously to my state board and the ASB.

Maybe a better way is for all of us to send the same question to our individual State Boards and just cut out the ASB. I say this because this is a question of Law, not a policy of the seven member Appraisal Standards Board.
 
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I'd say you're probably right about it being more a matter of law than appraisal standards as such.

It will come down to relationships. The AMCs will assert that they are the contractor to the Client and the appraiser is the subcontractor. They'll will say their role is similar to that of a supervisor at a fee shop or at the appraisal dept. of a bank.
 
George,

I am trying to figure out how we comply with USPAP Ethics Section specifically Confidentiality and Graham Leach while dealing with AMC's. The expected proliferance of AMC's is going to bring this to the forefront.

----------------------------------

I was not going here yet,, but I will post something(I was already aware of) from my NC state law that was sent to me by a friend.

NC General Statute 93E

A trainee registration, license, or certificate is not required under this Chapter for:

(1) Any person, partnership, association, or corporation that performs appraisals of property owned by that person, partnership, association, or corporation for the sole use of that person, partnership, association, or corporation; (irrelevent, this applies only to property the entity or person actually owns)
(2) Any court-appointed commissioner who conducts an appraisal pursuant to a judicially ordered evaluation of property;

(3) Any person to qualify as an expert witness for court or administrative agency testimony, if otherwise qualified;

(4) A person who appraises standing timber so long as the appraisal does not
include a determination of value of any land;

(5) Any person employed by a lender in the performance of appraisals with
respect to which federal regulations do not require a licensed or certified
appraiser; and (This is a little confusing as NC is a mandatory state. It appers to pertain only to bank employees and deminimus that means anything under $250K or not complex.)


(6) A person who performs ad valorem tax appraisals and is certified by the
Department of Revenue under G.S. 105-294 or G.S. 105-296;
however, any person who is registered, licensed, or certified under this Chapter and who performs any of the activities set forth in subdivisions (1) through (5) of this subsection must comply with all of the provisions of this Chapter.
 
Andrew, that statute has some interesting implications.

If you want to get anywhere with this, I hope state laws are better enforced in NC than appraisal regulations are.
 
Andrew, that statute has some interesting implications.

If you want to get anywhere with this, I hope state laws are better enforced in NC than appraisal regulations are.


These outfits are evading my State Tax system. We need more tax money in NC. I will be letting some people in the state house and state senate know about this tax evasion. Plus, the AMC's are selling an AVM product in the State of NC without paying sales taxes on these products! How dare they.

Lets get back to the confidentiality issue of USPAP and AMC's if we can!

I think on interpretation of the following NC Statute that AMC's are appraisers or preceived as appraisers when it comes to review functions.

§ 93E‑1‑4. Definitions.

When used in this Chapter, unless the context otherwise requires, the term:

(1) "Appraisal" or "real estate appraisal" means an analysis, opinion, or conclusion as to the value of identified real estate or specified interests therein performed for compensation or other valuable consideration.

(2) "Appraisal assignment" means an engagement for which an appraiser is employed or retained to act, or would be perceived by third parties or the public as acting, as a disinterested third party in rendering an unbiased appraisal.


(3) "Appraisal Board" or "Board" means the North Carolina Appraisal Board established under G.S. 93E‑1‑5.

(4) "Appraisal Foundation" or "Foundation" means The Appraisal Foundation established on November 20, 1987, as a not‑for‑profit corporation under the laws of Illinois.

(5) "Appraisal report" means any communication, written or oral, of an appraisal.

Again, they are evading NC State Laws by simply ignoring them. There are licensing and Fee requirements required by my state that they are evading.

I intend to increase regulatory burden and hard cost on the AMC's operating in my state. My state needs Tax revenues! :)
 
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I'd say you're probably right about it being more a matter of law than appraisal standards as such.

It will come down to relationships. The AMCs will assert that they are the contractor to the Client and the appraiser is the subcontractor. They'll will say their role is similar to that of a supervisor at a fee shop or at the appraisal dept. of a bank.


So what is an AMC? An appraiser? An Agent for the Bank? What entitles them to rise to the level of a Client?

How may I discuss the appraisal results with them absent any extension of the Confidentiality veil from the Client to the specific AMC? What confidentiality rule does an AMC follow.

Here is an example. Professional Peer Review Groups such as AI are covered under USPAP. Where is an AMC in that mix?
 
Carnivore,

I have questioned this many times and all I get is no one wants to fight it because they don't see a great benefit.
My other problem I have is no AMC's in our state are licensed yet they provide Professional services.
Can you imagine a legal firm owned and run by some office personnel who have connections for contracts but rather than be attorney's they just hire some and add a fee to every transaction that they bill as legal fees?
 
I'm not saying they're the client - they're the appraisal company (just like any fee shop) and their appraiser is their employee or subcontractor.

If you own and run a fee shop and assign one of your employee or subcontractor appraisers to perform an assignment, is it a violation of the Confidentility section of the Ethics Rule for that appraiser to hand their work into you for your QC review prior to you submitting it to your client?
 
I'm not saying they're the client - they're the appraisal company (just like any fee shop) and their appraiser is their employee or subcontractor.

If you own and run a fee shop and assign one of your employee or subcontractor appraisers to perform an assignment, is it a violation of the Confidentility section of the Ethics Rule for that appraiser to hand their work into you for your QC review prior to you submitting it to your client?


Peer to Peer review and consultation is not a violation of USPAP or of confidentiality.
 
I'm not saying they're the client - they're the appraisal company (just like any fee shop) and their appraiser is their employee or subcontractor. ....


is it a violation of the Confidentility section of the Ethics Rule for that appraiser to hand their work into you for your QC review prior to you submitting it to your client?

If they are an appraisal company and they have people performing appraisal services on other appraisers reports such as a review, then in the state of NC they must meet licensing requirements.

This is regardless of the Client FRT status or FHA and VA status. Lets look at FRT status for a moment. What if the property appraisal under review is of a complex subject. That raises the bar on licensing. What about FHA reports? Yes, the webs they weave.

Anybody still with me.
 
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