Another confidentiality question

[Tom Barclay]

Need some advice for a report I'm working on.
Scenario is, I appraised a property for a refi in Oct. 2005, pretty tight range of comps, good looking report IMHO. Appraised for $145,000. MB was ****** beyond belief, he needed $200,000 to make his deal work and tries to put a stop payment on the check. No refunds.
Loan closes early 2006, for $200,000. Skippy hits again.
Yesterday I get a loss mitigation appraisal for the same property, pending sale price $129,000(short sale by almost $100,000). request came through AMC, for a national lender. At first I got a sick feeling when I drove up, thought that I could possibly have done the questionable appraisal. I just knew I had done it before, but didn't remember when or the result. It's in slightly less condition than 2005, some repairs needed. Not really a typical REO but does need some repairs.
So, it becomes obvious that the loan officer did not use my report. I want to disclose in my current report that I appraised the same property two months before it closed, and I want to tell them what it appraised for. Don't really need to disclose the MB as they already know that. At least that way major lender can go after skippy and the MB. Clearly some fraud went on here, but I shouldn't dislose the results of an assignment. How are we ever going to nail these folks if we can't say anything. What say you?

 

[Kevin A. Spellman]

Unfortunately confidentiality goes with you to the grave unless a higher authority such as judicial system asks you how much you know. There is one option to have your state licensing board audit the appraisal for the loan going into foreclosure. This is where the state can generate revenues. Every state could generate revenues from fining appraisers from all these bad loans, but unfortunately the states do not have the funding to seek these culprits.

 

[Michigan CG]

Learning experience here for me as I am not exposed to as much residential work, but couldn't someone disclose they appraised the property before for $zzz without naming the client and maintain confidentiality?

 

[Kevin A. Spellman]

You cannot state you did an appraisal to a unintended user.

 

[starmansf]

you can, and should, disclose the previous appraisal in the report itself. It specifically asks what you use for you source of information. A prior appraisal is a source.

 

[Tom Barclay]

I unfortunately don't know who did the other appraisal. I do know that none of the local appraisers that work here would have overvalued the property by 30%. Had to be someone from out of town. I did have a short panic attack when I thought that the MB could have altered my report and submitted that. If so it will all work out as my original file is in order, lender will go after me, then I am free to provide my file and report.
Just frustrates me because I know there is something very wrong here and I can't say anything.

 

[Kevin A. Spellman]

I did an appraisal for an estate in February 2008, date of death valuation service. I did a second appraisal for financing in July 2008. The largest lender in USA now has two reports on the same property done by the same appraiser for two difference purposes. The reviewer was comparing these two reports with each other. The reviewer was asking me why there are no more recent comparables. I told this reviewer who is license in New York and also in New Jersey if he asks me one more question about the estate report I will file a complaint. The reviewer was taken off the review after 31 different posts in Appraisalport for the same property and same problem.

I refused to discuss the estate report he had in his possession. If I discuss the estate report with the lender/reviewer I would have violated confidentiality. I told him he has provided a misleading review with comments about the two reports with two different intended users. A new reviewer came into play and was aware of the mistakes and only discussed the one appraisal report for lending purposes.

This was my confidentiality issue this week.

 

[Kevin A. Spellman]

I’m sorry Michael, but I will disagree and I’m sure a USPAP instructor or Webb will agree with my interpretation of confidentiality. You cannot discuss or expose your reports to anyone else but to the client or a judicial governing body. For source of data, Michael I would only state prior inspection and not an appraisal report.

 

[The Warrior Monk]

The Ethics Rule is very limited when it comes to confidentiality. Disclosing that you did a prior appraisal is not a problem, except by agreement (client states do not discuss appraisal with anyone). However, you cannot disclose what you appraised it for without permission of the client (excepting those entities noted in USPAP).

 

[Mztk1]

I agree with Dave. An appraisal, or a prior appraisal you did, can always be considered a source of information and can be disclosed, but you cannot disclose the results nor provide any information in the new report that was confidential.

What you can do is research the market from the date of last mortgage, determine what the average or median value was for competitive houses at the time, discuss it in a matter of measuring decline in the market (if any) and state that it appears the prior mortgage amount of $200,000 is above what similar houses were selling for at that time. You just have to make sure you are supporting that conclusion with solid data.