Appraisal With No Inspection By Appraiser?

[hastalavista]

Have you ever known an appraiser sanctioned where Std. 1 and 2 were not involved? Me neither

If what you say is true, then an appraiser, who is performing the inspection-component of a hybrid and who is not signing the certification, has zero regulatory risk in taking the inspection-component of the assignment.

But I suspect what you say wouldn't be true. Because if an appraiser, acting as such, takes the inspection component and not signing the certification, makes a gross mistake in the inspection because s/he didn't know what s/he was doing, would likely get sanctioned by the state regulator and it wouldn't involve SR-1 and/or SR-2. It would be a violation of the Competency Rule and perhaps the Ethics Rule. For sure, if that same appraiser knew what s/he was doing and intentionally misreported information for her/his inspection-component, it would be a violation of the Ethics Rule.

Which brings up this point:
Typically, appraisers get sanctioned by their boards because an appraisal or appraisal review assignment they completed and signed the certification for has some errors in either development or reporting; in addition, there are usually competency issues, can be ethics issues, and (many times) violation of the Record Keeping Rule.
The hybrid with an appraiser acting as the inspector and when that appraiser is not signing the certification, still has regulatory risk for the reasons I cited.

Therefore, why you may not have seen sanctions other than those that include SR-1 and/or SR-2, you can be certain that

• if hybrids become more prevalent and if appraisers are engaged as the inspectors; and
  
• if in that role of inspector the appraiser does not sign the certification; and
• if the appraiser acting as an inspector makes a gross error due to competency or reports misleading characteristics intentionally, then
• that appraiser, if investigated, will be sanctioned. And that sanction will not involve SR-1 and/or SR-2.

 

[Terrel L. Shields]

Because if an appraiser, acting as such

Such what? Appraisers licensed and acting as home inspectors are not wearing their appraisal hat. I know appraisers who have surveying, geological and forestry licenses. They normally wear only one hat at a time. If inspecting certified or not, I am merely an observer and won't evoke my appraisal license. Why should I?

The scenario you allude to would require an appraiser to get stupid and declare their observation as an appraisal practice and affix his/her license to the observations. Valuation is an appraisal practice. Evaluation is not imnsho. I suppose next a wedding photographer will be accused of marrying the couple without having a ministers credentials.

 

[Riick]

FYI:
Amrock says their hybrid will be on a *Modified* FNMA 1004.
Modified so that the Certifications no longer state that
(a) the Certs cannot be changed, and
(b) with removal of statement that the appraiser has
"perform(ed) a complete visual inspection of the interior
and exterior areas of the subject property"

Of course, a loan supported by such an appraisal
wouldn't be saleable to Fannie...today.
Tomorrow, trying to support the inflated market,
Fannie might buy anything, after all, who's on the hook?
Answer: Not the Banks, Not Fannie, Yep, that's right: Taxpayers
.

 

[hastalavista]

Such what? Appraisers licensed and acting as home inspectors are not wearing their appraisal hat. I know appraisers who have surveying, geological and forestry licenses. They normally wear only one hat at a time. If inspecting certified or not, I am merely an observer and won't evoke my appraisal license. Why should I?

Your kidding me, right?
If you are hired to perform an inspection because you are an appraiser, then regardless of how many other hats you wear, you were hired because you were an appraiser. If licensed, then most (if not all) states require that USPAP be followed.

Valuation is an appraisal practice. Evaluation is not imnsho.

I suggest you read AO-21. Then get back to me.
And, I hate (not really) to tell you, in most states, if you are an appraiser and are hired to do an evaluation (IIAEG-defined), it becomes an appraisal if you do it correctly.

I suppose next a wedding photographer will be accused of marrying the couple without having a ministers credentials.

This comment in regard to this discussion is ridiculous.

 

[Meandering]

Your kidding me, right?
If you are hired to perform an inspection because you are an appraiser, then regardless of how many other hats you wear, you were hired because you were an appraiser. If licensed, then most (if not all) states require that USPAP be followed.


I suggest you read AO-21. Then get back to me.
And, I hate (not really) to tell you, in most states, if you are an appraiser and are hired to do an evaluation (IIAEG-defined), it becomes an appraisal if you do it correctly.

This comment in regard to this discussion is ridiculous.

AOs are not part of USPAP. They are just the advertising of interested parties at the foundation.

There is no USPAP standard for taking photos.
No opinion of value is being developed, or reported by the person taking the photos.
To be an appraisal,
there must be an opinion.
Taking photos does not require opinions.
Just point, click and email.

.

 

[Evincere]

Exactly--they are already picking the comps, might as well let them make the adjustments too. I mean if they are deciding condition and quality and picking the comps, about all that's left is adjustments and recon.

Tell you what, just send me the completed report, and I will review it for USPAP compliance for only $375. Guaranteed turn around time of 1 hour after acceptance with pre-payment.

Trust that if they could do those bothersome adjustments they would. Stay tuned for an updated USPAP AO.

And instead of buying supplements we will pay $100 for the new updated (every 2 yrs) USPAP hand book.

 

[hastalavista]

There is no USPAP standard for taking photos.
No opinion of value is being developed, or reported by the person taking the photos.
To be an appraisal,there must be an opinion.

Again, please read the full content of my post. Because what you are saying:
1, There are no USPAP standards that apply to the inspection component of a hybrid if the inspector is an appraiser
2. It isn't an appraisal because there is no opinion

Is exactly what I said.

Taking photos does not require opinions.
Just point, click and email..

If engaged because you are an appraiser to do this component, then USPAP does apply; just not any of the standards (again, please read the full context of my post).

AOs are not part of USPAP. They are just the advertising of interested parties at the foundation.

Your cynicism on AOs is well known. The inference one can get from reading the above is it is ok to ignore the AOs because they are not part of USPAP.
I won't try to change your cynicism, but I will say that ignoring the AOs because they are not part of the USPAP is bad advice. It is bad advice because regulators routinely rely on them to make their enforcement-action decisions.
So let me be perfectly clear and all can draw the contrast between our two positions and make their own decision:

If you read AO-21, you will see that when you are engaged as an appraiser, the expectation (public trust) is that you will be acting as an appraiser. For the inspection-component of this discussion, it is not an appraisal or appraisal review; therefore, none of the Standard Rules apply. However, it does fall under the Ethics, Competency, and Jurisdictional Exception Rules.
Therefore, any appraiser who thinks if they are engaged, because they are a licensed appraiser, to do the inspection component that it is "...just point, click and email" and not subject licensing regulations is going to be in for a rude awakening. Ignoring the AOs as if they don't matter is very bad advice.​

 

[DWiley]

Of course, a loan supported by such an appraisal
wouldn't be saleable to Fannie...today.
.

That would be true, unless the lender is in Fannie's pilot program and has a documented contractual exception to the existing wording in the Selling Guide that allows such loans to be sold to Fannie as part of the pilot. That is the approach they took years ago when the 2055 (and other forms) was rolled out. So it would be logical that a similar approach would be taken with any new form/format/service being considered.

 

[Renee Healion]

Is their participation in the pilot program disclosed to appraisers who are asked to perform the work?

edit I am asking if they must disclose, not whether one or another would.

 

[Terrel L. Shields]

Your fake indignation duly noted, @Denis DeSaix An IAG "evaluation" is a euphemism for an appraisal prepared by a non-appraiser. There are plenty of estimating jobs that are not "appraisals" - architects, engineers, etc "estimate" but that is not an appraisal. Evaluation rarely involves valuation. And the function of the inspection isn' t to appraise it. Again these false canards hide the fact thy are almost certainly off the state board radars not to mention USPAP questionable.