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Changing Lender Name...

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SmilingDog

Member
Joined
Apr 22, 2003
Professional Status
Certified Residential Appraiser
State
California
Every once in a while I get a call from a lender asking if they could get an appraisal done by me a few weeks earlier under their name. I've called the Office of Real Estate Appraisers in California several times on this issue but they have been non-committal.

Finally what I have done is write up a letter which the original lender/client signs and sends back to me authorizing the release of the appraisal to another lender, etc.

Are there any other provisions in USPAP specifically regarding this issue? Should I be obtaining any other documentation?

Recently I was asked to change an appraisal done for a mortgage broker to Wells Fargo. The Wells Fargo appraisal dept said they need a "transfer letter" which assigns the appraisal to them.

Any thoughts on this??? :blink: :blink:
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
See General Appraisal Forum; Just the FAQs, retypes, recerts, updates etc with all the links to the applicable topics on the Appraisal Foundation Website.

A retype request is a request for a new appraisal assignment. New assignment, new intended user, new intended use, new appraisal report. What is not too clear is if there needs to be a new effective date. If a new effective date, then the subject has to be at least driven by on a new date. If you decide to stay with the original effective date--one way of handling this (and the jury is out of whether it is a correct way to handle this) is to make it very clear in numerious locations the chain of events between lender ABC to lender XYZ. Always remembering the confidentiality issue--does lender ABC want XYZ to know they were the original client? Does XYZ want ABC to know they are now considering making a loan to ABC's borrower? Is that borrower still ABC's customer?
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Yes, I did forget the most important item! Your fee is your decision--if the client doesn't like your fee they can just hire a different appraiser and probably pay a higher fee!
 

Dave Smith

Senior Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Wisconsin
At a USPAP continuing ed class I took in May we were told by Tracy Martin, an instructor for McKissock, Inc., that the new lender can use the appraisal "as is" as long as it was prepared by a licensed or certified appraiser for a federally related transaction to start with. She said the new lender does not need the client name changed or even any kind of letter authorizing the use of the appraisal.

According to Tracy FIREA was the source for her opinion.

Thoughts, anyone?
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
That has been true for many, many years. They lender wants access to the appraisers E & O insurance is the real reason behind the requests of a change in the lender's name. I forgot one more new thing--new liability for a new client. The lenders can wheel and deal amongst them selves and never get the appraiser involved.
 

SmilingDog

Member
Joined
Apr 22, 2003
Professional Status
Certified Residential Appraiser
State
California
Originally posted by Jo Ann Meyer Stratton@Aug 21 2003, 01:24 PM
A retype request is a request for a new appraisal assignment. New assignment, new intended user, new intended use, new appraisal report. What is not too clear is if there needs to be a new effective date.
New Assignment? - No, inspection already done. Assignment has not changed. The scope of the appraisal is the same.

New Intended User? - YES, that would be the new lender requesting the appraisal client name change (the original lender has given a written authorization to appraiser to release the appraisal report to the new lender).

New intended use? - NO, intended use is the same, for a mortgage transaction.

New appraisal report? - NO, it's the same report with nothing being changed on the report except the lender/client name.

New effective date? - No. Since the appraisal is only a few weeks old and the new lender is willing to accept the new report with the original effective date, there is no need to change this.


**** The original lender authorizes the lender/client name change to the new lender IN WRITING, so why can't it be done? There is no confidentiality disclosure from ME (the aprpaiser), since the original lender already knows of the new lender's intent to use the report.

The fee to change a lender/client name would be minimal, and with today's technology ot would be just a few mouse clicks to send another PDF file. I don't see clearly how this violates USPAP when all parties involved are in WRITTEN agreement to release the appraisal report.

The foundation has not (and likely will not) clearly say one way or another. They are as vague as USPAP, likely written by attornies specializing in confusing the issues, and remaining non-commital about everything.

:eyecrazy:
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
"New Assignment? - No, inspection already done. Assignment has not changed. The scope of the appraisal is the same."

Yes, a new assignment, new client, new intended user, new intended use, etc, etc. The inspection date is not the assignment.

"New intended use? - NO, intended use is the same, for a mortgage transaction."

Yes, new intended use, intended use is now to assist XYZ mortgage client in a financial decision. The old intended use was to assist ABC mortgage client in a financial decision.

"New appraisal report? - NO, it's the same report with nothing being changed on the report except the lender/client name."

Yes, it is a new appraisal report that might have been cloned from a prior report, but it is a new report because it is a new assignment, new client, new intended user, new intended use, etc. The old, original appraisal report now belongs to ABC mortgage client. You are now writing a new report for your new client XYZ mortgage co and after you send it to them, that new appraisal report belongs to XYZ.

"New effective date? - No. Since the appraisal is only a few weeks old and the new lender is willing to accept the new report with the original effective date, there is no need to change this."

That is your decision whether you change the effective date or not. Your new assignment for the new client may have the same effective date as the original report, but it now has a new signature date that you completed the new assignment for the new client. The new client, regardless of how you handle or decline the assignment, is now your new liability.

"**** The original lender authorizes the lender/client name change to the new lender IN WRITING, so why can't it be done? There is no confidentiality disclosure from ME (the appraiser), since the original lender already knows of the new lender's intent to use the report."

If the original client has agreed in writing that you can now complete a new assignment for a new client, then the confidentiality issue has been covered.

The fee is your decision, not the client's decision. Their only decision is whether they agree to receive the service at the costs that you determine. If they agree, forge onward. If they don't agree, then they have to decide what to do--you are no longer in the picture.

And the lender really doesn't need to have the name of the client changed. A lender may use an appraisal report that was prepared for a different lender, it does not need to have a new lender's name on it. The new lender just wants access to your liability insurance!

Advisory Opinions, FAQs, etc are attempts by the various entities of the Appraisal Foundation to assist appraisers in following the intent of USPAP.
 

Patrick Egger

Sophomore Member
Joined
May 29, 2003
Professional Status
Certified General Appraiser
State
Nevada
I think all of this is covered under the new AO-26 ... which was approved.
 
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