Although a nice try I don't believe that this bit of authoritarianism justifies their contention. Confidential information residing in a workfile is not the same as confidential information recited in an appraisal report for third parties to "gaze at" and "profit from". Of course you should have all that information in your workfile readily available to an enforcement agency. That does not mean HUD has the authority to demand you make private, confidential information available to third parties (such as your client) for them to profit from. HUD is attempting to make a loan and not initiating an investigation. They would be more than welcome to my workfile (during the course of an investigation) where private, confidential information can safely reside however I would not PUBLISH information specifically designated as "confidential" by the source into the public domain (such as your appraisal report). In small towns people compare their appraisal reports more often than you would think. It would be a sad day and somebody would hear about it at length if my confidential closing information became common knowledge around the neighborhood. Your client can PAY to gain access to that confidential information from the people that control it if they want to make the loan bad enough. You have their names, addresses and phone numbers. You disclosed all the information you were entitled to disclose and you have the three best "nonprivate sales" recited in your last report revision. After the BS attempt at your integrity they forwarded to you above I would tell them they were welcome to use whichever version of the report they pleased and then simply relax and enjoy their discomfort. At this point you hold the high ground as you have done nothing wrong and have violated neither law, regulation nor confidence.
You're neglecting the fact that comparable fabrication is an enormous problem.
For HUD market rent studies, appraisers almost always use other HUD rents. You end up with spiraling increasing of rental rates to the point of absurdity. A 1-bedroom apartment in Waterbury, CT - a city totally taken over by Section 8 vultures - is a few hundred dollars less than a brand new Class A apartment in New Haven. Southeast Washington, DC has HUD rents at say $500 less than a Class A apartment in many surrounding areas. You are presuming this appraiser hasn't fabricated comps, but it has gotten to the point where HUD has enough data to make an accurate guess.
In Texas, this is probably not as big of a problem, yet, as zoning laws are more lax. You can keep building apartments and real market rents to determine Section 8 rents are possible. But I've reviewed total BS reports from Texas many times, and the problem is endemic enough that on the commercial side, the state has the lowest fees in the nation. Dallas, in particular, is black mark on this profession.
At the end of the day, multi-family appraising will be automated away just as single-family homes. The government effectively controls the market with building standards and subsidized financing. Rents are a function ultimately of income demographics, which those who fabricate data do not grasp.
Appraisers dug their own grave, and Freddie Mac data should make it clear reporting all your comps as confidential won't protect you. If your comps fall outside the range of the actual rents the government has on the books for recently financed properties, you've got a problem.
I have every Freddie Mac deal since 2020 stored in an Azure database that costs me $50 a month. That's how cheap Big Data is.
