Disclosure Of Prior, Recent Appraisal

[CANative]

Regarding a new assignment where a client wants you to reappraise a property you have recently appraised for a different client.

I'm thinking about including a small statement in the body of the report and expanding the scope of work description to reflect that I have recently appraised the property for a different client, that I have not revisited the property since the effective date of the appraisal (if that is the case.)

Any opinions about the pros and cons? Will lenders/MB's freak out thinking it's going to jinx their underwriting and approval? Is this an overkill on disclosure and CYA's?

I read on the forum, that the new test forms may require this disclosure.

 

[Joker]

I have an approval package from a client who requires that prior to accepting an assignment I must disclose if I have previously appraised the property for the same borrower. I am on their approved list already but they are apparently changing their ways and their Skippies. However, this among other things has me concerned.

I don't think I would state in the appraisal that you had previously appraised it for ABC Lending Co., but rather that you had observed the property on such and such date and not revisited, yadda, yadda, disclaim, disclaim. If you want to state that you had appraised it for a different client, you could. I don't think it's necessary and I definately wouldn't name the prior client.

 

[Otis Key]

Greg - I disclose that I've appraised it before but be sure to remember to follow the USPAP guidelines.

USPAP AO-27

 

[DTB]

Isn't the order from Client A a confidential document? I thought anything gleaned from / during an appraisal, other than public info, was confidential.

Greg,
What part of A would this type of CYA cover?

Personally I don't think it is any of Client B's business and wouldn't enter into the lending decision. They should ask these questions of their client not us.

 

[CANative]

Mike,

Since this is a new assignment, there is no Client A. And since I'm not disclosing any confidential information about any other "business" dealings, I don't think this is in contradiction to the confidentiality rule of the ethics section.

Personally I don't think it is any of Client B's business and wouldn't enter into the lending decision.

There have been several instances where condition/value or other issues have caused a loan to fall apart and then I get a request from a different client who thinks he may have the magic to make the deal work. Perhaps their funding source, the one who actually has the money, would want/need to know that this appraisal has been floating around.

I think there is a growing concern about readdressed appraisal reports and lenders and appraisesrs casually dispersing reports under the "protection" of the AO's from 2004. Maybe I'm ahead of the curve (or behind the 8-ball)

 

[Mike Garrett RAA]

The Chairman of the Colorado Board of Real Estate Appraisers spoke to our local appraisers group last night....this was a major concern of his. The new forms specifically have a place to identify a former client and he believes this is a violation of USPAP.

You might want to go to efanniemae.com and down load the newest of the new forms. Comment period ends December 15th. There are 11 new forms and most are a re-write of the test forms introduced this year.

Even though I am a AQB certified USPAP instructor, I do not take it upon myself to interpret USPAP. Look something in the Q & A in the very near future concerning this issue. That said, as far as being a practicing appraiser I will certainly indicate that I have previously appraised the property...just not identify the former client.

 

[Joker]

Let's say you do a new site visit. Would you disclose if you have appraised it in the last 3 months, 6 months, 9 months, 12 months, 24 months? What should be the cutoff?

 

[CANative]

Let's say you do a new site visit.

For the same client or for a new client, as a follow up to a previous assignment or for a new appraisal assignment?

In the old days, before the AO''s "clarified" things, if we were approached by a potential client to appraise a property we recently appraised, we would check tax records to see if there was any mortgage activity. If there was a closing after our original appraisal we considered the appraisal had served it's purpose and our client/appraiser relationship had been concluded for that assignment and could appraise the property for a new client. If there was no activity, we would require a written release of the appraiser/client relationship before appraising the property for a new client.

The new "clarification" has taken the hand wringing out of some of these decisions, but I think it may be allowing a "free-for-all" atmosphere in the business. If I was lending my own money on collateral I've never seen, through a middleman I don't really know and valued by an appraiser who may or may not be simply stamping new client names whenever asked to, I'd be nervous about my money.

 

[Joker]

New client, new assignment.

 

[Otis Key]

Greg - I'll still disclose.

Mike - I agree with you, but since all of USPAP is written in "legalize" it becomes necessary for each and everyone of us to interpret USPAP since they will not give a straight forward answer.

DW - True, but CYA, from my point of view, is YES, I will disclose any prior appraisal.