Dodd-Frank provision and Mandatory Reporting

[Elliott]

WilliamH,
If a doctor is approached at a cocktail party by a neighbor and asked about a pain the neighbor has in his abdomen, the doctor will probably avoid offering an opinion on the spot. The doctor would probably suggest it could be serious and the neighbor should see a specialist.

Dodd-Frank doesn't compel you to act, but you probably have a responsibility under the Preamble of USPAP, which says,

"An appraiser must promote and preserve the public trust inherent in appraisal practice by observing the highest standards of professional ethics."

 

[William K]

Yes, here is my question, under my license I AM BOUND by Confidentiality to my client, AM I BREACHING THAT ETHICAL STANDARD OF CONFIDENTIALITY if I then forward a document I acquired due to an engagement by a client????

Conduct:

"An Appraiser must not knowingly permit an employee or other person to communicate a misleading or fraudulent report"


In my most recent USPAP class this ( reporting an appraiser to the state) caused the most discussion. The majority felt it fell under the Preamble to to USPAP to "promote and maintain a high level of public trust".

If we are in essence to "police are own" as part of maintaining a high level of public trust then the argument could be reporting a violation under CONDUCT to the proper Regulatory Agency would not be a violation of confidentiality.

The one area where it seemed to get cloudy had to do with working with an attorney who might be defending another appraiser and you are asked to review a report and present your opinion to the attorney. Is that information provided, private and confidential? Even if the publics trust in the appraisal practice is in jeopardy?

 

[Meandering]

I did a review and this guy included enclosed porches of the comparables to bring the GLA in line, of 5 comparables, FOUR had the wrong GLA along with other serious information/unverified errors). I sat here and thought it through and decided, there was no way I would have ever gotten a copy of that report if I had not been engaged to do the desk review, I informed my client of the errors, reported that the report had serious credibility issues and was not reliable enough to lend on and kept my own ethics of confidentiality to my client. When all is said and done, MY ethics are my responsibility.

Conduct:
"An Appraiser must not knowingly permit an employee or other person to communicate a misleading or fraudulent report"
In my most recent USPAP class this ( reporting an appraiser to the state) caused the most discussion. The majority felt it fell under the Preamble to to USPAP to "promote and maintain a high level of public trust".
If we are in essence to "police are own" as part of maintaining a high level of public trust then the argument could be reporting a violation under CONDUCT to the proper Regulatory Agency would not be a violation of confidentiality.
The one area where it seemed to get cloudy had to do with working with an attorney who might be defending another appraiser and you are asked to review a report and present your opinion to the attorney. Is that information provided, private and confidential? Even if the publics trust in the appraisal practice is in jeopardy?

So, we have what might appear to be a conflict in policy and/or law within USPAP. If we are in possession of a report that appears to violate USPAP at least on some level, through a client to which confidentiality is owed.

While we are all in control of our own ethics, the question of what to do still remains a question concerning the policy/law of USPAP and is best directed to someone within the each state that is knowledgeable with the state law and with USPAP who can give the best answer.

My understanding, and as I said, I am no USPAP instructor, but my understanding is that the state here must enforce the Standards, Comments and Opinions contained in USPAP upon Certified and Licensed Appraisers.

Not the FAQ, Not the Preamble, and Not on anyone who is not a state approved appraiser. Each state can vary, and most do, that’s why it is best to check with someone who knows from where you are. Regardless to the high moral standard everyone strives to achieve, it is not a reflection of good moral standard to pick and choose which portions of USPAP to follow and which portions to ignore because WE know we are right about something and are hell bent on making the world know WE are right and someone else is wrong, because two wrongs don’t make a right.




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[hastalavista]

An appraiser turning in another appraiser is a serious matter.

As for what does the regulator say, my regulator says that there is no confidentiality breach if an appraiser submits another's report for the state to review.
Further, an appraiser who turns in another's report and cites his/her concerns in the complaint is not completing an appraisal review (per my state).

I've been consistent in my advice that filing a complaint against another appraiser is serious, and should be done with a lot of consideration.

I agree with Terrel; I'll submit the most egregious (and I have) reports. I could care less if there value is something different than what I may think.
I care a lot when they represent a retail store as a house.
Or, like the time when an appraiser ripped off the signature of another and used it to complete a report (I figured this out when I called the appraiser whose signature was on the report; one advantage when the reviewer has the ability to directly contact the appraiser).
There isn't much need to deliberate in those kinds of situations!

 

[Meandering]

Thanks Denis.

The world would be easier if all states were uniform in their application of USPAP and complaints and similar issues. Unfortunately the states are not uniform, that's why it's hard to give a fast and easy answer to these types of questions.


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[hastalavista]

Unfortunately the states are not uniform, that's why it's hard to give a fast and easy answer to these types of questions.

All that is needed is to have the representatives of the various 50-states and jurisdictions get together and agree on a common standard.
You know how well that works in Congress!

(so, I'm not holding my breath :new_smile-l.

But, all kidding aside...

This is one of the reasons (I have heard) that my state (California) has re-introduced the requirement to take "State Laws & Regulations" for license renewal.
That course is required for new licensing.
It used to be required for renewal when licensing first started.. then they dropped the requirement and allowed appraisers to sign a certification that said they "read" the applicable state laws (and, yes, I actually did! :laugh.
But, obviously, what they were finding is that many were not as up-to-date on the state requirements/regulations as they should be. So, now California requires that course to be taken.
I think it is a good thing (I'll be taking mine in February... I'll see if I'm as smart as I think I am!).

:new_smile-l:

 

[Meandering]

We have mandatory state law update, 2 hours every two years here.

Plus the state issues, each, a green and white booklet for us to take home from the class and read the state laws and reference when we need to.

Now that does not mean that every appraiser diligently reads those booklets and lays them on their desk as reference material should a question arise. And, the state actually recognizes this and has live people from the board who will talk to appraisers on the phone and answer any questions directly or will meet and issue an official response to questions that are asked multiple times by multiple people.

But not all states operate this way, and I applaud California and AZ and others that publish lists of licensed AMCs because I have not seen this in my state. But we are not mandated to check a list either.

It is what it is, and local knowledge on this subject will render the best answer.


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