Evaluation Liability

[Terrel L. Shields]

The fixation on labels is a complete distraction.

Yes, but tell that to your E&O carrier

not by the person's licensing status who did it

again, the eval is a separate animal from appraisal & outside those two states, must comply w USPAP when done by appraiser...

The fees are good, E&O does not apply because they aren't considered appraisals, and much of the red tape nonsense we all complain about does not apply.

That is nonsense. You can be sued period. I“ve yet in 25 years been offered a "good" fee for an eval or restricted report. And restricted does not mean short-cutting Std 1. SOW may be limited but runs risk of being too brief, indefensible and requires appraiser to be wordsmith extraordinaire. Clients seem to think restricted means you write report from an arm wave analysis.

 

[Meandering]

There is nothing in USPAP that would prohibit one from labeling a report as a Restricted Appraisal Report Evaluation. See the FAQ about the "Summary Appraisal Report" label on all URARs,. So long as an appraiser uses the required term he or she is free to add to that term.

I live in a state with a unique state law that allows appraisers to perform evaluations that comply with the IAG, but they do not have to follow USPAP. That is not the case in most states. In most states, one has to provide an appraisal report in order to report market value. No lies there, just fact.

Even though my state allows non-USPAP compliant "evaluations," when asked for an "evaluation" I usually went the extra step and added enough to the report for it to be a USPAP compliant appraisal report. The IAG rules are like USPAP in that way - it is OK to do more than is required. So, if only an evaluation is required, one can deliver an appraisal report, as long as that report meets the IAG requirements. I opted for Restricted Reports with enhanced content (enhanced above the bare minimums of STD 2) in order for the report to comply with both USPAP and the IAG.

Please point out where anyone has suggested that appraisal reports do not have to comply with STD 2. I don't see any such post.

And, lastly, if you are going to accuse someone of lying, and then quote something from me, you had better be prepared to back it up. Put up or...

So far, I see only one post that is full of BS.

Did you read the IAEG 2017 April bulletin?

I did.

.

 

[Meandering]

In most states, one has to provide an appraisal report in order to report market value. No lies there, just fact.

Absolutely and needs to be restated, least the hero worshippers in other states, only read that Danny and Denis do evaluations so they can too. And that point is so important lets clarify it.....

In most (all but two) states, an evaluation done by an appraiser has to meet the requirements for an appraisal.

As appraisers, the choice is to diversify and do that type of work, or leave it to others.

Don't want you tempting the stupid into doing something their state doesn't allow.

We do evaluations for several clients. As Danny said, these are done in full compliance with USPAP as restricted appraisals.

When an "evaluation" is ordered the decision to use something other than a "full" appraisal has already been made. .

Now how can it be that your client orders an evaluation, and you provide a restricted appraisal? Darn ASSIGNMENT CONDITIONS again, get you when you're not even paying attention to them, huh?

Typically, these reports replace internal valuations which were done by a loan officer, as part of the loan monitoring proces.

Looks like the loan monitoring process includes more than one intended users, sorry, you can't comply with USPAP and provide a Restricted Appraisal for that use. If that were the case, all non FRT lending reports would be restricted appraisals, 'cause they're cheaper, you know.

Comment: When the intended users include parties other than the client, an Appraisal Report
must be provided. When the intended users do not include parties other than the client, a
Restricted Appraisal Report may be provided.

'Cause you know how we know that???

Regulation B require creditors to provide to applicants free copies of all appraisals and other written valuations developed in connection with an application for a loan to be secured by a first lien on a dwelling, and require creditors to notify applicants in writing that copies of appraisals will be provided to them promptly.

Darn Federal Regulations.
https://www.consumerfinance.gov/pol...er-equal-credit-opportunity-act-regulation-b/

'Cause you know, not just the loan officer is going to "use" the report, when a copy has to be provided to the borrower.

And if you're signing that evaluation as an appraiser, hopefully your "report" explains why it is an evaluation restricted appraisal report, signed by an appraiser, yet is not an appraisal report, because the "real" appraisal report is signed by the appraiser that completed the full appraisal for the loan, but you were just evaluating the property, not really appraising it, even though your report says restricted appraisal. Oh yeah, and these are the borrowers that were not taken in by subprime, interest only loans, ruining their credit. Oh no, these are now the "smart" borrowers who will not be MISLEAD by your report.


AO 13

Conclusion
An evaluation, when performed by an individual acting as an appraiser, is an appraisal. In addition to complying with USPAP, the appraiser must be aware of and comply with any additional assignment conditions and reporting requirements imposed on the assignment.

You are providing appraisals. Call them evaluations if you want, but if more than the loan officer is an intended user, you're in violation of USPAP with your Appraisal, regardless to what you label it. And if you are calling them evaluations, you are mixing terms that are separate and distinct under Federal Regulations. But you're doing so, just to make your client happy, you malleable..........




Have a great Tuesday.



.
.

 

[Dale Floyd]

That is nonsense. You can be sued period. I“ve yet in 25 years been offered a "good" fee for an eval or restricted report. And restricted does not mean short-cutting Std 1. SOW may be limited but runs risk of being too brief, indefensible and requires appraiser to be wordsmith extraordinaire. Clients seem to think restricted means you write report from an arm wave analysis.

Certainly, Junior could sue Granny for putting his peanut butter on the wrong side of the bread I suppose, but one can't live life in fear of the ridiculous.

Your point about "restricted" is well made.

Again - This state's law spells out very clearly that an evaluation is what it is, and an appraiser can perform that service in Tennessee just like anybody else. Evals are specifically for bank use only, and are usable in cases when an appraisal is not required. We called them Collateral Reviews before all the legalese of the appraisal laws were written. There hasn't been a successful suit against appraisers doing evals yet in Tennessee that I'm aware of and they've been around just as long as the appraiser licensing laws. I don't personally do evals or drive-by appraisals anymore within my firm, but if there are TN appraisers reading this who do, I would quote T.C.A. in every evaluation report that leaves the office.

 

[Dale Floyd]

Conclusion
An evaluation, when performed by an individual acting as an appraiser, is an appraisal. In addition to complying with USPAP, the appraiser must be aware of and comply with any additional assignment conditions and reporting requirements imposed on the assignment.

You are providing appraisals. Call them evaluations if you want, but if more than the loan officer is an intended user, you're in violation of USPAP with your Appraisal, regardless to what you label it. And if you are calling them evaluations, you are mixing terms that are separate and distinct under Federal Regulations. But you're doing so, just to make your client happy, you malleable...........

I'm curious - Since there are appraisers across the continent who are also real estate agents, do you also consider the BPO's they do under their "realtor" umbrella to be an appraisal too?

Also, just curious - Has there ever been a legally resolved case that anybody can point to that states a BPO or a bank evaluation performed by an appraiser is the exact same thing as a compliant appraisal and must adhere to USPAP? Unless something has changed recently, neither are considered an appraisal by the TN appraiser commission members of the past.

Rather than going back and forth with our opinions, I think the answer to those two questions would resolve the matter. I believe there is a distinct difference between those products, especially since our law addresses it in this state. And since the states are charged with appraiser licensing and compliance by the Feds, and many have varying language, then perhaps that's where we find the basis of our differences in opinions.

 

[DWiley]

M,

The fact that someone is provided a copy of a report through a disclosure obligation does NOT make them an intended user. So, the fact that the borrower receives a copy has no effect on whether a Restricted Report may be used.

I am actually teaching the 15 hr USPAP today, and there are a few seats open - just in case you want a refresher.

 

[Pittsburgh Pete]

Someone could certainly use a refresher course. Love ignorance (i.e. lack of knowledge) put forth with such vigor!

 

[Meandering]

M,

The fact that someone is provided a copy of a report through a disclosure obligation does NOT make them an intended user. So, the fact that the borrower receives a copy has no effect on whether a Restricted Report may be used.

I am actually teaching the 15 hr USPAP today, and there are a few seats open - just in case you want a refresher.

Perhaps you should review all the intended listed on a URAR then wonder how come they are not the same intended users for an evaluation performed for a loan officer to track the loan progress. And ghee whiz, all those appraisal report portability regulations where just a waste of time? Cause intended users don't matter for USPAP once you can name report an evaluation, with only one intended user.

But I already know the rebuttal is that it's okay when performed for a lender who holds all their loans in house and never sells them into the secondary market or to other lenders.

'Cause your lender is self funded!
Yeah that's the ticket.
Thousands of people make new deposits into their bank everyday so they always have more money to spend.
Yeah, yeah, and, and, sometimes they even print their own money, that way no "investors" need those appraisals to know the value of the portfolio, so that loan guy is the only intended user.
Yeah that's the ticket.

John Lovett would have made a great appraiser.

 

[Meandering]

M,

The fact that someone is provided a copy of a report through a disclosure obligation does NOT make them an intended user. So, the fact that the borrower receives a copy has no effect on whether a Restricted Report may be used.

I am actually teaching the 15 hr USPAP today, and there are a few seats open - just in case you want a refresher.

Perhaps you should go rogue and teach the standards instead of the FAQs

After all its violations of the standards that get appraisers in trouble, not violations of FAQs.

Aww but how can they propagate the smoke and mirrors.

.

 

[Pittsburgh Pete]

Me thinks John Lovett might have a greater grasp of USPAP than some already in the field!