Evaluations & USPAP - Question from a bank staff appraiser

[bernielomax]

I am a certified general appraiser who is employed as a full time employee by a mid-sized bank. I currently order, manage and review all commercial appraisals.

The bank would like to expand the scope of my responsibilities and have me start handling some evaluations for loans that meet the criteria.

Do evaluations completed by an appraiser, who is an employee of a bank need to conform to USPAP?

Are there any bank staff appraisers the perform evaluation duties? How do you deal with USPAP?

 

[TerryRohrer]

Depends mostly on state appraiser regulations, I think. Some states allow appraisers to complete evaluations without complying with USPAP, some dont.

 

[sputnam]

Depends mostly on state appraiser regulations, I think. Some states allow appraisers to complete evaluations without complying with USPAP, some dont.

Right. Depends on the state.

 

[Tom D]

By definition, if there is any mention of any type of any value, you better be following USPAP. I wouldn't leave myself open to any rouge administrator.

 

[JTip]

AO-13

 

[J Grant]

USPAP is not hard to comply with and might require a few comments, such as addressing a prior sale within 3 years of the subject - I could never figure out why an appaiser would not make every report USPAP compliant -keep a copy of work file etc , maybe a few steps more than what they are doing in a report.

 

[Mark K]

Right. Depends on the state.

My question is whether or not the report must comply with USPAP if the loan is sold to an investor in a state that requires compliance or if it is sold on the secondary market.

I think some clear guidance from and understanding with the bank would be in order. If they end up having to keep a bunch of loans on their books due to the inability to sell them because of USPAP non-compliance, someone is going to end up a scapegoat.

 

[George Hatch]

I do evals in compliance with USPAP. It don't cost nothing and doesn't take me any more time to do so. There's no downside that I can see.

Just because a client might require "more" for some appraisal assignments than for others doesn't mean the latter can't be performed in compliance with USPAP. Where I think some appraisers get wound up is in thinking there's only one "appraisal" under the sun and that any deviations are always unacceptable. That, and I think some appraisers want to create the distinction for marketing and fee purposes.

 

[jay trotta]

AO-13

View attachment 92157

I agree, but then some States have their own compliance for license law and some conflict with USPAP......a razors edge so to speak.

 

[BRCJR]

As a LENDER EMPLOYEE you do not have to follow USPAP.

You simply take off your Appraiser hat and wear only your Lender Employee hat when conducting an Evaluation.

I am not aware of any state the disallows this.

Federal law does not require anything other than competency and independence when completing an Evaluation when doing so for the employer in the normal course of business.

I once did what you do and now have moved into a role of only doing commercial Evaluations and Appraisal Validations.

Check with your state for confirmation but, here is the Virginia law:

Code of Virginia​

Table of Contents » Title 54.1. Professions and Occupations » Subtitle II. Professions and Occupations Regulated by the Department of Professional and Occupational Regulation and Boards within the Department » Chapter 20.1. Real Estate Appraisers » § 54.1-2010. Exemptions from licensure

§ 54.1-2010​

A. The provisions of this chapter shall not apply to:

1. A real estate broker or salesperson licensed in the Commonwealth who, in the ordinary course of business, provides a valuation or analysis of real estate for a fee; however, such person shall not hold himself out as a real estate appraiser, and the valuation shall not be referred to as an appraisal and shall not be used in lieu of an appraisal performed by a licensed appraiser.

2. An officer or employee of the United States of America, or of the Commonwealth or a political subdivision thereof, where the employee or officer is performing his official duties, provided that such individual does not furnish advisory service for compensation to the public or act as an independent contracting party in the Commonwealth or any political subdivision thereof in connection with the appraisal of real estate or real property.

3. Any person who, in the ordinary course of business, provides consulting services or consultative brokerage for a fee, which services may include a valuation or analysis of real estate or standing or severed timber; provided such consulting services or consultative brokerage shall not be referred to as an appraisal and shall not be used in connection with obtaining a loan to finance or refinance real property or standing or severed timber or in connection with any federally related transaction.

4. Any person who, in the regular course of business, provides services to his employer, which services may include a valuation or analysis of real estate, provided such services shall not be referred to as an appraisal and shall not be used in lieu of an appraisal performed by an appraiser licensed hereunder.

5. Any person, including (i) a licensed residential real estate appraiser, certified residential real estate appraiser, or certified general real estate appraiser or (ii) an employee of a financial institution or lender, who provides an evaluation of real estate or real property in connection with a real estate-related financial transaction where an appraisal by a state-certified or state-licensed appraiser is not required by the state or federal financial institution's regulatory agency engaging in, contracting for or regulating such real estate-related financial transaction or regulating the financial institution or lender engaged in or about to engage in such real estate-related financial transaction. The evaluations provided by such persons shall comply with any standards imposed by the state or federal financial institution's or lender's regulatory agencies for evaluations prepared by nonstate-certified or nonstate-licensed appraisers.

B. Nothing contained herein shall proscribe the powers of a judge to determine who may qualify as an expert witness to testify in any legal proceeding.