Evaluations

[J Grant]

Perplexity:

View attachment 99493

Thanks for this post - seems Minnesota has an appraiser disclose it is an evaluation and not an appraisal and that lets them out of ISPAP compliance --

Any other state, - still that pesky USPAP has to be in compliance for any opinoo of value. Of course, an evaluation done by a nonappraiser would not be subject to USPAP , so when folks argue that the state law protects the appraiser, perhaps not -- per the "others" box above - when an appraiser is offering any opinion of value.

It seems that if one can get a gig doing evaluations on salary or retainer, then drop the appraisal license and have less scrutiny.

 

[Dale Floyd]

Actually, they do. The OCC regulates National Banks. The FDIC regulates State Banks. It is FDIC bank examiners who can enter any state bank and audit their books and compliance with regulations that the Interagencies ergo, OCC, FDIC, NCU and Federal Reserve. The regulatory agencies primarily responsible for supervising commercial banks and administering state and federal banking laws include the Federal Reserve System, the Office of the Comptroller of the Currency (OCC), the FDIC and the state banking agencies.

The FDIC (Federal Deposit Insurance Corporation) regulates state banks that are not members of the Federal Reserve System. The FDIC also insures deposits in both state and national banks.​

Actually, they don't. The FDIC makes no laws, but they regulate financial institutions which use them as the insurance for their deposits. Most states require charters to be approved for FDIC regulations because states no longer carry deposit insurance anymore. The FDIC must consult state officials and get proper authorization from the local circuit judge before they can seize a bank for non-compliance reasons. It is that state authority allowing them to transfer all deposits and loans from the bank to them. The state departments of financial institutions and the OCC work similarly, but there's a difference in their regulatory auditing.

The FDIC has no powers over appraisers, other than possible complaints like everybody else. If the FDIC reviews an appraisal that is problematic, the bank gets the stipulation and is required to handle that. If a bank uses an evaluation that doesn't measure up to the standards they've adopted, they do not call the evaluator in. All of that goes back to the bank and their officials.

I was one of the integration guys who worked with the FDIC and private auditors when our bank merged other banks, or when we took over failed institutions.

 

[TerryRohrer]

The Alabama Legislature enacted legislation, effective May 29, 2019, allowing state licensed appraisers to perform evaluations of property authorized by federal financial institutions for transactions that do not require an appraisal.

Act 2019-282 states that appraisers “shall not be subject to any provision” of the state’s appraiser licensing law when performing an evaluation. The evaluation report must include a disclaimer stating “this is not an appraisal”, and the requirements for an appraiser to comply with the Uniform Standards of Professional Appraisal Practice DO NOT APPLY.

Also, evaluations may not be used for experience credit by appraisers who intend to upgrade their license. Effective immediately, appraisers must attach a copy of the engagement letter to their log for each appraisal listed before the log is submitted to the Board.

Additionally, the Law clarifies that evaluations are “governed by federal law and rules of the federal financial institution regulatory agencies, and NOT THE BOARD.” Therefore, the Board will not accept complaints against appraisers regarding evaluations they have completed.

Alabama Appraisers Can Now Begin Performing Evaluations – Alabama Real Estate Appraisers Board

reab.alabama.gov

 

[TerryRohrer]

The 87th Texas Legislature passed House Bill 2533 which allows Texas appraisers to complete evaluations without complying with the Uniform Standards of Professional Appraisal Practice (USPAP). Prior to this change, Chapter 1103 of the Occupations Code required appraisers licensed or certified in Texas to comply with USPAP when performing an evaluation of real property.

This change in statute became effective on June 15, 2021, and applies to evaluations related to real property transactions commenced on or after this date. Evaluations performed for transactions commenced prior to June 15, 2021, are subject to prior law and must be done in compliance with USPAP.

Appraisers performing evaluations not in accordance with USPAP authorized by the change in law must include the following notice on the first page of an evaluation report: “This is not an appraisal performed in accordance with the Uniform Standards of Professional Appraisal Practice.”

Newly passed evaluations bill: What appraisers need to know | TALCB

www.talcb.texas.gov

 

[TerryRohrer]

the CT Department of Consumer Protection adopted updated Real Estate Appraisal Regulations. The updates were approved by the CT Attorney General on July 19, 2021 and the Legislation Regulation Review Committee on September 28, 2021 becoming effective September 30, 2021. The changes were prompted by the Connecticut Real Estate Appraisal Commission. Section 20-504-2 (4) was added, which states: “..when an evaluation of real property collateral is required in lieu of an appraisal, a Connecticut certified appraiser may perform such evaluations outside the scope the USPAP by following Section XII (evaluation Development) and Section XIII (evaluation Content) of the Interagency Appraisal and evaluation Guidelines…”. The bottom line, in Connecticut, a lender can now use a licensed/certified real estate appraiser to complete an evaluation and a CT licensed/certified real estate appraiser can perform an evaluation and still comply with State of CT Law.

CT regulation change to permit appraisers to complete evaluations - by John Galvin

John Galvin Instead of real estate appraisals completed in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP), in 2010,...

nerej.com

 

[glenn walker]

In my opinion, if the appraiser is a licensed appraiser and signs as an appraiser, they are bound to follow USPAP when they offer an opinion of value, regardless of the label given to the report.

Evaluation is a label, a name someone gave to this product. How did they state the value - did they call it a value estimate? An opinion of value? I have never seen an evaluation, but USPAP compliance seems so simple it is puzzling why someone would not follow it. Create a work file, disclose prior sales and any prior service, a few things like that and a report is USPAP compliant - as a format anyway. USPAP addresses ethics and peer practice, which is less tangible.

The sacred word "value" is what differentiates a Realtors BPO a CMA or a Evaluation. Those product's don't and aren't certifying a value. They give a Price. As a Broker or layman I can offer a price opinion but the minute I Give A Certified Opinion Of Value it becomes an appraisal. That's how it's treated by State Boards, Federal FTR and courts. A Evaluation Is Not an Appraisal...lol

 

[J Grant]

As far as I know, Realtors (or anybody ) can offer a value opinion or a value estimate - they just can't represent themselves as a licensed appraiser if they are not - or call it a certified appraisal.

I have never seen an evaluation - what is the statement at the end , how is the $ amount phrased, (as a price or as a value- an opinion or an estimate? ) and does the analyst sign it ?

 

[Terrel L. Shields]

All of that goes back to the bank and their officials.

When the board gets one of those letters outlining what they need to do, the bank doesn't ignore it.

 

[Dale Floyd]

When the board gets one of those letters outlining what they need to do, the bank doesn't ignore it.

That’s absolutely the truth. Nothing ruins a day more for a bank official than the exit interview of the FDIC. lol.

 

[DWiley]

As far as I know, Realtors (or anybody ) can offer a value opinion or a value estimate - they just can't represent themselves as a licensed appraiser if they are not - or call it a certified appraisal.

I have never seen an evaluation - what is the statement at the end , how is the $ amount phrased, (as a price or as a value- an opinion or an estimate? ) and does the analyst sign it ?

The IAEG require an evaluation to develop an estimated market value.