Evaluations

[J Grant]

As USPAP itself states, the obligation to follow USPAP is driven by law, regulation, agreement or choice.
In my state the law is crystal clear - an evaluation is not subject to the appraisal law and does not have to follow USPAP, even if completed by someone with an appraiser credential.

I thought USPAP was an industry standard when we offered a value acting as an appraiser regardless of a state law for a particular label on a report -- then why not change the title of an appraisal to an evaluation and then appraisers won't need to follow USPAP since they are not doing appraisals any longer? ( assuming the law in states can be changed to match)

So whether it is an appraisal or not comes down to the label on a report - interesting.

 

[Terrel L. Shields]

I don't believe the FEDS have ever defined a property evaluation. USPAP is a set of standards issued by the TAF, which is not the FEDS. Interagency Guidelines are a set of standards issued by the FDIC which is also not the FEDS.

FDIC is a federal agency...

Yes, the Federal Deposit Insurance Corporation (FDIC) is an independent agency of the federal government. It was created by Congress to maintain stability and public confidence in the nation's financial system. The FDIC's primary functions include insuring deposits, examining and supervising financial institutions, and resolving failed banks.​

 

[Terrel L. Shields]

hy not change the title of an appraisal to an evaluation

Evaluations have a max limit that is less than a lot of house values and loan amount.

 

[Dale Floyd]

FDIC is a federal agency...

Yes, the Federal Deposit Insurance Corporation (FDIC) is an independent agency of the federal government. It was created by Congress to maintain stability and public confidence in the nation's financial system. The FDIC's primary functions include insuring deposits, examining and supervising financial institutions, and resolving failed banks.​

The FDIC is an insurance, and they are not lawmakers. Regulating banks for safety and soundness doesn't give them legal authority over state laws. TVA was also created by Congress to understand the cost of creating electricity, but they aren't the FEDS either.

 

[DWiley]

So whether it is an appraisal or not comes down to the label on a report - interesting.

What it is is based on the applicable law and the definitions therein, and those vary by state. In my state, an evaluation must state prominently that it is not an appraisal, but it is not the label that determines what it is.

 

[Elliott]

Perplexity:

 

[Terrel L. Shields]

monitor the performance of appraisers and persons who perform evaluations. The criteria should ensure that:
• The person selected possesses the requisite education, expertise, and experience to competently complete the assignment.
• The work performed by appraisers and persons providing evaluation services is periodically reviewed by the institution.
• The person selected is capable of rendering an unbiased opinion.
• The person selected is independent and has no direct, indirect, or prospective interest, financial or otherwise, in the property or the transaction.
• The appraiser selected to perform an appraisal holds the appropriate state certification or license at the time of the assignment. Persons who perform evaluations should possess the appropriate appraisal or collateral valuation education, expertise, and experience relevant to the type of property being valued. Such persons may include appraisers, real estate lending professionals, agricultural extension agents, or foresters

 

[J Grant]

A qucik look up:

Defining Residential Evaluations​

A residential evaluation, such as Valligent’s eVAL, is a streamlined alternative to a traditional appraisal. Evaluations offer a way to assess a property’s value without the more intensive requirements of a traditional appraisal, which can make them especially useful for certain types of loan approvals, such as moderate-risk loans or properties with average value and complexity.

With eVAL, the process is quick and efficient: a highly trained real estate professional first conducts an inspection of the property, which can be done in person or virtually. Then, an analyst reviews the data and finalizes the valuation. Evaluations can be a cost-effective option when a traditional appraisal is

My comment - it seems evaluations can be done by non-appraisers (an analyst, or a "highly trained RE professional" -neither of which is an appraiser) It follows that people who are not appraisers can not be expected to comply with USPAP. - and then it makes that per state law, an evaluation does not need to be USPAP compliant.

However, when an evaluation is done by an appraiser acting in the role of appraiser ( an opinion of value ), is the appraiser still bound by USPAP?

In any case, since USPAP has so few minimums, why wouldn't an appraiser follow it ...

 

[Terrel L. Shields]

The FDIC is an insurance, and they are not lawmakers. Regulating banks for safety and soundness doesn't give them legal authority over state laws.

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.​

 

[Terrel L. Shields]

However, when an evaluation is done by an appraiser acting in the role of appraiser ( an opinion of value ), is the appraiser still bound by USPAP?

In all but 2 states as best I can tell. If licensed, you have no choice but to comply with USPAP. However, you are not bound by FNMA forms in developing that report. You can use a short form, an old form, or write as a narrative. I do the narrative. I'm about to log off and finish a report today for 4 acres of vacant land. It's an appraisal. It's a narrative. It's going to be about 20 pages long. No UAD, no FHA rules, no ANSI ,etc. needed. 3 comps, no listings, and 3 hours from now I will be done. Visited the place yesterday - in a deluge no less. Water over the roads, muddy mess, real old fashion downpour and they had had high winds before I got there, I saw several trees down.