Fannie Mae and "Multiple Parcels"

[offtherecord]

Just as a reminder to everyone: References are made to the Current USPAP.

Specifically The two FAQ in Question that addresses the Issue.

On Jan 1, 2020 those will be incorrect

That is why I love USPAP. From year to year appraisal theory gets warped. Crazy for a standard . Ethical one year. Not the next.

 

[Terrel L. Shields]

You mean you haven't already taken the new USPAP course? ...he said smugly.

As for FAQs...no they are not USPAP but you can bet the ranch that a judge is very likely to use them as guidance if they ever come up in court, ditto the state board. They might as well be USPAP.

 

[George Hatch]

That is why I love USPAP. From year to year appraisal theory gets warped. Crazy for a standard . Ethical one year. Not the next.

Just for the sake of discussion.....

Which of the fundamentals of USPAP as it relates to the appraisal process itself - aside from the conversion from Complete/Limited to the user-driven SOWR - do you think have changed in the last 30 years? Which of the ETHICS-related specifics do you think have waffled?

 

[offtherecord]

George, I think that topic would be going off the rails and one worthy of USPAP scholars. I don’t profess to be one.My primary complaint is that it changes . And for the sake of revenue. It is so complicated and misunderstood as evidenced here.

The confidentiality rule is confounding to say the least. Lender A hires the Appraiser. Lender B buys the loan. It is discovered that the appraisal may have been incompetently performed . The appraiser hides behind USPAP? That is ethical? What a goofy document that allows fraud and or incompetence to flourish. It makes the whole intended use / intended user debate make my head explode.

I’d love to see USPAP distilled to 10 Commandments.

 

[George Hatch]

The more explicitly the expectations are spelled out the longer and more complicated the document becomes. The less explicitly the expectations are spelled out the more "interpretation" must be applied to fill in the blanks. So there are obvious hazards to either extreme, which will generally prompt for a compromise of some sort.

Right now SR4 ends on page 31 of the document, and SR3/SR4 mostly parallels SR1/SR2, which end on pg 24. By contrast, the table of contents (alone and by itself) for the Calif Vehicle Code runs 18 pages. So maybe 31 pages of USPAP isn't too much for appraisers to search through if/when they have a question.

 

[George Hatch]

The confidentiality rule is confounding to say the least. Lender A hires the Appraiser. Lender B buys the loan. It is discovered that the appraisal may have been incompetently performed . The appraiser hides behind USPAP? That is ethical? What a goofy document that allows fraud and or incompetence to flourish. It makes the whole intended use / intended user debate make my head explode.

"Incompetently performed" is related to Lender A's criteria, not those of Lender B. That's what "intended user/intended use" are for. Confidentiality is to prevent the appraiser from enabling Lender B to steal the loan from behind Lender As back without their permission. Or to prevent Litigant B from discovering what the appraiser prepared for Litigant A without their express consent. Confidentiality is intended to protect the legitimate interests of the Appraiser's client, in support of the appraiser-client relationship which provides the foundation of the public trust in the appraisal profession. How can my client trust me if I an allowed (or at least, not prohibited from ) conspiring with their competition behind their back?

As for the issue of intended users, how do I go about meeting the expectations of any user of whom I am not aware, have no relationship with, and whose expectations were never communicated to me and are therefore unknowable by me?

And why is Lender B buying loans from Lender A without anyone instructing the appraiser that Lender A wants them to cooperate with Lender B in the event there's a question? If Lender B bought that loan without doing their own due diligence on it then whose fault is that?

Blaming the appraiser for decisions Lender A/Lender B made is not a plan. Those lenders did the expedient thing - which is fine - but that doesn't make the potential downsides of that decision the appraiser's problem. No appraiser should be compelled to *guess* when their ethical obligations to their original client end. And no lender should be *making* loans on appraisals they haven't vetted or *buying* loans based on appraisals they haven't vetted - that's how we keep running into these financing bubbles.

Long story short - I see this as an issue to be resolved in advance by contract with the appraiser, not an issue our appraisal standards should be dorked to accommodate.

And BTW, the fundamentals of the CONFIDENTIALITY RULE weren't even created by the original framers or USPAP or altered since then - they predate USPAP itself in our profession by at least 90 years that i know of and probably prior to that.

 

[gregb]

Peter Christensen has touched on the confidentiality issue.

http://collateralrisknetwork.com/wp-content/uploads/2015/04/christensen_appraisal_confidentiality_issues.pdf

 

[Carnivore]

That is why I love USPAP. From year to year appraisal theory gets warped. Crazy for a standard . Ethical one year. Not the next.

Sorry my bad I did not mean the FAQ in question changed , I meant They change location in USPAP FAQ # and Page

 

[Lee Lansford]

That is why I love USPAP. From year to year appraisal theory gets warped. Crazy for a standard . Ethical one year. Not the next.

I believe that what was said is specific to the numbering of the FAQs will (may) change from edition to edition of USPAP.

 

[Lee Lansford]

You mean you haven't already taken the new USPAP course? ...he said smugly.

As for FAQs...no they are not USPAP but you can bet the ranch that a judge is very likely to use them as guidance if they ever come up in court, ditto the state board. They might as well be USPAP.

The FAQs I have found to be solid advice as to how to understand practical application of important matters.