HERE IS THE BEST I COULD FIND REGARDING THIS SUBJECT TRANSFERS. Does not mention reworking additional data or effective date which is still a question? But I am assuming that if nothing but the effective date was performed differently and the appraisal remained mostly intact even if it a new assignment IT IS STILL CONSIDERED A TRANSFER,that the appraiser has the responsability of DISCLOSING previous client when and if initiating THIS new assignment. On a new assignment,To me one would NOT only have to verify acceptability via approved Financial Lender but also reinspect and check new relavant data (basically a whole new assignment) along with update and DISCLOSE the that you had performed initially for a qualified Lender and I would also note any Valuation differences if any. It really does make it where we as appraisers are much better off not even doing a complete new report. But I think there is some judgement required. Most Lenders will blame the appraisal for the loan denial to COVER themselves. Yet if the Lender'(s) is shopping the report then when would it end? My esteemed MAI Dr Vince Barrett PHD who is in office and teaches many courses for the state of NM was correct in his discription regarding client contractual relationship however as to when it ends which is when the intended purpose of the appraisal is fullfilled whether it closes or not(your done with it) or when the reconciled value would no longer be applicable. You can accept new assignments regarding previous subject properties,the major jist of the verbage is the IMPARTIALITY principal. THIRD PARTY CONFIRMATION pricipal(no direct borrower engagenment but only approved Financial Insitutions). Disclosure of previous engaement if applicable so as not to be MISLEADING principal. Its still open to debate via wanting to take the risk of not doing it at all vs Disclosure and taking the opportunity to self review and clean up the mis-spellings,typos and such in the report. One could say that whats done is done and never call me again on this property stance vs Taking the time to determining the three principals as they apply. Most reports (more than 95%) per the appraisal institute have some USPAP violation because so much is left to interpretation and also coupled with the fact that it(USPAP), is a growing document not etched in stone. Good Luck
HOPE THIS HELPS? Still looking for verification via HUD.
9. Can a regulated institution accept an appraisal from a prospective borrower and determine
its acceptability based on a review?
Answer:
No, a regulated institution cannot accept a borrower-ordered appraisal.
10. Can an appraisal be transferred from one lender to another and, if so, under what
circumstances?
Answer:
A regulated institution may accept an appraisal transferred from another regulated
institution or from a financial services institution (that is, a non-regulated institution),
provided 1) the appraiser is engaged directly by the institution transferring the appraisal,
2) the appraiser has no direct or indirect interest in the property or transaction, 3) the existing
appraisal or evaluation remains valid, and 4) the regulated institution determines that the
appraisal conforms to the agencies’ appraisal requirements and interagency guidelines and is
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otherwise appropriate. (A financial services institution describes entities that provide services
in connection with real estate lending transactions on an ongoing basis.)
Regulated institutions are expected to perform a more thorough review when accepting an
appraisal from another financial services institution to confirm that the appraisal complies
with the regulation and has sufficient information to support the lending decision. Moreover,
the regulated institution accepting the appraisal should determine whether appropriate
documentation is available to confirm that the financial services institution (not the borrower)
ordered the appraisal.
11. Can a regulated institution accept an appraisal prepared by an appraiser who was engaged
by a loan broker?
Answer:
The agencies’ appraisal regulations allow a regulated institution to accept an
appraisal prepared by an appraiser engaged by another financial services institution,
including a loan broker. This is allowed as long as the regulated institution has appropriate
controls in place to ensure that the appraiser is acting on behalf of the financial services
institution, the appraisal conforms to the requirements of the regulation and is otherwise
acceptable, and the appraiser is independent from the borrower. Regulated institutions
should review broker-ordered appraisals thoroughly to ensure that the appraisal complies
with the regulation and meets the quality standards required by the institution’s appraisal
policies.
12. May an appraisal be readdressed to a regulated institution from the borrower or another
institution?
Answer:
A regulated institution cannot accept an appraisal that has been readdressed or
altered by the appraiser with the intent to conceal that the original client was the borrower.
Readdressing appraisals to conceal the original client, whether the client is a borrower or
another financial services institution, is misleading and violates the agencies’ regulations and
USPAP.
13. May an appraisal be routed from one lender to a regulated institution via the borrower?
Answer:
A regulated institution cannot accept an appraisal from the borrower unless the
regulated institution can confirm that the appraisal was in fact ordered by another regulated
institution or financial services institution. In accepting the appraisal, the regulated
institution must also confirm that the appraiser is independent of the transaction and that the
appraisal conforms to the agencies’ appraisal regulations and is otherwise acceptable.
14. Can a borrower pay the appraiser directly for an appraisal that is ordered by the lender?
Answer:
Since the regulated institution has engaged the appraiser for its services, the
regulated institution should be the party to remit payment to the appraiser. The regulated
institution may seek reimbursement from the borrower for the cost of the appraisal.
However, the borrower may not recommend an appraiser to the institution or select the
appraiser.
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15. Can an appraiser deliver an appraisal report to more than one lender assuming the
appraisal has been ordered by one of the lenders?
Answer:
The agencies’ appraisal regulations do not address whether an appraiser can
deliver an appraisal report to more than one lender. The case may depend upon the
provisions of the engagement letter. For example, the lender may specify in the engagement
letter that the appraisal may be provided to another financial institution if the lender decides
not to go forward on the loan. In the case of a syndicated loan, a lead lender is usually
responsible for engaging the appraiser and providing copies of the appraisal to the other
participating financial institutions. With regard to standards of confidentiality, USPAP
directs an appraiser to be aware of, and comply with, all confidentiality and privacy laws and
regulations applicable in an assignment.
16. Can the regulated institution accept an appraisal prepared by an appraiser who is a family
member of the loan broker who engaged him/her?
Answer:
The agencies’ appraisal regulations do not address family relationships between
the appraiser and the person who engages the appraiser. However, the agencies’ appraisal
regulations do not permit a regulated institution to accept an appraisal in which the appraiser
has a direct or indirect interest, financial or otherwise, in the property or the transaction.
Therefore, the regulated institution should review appraisals where a potential conflict of
independence may exist and should accept the appraisal only if it can determine that the
appraiser is independent of the transaction.
17. Can the regulated institution accept an appraisal prepared by an appraiser who is engaged
by a financial services institution with whom the appraiser has an affiliated business
relationship?
Answer:
The business relationship between the financial services institution and the
appraiser may not necessarily violate the independence requirement of the agencies’
appraisal regulations. However, the agencies’ appraisal regulations do not permit a regulated
institution to accept an appraisal in which the appraiser has a direct or indirect interest,
financial or otherwise, in the property or the transaction. The regulated institution should
evaluate the financial services institution’s controls to ensure independence and that there is
appropriate separation of responsibilities and reporting lines between the appraiser and the
financial services institution’s lending function.
18. How can a regulated institution ensure appraiser independence when accepting an appraisal
prepared for a financial services institution?
Answer:
Documentation (that is, an engagement letter) should be available to indicate that
the financial services institution (not the borrower) ordered the appraisal and that the
appraiser has no direct or indirect interest, financial or otherwise, in the property or the
transaction. The original lender’s engagement letter to the appraiser should be made part of
the appraisal report to provide additional information on the identity of the client in order to
ensure independence in the appraisal process.
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REVIEWING APPRAISALS
19. Should all appraisals undergo a compliance review?
Answer:
Yes, prior to a final credit decision, regulated institutions should perform a
compliance review on all appraisals to confirm that they comply with the minimum appraisal
standards as outlined in the agencies’ appraisal regulations, the interagency guidelines, and
the independence statement. Loan administration files should document this compliance
review, which may be in checklist or narrative format. In addition, certain appraisals should
be reviewed more comprehensively to assess the technical quality of the appraiser’s analysis
prior to making a final credit decision. The regulated institution should establish guidelines
for a more detailed, technical review based on transaction risk, transaction size, or other
criteria. (See “Program Compliance” in the interagency guidelines.)
20. Can a regulated institution approve a loan subject to receipt and review of an appraisal, or
must the appraisal be obtained and reviewed prior to making the final decision?
Answer:
A regulated institution may grant conditional approvals to prospective borrowers
before obtaining an appraisal. However, a final credit decision or action should only occur
after the regulated institution receives, reviews, and accepts the appraisal.
21. What qualifications would constitute a “qualified and adequately trained individual” for the
purpose of conducting appraisal reviews?
Answer:
Individuals who review appraisals as part of a regulated institution’s internal
compliance function should be independent of the transaction and possess the requisite
education, expertise, and competence to perform the review commensurate with the
complexity of the transaction.
24. Should a regulated institution comply with the independence requirements if an appraisal is
not required by the agencies’ appraisal regulations?
Answer:
A regulated institution should ensure independence in the ordering process for an
appraisal even if the appraisal was not required under the agencies’ appraisal regulations.
Regulated institutions should also maintain independence for evaluations.
25. Does a tax-assessment value from the local taxing authority constitute an evaluation? Can a
loan officer who approves and/or recommends a loan conduct an evaluation if the market
value that the officer develops in the evaluation does not exceed the tax-assessment value?
Answer:
A value from the taxing authority alone is insufficient to be considered an
evaluation. An evaluation report should include calculations, supporting assumptions, and, if
utilized, a discussion of comparable sales. If tax assessment information is used as part of an
evaluation, the regulated institution should document the facts and analysis used to
demonstrate that there is a valid correlation between the assessed values of the taxing
authority and the property’s market value. In addition, an evaluation should describe the real
estate collateral, its condition, and its current and projected use.
A regulated institution should ensure that an individual who performs an evaluation is
independent of the loan production function. Simply restricting the size of a transaction to
less than the tax-assessed value alone does not comply with the agencies’ appraisal
regulations or the interagency guidelines, which address standards of independence. (See
“Independence of the Appraisal and Evaluation Function” in the interagency guidelines.)
26. The work-out plan on a $5 million problem loan calls for a regulated institution to receive an
assignment of a $2 million note from the borrower’s relative secured by a deed of trust on a
different property. Is this financial transaction considered real-estate-related and is an
appraisal required on the collateral property?
Answer:
Yes, this is considered a real-estate-related financial transaction. The agencies’
appraisal regulations and interagency guidelines allow for an evaluation in lieu of an
appraisal on new real estate collateral in certain loan workout situations depending on loan
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quality, collateral quality, and validity of an existing appraisal or evaluation. (See
“Renewals, Refinancings and Other Subsequent Transactions” in the interagency guidelines.)
27. What is the useful life of an appraisal?
Answer:
The useful life of an appraisal varies with market conditions and property type.
The agencies allow a regulated institution to use an existing appraisal to support a subsequent
transaction if the institution documents that the existing value estimate remains valid.
Factors which could impact the value include the passage of time; the volatility of the local
market; the availability of financing; the inventory of competing properties; improvements
to, or lack of maintenance of, the subject property or competing surrounding properties;
changes in zoning; or environmental contamination. (See “Valid Appraisals and
Evaluations” in the interagency guidelines.)
28. Can a regulated institution advance new funds without a new appraisal if the value of the
total loan continues to be supported by an existing appraisal and is consistent with
supervisory LTV limits? Does the age of the appraisal matter if the physical condition of the
property and the market conditions have not changed?
Answer
: A regulated institution may use an existing appraisal or evaluation to support a
subsequent transaction, as long as the credit file documents the facts and analysis that support
the institution’s conclusion that the appraisal or evaluation remains valid. Criteria for
determining whether an existing appraisal or evaluation remains valid will vary depending
upon the condition of the property and the marketplace and the nature of any subsequent
transaction.
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Really accept my apology FOR BEING RUDE and THANKYOU!