FIRREA ?

[Farm Gal]

You GO Mike!!!

LOL LOL LOL in fact:

ROTFLMAO
as I set another appointment to go "Look at a house" for da bank

 

[Jo Ann Meyer Stratton]

When I call to make an appointment I tell the home owner that XYZ Bank has ordered an appraisal assignment from me and I am calling to make an appointment to do the field work for that assignment, will there be an adult in the home that will be able to let me in the home at 9AM Thursday? And I have gotten around the printed words by having a statement that wherever the word inspection or inspected apprears in preprinted forms it shall mean observed. As I am not a home inspector and observe for valuation puposes only. If the client has any concerns they need to contact a professional for that specific concern.

 

[Steve Owen]

I wouldn't lie, but I might take the option of not answering directly...

Now, I'm not throwing stones here, so don't go ballistic, but, if you don't include the fact that you previously did the appraisal for someone else, aren't you lying by omission? (Of, course, I'm not talking about a case where there is a new date of value and new information - that is a new appraisal and you have no obligation to acknowledge that you have appraised the property before.)

 

[Paul Ness MAI]

Lee Ann: I wouldn't lie, but I might take the option of not answering directly: I would prefer not to answer that, why do you want to know? Would be my first question in return!

* Mr. Banker then says "I want to know because if it was originally done for the borrower then I can't accept the report. You should know that".

Lee Ann: What is to prevent me a lowly residential appraiser (who deals not with the lofty issues you MAI's must wrestle) from getting the cleint's permission to disclose?

* Nothing, but the bank can't accept the report. The Agencies Amended Final Rules (dated 7/7/94 on page 29498 of the Federal Register) state "The prohibition on the institution using an appraisal prepared for the borrower remains in effect."

Someone else said in a recent post that it's not the appraiser's problem if the bank accepts an appraisal done for the borrower. This is correct, but IMHO the appraiser only has the responsibility to disclose the original client. Now as a review appraiser myself, if the appraiser readdresses a report without disclosure of the change but I know the borrower originally engaged the appraiser I can't in good conscience accept the report for two reasons (1) the FIRREA rule for lenders and (2) as a certified appraiser I would be violating ethics by accepting such an appraisal.

Lee Ann: The S&L crisis was to a minor the result of borrowers shopping Made As Instructed reports: NOT a slang on your designation- don't shoot!

* My point exactly! That was the whole reason for this portion of the FIRREA regulation.

Lee Ann: The residential borrower however should have the option to ASK the bank if they can accept the appraisal recently completed, for which they might have to sign a release to use it. (My preference) Anyway they paid for and used the information from the first appraisal in making their buying decision.

* You're right, they paid for it but the appraiser did them a disservice by agreeing to do the appraisal if they knew the customer wanted to use it for financing. The borrower may get stuck having to pay for a second appraisal (I have seen this happen). Most appraisers I work with know this fact and if a person calls them and the purpose is for financing, the appraiser will tell them the bank has to order the appraisal.

Lee Ann: I don't HAVE any fiduciary responsibility to the cleint once I collect my fee and deliver the goods. Ethics we can argue. But the translation of the ethics I got was it is not MY problem!

* The translation of the ethics I got from an instructor a few years ago was that my relationship ends when the intended use is consummated, i.e. when the loan closes, the estate is settled, the bankruptcy is closed, the condemnation proceedings are ended, or the appeal decision is final.

Lee Ann, I'm not trying to pick a fight, just engaging in healthy debate. We obviously have different comfort levels when it comes to walking the ethics tightrope. Just don't let it hang you sometime.

 

[Farm Gal]

Paul:

I am an appraiser: thin-skinned I ain't! I am not going to take offense, nor do I have a firmly established opinion on many of these issues, to large extent I am parroting what was presented in a very professional seminar, from credible instructors....

I DEEPLY desire the sort of prodding and nit-picking that is going to occur on this forum: I am still forming opinion on some of these matters. If the rules are wobbly I kinda like to get others' opinions also, NOT that I am lacking my own, but reality checks are welcomed!

Harking back to your posting re: your FHA Garage issue, you will notice my preference for knowing exactly what the rules ARE, then proceeding to form my own opinion and being able to back it up with source material.

I also play devils advocate a LOT, even if I might not follow that traintrack myself... Whether or not someone else choses to go over a set of rails with no support cause somebody said it was safe, I tend to take the safe in MY opinion route. My daddy was an engineer: it leaves a pretty indelable impression on a kid to have a <u>"over-engineer everything upbringing"</u>. Yup belt AND suspenders, that's me.

And I am not afraid to admit what I do NOT know: FIRREA rules and such.

OK so now: Disclaimer to all: I usually try to differentiate between my OPINION versus WHAT I HEARD. On my last few posts to this topic I did NOT do so clearly, for which I apologize: I wuz in a hurry your honor, I didn't MEAN to do wrong :wink: However: MOST of what I wrote came from class notes and memory: and I find some of it pretty scary!

BUT it is the WORD according to the SOURCES... so where do we take it from here?

Me: I am going to travel someplace between 'Paul's way' and what I have posted as 'stuff I learned on summer vacation/eerrrr, make that working hard at a professional seminar'. Much of this is either going to become more clear, or significantly less so as we all take USPAP 2003...

I think I am going to wait til mid year to take USPAP2003 myself as I suspect that after folks like Paul pick it to pieces in January and February, that clarifications will be issued. I don't want to take the class three times next year just to stay on top of the carpet! :roll:

Regards to all!

Lee Ann

 

[Paul Ness MAI]

No question this is in the realm of opinion. It's tough to get a conclusive fact from anyone, but I have contacted Stephanie Coleman at AI from time to time for her "authoritative opinion" on other matters.

 

[Mike Garrett RAA]

Paul, wouldn't you agree that the S & L crisis of the 1980s was caused mostly by large land developments, income properties, and other commercial properties more so than single family residential?

Colorado Springs became known as "The foreclosure capital of the United States" because of the dollar amount; however, it was mainly due to two large land developments in which both investor and appraiser fraud were involved.

True we had lots of single family homes in foreclosure, but that was mainly due to the general collapse of the building trades industry and the movement of high tech companies overseas or to Mexico.

Does the name Aries ring a bell with you? He left Colorado Springs with millions of dollars in his pocket and thousands of acres of undeveloped land in the hands of the resolution trust corp. I have some of the office furniture that was sold at auction from his corporate headquarters, mostly large lateral file cabinets.

To your issue about doing the appraisal for the home owner and then changing the name to the bank....I still contend IF the bank says it's ok to do then I will do it with a release from the original client and a letter in my file authorizing me to do it. This was also brought up at the USPAP instructors seminar and they said it was a very grey area. Not USPAP, more FIRREA.

 

[Paul Ness MAI]

Mike, I agree with your assessment of the S&L crisis, but it is what precipitated the FIRREA requirement that lenders order the appraisal, and it applies to residential and commercial. I realize all through this post that I am viewing this from a commercial standpoint and the game is played a little differently in the residential world, but the rules are not different for one -vs- the other, maybe they should.

As for getting a release and putting it in the file, my opinion (again just my opinion) is that if you don't disclose it in the report itself, you are being purposely misleading (USPAP/ethics violation) in order for the bank to then take a report they otherwise would not be permitted to accept - because of course if it was disclosed in the appraisal it would then be a useless report to the bank.

 

[Mike Garrett RAA]

Paul, I always include the information in the report....seems many of the banks don't care so long as they are the named client. Go figure!

 

[Jo Ann Meyer Stratton]

I had a situation several years ago. Property owner contacted me to do an appraisal of the family home to be purchased from another family member. I explained that the appraisal would be for their use only, that it could not be used by a lender for financing. Two months later I get a call from the property owner, he had approached one of the largest banks in the USA about financing and they wanted my report retyped in their name as the client. I again explained the same thing to the property owner but then I received a letter from the bank requesting a retype and an invoice for the retype. Got written permission from the property owner, did the retype showing the bank as the client. On the URAR I typed in that the report was originally completed for the property owner, with written permission was completing a retype at their request to show the bank as a client. My original statement on the USPAP compliance addendum still said the the purpose, intended use and intended user was for the property owner to make an offer on the property. The bank paid the bill and everyone was happy. I figured it would go over like a lead ballon when it finally got to someone who knew the bank could not accept that appraisal. Several weeks later I am researching trust deeds in the recorder's office and there was a Trust Deed for that bank on that property for that property owner! Guess the bank didn't bother to read the fine print on the appraisal report (or didn't care).