Gated Community

[23Degrees]

Sounds like we have agreement. One last point just to clarify - Yes, when you complete a report using the fannie forms you are of course under USPAP. But you sign into an arrangement where there are particulars required by the SOW, certifications, and other areas of the form that are not necessarily directly mentioned by USPAP that if done irresponsibly, erroneously, or fraudulently (in your interrogators opinion) would be considered a violation of USPAP - in this case I believe the argument would be centered around the Ethics Rule although I am not a USPAP instructor and reserve the right to be corrected by someone who is.

One does not need to inspect the property per USPAP. But once one has agreed to do so, or said they did so in a report then they are bound to do so or they have arguably violated USPAP. Many would say not arguably but definitely. Along the same lines if one creates a report that says X in one section but says not X in another section then they could be accused of being misleading by some - the possibility exists. We all need to try to be aware of what we write and what we sign and when we contradict ourselves in our reports in ways that can have consequences.

Hopefully that clears that up a bit as my intent was not to give the impression in any way that a form over rides USPAP. Quite the contrary.

 

[J Grant]

Sounds like we have agreement. One last point just to clarify - Yes, when you complete a report using the fannie forms you are of course under USPAP. But you sign into an arrangement where there are particulars required by the SOW, certifications, and other areas of the form that are not necessarily directly mentioned by USPAP that if done irresponsibly, erroneously, or fraudulently (in your interrogators opinion) would be considered a violation of USPAP - in this case I believe the argument would be centered around the Ethics Rule although I am not a USPAP instructor and reserve the right to be corrected by someone who is.

One does not need to inspect the property per USPAP. But once one has agreed to do so, or said they did so

The review appraiser said they DID NOT inspect the subject on the report, so where did they state they did so? Because a preprinted SOW says the appraiser inspected subject areas from the street? But the appraiser stated they could not access subject house to inspect, so they are NOT saying they did something they didn't do. They supply a big bold photo of a security gate as proof so it is not misleading.

The apprasier's statement overrides the pre printed verbiage regarding scope of work, whether on a FNMA form or any other form. The day the apprasier no longer decides the scope of work, and a pre printed or pre filled out form decides SOW, will be the day there is no more appraising. Then it will all be done by computers with the form calling the shots (which is how an AVM is done).

in a report then they are bound to do so or they have arguably violated USPAP. Many would say not arguably but definitely. Along the same lines if one creates a report that says X in one section but says not X in another section then they could be accused of being misleading by some - the possibility exists. We all need to try to be aware of what we write and what we sign and when we contradict ourselves in our reports in ways that can have consequences.

Hopefully that clears that up a bit as my intent was not to give the impression in any way that a form over rides USPAP. Quite the contrary.

I understand your examples and respect what you have to say, and yes a clever lawyer can try to twist things around, but one would hope that the examples and advisory opinions of USPAP would hold up. It is an interesting thread and makes all of us more careful for sure, and hopefully more knowledable about USPAP ( a lifelong stuidy, it seems, USPAP is as inscrutable in its wisdom as the I Ching )

 

[CSP 49]

I didn't read through the whole thread so my apologies if I've stolen any material.

Lets forget theory and technicalities for a moment and go real life. The GSE's are going through hundreds of thousands of properties per year. In the big scheme of things this is trying to get off on a technicality. Valid defense, maybe, likely to work, probably not. When was the appraisal done? Is there anything meaningful to be gained by actually driving by the subject? The GSE's are looking at 3 main things in the original appraisal. Was there any misrepresentation, was the property eligible for sale to the GSE's and was the value supported.

The GSE's have zero obligation to even provide a field review. The seller of the loan has to prove the property was eligible and had a reasonable value estimate. The GSE's are actually trying to be fair to the loan originator and give them the benefit of the doubt by ordering a field (which again they have no obligation to do). Their volume is huge so I imagine some bad ones slip though but picking on the report format does not seem like the way to go for a rebuttal.

With the volume of loans they go through I would think hitting them with a technicality could work against you if you frustrate them and they feel they are wasting their time on an issue that is not relevant in their eyes to the true underlying valuation issues. I would imagine it would make the job slightly tougher for the lenders negotiation team.

 

[Couch Potato]

I didn't read through the whole thread so my apologies if I've stolen any material.

Lets forget theory and technicalities for a moment and go real life. The GSE's are going through hundreds of thousands of properties per year. In the big scheme of things this is trying to get off on a technicality. Valid defense, maybe, likely to work, probably not. When was the appraisal done? Is there anything meaningful to be gained by actually driving by the subject? The GSE's are looking at 3 main things in the original appraisal. Was there any misrepresentation, was the property eligible for sale to the GSE's and was the value supported.

The GSE's have zero obligation to even provide a field review. The seller of the loan has to prove the property was eligible and had a reasonable value estimate. The GSE's are actually trying to be fair to the loan originator and give them the benefit of the doubt by ordering a field (which again they have no obligation to do). Their volume is huge so I imagine some bad ones slip though but picking on the report format does not seem like the way to go for a rebuttal.

With the volume of loans they go through I would think hitting them with a technicality could work against you if you frustrate them and they feel they are wasting their time on an issue that is not relevant in their eyes to the true underlying valuation issues. I would imagine it would make the job slightly tougher for the lenders negotiation team.

Yes, like finding out the house pictured in the appraisal is not the right house, or maybe it does not exist. Those are two examples I encountered in the past. Fairly important information that was not otherwise available. :new_all_coholic:

 

[CSP 49]

Yes, like finding out the house pictured in the appraisal is not the right house, or maybe it does not exist. Those are two examples I encountered in the past. Fairly important information that was not otherwise available. :new_all_coholic:

Good point.

I was assuming a few things. First, most of the problems originated in 2005 and 2006 so a higher than average chance that the subject had been listed at some point since the original appraisal. Second google, bing maps, county tax cards. I, like most people tend to think in terms of the tools we have to work with. Orange County FL provides aerial maps as well as front photos of houses (incluuding gated communities).

 

[Couch Potato]

Good point.

I was assuming a few things. First, most of the problems originated in 2005 and 2006 so a higher than average chance that the subject had been listed at some point since the original appraisal. Second google, bing maps, county tax cards. I, like most people tend to think in terms of the tools we have to work with. Orange County FL provides aerial maps as well as front photos of houses (incluuding gated communities).

Once over in Windemere I had a job were a house was built on three lots. It didn't matter which lot you pulled up in the county records, you saw that house pictured. An enterprising scumbag down the street "purchased" the lot with the tenis court on it. He didn't really buy it, but he did record the paperwork and have an appraisal indicating the house on the adjacent lot was on the lot he claimed to buy. Only by being there in front of the property was it obvious what was going on.

As you might remember public records in 2005 still showed pictures of places that "disappeared" in 2004 thanks to Charlie and his friends that visited that year. I now work in Orange county North Carolina, but in 2005 I was working in Orange county Florida. I know very well what they have, but I would not begin to trust it. In several areas all the pictures were off by one. It was always the house next door.

If the scope of work was a desk review such errors would be totally forgivable if they were found in a report, but if the scope of work indicated driving by the subject the appraiser would be screwed. A statement somewhere in the report that it was too much trouble to drive by the property is not likely to help when the order indicates a drive by was requested, and the preprinted language in the form says it was part of the scope of work.

 

[Mike Kennedy]

The sentence about inspecting areas of the subject from the street is on the SOW, not the certications.

Bottom line, when you stray from the pre-printed SOW or certs or any other portion of the form at the very least you have a built in conflict that can be used to put your credibility in question.

Per appraisal methodlogy...the appraiser determines the SOW, not a pre pirnted form. An appraiser can expand or change the SOW as the assignment develops, as long as they explain it, disclose it, and state that they can still develop credible results.

http://www.USPAP.org/AO/ao21_32/ao_28.htm

 

[J Grant]

A statement somewhere in the report that it was too much trouble to drive by the property is not likely to help when the order indicates a drive by was requested, and the preprinted language in the form says it was part of the scope of work.
__________________
Nothing in this thread was about saying it was too much trouble to drive by the subject? This is about where legal entry is denied for review appraiser to view the subject, such as a guard gated comunity or long private drive with no tresspassing signs. And USPAP states the appraiser can change or modify or expand the prepirnted SOW when developing the assignment, as long as the appraiser feels they can develop credible results.

If a house was wiped out two years later by a storm and doesn't exist anymore, if it existed at the time of the review apprasisal that is what matters. It would be an extremely rare case where an original apprasier appraised a different house than the subject. I have read some really terrible and fraudulant ortiginal appraisals, but all of them, bad as they were, appraised the right house. Of course review appraisers are somewhat limited in that no matter what, they almost never enter the interior and have to rely on original appraisal. Still, the fraudulant/inflated appraisals are pretty obvious with a bit of reserach. Most of the fraud occurs with not identifyng market conditions (saying it was stable when declining), or in comp selection, or wrong adjustments. Some try to fudge subject site or location, forgetting to mention the subject backs up to a railroad tracks, for example. But with today's overhead maps, even if an appraiser can't enter a gated community, they can see those externam obsolesence on an overhead map. In any event, if a rev appraiser can't enter, they should clearly disclose it on the form and the client/user will know the report is subject to that condition.

 

[23Degrees]

And USPAP states the appraiser can change or modify or expand the prepirnted SOW when developing the assignment, as long as the appraiser feels they can develop credible results.

Where does USPAP mention forms or pre-printed SOW's?

USPAP allows substantial freedoms in developing the scope of work. I do not believe it gives free reign over changing the document language within an agreed upon format. That is between the appraiser, the client, and the agency involved, if any.

 

[J Grant]

You are correct, USPAP does not include the word preprinted...but then neither does it exclude it, saying something such as "an apprasier can change the SOW except when using preprinted forms. or except when using a FNMA form.

Your statement is correct, a change of SOW is betweeen an appraiser and client and agency if there is one. A change in SOW is first determined by appraiser, and then comunicated and acceped by client which is what happenes when the apprasier writes clearly and visibly on the report that they were denied access to inspect subject exterior, they still feel they can develop credible results and relied on alternate sources such as original appraisal description etc.