Hybrid

[chad hampton]

In NC, it's class 1 misdemeanor to act as a RE appraiser w/o holding a valid license.

 

[J Grant]

So is an inspector "acting as an appraiser" if they do a tier iii (USPAP FAQ subject inspection ). Not anymore, say the AMC and Fannie lawyers, /advisers, since the non appraiser inspector is merely "data gathering or data collecting " when "inspecting "a subject, and the non named mystery inspector will not provide any opinions or judgement about the subject or comps...act as a robot taking notes and photos/measuring.

Licensing is about state regulations and certain regulatory and lender /FHA /entity requirements for RE appraisals, it also speaks to a minimum of training and mentor ship to get the license.

 

[Addie]

So is an inspector "acting as an appraiser" if they do a tier iii (USPAP FAQ subject inspection ). Not anymore, say the AMC and Fannie lawyers, /advisers, since the non appraiser inspector is merely "data gathering or data collecting " when "inspecting "a subject, and the non named mystery inspector will not provide any opinions or judgement about the subject or comps...act as a robot taking notes and photos/measuring.

Licensing is about state regulations and certain regulatory and lender /FHA /entity requirements for RE appraisals, it also speaks to a minimum of training and mentor ship to get the license.

What were they hired to do? Act as an appraiser or appraisal services? Or are they hired to, "Go measure this house and give condition for internal bank purposes. Or " go measure this house etc for its use in an appraisal/service?

Get a copy of what that broker was hired to do and then we can say if they need to adhere to USPAP or not etc.

 

[hastalavista]

non named mystery inspector.

I cannot speak for any hybrid product other than the one which was discussed in a conference I attended.
In that situation, the company offering the hybrids directly to clients was HouseCanary.
For their reports, it was reported that the inspector was specifically identified in the report (the inspector was not an appraiser).
For their assignments, they acted as a client to an AMC. The AMCs role (in this relationship) was to bid out the valuation component to appraisers (that was their only role in the arrangement; offering the bid to appraisers for the valuation component). HouseCanary would take care of the inspector-arrangements and interface with the client.
HouseCanary's product that was presented was not the GSE-pilot program.

I don't know if other hybrid products identify the inspector or not... but I seem to recall that, according to Digger (who has done some of these), the information sheet he received did identify the inspector (I hope he corrects me if I am wrong).

 

[Addie]

Found an engagement from Clear Capital to a broker for an inspection.

"Purpose:


Property Inspection only. No comps required.

Customer Specific Requirements Please do some quick preliminary research, before going to the subject. Stop Immediately and call Clear Capital Quality Assurance if any of the following characteristics exist for the subject. If the subject is 2-4 Units, Commercial Property, Mobile or Manufactured, Vacant Land, Co-Op,Condo, or the subject has more than 25 acres of land, call 530-582-5011, option 2 for Quality Assurance. It is likely the assignment will becanceled, please upload tax records or MLS and alert us prior to starting work on the file.If the subject is found to be not visible from the road, please Call ClearCapital Immediately.

Seems like they are not being hired as an appraiser or for an appraisal service. I'd say they do not need to adhere to USPAP. All this broker knows is, go inspect the property.

 

[J Grant]

Florida:

475.612 Certification, licensure, or registration required.—
(1) A person may not use the title “certified real estate appraiser,” “licensed real estate appraiser,” or “registered trainee real estate appraiser,” or any abbreviation or words to that effect, or issue an appraisal report, unless such person is certified, licensed, or registered by the department under this part. However, the work upon which an appraisal report is based may be performed by a person who is not a certified or licensed appraiser or registered trainee appraiser if the work is supervised and approved, and the report is signed, by a certified or licensed appraiser who has full responsibility for all requirements of the report and valuation service. Only a certified or licensed appraiser may issue an appraisal report and receive direct compensation for providing valuation services for the appraisal report. A registered trainee appraiser may only receive compensation for appraisal services from her or his authorized certified appraiser.
(2) This section does not preclude a Florida licensed real estate broker, sales associate, or broker associate who is not a Florida certified or licensed real estate appraiser from providing valuation services for compensation. Such persons may continue to provide valuation services for compensation so long as they do not represent themselves as certified, licensed, or registered under this part.

States have their own license laws. USPAP sets standards for appraisers performing appraisal services.

The shift to the bifurcated is they will have non appraisers performing what has traditionally been a crucial appraisal function ( interior inspection of subject/ext of subject and comps ). This function is specified in USPAP as Tier III and for decades lenders, Fannie, FHA, most lenders required a cert appraiser to inspect or accompany a trainee on inspection, establishing precedent for this part of appraisal practice. The mentor//trainee years revolved heavily around inspections as well.

Now they are reversing course, and saying never mind, Suzie RE agent or Joe inspector/REO servicer can go instead. Forget USPAP Tier III inclusion of inspection and their own decades of precedent , they shifted it to the subject inspection function is not appraiser practice since the inspector is merely "collecting data" onsite . And the inspector will not be giving opinions or judgments. Gotta hand it to their lawyers and lobbying power!

 

[George Hatch]

You do know you don't need a license to act as an appraiser and do appraisals right? But if you act as an appraiser, you must meet all of USPAP, license or no license.

Not exactly. You're only required to adhere to USPAP when the law requires it of you or when you agree to do so on a contractual basis.

A broker who is doing a BPO for non-brokerage uses and whose users expect an impartial opinion of value can be argued to be acting an appraiser, and performing an appraisal - regardless of the nomenclature they're using. As professional appraisers we *want* them to adhere to the standards that apply to people acting in that role and performing that type of service, but there's no way the requirement can be imposed on them outside of a law they would be required to obey or a contract to which they agreed.

 

[J Grant]

Found an engagement from Clear Capital to a broker for an inspection.

"Purpose:


Property Inspection only. No comps required.

Customer Specific Requirements Please do some quick preliminary research, before going to the subject. Stop Immediately and call Clear Capital Quality Assurance if any of the following characteristics exist for the subject. If the subject is 2-4 Units, Commercial Property, Mobile or Manufactured, Vacant Land, Co-Op,Condo, or the subject has more than 25 acres of land, call 530-582-5011, option 2 for Quality Assurance. It is likely the assignment will becanceled, please upload tax records or MLS and alert us prior to starting work on the file.If the subject is found to be not visible from the road, please Call ClearCapital Immediately.

Seems like they are not being hired as an appraiser or for an appraisal service. I'd say they do not need to adhere to USPAP. All this broker knows is, go inspect the property.

Brokers/RE agents can perform BPO's or in this case an inspection as a stand alone service for a lender or AMC. Neither of which is appraisal practice since neither is represented as an appraisal, . But in a bifurcated, their inspection will become part of the appraisal.

 

[chad hampton]

If the agent is hired for the purpose of supplying data for use in an appraisal, then I think they could be in trouble. Unless they also hold a valid appraisal license of course.

What becomes murky is banks aren't telling agents what they are doing these for. Agents are being told to go get data and send it in. The case in NC, the agent said she had no idea her report was going to be incorporated into an appraisal report. Had she known that, she wouldn't have done the work as she knows that is a violation of law. That is what she told the commission during the investigation. But wit so many agents out there, most have no idea of what their state laws are.

 

[chad hampton]

Found an engagement from Clear Capital to a broker for an inspection.

"Purpose:


Property Inspection only. No comps required.

Customer Specific Requirements Please do some quick preliminary research, before going to the subject. Stop Immediately and call Clear Capital Quality Assurance if any of the following characteristics exist for the subject. If the subject is 2-4 Units, Commercial Property, Mobile or Manufactured, Vacant Land, Co-Op,Condo, or the subject has more than 25 acres of land, call 530-582-5011, option 2 for Quality Assurance. It is likely the assignment will becanceled, please upload tax records or MLS and alert us prior to starting work on the file.If the subject is found to be not visible from the road, please Call ClearCapital Immediately.

Seems like they are not being hired as an appraiser or for an appraisal service. I'd say they do not need to adhere to USPAP. All this broker knows is, go inspect the property.

From what you posted, I have no idea what the agent was hired for. All that states is a list of things to call them on if the property is not a SFR or reasons they may cancel. Why are they gathering information? What information are they gathering? That's like appraisers doing an appraisal and having no idea what type of value the client is looking for, or what the purpose of the appraisal is.

 

[George Hatch]

There's no

Florida:

475.612 Certification, licensure, or registration required.—
(1) A person may not use the title “certified real estate appraiser,” “licensed real estate appraiser,” or “registered trainee real estate appraiser,” or any abbreviation or words to that effect, or issue an appraisal report, unless such person is certified, licensed, or registered by the department under this part. However, the work upon which an appraisal report is based may be performed by a person who is not a certified or licensed appraiser or registered trainee appraiser if the work is supervised and approved, and the report is signed, by a certified or licensed appraiser who has full responsibility for all requirements of the report and valuation service. Only a certified or licensed appraiser may issue an appraisal report and receive direct compensation for providing valuation services for the appraisal report. A registered trainee appraiser may only receive compensation for appraisal services from her or his authorized certified appraiser.
(2) This section does not preclude a Florida licensed real estate broker, sales associate, or broker associate who is not a Florida certified or licensed real estate appraiser from providing valuation services for compensation. Such persons may continue to provide valuation services for compensation so long as they do not represent themselves as certified, licensed, or registered under this part.

States have their own license laws. USPAP sets standards for appraisers performing appraisal services.

The shift to the bifurcated is they will have non appraisers performing what has traditionally been a crucial appraisal function ( interior inspection of subject/ext of subject and comps ). This function is specified in USPAP as Tier III and for decades lenders, Fannie, FHA, most lenders required a cert appraiser to inspect or accompany a trainee on inspection, establishing precedent for this part of appraisal practice. The mentor//trainee years revolved heavily around inspections as well.

Now they are reversing course, and saying never mind, Suzie RE agent or Joe inspector/REO servicer can go instead. Forget USPAP Tier III inclusion of inspection and their own decades of precedent , they shifted it to the subject inspection function is not appraiser practice since the inspector is merely "collecting data" onsite . And the inspector will not be giving opinions or judgments. Gotta hand it to their lawyers and lobbying power!

When push comes to shove, the act of inspecting the subject in isolation of performing any other aspect of the valuation will not be equated to appraising, any more that pulling a title report or taking a photo. Particularly when appraisals can and are performed without personal inspections. The cert relating to personal inspection has alternative answers for a reason - because inspecting is not inherently a part of the appraisal process except as an assignment condition.

In isolation of the additional requirements of the GSE assignments, the use of unlicensed runners to impersonate the licensee becomes a USPAP violation *only* because of the lack of disclosure and the misleading part, not because only an appraiser (or someone acting as an appraiser) can inspect.

Beyond that, the Fannie policies comprise an additional layer of requirements for those assignments that fall under the category of assignment conditions. But that's what they are - additional requirements to which the appraiser has agreed to meet.


Besides, that, you're jumping to a wild and unsupported conclusion that appraisers CAN NOT and WILL NOT disclose the use of this data source in their appraisal reports. You need to refrain from doing that.


Now how the different states will treat the issue will probably vary, but that will be done at the state regulatory level.