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Intended User and Use statement?

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Greg davenport

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Mar 30, 2004
Professional Status
Certified Residential Appraiser
State
Arkansas
Working on a review of a Fannie 1004, in which the Intended User and Use statement does not match the statement on the form, or the "accepted" one

We are having a little discussion on if this in itself is a USPAP violation. What is your though and why, or why not.
 

USPAP Compliant

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Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Anything could be a USPAP violation if your state board decides it is.


Perhaps in light of the different use/user it could be a misleading report. Perhaps not.

Could be incompetence in that the appraiser thinks one size fits all for use and user and that the 1004 works for all appraisals. Perhaps not.

There is simply no way to predict what a state board might say.......they are the only ones that can say.
 

Randolph Kinney

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Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
Working on a review of a Fannie 1004, in which the Intended User and Use statement does not match the statement on the form, or the "accepted" one

We are having a little discussion on if this in itself is a USPAP violation. What is your though and why, or why not.
Does Fannie have any accepted modification of the intended user statement that is on the form? Or part of the supplemental standards?

I do know that it is a USPAP requirement to identify the client, intended user(s) and intended use(s), independent of what the form says.

Where Fannie blew it was on statement #23 and appraisers added that clarification on intended users, all different. Fannie tried to standardized that statement issuing what amounts to a press release and not part of their selling guide. Unless you can point to something in the suppliment standards or the selling guide, I don't think you can make it stick. It can be a client SOW issue where they want that standard statement on intended users incorporated. And they can enforce that like Indymac does.
 

timd354

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Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
Working on a review of a Fannie 1004, in which the Intended User and Use statement does not match the statement on the form, or the "accepted" one

We are having a little discussion on if this in itself is a USPAP violation. What is your though and why, or why not.

If the intended use and intended user are not correctly identified in the form, then the appraiser has a duty to modify the appraisal report to correctly identify the intended use and intended user, supplemental standards notwithstanding. See USPAP FAQ #190...the ASB is very clear that the USPSP requirements for accurately identifying the intended use and intended user must be met no matter what Fannie says about the issue.
 

timd354

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Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
No matter what Fannie had to say about the matter, the appraiser is required by USPAP to accurately identify the intended use and the intended users of an appraisal. See USPAP FAQ #190....no supplemental standard can change that requirement...See standard 2 Rule 2-2(b)(i) and (ii).
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
XI, 207: Intended User (11/01/05)
The appraiser’s certification # 23 is an acknowledgment by the appraiser that certain parties to a mortgage finance transaction that are not the lender/client and/or intended user often rely on the appraisal report. This certification clarifies that such other parties include the borrower, another lender at the request of the borrower, the mortgagee or its successors and assigns, mortgage insurers, government-sponsored enterprises, and other secondary market participants. The intended user is the party for whom the appraiser is writing the report, which is the lender/client for a residential mortgage finance transaction. Our appraisal report forms clearly identify the intended user as defined by the Uniform Standards of Professional Appraisal Practice as the lender/client. The acknowledgment of other parties that often rely on the appraisal report is not meant to expand the list of intended users. Instead, it is meant to clarify that others, although not intended users, often rely on the appraisal report as part of a mortgage finance transaction. The appraiser’s certification # 23 clarifies that the appraiser is accountable for the quality of his or her work to those who often rely on it as part of a mortgage finance transaction. The appraiser’s accountability for the quality of his or her appraisal should not be limited to the lender/client and/or intended user identified in the appraisal report.
Appraisers traditionally have not identified the other parties to a mortgage finance transaction that often rely on the accuracy of the appraisal report as intended users based on the current definition of an intended user in the Uniform Standards of Professional Appraisal Practice. However, if the appraiser believes that any of these parties should be identified as additional intended users based on information provided by the lender/client or from other sources, he or she should identify them as such in the appraisal report. Fannie Mae will accept such appraisals. We recognize, however, that there may be confusion in the appraisal community about the distinction between parties who “use” and parties who “rely” on appraisal reports.

In view of this, we will accept the following additional notice or statement when the appraiser believes the lender/client is the only intended user:




“The intended user of this appraisal report is the lender/client. The intended use is to evaluate the property that is the subject of this appraisal for a mortgage finance transaction, subject to the stated scope of work, purpose of the appraisal, reporting requirements of this appraisal report form, and definition of market value. No additional intended users are identified by the appraiser.”
 

Randolph Kinney

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Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
In view of this, we will accept the following additional notice or statement when the appraiser believes the lender/client is the only intended user:




“The intended user of this appraisal report is the lender/client. The intended use is to evaluate the property that is the subject of this appraisal for a mortgage finance transaction, subject to the stated scope of work, purpose of the appraisal, reporting requirements of this appraisal report form, and definition of market value. No additional intended users are identified by the appraiser.”
Ahem, does this rise to a client imposed scope of work? And if there are additional intended users? What language is acceptable to Fannie?

As we know FHA appraisals use the Fannie form and require something different. Of course, they are not going to Fannie, but I using that as an example where you do have intended users other than the client.
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
Working on a review of a Fannie 1004, in which the Intended User and Use statement does not match the statement on the form, or the "accepted" one

We are having a little discussion on if this in itself is a USPAP violation.
Is it a "substantial error" that "significant affects" the credibiilty of the appraisal?
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Ahem, does this rise to a client imposed scope of work? And if there are additional intended users? What language is acceptable to Fannie?

As we know FHA appraisals use the Fannie form and require something different. Of course, they are not going to Fannie, but I using that as an example where you do have intended users other than the client.

from above: Going to Fannie

"However, if the appraiser believes that any of these parties should be identified as additional intended users based on information provided by the lender/client or from other sources, he or she should identify them as such in the appraisal report."

Not going to Fannie: refer to the USPAP Intended Use/User(s)
 

Terrel L. Shields

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Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
I think the Ar board recently reprimanded a long time appraiser (40 yr exp) for not identifying the intended user in a report.
 
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