Is It USPAP Violation or Reviewer's Opinion

[George Hatch]

the only violations i see are the banksters manipulating state boards into reviewing legit appraisals as some sort of swatting event because the number was missed...there needs to be liability for the complainers to the appraiser when they make false claims...what appraiser would not agree to that

I don't know how often the boards get manipulated by the lenders, but any amount in excess of zero is clearly unacceptable and therefore fair grounds for criticism.

What these examples look like to me is board members not fully grasping the distinction between appraising vs reviewing. Whether we like it or not there are a lot of appraisers who automatically assume an adversarial position when reviewing. It's like looking for things to criticize as a means of demonstrating that they were there. Another thing a few reviewers do is treat every error like it's a serious problem whether its serious or trivial to the outcome.

That's bad when the reviewer is doing this when reviewing a report for a lender but its way worse when the reviewer is working on a report that is the subject of a complaint.

 

[George Hatch]

Of course, the state board is doing a reviiew, a special kind of review, where they can follow up with sanctions. - That is not the issue. Terrell's post is about them applying sanctions on the appraiser based on issues that he considered baseless. You are in the habit, of steering arguments towards your perpetual insistence of the importance of "client requirements." You are crazy. Who is the client of the Oklahoma Board of Real Estate Appraisers?

Besides steering nearly everything that comes your way to an issue of "client requirements," - you are forever engaging in obfuscation - assuming such steering is intentional. Or alternatively, you are unaware of your bias and don't know what you are doing. And so, in any case, I feel obliged to point out your bias as a matter of record occasionally. Part of your intentional obfuscation, by the way, is trying to convince the forum this has something to do with my "personal" interests. - No, not at all. It is just my "super-ego" at play here, a question of right vs wrong and terrible me slitting the throat of the rule violator whenever the opportunity arises. And even this doesn't come under so-called personal interests because I don't trust my own super-ego 100% correct on issues. Still, all things being equal, it is, I believe, at least as good as someone else's opinions and will let it have its way for the sake of expressing a different opinion, which nonetheless has value. And admittedly, this is getting too complicated...

I think you've blown the "user policies" issue way out of proportion.

The SOWR is supposed to result in a workproduct that hits all of the hardwired minimums in SR1/SR2 plus the user-driven extras. The only caveat being that a user extra cannot conflict with or undermine the minimums. That isn't an application that is too complicated for appraisers to understand.

The appraiser agrees to meet the legitimate requirements of the assignment when they accept the assignment. If I knew this assignment was supposed to go to BofA then it's on me to suss out their written policies, if one exists. Either that or I might have to play 20 questions with them to figure it out. Either way, we can't meet an user's SR1/SR2 expectations without first making an effort to identify them.


If the reason an appraiser is unaware of one of these user-driven extras is because they never bothered to look then that's on the appraiser. That's a problem I have seen many times. OTOH, if a user has an expectation that they never communicated or conveyed to the appraiser during the assignment then that's on the user and/or client. Same with a reviewer - they're supposed to review within the context of our minimums plus their client's extras - what it was possible for the original appraiser to be aware of during their assignment. Not add to or subtract from except to comply with our minimums. They're not supposed to act like Dean Wormer trying to sneak in some heretofore undisclosed double-secret probation requirement after the fact.

 

[RCA]

I think you've blown the "user policies" issue way out of proportion.

ME: What are "user policies" in appraisal?

ChatGPT said:​

In the context of appraisals, "user policies" can refer to guidelines, rules, or protocols that define how the appraisal services are provided, accessed, and used by the client or customer. These policies are crucial for ensuring clarity, compliance, and proper conduct during the appraisal process. Here are several key aspects typically covered by user policies in appraisal:

1. Access and Usage: User policies outline who can request an appraisal and under what conditions. They detail the procedures for initiating an appraisal, including any necessary documents, fees, and timelines.
2. Confidentiality and Privacy: These policies govern how personal and property information is handled. They ensure that sensitive data collected during the appraisal process is kept confidential and is disclosed only in accordance with applicable laws and with client consent.
3. Ethical Standards: Appraisers are often required to adhere to ethical standards, such as those set by professional bodies like the Appraisal Institute or the International Valuation Standards Council. User policies may incorporate these standards to ensure that appraisals are conducted impartially and professionally.
4. Dispute Resolution: User policies may include mechanisms for resolving disputes between the appraiser and the client, providing a clear process for addressing concerns or disagreements about the appraisal outcome.
5. Fees and Payment: These policies define the fee structure for appraisal services, including how and when payments should be made. They might also address refunds or adjustments in case of disputes or unsatisfactory service.
6. Report Usage: User policies can specify the permitted uses of an appraisal report, noting any restrictions on sharing the report with third parties or using it for purposes other than those for which it was originally intended.
7. Compliance: They ensure that both the appraiser and the client comply with all relevant laws and regulations, including those specific to real estate, taxation, and financial reporting.

User policies are essential for managing expectations and providing a framework within which appraisal services are delivered, thereby protecting both the appraiser and the client.

========

OK. Who is talking about "user policies" - or are you just having another terminology problem?

 

[George Hatch]

Instead of asking an AI which has never had a client how about you ask appraisers who do have clients?

Written instructions from the lender. Sometime an engagement letter will include portions of those instructions. Sometimes there's a actually a handout or a web page. They don't tend to be long in length. THe GSEs have written appraisal policies. FHA and VA have written policies. So do some of the AMCs and some of the lenders. One thing I have done for a couple of my clients is document their policies for them so they can provide such to the appraisers they're doing business with as well as their reviewers and their underwriters. It levels the playing field as to what is/isn't in their policies.

If a client doesn't have any written policies then there's really no pre-existing reference for these extras for a 3rd party reviewer to use in review. That's when the reviewer has to cede discretion to the appraiser in lieu of any instructions to the contrary.

R: "Appraiser failed to comment on the circular driveway"

A: "The lender never told me I needed to comment on circular driveways, so that's why I didn't do it". It's an omission, but it isn't a failure on my part. It's a failure on lenders part for not telling me what they needed"

 

[Trihard]

She also got busted for no smoke detector photos for FHA. Where in 4000.1 does it say smoke detector photos are required?

 

[Mejappz]

FHA and USPAP both need to go. Their standards and guidelines are starting to pose real risks to the public. With USPAP, you might have fake judges and investigators who go after appraisers and wreck their careers. On the FHA side, appraisers are asked to report on things they’re not trained to handle. Just look at the story about the single mom losing her home over a faulty septic tank because the FHA doesn’t require a licensed home inspector for property inspections. Both organizations seem pretty out of touch and corrupt. The entire appraisal industry needs an overhaul that's pretty obvious by now.

 

[Terrel L. Shields]

FHA and USPAP

FNMA ditto. Yellow Book ditto. I don't mean they need to be abolished. They need to be ONE DOCUMENT, ONE STANDARD, and only ONE.

The old "supplemental standards" problem needs abolished in the "SCOPE OF WORK".

Can you imagine and engineer being asked to build a bridge and then the client can dictate the safety margins and materials used? Can you imagine an electrician being told to substitute a smaller gauge aluminum wire for code that is calling for copper? Or a builder able to dictate to the architect to take out every other roof truss to save money?

There should be no 4000.1, no Selling Guide, and make one standard for everything. Everything else asked by the client should be non-negotiable. It should not be part of USPAP and failure to complete to the client's satisfaction should not be a violation of USPAP. It would simply be a matter between the client and appraiser and no board should be allowed to touch it.

 

[Elliott]

FNMA ditto. Yellow Book ditto. I don't mean they need to be abolished. They need to be ONE DOCUMENT, ONE STANDARD, and only ONE.

The old "supplemental standards" problem needs abolished in the "SCOPE OF WORK".

Can you imagine and engineer being asked to build a bridge and then the client can dictate the safety margins and materials used? Can you imagine an electrician being told to substitute a smaller gauge aluminum wire for code that is calling for copper? Or a builder able to dictate to the architect to take out every other roof truss to save money?

There should be no 4000.1, no Selling Guide, and make one standard for everything. Everything else asked by the client should be non-negotiable. It should not be part of USPAP and failure to complete to the client's satisfaction should not be a violation of USPAP. It would simply be a matter between the client and appraiser and no board should be allowed to touch it.

Which is why appraising for a residential appraiser is like being a tight rope walker with the AMCs, Lenders, and GSEs wiggling the wire.

 

[George Hatch]

Different users have different hot buttons.

The lure of the ACME Universal Widget approach is almost irresistible to a lot of people, and for sure it has it's selling points. One being that much of a universal widget approach it can be set up with the fire-n-forget boilerplate. No customizing involved.

The difficulty will come in attempting to dictate terms to the various users who will be using these things to make their decisions. As of now we're supposed to fit our work to their needs, not force them to simply accept what we give them with no deviations allowed. Seinfeld's Soup N@zi can get away with issuing the ultimatum. I don't think that will work with appraisals.

 

[sputnam]

If the 'Reviewer' says its a USPAP violation, then its a violation. As with virtually all 'half-***' reviews, the finder of facts is automatically the trier of facts, and prosecutor of facts. State regulators are expected to find at least one case a month to bring to the board and exert their authority. Its just the way the system works. Now sometimes the regulator will like the appraiser or not like the appraiser, and that eventually will determine if the 'allegation' will be prosecuted to the full extent of what they determine to be a USPAP violation. There are no known TAF committees that determine if USPAP is being properly administered.

That's because USPAP enforcement authority is given to the state appraisal boards. Only the state has teeth in determining a USPAP violation.

In the case presented by the OP, the reviewer is pointing out factual errors or omissions in the appraisal report. The reviewer is rightly, imo, pointing out that the appraiser should be considering any functional or external obsolescence in the subject. In a very strict reading of USPAP, those are violations (again, imo) because USPAP says..... Don't be misleading. Fortunately for all of us, those are the sorts of 'errors' that rarely bring disciplinary action from the state. The cure... and probably what the reviewer wants... is, revise the appraisal report to correct the issues raised.