Is It USPAP Violation or Reviewer's Opinion

[J Grant]

https://singlefamily.fanniemae.com/media/12356/display

The field review form ( desktop review is similar). The form asks a series of questions.

 

[J Grant]

GUIDANCE FOR COMPLETING THE ONE-UNIT RESIDENTIAL APPRAISAL FIELD REVIEW REPORT
The appraisal review function is important to maintaining the integrity of both the appraisal and loan underwriting processes. The following guidance is
intended to aid the review appraiser with the development and reporting of an appraisal field review:
1. The review appraiser must be the individual who personally read the entire appraisal report, performed a visual inspection of the exterior areas of the
subject property from at least the street, inspected the neighborhood, inspected each of the comparable sales from at least the street, performed the
data research and analysis, and prepared and signed this report.
2. The review appraiser must focus his or her comments on the appraisal report under review and not include personal opinions about the appraiser(s)
who prepared the appraisal.
3. The lender/client has withheld the identity of the appraiser(s) who prepared the appraisal report under review, unless otherwise indicated in this report.
4. The review appraiser must assume that the condition of the property reported in the appraisal report is accurate, unless there is evidence to the
contrary.
5. This One-Unit Residential Appraisal Field Review Report is divided into two sections. Section I must be completed for all assignments. Section II must
be completed only if the answer to Question 10 in Section I is “No.”
6. The review appraiser must determine whether the opinion of market value is accurate and adequately supported by market evidence. When the review
appraiser disagrees with the opinion of value, he or she must complete Section II. Because appraiser’s opinions can vary, the review appraiser must
have conclusive evidence that the opinion of value is not accurate.
7. The review appraiser must explain why the comparable sales in the appraisal report under review should not have been used. Simply stating: “see grid”
is unacceptable. The review appraiser must explain and support his or her conclusions.
8. The review appraiser must form an opinion about the overall accuracy and quality of the data in the appraisal report under review. The objective is to
determine whether material errors exist and what effect they have on the opinions and conclusions in the appraisal report under review. When the
review appraiser agrees that the data is essentially correct (although minor errors may exist), he or she must summarize the overall findings. When the
review appraiser determines that material errors exist in the data, he or she must identify them, comment on their overall effect on the opinions and
conclusions in the appraisal report under review, and include the correct information.
9. The Questions in Section I are intended to identify both the positive and negative elements of the appraisal under review and to report deficiencies. The
review appraiser must make it clear to the reader what effect the deficiencies have on the opinions and conclusions in the appraisal report. Simple “Yes”
and “No” answers are unacceptable.
10. The review appraiser must provide specific, supportable reasons for disagreeing with the opinion of value in the appraisal report under review in
response to Question 1 in Section II.
11. The review appraiser must identify any extraordinary

 

[J Grant]

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.

Agree with the majority of your post.

However, many reviews are retrospective, and/or their intent is not to have the appraiser correct or change their appraisal. The review is supposed to reveal the credibility and accuracy of the appraisal, and then users can make a decision on whether to rely on the appraisal or not or other decisions about it. (such as forwarding it to a state board )

Pointing out a minor error or lack of addressing a feature that does not materially affect value should not trigger a sanction from a state board - though nobody can predict what they do - in FL an investigator reads the review and appraisal in order to decide whether the state board needs to see it.

 

[George Hatch]

Remediation of any must-revise issues in order to improve the utility of the workproduct to the user is a valid role in a normal review. Highlighting errors for instructional purposes so that the appraiser won't continue to repeat the same errors over and over is a valid role. Highlighting errors for the purpose of disclosure is a valid role. But by the time someone is sending an appraisal to the House of Discipline we need to get serious about which types of errors and omissions are worth a nasty note vs which are worth a fine or suspension or revocation. We can't be suspending or revoking licenses for circular driveways or an error in the garage area calculation.

Not all errors are significant to the outcome and utility of the appraisal to its users, and in general I think reviewers should be mindful to make the distinction between serious (this is a sucking chest wound) vs trivial (we also noticed these other pimples). Go forth and sin no more. I would even go so far as to suggest that the reporting format used in these review-for-investigation include 2 fields when summarizing deficiencies; one for the errors and omissions which are significant to the outcome and a different field for summarizing the additional and far less significant errors which also came to light.

IMO

 

[jay trotta]

Functional and external obsolescence are part of depreciation. In appraisal, 'depreciation' is defined as a loss in the value of the improvements from any cause. USPAP requires you to consider all factors (that you can reasonably consider) that impact the value of the subject property.

IMO- Buyer "A" loves the visual of the pond and circular drive
Buyer "B" hates the pond for its invitation to mosquitos and hates the circular drive for all the additional maintenance

Both are market indicators, where does one determine the "loss" in value from the cause?

 

[djd09]

I don't know how often the boards get manipulated by the lenders,

one of the dum dum state boards thought missing a due date was a USPAP violation...where did they get that idea...some AMC...and the AMC is the agent of the lender...and weren't you around for the 2009 financial crisis where the crooked banksters got bailout...they are the master manipulators

 

[George Hatch]

Bailouts have nothing to do with what is/isn't an appraisal. You might as well be fixating about the spinners they were putting on their Escalade.

 

[Terrel L. Shields]

The difficulty will come in attempting to dictate terms to the various users who will be using these things to make their decisions.

So, by whimsey they can defeat the very purpose of the appraisal - a disinterested third-party view of the property. If that's the case, then let them hire their own "experts" and go for it....AND, then be liable for their failure. Frankly, too many "users" are using appraisers as a buffer between themselves and responsibility for their actions. And by their "underwriting standards" they are defeating the very purpose of appraisal.

 

[djd09]

Bailouts have nothing to do with what is/isn't an appraisal. You might as well be fixating about the spinners they were putting on their Escalade.

william fall was on the ohio state board...

 

[djd09]

Ernest W. Durbin

https://com.ohio.gov/divisions-and-programs/real-estate-and-professional-licensing/about-repl/ohio-real-estate-appraiser-board/