Is the borrower an intended user?

[john snyder]

Is the borrower an intended user?

If so should they have input into who is assigned the appraisal ?

Though anyone can turn in a bad report, if the complainant/borrower is not an intended user should they have any less right to file a complaint in your state? ie the appraisal is for refi - client is a lender and/or federal agency. Customer does not get loan and copy of appraisal is given to now disgruntled borrower.

In regards to potential new rules for ordering appraisals, if the borrower is an intended user should it be mandatory that they are advised of the appraisal ordering process and where their money is going?

The appraisal process should be transparent so -Let the people putting up the money, no matter how small, be advised of whats going on with their money.

jbs

 

[Marcia Langley]

John,

Intended users must be identified as such at the time of accepting the assignment and clearly stated in the report.

In the case of GSE compliant mortgage appraisals, it is a condition of the assignment that the only intended user allowed is the lender/client. No additional intended users are allowed. (See also cert 23 for "may reliers".)

One does not have to be an intended user to file a complaint with the state board. Anyone can do it.

Your confidentiality obligation is to your client. The client is always an intended user and the client has say-so over whether/who is to be named as an additional intended user and whether the so named additional intended users may be included or excluded from the appraiser's confidentiality.

These things are defined in USPAP and depended on by the consumers of appraisals.

 

[Michigander]

John, are you asking from your position as a state board member?

 

[PropertyEconomics]

Cert 23 certainly clouds the issue a great deal in my mind.

 

[Mary Tiernan]

I think homeowners should be intended users, however, any complaints filed with the state on the behalf of homeowners should have a professional review by a licensed appraiser completed first and accompanying the complaint.

I have been threatened by homeowners that because my value was low they would turn me into the state. I am confident in my work product, but I understand there may be violations of another sort.

We are continually learning here, and some reports may not have every nuance of USPAP or Michigan law in it - I've reviewed several reports which did not have Michigan required level of licensure on it - but that does not make the report bad, nor do I think the appraiser should be sanctioned, merely informed. Yes, I know it is our responsibility to know the laws, but even with continuing education and visiting the state website frequently, it is hard to keep up and know it all.

Anyways, I do tell homeowners the restraints I am under, I start by explaining that in the lending world the lender wants their name on the report, and that under the laws I am bound by I must keep a client confidentiality. I also explain to the homeowner, as a homeowner, that I think this is one of those Catch 22's of the lending world.

I truly believe homeowners should see the appraisal and actually drive by the comparables and find out as much as they can about the comparables utilized - perhaps then I won't follow a $240,000 appraisal two years later with a $140,000 value and get threatened with "turning it over to the state." Turn in your prior appraisal, you know, the one with the inflated value.

 

[john snyder]

Marcia,

"Intended users must be identified as such at the time of accepting the assignment and clearly stated in the report."

In the case of GSE compliant mortgage appraisals, it is a condition of the assignment that the only intended user allowed is the lender/client. No additional intended users are allowed. (See also cert 23 for "may reliers".)

One does not have to be an intended user to file a complaint with the state board. Anyone can do it.

Your confidentiality obligation is to your client. The client is always an intended user and the client has say-so over whether/who is to be named as an additional intended user and whether the so named additional intended users may be included or excluded from the appraiser's confidentiality.

These things are defined in USPAP and depended on by the consumers of appraisals."

The consumer is who?

Its not that AMC would be cut off its if the consumer that may be paying the freight John Q. Public may like to some input. Geographical competence, and reliance that an AMC is going to send somone out that has experience with difficult assigments.

The rules and regs are well justified and when applied properly seem to be with the best intentions of cleint confidentiality.

In reality does the general public believe they are an intended user?

Once the client provides a copy of the report to the borrower are they then an intended user?

I am trying to address and maybe need some assistance as to why the consumer is not better advised as to how this ordering with the intended use/client is presented.

Additionally there seems to be quite a bit of angst regarding recent posts of an AMC taking over appraiser clients at much reduced fees.

Should the public be made aware of their options in ordering or should they have at least some input. For instance if the collected fee is $400 should it be disclosed how the fee is diseminated? That is if we are serious about protecting the public trust .

Why is there such a liquidity problem in the lending today? Mostly non-performing loans. So the public/borrower is not a "client" but they certainly have an immediate effect on banks cash flow. John Q is an "intended" asset to the bank. But not enough to trust them to pick from a roster of appraisers?

On a legal/safety and performance basis isn't it prudent for the public to be able to check out who is coming out to their property before the assignment is granted?

These may sound naive but I have my reasons.

Serena, in a way yes.

jbs

 

[Rich Heyn]

Is the borrower an intended user?

jbs

Only if that is the intention of the appraiser. The "intent" in intended user refers to the intent of the appraiser.

 

[Lawrence R.]

Laws and facts aside.

I think the "motivation" of the party making the complaint should be taken into consideration. Disgruntled homeowner ought to go in a file for telephone interviews with the appraiser, client, whoever ordered the appraisal, etc...

I have always been a little "off put" with what I call "process gotchas", where in the process of investigating a disgruntled homeowner complaint about a low value, you find out the guy accidentally forgot to mention the house was on well and septic, and not county water and..gotcha! 500 dollar fine, besmirched record and retake a case study class to the tune of 300 bucks...(even though this wouldn't have made a difference in values)

Secondly, YES YES YES, the dissemination of fees needs to be disclosed on the GFE, and on the HUD1.

Maybe the homeowner wouldn't be so upset if he realized that the appraiser only got paid 175 bucks out of the 450 they got squeezed for.

"No wonder that guy sucked, he must have been the cheapest one they could find!!"

That may help our plight more than hurt it.

And regardless of USPAP, i think the borrower SHOULD always be an intended user of the report, and should get a copy PRIOR to closing.

I think they should also have the right to ask the lender to have it reviewed at the borrower's expense. (appraiser full employment scheme)

I don't think the pick from a list is the way to go...the banks can still manipulate this process. This may sound overly self important, but we are way to crucial to this assignment to be picked by anyone with skin in the game. The idea of an AMC is a good idea, until you actually put it into practice.

I am so perplexed by the state of affairs we are currently in, and frankly, with the possible exception of a coop based system, with several coops competing for the best, most reliable, well founded appraisals, none of the proposed changes to the system are going to change a thing.

If I were the AI, I would be forming an AMC of MAI appraisers.

 

[Rich Heyn]

John,
In the case of GSE compliant mortgage appraisals, it is a condition of the assignment that the only intended user allowed is the lender/client. No additional intended users are allowed.

Per USPAP or per the GSE's? While it would be foolish on the part of the appraiser, Fannie doesn't care if the appraiser identifies the borrower as an intended user. While the form says no modifications, additions or deletions to the intended user are permitted, Fannie superseded this with a series of FAQs in November of 2005, where they stated in response to question #11:
"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."

 

[Marcia Langley]

Thanks Rich,

I'd forgotten that.

=======

John,

I used the term, "consumers of appraisals" to mean the client. In the case of a GSE compliant mortgage appraisal, that would be the lender, the entity that ordered it and paid for it.

The borrower is the "consumer of the loan." They are the lender's client and may be expected to reimburse the lender for the appraisal fee.

But the fact remains that the intended user(s) are identified in the report. And so are their respective intended uses. In my opinion, that does not inhibit the consumer of the loan from filing a complaint with a state board.

In general, I think it is extremely important for appraisers to use these USPAP defined terms (client, intended user, additional intended user, intended use(s), etc) in the most precise way possible. Sticking strictly to the USPAP defined terms is the only way to have any consistency in the understanding of a report. Or a conversation, for that matter.

The concept that a "may relier" could have the same standing as an intended user is not the same thing as saying they are an intended user.

The difference between being "intended" or "not intended" is huge.

I'm all for a recognition of loan-consumers' rights. I am just very, very opposed to casual conversation that identifies them as an intended user when their name has not been identified as such in the appraisal.

If there were a general industry change that lender-clients start requiring their loan consumers to be identified as an additional intended user, I would certainly comply. I would also be extremely careful how I crafted the additional intended use of that additional intended user.

==========

I share your concerns regarding loan-consumers' rights.

I believe, for example, that borrowers should always, and automatically, get a true copy of every single appraisal that is ordered by their lender and agents of the lender. I believe that should be a federal law for all tyes of mortage appraisals regardless of jurisdiction.

Whether the loan-consumer has standing in the courts and state boards is a seperate issue from properly identifying the intended user(s) per USPAP.

I am very adament about sticking to USPAP definitions of terms. A "may relier" has a standing of his own that can be interpreted by the courts and by the state boards. But a "may relier" is not defined in USPAP.