July 2008 ASC Q&a- Wink Wink Comp Comp

[Kevin Mc]

The USPAP July Q&A does reiterate (fyi: you have to hunt around a wee bit...it's on page 2 in the response the 2nd question) that when the appraiser communicates an opinion of value--or, a range of value or "price"--the appraiser has communicated an appraisal.

The "Q&A", responding to the 3rd question (p. 3), offers "...that receiving a 'full' appraisal assignment is not contingent upon the result of the 'comp check' assignment."

I think that both you and I understand these words.

I agree that many on the board understand the full context of the Q&A response. I think stating emphatically Yes. to the question is just pouring gasoline on the fire. Why do they just state No. and then include the exceptions of when it is allowed? The bottom line is the reality of the "comp check" world requires appraisers to step all over Standards 1 and 2 and stating Yes. to the question certainly doesn't dissuade those who do them from doing them. Of course the majority out there fulfilling the needs of those that demanding comp checks most likely would have a hard time defining USPAP.

 

[Tucson Appraisals]

OK, Your fax rings and you get a request to do a free comp check. You do the comp check and attach a disclaimer to that comp check that says: “ I performed this free comp check out of my professional courtesy and I don’t have any expectation of the second assignment and send them to your favorite lender". Two days later, you get the assignment. What would you do? You already told the lender that you did it for free without expectation to get the assignment but he liked your comp check and sent you the assignment. Should you take it or reject it?

Unbelieveable! Was that a serious question? Knowing what comp checks are used for....the comp check should never have been done in the first place. One can break USPAP all day long with ones actions...REGARDLESS OF THE STUPID DISCLAIMERS.

 

[Mr Rex]

We can't be trusted and will be eliminated while we cry out for guidance that we already have, have always had, and should have never needed to begin with.:new_all_coholic:

 

[Fred]

Where in any of my posts did I mention comp checks?

I asked you first. It IS the thread topic.

Going back to the former, no one is ruling anyone out. Not recognizing the huge potential for abuse that exists in the appraiser-mortgage company-national builder scenario I described is reckless and irresponsible. Furthermore, it serves as an excellent example of where the ASB could do something meaningful but refuses to do so. Force the appraiser to disclose the relationship; let the investor or other entity in the chain make their own determination of risk.

I won't have any to comment whether there is something meaningful to be done there until I see - as I orignally posted - the "language" or the proposed rule. I'd have to see what these "relationships" are.

The ASB hasn't refused to do anything, you have to certify that you were unaffected by outside influences and that would include "relationships." If appraisers are lying about that and violating the Ethics Rule, that is very different than saying the rule-makers have done nothing.

 

[Tucson Appraisals]

I just need to say this again:

It is truly unbelievable that this is even a discussion...

Some of you are like the loan officers...they find out they are not allowed to do something anymore... so they find a way around it by calling it something else or throwing disclaimers behind their actions.

Take responsibility for your actions! Actions are what break USPAP...not what wording you use or what disclaimers you utilize.

Truely...I mean truly.... unbelievable.

 

[Webbed Feet]

USPAP Preamble

PREAMBLE

The purpose of the Uniform Standards of Professional Appraisal Practice (USPAP) is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers. It is essential that appraisers develop and communicate their analyses, opinions, and conclusions to intended users of their services in a manner that is meaningful and not misleading.

Ok, so USPAP is a requirement for appraisers.

The Appraisal Standards Board promulgates USPAP for both appraisers and users of appraisal services. The appraiser’s responsibility is to protect the overall public trust and it is the importance of the role of the appraiser that places ethical obligations on those who serve in this capacity. USPAP reflects the current standards of the appraisal profession.

So while USPAP reflects our standards, it is we the appraisers who are responsible for protecting the public trust. Gosh, shouldn't we at least get a badge or something for having to do that? I want a uniform with a hat and maybe a gun even!

USPAP does not establish who or which assignments must comply. Neither The Appraisal Foundation nor its Appraisal Standards Board is a government entity with the power to make, judge, or enforce law. Compliance with USPAP is required when either the service or the appraiser is obligated to comply by law or regulation, or by agreement with the client or intended users. When not obligated, individuals may still choose to comply.

And, very obviously, even when obligated, they can also choose not to comply too! Surprisingly, or maybe not, the ASB does have the power to hand pick only the questions it wants to answer. Truncating off any nasty little side aspects not appropriate for today's answer...

I recall a saying, "if you can't solve the problem, change the problem." This makes me feel that a quick rewrite of the Preamble, a few other sections of USPAP, and the missions of the AF and ASB both may all be called for.

Webbed.

 

[23Degrees]

Perhaps the issue was left this way in anticipation of 01/01/2009. Should the no MB/LO provision of the HVCC survive then the contingency issue becomes moot. At that point the only decision an MB/LO can make with their comp check in hand is whether or not to start the paper pushing for that borrower and order an appraisal via a system where they no longer have their favorite appraiser by the puppet strings.

Unfortunately for him the "comp checks" would no longer be free without him being able to hold out the cookie of a full order to the comp checker and I suspect that said MB/LO would probably begin exploring some of the free online options rather than pay for a "comp check" before initiating his process and coughing up the dough for a full appraisal.

I'd really be thinking optimisticly if I were to suggest that in this scenario the MB/LO would begin paying for the compliant "comp check" in order to help him make this decision to proceed with the loan via an appraiser over whom he has no control but in some markets maybe it could happen.

01/01/2009 might be the date of death for the "comp check" as we know it and this Q&A simply leaves the door open for legitimate uses if the contingency issue becomes moot in lending anyway.

 

[George Hatch]

If you guys think you can do a better job with the appraisal standards then knock yourselves out. It wouldn't be the first time the ASB adopted something that was developed outside their internal process.

Just be aware that no matter what you come up with there WILL be some collateral damage and there WILL be some form monkey who will find a way to work around your wording. There will also be a lot of appraisers who will never read it (for content) on the one hand and then complain how it can't be understood on the other.

Go ahead and do it. I think you might learn something from the experience.

 

[Stone]

We can't be trusted and will be eliminated while we cry out for guidance that we already have, have always had, and should have never needed to begin with.:new_all_coholic:

No kidding.

What is it that Karl always writes? Something along the lines of the biggest problem for appraisers is appraisers themselves. Appraisers allowed the problem to exist and now are asking for someone to solve it for them.

 

[Hamlet]

Ok, so USPAP is a requirement for appraisers.

That is a problem when the other parties do not have to play by the same rules. Where are the ethical obligations for MBs? Even Realtors have a Code of Ethics. Tim is correct that they must be illegal to request at a Federal level.

Gosh, shouldn't we at least get a badge or something for having to do that? I want a uniform with a hat and maybe a gun even!

That I think a lot of appraisers would go for, if we have the power to police our own (with shoot to kill/take no prisioners)!

And, very obviously, even when obligated, they can also choose not to comply too! Surprisingly, or maybe not, the ASB does have the power to hand pick only the questions it wants to answer. Truncating off any nasty little side aspects not appropriate for today's answer...

Appropriate, but not comfortable or pleasing to some.

I recall a saying, "if you can't solve the problem, change the problem." This makes me feel that a quick rewrite of the Preamble, a few other sections of USPAP, and the missions of the AF and ASB both may all be called for.

I like the sound of that. Makes one feel like it is their patriotic duty.

Webbed.

My comments in blue...