July 2008 ASC Q&a- Wink Wink Comp Comp

[Mr Rex]

I think I was about 3 or 4 when my mama stopped holding my hand in public, because I might not know how to act. Some damned old appraisers that need USPAP hand holding and in large print to tell them over and over again right from wrong. Someone else suggested using the "Thou shalt not...." language. I think thats what got my attention at 3.:new_all_coholic:

Thou shall not provide an opinion of value without following USPAP is too generic. So there are 10 Standards and 10 Statements. The 10 rings a bell.

 

[George Hatch]

Great, now we want to see if there are different standards for "full appraisals" vs. "comp checks" as used in this Q&A. You guys just seem to refuse to believe that both are "appraisals" (and are treated as such in this AO) and are subject to the same minimums in USPAP.

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My question is am I in violation because the second order was contingent on the value opinion of the first? Or because the fee was contingent upon me completing a second appraisal which was contingent on the Comp Check value?

Let's discuss the nature of an improper contingency.

If you recieve a request to perform a 2055 exterior-only appraisal on a property, and the client later decides to send the deal through a program that requires a 1004 appraisal with interior/exterior, is the 1004 assignment "automatically contingent on the results of the previous 2055?"

Does the fact that you've already completed the 2055 automatically prejudice the results of the 1004 even if additional or different information arises from the more comprehensive SOW?

'Cause those are a couple of the assertions that have been made in this thread. According to some posters, you should be prohibited from accepting the second assignment under any circumstances.

Loading the questions with rigid assumptions, the arbritrary uniformity of which are clearly unfounded, is not an honest form of discourse. You're assuming the second assignment always contingent on a minimum value when in fact there are circumstances where it clearly isn't.

 

[George Hatch]

The difference is the communicating of the pre-determined value to the appraiser. If the appraiser has the knowledge of what number is expected, then you have a target to hit.

So again, we get to the point where merely communicating a desired result triggers the "help me, I'm tempted and I can't say no" reaction from appraisers. If that's true then it stands to reason that appraisers never appraise a property for more or less than the contract price that they saw when they analyzed the sales contract in conformity with SR1-5.

And yet, that's not what happens at all. Lots of appraisers (I'd like to think it's most appraisers) routinely call them as they see them. I do it on a regular basis.

Merely knowing what direction a client wants doesn't automatically rise to the level of an improper assignment condition. Were that not so I'd have to walk out of every inspection where a borrower passes the comment to me saying "do the best you can".

The client has to make it a take-it-or-leave-it proposition, as in, "Do what I want or you won't get the assignment", or "Do what I want or you won't get paid", and the appraiser has to accept those terms.

 

[Lee Lansford]

...
Loading the questions with rigid assumptions, the arbritrary uniformity of which are clearly unfounded, is not an honest form of discourse. You're assuming the second assignment always contingent on a minimum value when in fact there are circumstances where it clearly isn't.

George, how can anyone have any fun without such assumptions?

Lee

 

[Carnivore]

As far as the problem never going away, I dunno about that. Compared to 10 years ago, I think a lot more appraisers understand that an "appraisal" is not just limited to a signed 1004/2055 form. We are making progress even though it doesn't seem like it.

I just know the comp check stuff will not go away. If your correct about things improving then we will now have comp checkers doing there craft with some guilt and occasionally some of them may even look over there shoulders.

 

[Mike Kennedy]

So again, we get to the point where merely communicating a desired result triggers the "help me, I'm tempted and I can't say no" reaction from appraisers. If that's true then it stands to reason that appraisers never appraise a property for more or less than the contract price that they saw when they analyzed the sales contract in conformity with SR1-5.

And yet, that's not what happens at all. Lots of appraisers (I'd like to think it's most appraisers) routinely call them as they see them. I do it on a regular basis.

....and twice as many do exactly what the bold states......... the lenders know it, the borrowers know it, the mortgage brokers know it, the real estate agents know it .........and so do Fannie, Freddie, the VA and the FHA.

.......the last 5 years proved it.

.......given the "state of the industry" - TRIAL BALLOON - 1 year - CONTRACT PRICE or any OTHER advance Value Indication is made a FEDERAL CRIME.

Interesting Results when half of the (a)ppraisers are no longer (a)ppraisers and REVIEW ASSIGNMENTS QUADRUPLE.

 

[Hamlet]

Merely knowing what direction a client wants doesn't automatically rise to the level of an improper assignment condition.

Yes, I agree that those with ethics can push aside suggestion or indications, etc. and not be influenced.

And yet, that's not what happens at all. Lots of appraisers (I'd like to think it's most appraisers) routinely call them as they see them. I do it on a regular basis.

How many appraisers are sadly lacking in ethics? I would hope very few. However with the large number of newly trained, untested and fledglings out on their own with no real back bone or fortitude that have succumbed is only speculation. Apparently there are enough for the lenders to find and use to pump their loans through the mill.

Were that not so I'd have to walk out of every inspection where a borrower passes the comment to me saying "do the best you can".

The borrower is not our clients, they may threaten and bluster or try a guilt trip if they aren’t pleased, but for the most part they hold no real threat to an appraisers livelihood or reputation. The lender however holds tremendous power in that regard and they USE it.

The client has to make it a take-it-or-leave-it proposition, as in, "Do what I want or you won't get the assignment", or "Do what I want or you won't get paid", and the appraiser has to accept those terms.

Most of these types of lenders are smart enough not to put the outright threat in writing. It is the unspoken threat. The black lists.

I totally agree with you that say that USPAP is not there to enforce lender standards. It is there to enforce standards of appraisal practice. My only problem with the Q&A is the esoteric nature of the wording. Lets face it, it really isn’t going to help to hold this up to an MB, they will see the word YES and run with it. ”Appraisers are liars; we knew all along appraisers were allowed to do comp checks. HAHAHAHAHAHA.”

My feeling is that instead of expecting USPAP to stop the comp checks, they must be defined as MB/lender speak “guaranteed, pre-determined value checks” that follow with the unwritten threat of “no soup for you” illegal on a Federal level with harsh punishments.

Just my opinion.

 

[Fred]

My question is am I in violation because the second order was contingent on the value opinion of the first?

It seems to me that no matter how many times this question gets asked, the answer is the same. You cannot agree to hit a predetermined number or hit a predetermined number.

Now we both know that a "Comp Check" is an appraisal.
Why didn't they use the term appraisal?
Why did they use the term "Comp Check"?

But they did use the term appraisal, right there in USPAP.

Now maybe I am reading the QA wrongly, but the ASB isn't using the term "comp check" to mean appraisal. In the first comp-check answer, they establish that "comp check" can be construed to mean either a report containing data only or a report of an appraisal. I don't see where the meaning of the answers to the second and third comp-check answers is affected by whether the comp check is an appraisal or not an appraisal (data only).

The key point is that USPAP makes no distinction about whether you are appraising something for the first time, whether you have appraised a property before for the same client, or if you have communicated data to the same client before, etc.; the "new" assignment is subject to exactly the same rules, standards, and standards-rules in any and all cases. That is, there is no difference whether they call the first assignment a "comp check" or something else, whether it is an appraisal or something else. So, all this squirming about what comp-check means or might mean is actualy irrelevant to the substance of the answer.

 

[The Warrior Monk]

....and twice as many do exactly what the bold states......... the lenders know it, the borrowers know it, the mortgage brokers know it, the real estate agents know it .........and so do Fannie, Freddie, the VA and the FHA.

.......the last 5 years proved it.

There are also plenty of examples to the contrary. We only have to look as far as our own client base. Those that do want the truth (i.e., the one's responsible for the money the lend) do get it, and everyone else goes elsewhere.

.......given the "state of the industry" - TRIAL BALLOON - 1 year - CONTRACT PRICE or any OTHER advance Value Indication is made a FEDERAL CRIME.

Not providing contracts cuts off a major data source, especially for those that work in specific market areas. Contracts contain information not available elsewhere.

The problem is not with the contract, it's with the appraiser that is a number hitter. Hiding the contract from the appraiser stops nothing; they'll still be unethical.

Kind of reminds me of the Z video...appraiser is claimed to be free of influence. Of course, when the driveby doesn't hit the number, the appraisers inspects the interior of the home, and meets....the homeowner. I'm sure the homeowner won't try to influence the appraiser. How are we going to avoid that...make it a federal crime for the homeowner to met the appraiser?

If the lender (or lender's agent) cannot provide the appraiser the contract, the appraiser will be influenced in other ways, everything from meeting the MB/salesperson/buyer/seller at the property, to having a sales contract laying out on the kitchen counter during inspection.

Many of these proposed changes are in effect protecting appraisers not from third parties, but rather from themselves.

 

[Hamlet]

It seems to me that no matter how many times this question gets asked, the answer is the same. You cannot agree to hit a predetermined number or hit a predetermined number.

True the appraiser cannot, however the lender can abuse, threaten, coerce, etc. with impunity....so it seems. Maybe that is where the confusion comes it, it is hard for the human mind to accept that once side must deal with the ethics of the profession, but the other side has no such limits. Its like living in the Twilight Zone.:Eyecrazy: