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Just what is an FRT and when does your appraisal Fall under Designation ?

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Ray Miller

Thread Starter
Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Just what is an FRT and when does your appraisal fall under that Designation ????

In simple terms what is an FRT?

What kind of Federal Regulated Instatution?? Is it a state charted bank? Is it a mortgage broker? Is it a state chartered Savings and Loan? It it a state charted Credit Union? Is it an AMC? Is it a hard money Lender? Is it an investment firm that buys loans from State Charted Banks and Hard money lenders or other investment sources?
 

rcsone

Senior Member
Joined
May 26, 2007
Professional Status
Certified Residential Appraiser
State
Oklahoma
....fed insured, examined, funded, supervised, guaranteed, regulated, employees/employed, enforced, audited, mailed and/or other detailed...best to all......rs........PS: might not apply in Wisconsin due to cheese and snow load........but partially...
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
Just what is an FRT and when does your appraisal fall under that Designation ????

In simple terms what is an FRT?

What kind of Federal Regulated Instatution?? Is it a state charted bank? Is it a mortgage broker? Is it a state chartered Savings and Loan? It it a state charted Credit Union? Is it an AMC? Is it a hard money Lender? Is it an investment firm that buys loans from State Charted Banks and Hard money lenders or other investment sources?

From the California Business and Professions Code, Part 11301..

(b) "Appraisal" means a written statement indepedently and impartially prepared by a qualified appraiser setting forth an opinion in a federally related transaction as to the market value of an adequqtely described property as of a specific date, supported by the presentation and analysis of relevant market information.

(f) "Federal financial institutions regulatory agency" means the Federal Reserve Board, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Office of Thrift Supervision, Federal Home Loan Bank System, National Credit Union Administration, the Resolution Trust Corporation, and any other agency determined by the director to have jurisdiction over transactions subject to this part.

(g) "Federally related real estate appraisal activity" means the act or process of making or performing an appraisal on real estate or real property in a federally related transaction and preparing an appraisal as a result of that activity.

(h) "Federally related transaction" means any real estate-related financial transaction which a federal financial institutions regulatory agency engages in, contracts for or regulates and which requires the services of a state licensed real estate appraiser regulated by this part. This term also includes any transaction identified as such by a federal financial institutions regulatory agency.
 

Couch Potato

Elite Member
Joined
Mar 15, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Residential appraisals that conform to the standards of Fannie/Freddie are not FRT; however, those standards require one to be Certified or Licensed. Determining which appraisals require one to be Certified or Licensed is far more complex than determining if the job involves a FRT.

They made it easy here in NC; all appraisals must be done by a Certified or Licensed appraiser.
 

rcsone

Senior Member
Joined
May 26, 2007
Professional Status
Certified Residential Appraiser
State
Oklahoma
....if so chosen by THEM, someone drawing Social Security and using part of that to pay on anything could and would be a FRT......using the phone in the pursuit of income in error legally because of government taxes and fees collected from carrier could be FRT. . . . . What could not past remotely be considered somewhere a transaction not Federal, if it involved money, information, communication or some sort of supervision? Personal?....rs
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
I noticed that one bill wandering though Congress defines all appraisals for lending purpoes a FRT. Whatever the consensus today, may well be different tomorrow.
 

Ray Miller

Thread Starter
Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
At the time an appraisal is ordered I have ask the ordering person if it is an FRT, most have not had a clue as to what I am talking about. I have tried to give them a Definition of an FRT and they still don't understand.

So if the order does not come from a Federal Regulated Institution or business, or comes from an AMC, and the ordering person does not have a clue. Should we consider it not to be an FRT appraisal and state so in our scope of work?
 

Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
Mr. Miller,

You've brought up what really is an excellent problem to discuss!

The USPAP and appraisal powers that be, from the ASB and every other "letters" we can dream up, all need to get down off this FRT horse and make a good clean kill of the entire concept. Then bury it forever along with permanently retiring SMT-10. The entire thing is just stupid.

You are exactly correct. When 99% of the people ordering real estate appraisals are 100% clueless as to what a FRT is, and is not, and are incapable of letting the appraisers know if they are ordering under a FRT standard...... the entire thing needs to be struck from the books and forgotten. About the only practical thing we are trying to determine is if an "as is" value is needed if and when any "Subject To" condition that uses a HC or EA is required. The demand for this, if the transaction is for a FRT, needs to be removed from all non-commercial appraisal practice.

In the meantime, I advise you simply document you asked your client and that the client had no idea what a FRT even was. As long as the client is requiring any 03/2005 form, we should move forward stating that due to exemptions handed all the secondary market players, and the appraisal made to Fannie standards, it is not for a FRT. The key is just do not be stupid and leave boilerplate in your report saying the appraisal is for a FRT. If you do that ya just shot yerself in the foot!

This leaves lenders, like banks and such, who proceed to claim they are going to "keep the loan in-house" typically in an effort to get the appraiser to sidestep a Fannie / Freddie standard they want to get around to fit a round peg in a square hole of a loan. Most of the time I know they are flat out lying to me. But this would trigger that FRT standard. Then I have the fun job of telling them that required "as is" value is going to cost them a few thousand dollars because they are claiming they are going to keep some POS "in house" and don't want me to "Subject To" anything when the house is falling off it's foundation. You know, the cost to cure crowd manuvers.

Webbed.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
About the only practical thing we are trying to determine is if an "as is" value is needed if and when any "Subject To" condition that uses a HC or EA is required.

Is it the only thing? It seems to me that FRT status has more to do with the states enforcement policies.
 
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