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Legal, ethical, or something else?

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Pamela Crowley (Florida)

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Elite Member
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
I have been asked about this situation, but don't have any ready answers:

Federally Regulated Lender staff/underwriter writes up reviews of appraisals that include what I would call an "appraisers certification". Similar to what you or I might use, and it includes the following statement:

“My analyses, opinions, and conclusions were developed, and this review report was prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) and all applicable federal, state and banking regulations in force as of the date of this report.”

If the only person signing this "review" (on another page) is not an appraiser, I think this is misleading at best. I'm also thinking this would possibly end up being a State specific possible problem, especially in mandatory states. But, what about those federal, state, and banking regulations???

What do the rest of you think???
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Opinion:

Depends on the State. Doubt one might find any fed or state law which precludes anyone not-licensed as an Appraiser from citing compliance with USPAP. In that event USPAP is not binding on that individual.

However, in states which prohibit non-licensed Appraisers from purporting to be an Appraiser, or acting AS an Appraiser by Law - such an act would most probably be considered Fraud. Further, if said person did so as an employee of a Federally Regulated Institution - odds are that Bank or Thrift (or opeating subsidiary of same) would be in Violation of Fed Banking Laws and Banking Regs. (OCC, OTS, FDIC).
 

MBD

Member
Joined
Jan 10, 2005
Professional Status
Certified General Appraiser
State
New York
“My analyses, opinions, and conclusions were developed, and this review report was prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) and all applicable federal, state and banking regulations in force as of the date of this report.”

If the property were located in a mandatory licensing state, wouldn't the "reviewer" be in violation of the state laws?
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
What's the difference if someone who is not licensed as an appraiser fills out Fannie's 1004_05 form and signs it (without a license number or state)? :shrug:

In other words, can Joe public sign on the form that is used in lending and can Joe public be held responsible or accountable for anything that follows, not being duly licensed as an appraiser?

I suspect there is an element of due diligence on the part of the user of forms in lending that require a valid appraiser to sign before accepting or using that form for the basis of anything that follows.

The fault lies with the lending institution who should have known that the person signing the form is not qualified to do so and should have taken the necessary steps to guard itself from liability and loss.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
If the property were located in a mandatory licensing state, wouldn't the "reviewer" be in violation of the state laws?


Mike Kennedy said:
if said person did so as an employee of a Federally Regulated Institution - odds are that Bank or Thrift (or opeating subsidiary of same) would be in Violation of Fed Banking Laws and Banking Regs. (OCC, OTS, FDIC).

No ... staff performing this function for the benefit of their employer are not subject to licensing. i.e. - staff reviewer for a bank is not required to be licensed

The person is not acting as an appraiser for the a third-party (john q public) but is functioning in house performing services solely for their employer
 
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Pamela Crowley (Florida)

Thread Starter
Elite Member
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
I'm wondering if the bank employee has any clue what USPAP is when they are SIGNING a statement certifying they have complied with it!!!
Can a person signing that they have complied with a book of rules and regulations be held responsible for non-compliance with it? I would think so!
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
Who would be the enforcment agency - AQB has no enforcement authority, state licencing board has no jurisdiction (unlicensed individual)?
 

Caligirl

Senior Member
Joined
Jan 27, 2006
Professional Status
Certified General Appraiser
State
California
If a tree falls in a forest.

I'm wondering if the bank employee has any clue what USPAP is when they are SIGNING a statement certifying they have complied with it!!!
Can a person signing that they have complied with a book of rules and regulations be held responsible for non-compliance with it? I would think so!

If I 'review' a court document, as an employee of a law firm, and I sign a certification that I adhered to American Bar Association standards of professional practice applying to professional attorneys, and I am not an attorney, does my 'review' even mean anything?

Sorry, this just seems like more cost cutting on the lender's behalf. When they've lost enough money they'll wake up.
 

Scott Kibler

Elite Member
Joined
Oct 7, 2003
Professional Status
Certified Residential Appraiser
State
Illinois
My banking career continues to recede into the past but as I recall, nationally chartered banks (i.e. OCC regulated) were exempt from state licensing of many activities that other entities were required to follow.
 
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