Lender Supervision Requirements

[PaulBrown]

We currently operate an appraisal business with five staff appraisers consisting of two certified generals, one certified residential, and two associate/licensed appraisers. The general responsibility roles within the company are that one of the certified general appraisers handle farmground, the other commercial, and the certified residential appraiser consumes the majority of the residential work. The two associates will work with all three as needed/available. Recently we had a lender that is requiring a certified general to sign as the supervisor on all reports, regardless of the property type. We've explained that this may not be in either parties best interests on residential reports due to the fact that in our company, the individuals with certified general licenses have limited exposure to residential properties and the UAD reporting format. I was curious to know others thoughts on this and any rationale for a policy such as this being in place.

 

[The Warrior Monk]

Clients are free to have their own internal requirements. Appraisers can decide whether or not to work with such a client.

It is certainly reasonable for an appraiser to discuss such requirements with a client to arrive at some mutual agreement.

 

[glenn walker]

This is a new one ... I have never heard of this kind of request .

 

[bnmappraisal]

Recently we had a lender that is requiring a certified general to sign as the supervisor on all reports, regardless of the property type

Even if the Cert Res is completing the report? Seems a bit of overkill to require a CG sign off on a CR's report

Also, is this lender mainly a commercial lender? That's about the only reason/rationale why they would require a CG to sign (still doesn't make sense to me, but they are free to require what they want)

 

[Terrel L. Shields]

I was curious to know others thoughts on this and any rationale for a policy such as this being in place.

Tell them to pay... Add about $200-400 per report and don't take no for an answer. If they "need" a CG, then they "need" to pay for it.

 

[BRCJR]

First question that comes to mind, is the client engaging the firm or an individual appraiser? Proper protocol, for regulated lenders, is to engage the individual appraiser. If that is done the issue, you describe, goes away.

 

[Mark K]

I'd say that the rationale is that they want two appraisers to sue instead of just one it the loan goes bad.

If they're willing to pay for the supervisory review and signature, fine. But as you said, some CGs are relatively clueless when it comes to appraising a SFR and understanding F/F guidelines so I'm not sure of the added value to the report.

 

[hastalavista]

Are the residential assignments completed on the GSE forms and must they be consistent with the GSE requirements?

The GSE non-modifiable statement of limiting conditions has the following:


From the GSE selling guide:


The certified generals you describe may not meet this threshold. This is no dis on those appraisers; I know many commercial appraisers who have never (and never want to) appraise a 1-4 residential property.
Agreeing to co-sign the report when the general doesn't have the requisite knowledge and experience to appraise that property, competently and to the client's expectations, him or herself, is (a) violating the certification and guideline requirements (IMNSHO) and (b) taking on a significant liability.

If your staff does not meet this minimum requirement, I suggest you professionally inform the client that their co-signing of the reports would be in conflict with the requirements/guidelines. Hopefully, the problem will go away.

If they are competent, then it becomes a business decision.

Good luck!