More On Free Comp Checks

[Steve Owen]

I quit even doing that because it wasn't enough - they wanted a number.

Therein lies the crux of the issue.

 

[sbb04]

Yeah, I see what you mean. One difference is almost all VAs are sales and the 'heads up' you refer to is only to notify the lender you have a problem with value and give them the opportunity that to provide additional info such as sales data, etc. I really don't see anything particularly wrong in that. I can't recall a time when it made any difference, just an annoyance. You already have inspected the property and done your research. It's not like a 'comp check'.
Actually when I call an agent to set an appointment I ask them if they had any sales they felt were relevant. I do this whether VA or cnv.

My reply was to the gentleman quoted and referred to statement 18 (I believe he means Certification #18 of the 3-05 URAR.

Note the statements VA makes in their bulletin, since this heads up, for the stated purpose of minimizing reconsiderations of value could easily pass as stealth pressure on an appraiser one way or another while in the process of developing an estimate of value. A lender's attorney couldn't have handled it any better

http://www.vba.VA.gov/ro/atlanta/rlc/INFO/261-04-05.htm

 

[EVAUSA]

"Comp Checks" do not conform to USPAP if you are determining a value or range of values; ITS AN APPRAISAL!

Keep your comp checks (appraisals) work file and certification for 5 years, treat it like an appraisal, and no worries. It's up to the appraiser if they want to do an appraisal for free. I do them, and if they are easy (10 minutes), I do them for free. I'd love to turn them down, since they don’t always pan out (upgrade to inspection), but if I don’t offer the service, there are HUNDEREDS of others in my market who will. Yea, yea, if we ALL turned them down the LO’s would have to pay for them. And if everyone stopped throwing bombs, there would be no war. Maybe these 2009 changes in appraisal ordering will help this problem, but until then, I’m a realist. Not trying to **** anyone off, I know this is as touchy of an issue as fee-split work…maybe this blog should be titled “Things that are destroying the industry”

 

[Webbed Feet]

Keep your comp checks (appraisals) work file and certification for 5 years, treat it like an appraisal, and no worries. It's up to the appraiser if they want to do an appraisal for free. I do them, and if they are easy (10 minutes), I do them for free. I'd love to turn them down, since they don’t always pan out (upgrade to inspection), but if I don’t offer the service, there are HUNDEREDS of others in my market who will. Yea, yea, if we ALL turned them down the LO’s would have to pay for them. And if everyone stopped throwing bombs, there would be no war. Maybe these 2009 changes in appraisal ordering will help this problem, but until then, I’m a realist. Not trying to **** anyone off, I know this is as touchy of an issue as fee-split work…maybe this blog should be titled “Things that are destroying the industry”

Unfortunately for you, I believe you are full of it. Shall we get down to brass tacks and nuts about what you are NOT doing? What you are not doing is establishing an Intended Use, with a relevent SOW, that is credible for the assignment. I'll happily challenge you just as I did Mr. Smirth.

Mr. Smith,

Let's cut to the chase shall we? How about forum members make arrangments for two well USPAP understanding forum members, located near your office, to drop by with one of your State board enforcement administrators. We let them randomly go through the last year or two of your files looking for your work files on these "Restricted Use Oral Appraisal Reports" and spend the day auditing them for compliance. Then use your written logs to match them up to any following appraisals completed on the same subject addresses and audit those too.

Your in compliance... so you have nothing to fear.

Webbed.

So put your money and reputation where your mouth is. Identify your real self, and invite some very well USPAP informed forum members over to your office to audit the last two years of all these "Comp Check" work files of yours.... Because not only do I doubt we will find the work files, if we do find any I doubt what was done will be in compliance with USPAP and state administrative rules.

Same thing. As your so in compliance, you have nothing to fear. Right?

Webbed.

 

[Mike Kennedy]

My reply was to the gentleman quoted and referred to statement 18 (I believe he means Certification #18 of the 3-05 URAR.

Note the statements VA makes in their bulletin, since this heads up, for the stated purpose of minimizing reconsiderations of value could easily pass as stealth pressure on an appraiser one way or another while in the process of developing an estimate of value. A lender's attorney couldn't have handled it any better

http://www.vba.VA.gov/ro/atlanta/rlc/INFO/261-04-05.htm

The purpose of this Loan Guaranty bulletin is to encourage VA program participants to provide relevant market data to VA fee and staff appraisers during the appraisal process.

These guidelines should help limit the number of cases that reach the reconsideration of value phase and also provide a more timely response to those cases that are submitted for reconsideration.

However, the procedures described in this bulletin should in no way suggest that appraisers are being pressured to make appraised values meet or exceed sale prices.

VA fee appraisers are required to notify the listed POC

when it appears that the appraised value will come in below the sales price of the subject property.:Eyecrazy:

The requestor may designate whomever they feel is most appropriate as the POC including the Realtor, Loan Officer/Originator, etc. If this information is not provided, the appraiser will be required to call the appraisal requestor shown on the appraisal request to make such notification.

c. Once the fee appraiser has notified the lender or POC, they will have 2 working days to provide additional information to the fee appraiser, in a format similar to the comparable sales grid on the URAR. Verification that the sale actually closed is also required. If pending sales contracts are submitted to support a time adjustment, they must be complete with all contract addendums attached. In addition, there should be a brief narrative attached that describes the similarities/differences between the pending sale and the subject property.

............PSST......... "team player" ..........don't send in your completed report for 2 days till all the parties with vested interests have the opportunity to "gang rape you" and MAKE YOU MATCH THE CONTRACT..


Oh.......and this is NOT an attempt to COERCE you ........... really......

WE SWEAR !!!!! :new_smile-l:



KEEP IN MIND......... "Complaints on fee appraiser performance, timeliness, or demeanor should be directed to the RLC of jurisdiction."

 

[JSmith43]

Because not only do I doubt we will find the work files, if we do find any I doubt what was done will be in compliance with USPAP and state administrative rules.

You may well be right in guessing that the files are not audit proof, but they easily could be.

It isn't too difficult to imagine an intended use (to aid LO in sorting through deals to prioritize, to give the LO the spine to set realistic expectations for the borrower, etc).

SOW is equally easy to boilerplate to the most common situation.

But, I see your point, duckling. Gary Hart shouldn't have taunted the press to find out anything tawdry about him and he shouldn't have gone sailing with a baba on a boat named Monkey Business. A little better planning for potential presidential candidates, please.

In other words, Mr Hart had his files audited and he flunked for lack of a little discretion and preparation.

 

[JSmith43]

1. Purpose of this Bulletin.

The purpose of this Loan Guaranty bulletin is to encourage VA program participants to provide relevant market data to VA fee and staff appraisers during the appraisal process. These guidelines should help limit the number of cases that reach the reconsideration of value phase and also provide a more timely response to those cases that are submitted for reconsideration. However, the procedures described in this bulletin should in no way suggest that appraisers are being pressured to make appraised values meet or exceed sale prices.


My comments stand.

I don't think that the VA is being all that unreasonable. And I also think that requests for staged reporting by other entities necessarily is all that unreasonable.

What I do think is that the standards are written in such a way that people with their shoes on too tight might claim this type of action encourages a USPAP violation when practiced by an entity other than the VA. Why should or shouldn't it apply in either case?

 

[PropertyEconomics]

Originally Posted by John Muller
"Comp Checks" do not conform to USPAP if you are determining a value or range of values; ITS AN APPRAISAL!


And many USPAP instructors are teaching that you can do a restricted use appraisal for that very purpose with some of them even handing out how they do it. They go on to say that accepting the second assignment is ok to complete a full report.

I say bunk ... and using words like ... "It wasnt based upon a predetermined value" are pretty hollow in my mind. Just cause you say it isnt so .. doesnt make it not so. Good luck with that one.

 

[Lobo Fan]

I agree with PE. I don't see how discussing and negotiating value prior to an assignment is not establishing a pre-determined value. The test of that theory is what happens when the appraisal comes in less than the comp check. If the lender is cool and ready to give you more orders, then you may have pulled it off.

But if the lender calls shrieking and demanding refunds then you were working on a pre-determined value.

I don't think it is possible to check value and not put a minimum number in te lender's head. Even if you give them a range, the only number they hear is the highest one.

I wonder what a state board would do if a lender turned in a complaint about a low value and the complaint incuded written comp checks? Was there a scope of work and all the other legal stuff included? Could be dangerous ground.

 

[Bob Ipock]

A restricted report for a client unfamiliar with the property? Not a good idea.

AO-11

Content of the Restricted Use Appraisal Report (AO-11)
As noted in the Comment to Standards Rules 2-2(c)(i) and 8-2(c)(i):

The Restricted Use Appraisal Report is for client use only. Before entering into an agreement, the appraiser should establish with the client the situations where this type of report is to be used and should ensure that the client understands the restricted utility of the Restricted Use Appraisal Report.



The Restricted Use Appraisal Report should contain a brief statement of information significant to the solution of the appraisal problem. “State” is the distinguishing term related to the Restricted Use Appraisal Report.



Standards Rules 2-2(c)(vii) and 8-2(c)(vii) requires the report to state the scope of work used to develop the appraisal. The client for a Restricted Use Appraisal Report should not expect to find all significant data reported.



The report must reference the existence of specific workfile information in support of the appraiser’s opinions and conclusions. The contents of the workfile must be sufficient for the appraiser to produce a Summary Appraisal Report. The workfile should be available for inspection by the client (or a client’s representative, such as those engaged to complete an appraisal review), state enforcement agencies, and such third parties as may be authorized by due process of law, and a duly authorized professional peer review committee, except when such disclosure to a committee would violate applicable law or regulation.





AO-12

A decision to use the Restricted Use Appraisal Report is absolute because the minimum level of information required in a Restricted Use Appraisal Report is not designed to address the needs of any third-party users. When an appraiser uses the Restricted Use Appraisal Report option, a prominent notice to any reader must be provided. The prominent notice must warn any reader of the report that the appraiser’s opinions and conclusions set forth in the report may not be understood properly without the additional information in the appraiser’s workfile. The Restricted Use Appraisal Report may be useful when:

the client is the only intended user of the appraiser’s opinions and conclusions set forth in the report;

the client understands the limited utility of this option;

the intended use of the appraisal warrants restricted disclosure about the appraisal process steps completed in the assignment; and

the client (the only intended user) does not need the level of information required in a Self-Contained Appraisal Report or Summary Appraisal Report.
This Advisory Opinion focuses on the use of the appraisal report options and should be read in conjunction with Advisory Opinion 11, which focuses on the content of the appraisal report options of STANDARDS 2 and 8.



I would love to see this "Restricted Report" being handed out. Perhaps they are right, perhaps not.