New USPAP Q & A October 2009

[LindaSL]

Well I guess I didn't read far enough down this thread....sorry. But it is about as clear as mud. If a new assignment is required, especially within a few weeks, that is just a waste of time and money, IMHO.

 

[rcsone]

we not write the rules.

Well I guess I didn't read far enough down this thread....sorry. But it is about as clear as mud. If a new assignment is required, especially within a few weeks, that is just a waste of time and money, IMHO.

....but sometimes we get to hit and throw the ball according to the dictates of the confused others............best to all........rs

 

[NC Appraising]

Well I guess I didn't read far enough down this thread....sorry. But it is about as clear as mud. If a new assignment is required, especially within a few weeks, that is just a waste of time and money, IMHO.

I agree. Were hated enough.



But on the other hand, if lender B ordered the appraisal on 10/15/2009 and you just "transferred" the clients name like most appraisers do, and the effective date is 10/1/2009, and the home burns down or get vandalized, etc. or the pending sale that was in reality your best comp just closed..... I can see why FHA/HUD would want a new effective date (new inspection date and new market data. It's the secondary market or the investors that are buying or insuring the loans that care. The LO, MB, or the lender that is originating the loan could care less. Just make it work.

If you went to court for any reason, I could also see how this could raise issues, since the scope of work or assignment type did not involve a "retrospective" value/inspection date/effective date. (1004 URAR effective date = inspection date).

 

[LindaSL]

That is a very good point...in a few weeks a lot can happen to a property, by nature or otherwise. However, in the case of a refi or purchase, it would seem an exterior inspection to verify its existance should suffice. If a refi, the owners would have no motive to destroy the interior. And if it's a purchase, a realtor and prospective borrowers would be your eyes for the interior. It's sure a sign of hard economic times when we discuss issues like this - saving a few hundred on a re-inspect for the homeowner/borrower.

 

[carol109]

If it is an "update" then why would it have the same effective date?

I type too fast. But, with new effective date, it is a new appraisal. If we're only talking days or weeks, and there are no new comparables or information to consider, the value is likely going to be unchanged. I'm not finding anything that would prevent a conventional appraisal being updated for a new lender with their name as the client as long as the report has been released from one lender to another, and the appraisal report is incorporated into the update. I talked to one lender I work with just a bit ago concerning this, and they are doing this very thing for some of the loans they are making so their customers don't have to pay two full fees. In my mind, that is a fair solution. The appraiser gets their fee for the added work/new inspection, the lender gets a current Update with their name on it, and the customer isn't soaked for two full fees.

 

[LindaSL]

It was my understanding the lender A did not need to 'release' the report anymore to lender B, C, D, etc. as of the 2006 (?) UPSPAP changes, nor do they need to wait 6 mos without a 'release'. It is a 'new' assignment, period. Am I incorrect?

 

[carol109]

It was my understanding the lender A did not need to 'release' the report anymore to lender B, C, D, etc. as of the 2006 (?) UPSPAP changes, nor do they need to wait 6 mos without a 'release'. It is a 'new' assignment, period. Am I incorrect?

Under HVCC, the lender can send the report directly to the other lender, certifying that HVCC was complied with. This is not to be mistaken with those appraisers who get a release and send it from their office, that, I believe, has always been a no no. The new lender can use the report (with the original client identified), if they so choose to. Please don't misconstrue this to mean that with a "release" you can send files to a new lender - you can't.

 

[mike32716]

Seems to be some pushback on other forums. HUD does not have the authority to regulate banks and the collateral requirements for the banks. They can only state the HUD requirements. Which they did. They already accept appraisals regardless of the named client, and HUD is already one of the intended users. It seems that this idea of a limited SOW to readdress the lender client was a "workaround" that some beanhead came up with. That the second lender wants the appraisal in their name shows the second lender's ignorance. The FHA case number will have already been transferred to that lender.

 

[CANative]

HUD is just stating that a new appraisal for a new client of a property previously appraised by the appraiser for a different client is okey dokey with them. It probably always has been. The confusion was the result in interpreting the 6 month life of an appraisal as meaning that no new appraisal could be done.

I don't think anyone even needs to wait until January 1st to do a new appraisal for a new client.

Just ignore the nonsensical verbiage in the ML and do what's necessary.

 

[hastalavista]

I type too fast.

So do I; ok, I understand what you mean. New effective date but with no significant changes in data that would create any significant change in the analysis, results or the communication of the results.

I'm not finding anything that would prevent a conventional appraisal being updated for a new lender with their name as the client as long as the report has been released from one lender to another, and the appraisal report is incorporated into the update.

Let me delve into this a bit: anyone who disagrees, please chime-in!

The term "released" can cause confusion. The casual inference of the term "release" in the context that we are discussing is that a release is necessary to accept a new assignment. There is no such requirement.

However, in updating an assignment for a new client that was originally completed for different client, AO-3 (lines 80-85) make it clear that the appraiser must comply with the confidentiality requirements.
Most on this forum (myself included) believe that, at a minimum, the reported results (the value) is confidential; other things may be also confidential depending on the engagement agreement with the original client.

When completing an update on the current form, the update form states the appraiser has "updated the appraisal by incorporating the original appraisal report".
If the original report was completed for another client, then without obtaining a release for disclosing confidential information to the new client, I don't see how one can complete the assignment without violating the confidentiality section of the Ethics Rule.

So, in your case, Carol, if you are completing an update of an assignment for client B that was originally completed for client A, I think you do need a release (and, that is indeed what you are doing). The release is not needed to accept the new assignment but needed to relieve you from maintaining the confidentiality of the original assignment.
That may sound like a difference with no distinction in practice, but in the arcane world of regulatory oversight, it is (IMO) the difference between compliance and non-compliance.

My two-cents.