New USPAP Q & A October 2009

[hastalavista]

Denis-
...
Are we on the same page here?

-Lee

Lee, we are on the same page, but that page is muddied and unintelligible. :laugh:

I'll have to respectively disagree with you on this until TAF clarifies it further. My current interpretation of the Q&A is this:
You cannot accept a new assignment if the only change is the client's name. The reason is because it is the client who is directing the entire SOW process in this new assignment and that violates USPAP.

We haven't even talked about the retroactive nature of the request (a new assignment with an effective date in the past).
Or, how client identification is part of the first step in the valuation process (before SOW decision/development process).
And, as others have pointed out, acceptance of this new assignment opens a potential minefield of additional assignment-requirements which may be impractical or impossible given the retroactive nature of the value.

The title of ML2009-29 is "Appraisal Portability". In the letter, HUD already states

In cases where a borrower has switched lenders, the first lender must, at the borrower’s request, transfer the case to the second lender. FHA does not require that the client name on the appraisal be changed when it is transferred to another lender.

(my bold)
so the name change is an unnecessary step in Lender B's acceptance of the appraisal if Lender B intends to accept it as-is. However, if Lender B has additional requirements that the original report does not meet, then the SOW change is more than just a client-name, is it not? And, if the SOW change is more than just a client-name change, then it is inconsistent with the intent and specific wording of ML2009-29 which appears to be limited to changes of the client name only.

I would call this announcement confusing at best and self-contradicting at worst. :Eyecrazy:

I could be wrong. My guess is that some entity (I'd argue it is TAF) will need to clarify exactly what is and is not allowable and do so in a manner that does not require one to be an appraisal-process contortionist.

 

[Carnivore]

Denis

I think this name thing goes to the plain vanilla wrapper loan package. This way they package or sell it to anyone they want.

I really believe that all the standardization, which requires *******ization of USPAP is the whole story. They dont want any fences or gates. No pigien-holing.

How else will they mix in the bad stuff?

 

[CANative]

My guess is that some entity (I'd argue it is TAF) will need to clarify exactly what is and is not allowable and do so in a manner that does not require one to be an appraisal-process contortionist.

I don't need TAF or HUD to tell me what should be obvious to the most casual observer.

The only reason for the statement in the ML is to clarify (or change) the position of FHA on completing a new assignment for a different client within the shelf life of the appraisal and be more like the GSEs.

 

[hastalavista]

Denis

I think this name thing goes to the plain vanilla wrapper loan package. This way they package or sell it to anyone they want.

I really believe that all the standardization, which requires *******ization of USPAP is the whole story. They dont want any fences or gates. No pigien-holing.

I think you are right.
It is hard to explain any other way.

 

[CANative]

What caused the *'s in your post Andrew? F*a*r*t ilization?

 

[hastalavista]

I don't need TAF or HUD to tell me what should be obvious to the most casual observer.

:laugh:

Greg,
I don't need those entities to tell me what is trying to be achieved either.

I do need TAF to tell me how it is compliant with USPAP, however, so that if it is, I can do it (and not worry about some over-zealous regulator taking exception), or if it isn't, I can refuse (and not alienate a client who is just following the ML).

 

[CANative]

Just tell the new client to order an appraisal from you and you'll do the rest.

 

[rcsone]

...just tell the lender you are willing to "name change" for him in exchange for rate change from you..............best to all............rs

 

[Tres Kirkland]

MY BOLD

Tres,
I think your question has some merit. However understand these basics.

We are paid for our Time, our Experience and our Exposure. In essence when these things increase so should the compensation/fee charged.
While your Time to make just a name change is only minimal, and your Experience to change the name is not needed (anyone who can type can do it), your EXPOSURE has almost doubled with no additional monetary benefit.

It is a hassle, and I never said do it for free. My time is valuable too and am not going to work for fee, especially for a lender/client that I will probably never hear from again. I just don't feel right about charging for a new appraisal when I'm going to spend a fraction of the time doing the second report. Yes, we are getting paid by the lender, but they are passing those charges onto the borrower.

I agree with others who suggested listing the client as "FHA approved lender" or something of the like.

So, the question is what are we supposed to do when we get a request to do this. They are required by FHA to use your appraisal. So, if I do appraisal, new inspection with a new date etc... will that appraisal even be valid for FHA?

Bigger question, what do you do when the borrower has changed? This happened to me earlier this year for a purchase. The deal fell thru, and the new lender with new buyer still had to use my appraisal.

 

[Michael Tipton]

FHA could have just as easily eliminated their 6 month appraisal life reg, soon to be 4 months. We could then complete new assignments without having the "re-addressing" new assignment ML.

As stated earlier, this issue appears to be an appeasement to the secondary market. The ML did use may, not must "re-address".