Re-assign prohibition reference

[Fred]

You cannot add what is in effect a new “intended user” after the completion of an as-signment, no matter what terminology you use.

I having trouble finding that rule.

 

[Wayne Tomlinson]

The banking and the OCC and other regulations allow one regulated bank to use an appraisal prepared for another bank any time that they want to. That is within there ability. We used to get permission from the original client to allow the name change. Not now!

They want their name on it, so they want it "re-addressed" which is specifically denied in our state law, and also in federal regulations.

The lenders want their name on it and they want the appraiser to make it look that way.

Tell them that what they are asking for in a new appraisal, which you will be happy to do for them, leave it in the new lenders court.

Wayne Tomlinson

 

[Farm Gal]

tain't no rule, its more of a guideline, maybe...

Steven I cited my source, where did your search skills disappear to?... or were you being your usual scathing self when it comes to 'documentation quoted as 'rooles' by other than the USPAP???
Direct link to full source:USPAP Q&A Vol. 8, No. 12 December 2006

I did not cite what I quoted as a 'rule', merely as a way to divert the problem back onto the source... from a theoretically reliable and reputable source called the Appraisal Foundation

I did not cut out all the hypens found in MY on-line source sorry folks!:blush:

 

[Lee Lansford]

I having trouble finding that rule.

USPAP, Definitions: Intended User.

Yes, not a "rule"...but, within the definition.

 

[Mike Garrett RAA]

Just fax her a copy of Advisory Opinion 26 (AO26).

 

[CANative]

I'm sure there's a rool somewhere in USPAP that prevents an appraiser from selling or giving away a clients confidential information or assignment results.

 

[Doug Trites]

This is only a small part of the letter....

Office of the Comptroller of the Currency
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of Thrift Supervision
National Credit Union Administration

INDEPENDENT APPRAISAL AND EVALUATION FUNCTIONS

October 27, 2003
The agencies’ appraisal regulations address appraiser independence and require that an institution, or its agent, directly engage the appraiser. The only exception to this requirement is that an institution may use an appraisal prepared for another financial services institution, provided that the institution determines that the appraisal conforms to the agencies’ appraisal regulations and is otherwise acceptable. Independence is compromised when an institution uses an appraiser who is recommended by the borrower or allows the borrower to select the appraiser from the institution’s list of approved appraisers.

Institutions may not use an appraisal prepared by an individual who was selected or engaged by a borrower. An institution’s use of a borrower-ordered appraisal violates the agencies’ appraisal regulations. Likewise, institutions may not use “readdressed appraisals” – appraisal reports that are altered by the appraiser to replace any references to the original client with the institution’s name. Altering an appraisal report in a manner that conceals the original client or intended users of the appraisal is misleading and violates the agencies’ appraisal regulations and the Uniform Standards of Professional Appraisal Practice (USPAP).

This is a FDIC ruling I keep on my desktop and send to callers just like you have recieved. If you want the exact ruling number PM me and I will send it to you on Monday. Happy Thanksgiving

 

[Functional Obs]

See, that is way more than I tell them. I prefer to make it a lot simpler for them:

"Mr. LO, I was sitting here watching a subtitled telenovela and updating my facebook page when you interrpted me to tell me that what I ought to be doing instead is working. So you want me to drop what I'm doing, break some silly rules, AND, since you've determined there is really no work involved int his, NOT pay me. Ummm, no."

Rachel, please look over this (especially highlighted area below) and tell me how you would like to proceed.

The appraiser may not reissue, retype, re-certify, update, transfer or otherwise pass an appraisal report prepared for one lender/client to another lender, client, party, person or entity. A new lender requires a new appraisal order, as defined by the current interpretation of USPAP.

Unfortunately it is no longer ethical for an appraiser to readdress an appraisal. In the past this was done and sometimes the readdressing of appraisals led to fraud.

Our State Board, the AQB and the Appraisal Institute have addressed this issue and our licensing and designation does not permit readdress appraisals.

This standard falls under the Ethics Rule of USPAP. I have attached selected portions of USPAP addressing this and Advisory Opinions related to this for your review.

The Standards Rule does make this difficult, but was unfortunately deemed necessary because of actions of certain unscrupulous people.

The way I think the way this is handled these days is to request from the original client a letter transferring the appraisal to the new client. I certainly want to help in any way I can.

Call me to visit about this if you think I can help.


Timothy S Evans, Certified General Appraiser







________________________________________

ADVISORY OPINION 26 (AO-26)
This communication by the Appraisal Standards Board (ASB) does not establish new standards or interpret existing standards. Advisory Opinions are issued to illustrate the applicability of appraisal standards in specific situations and to offer advice from the ASB for the resolution of appraisal issues and problems.

SUBJECT: Readdressing (Transferring) a Report to Another Party

APPLICATION: Real Property, Personal Property, and Intangible Property

THE ISSUE:

After an assignment has been completed and the report has been delivered, an appraiser may be asked to “readdress” (transfer) the report to another party. Does USPAP allow an appraiser to “readdress” (transfer) a report by altering it to indicate a new recipient as the client or additional intended user when the original report was completed for another party?

ADVICE FROM THE ASB ON THE ISSUE:
Relevant USPAP & Advisory References
Illustrations


Relevant USPAP & Advisory References (AO-26)
 The Confidentiality and Conduct sections of the ETHICS RULE.
 Standards Rules such as 1-2(a) and 1-2(b); 7-2(a) and 7-2(b); and 9-2(a), which require an appraiser to identify the client, intended users, and intended use.
 Standards Rules such as 2-1(a), 8-1(a), 10-1(a), which require an appraiser to clearly and accurately set forth the appraisal in a manner that is not misleading.
 SUPPLEMENTAL STANDARDS RULE, which requires an appraiser to ascertain whether supplemental standards apply to the assignment in addition to USPAP.
 Statement on Appraisal Standards No. 9 (SMT-9), which requires the appraiser to identify and disclose the client and intended users and the intended use in an appraisal, appraisal review, or appraisal consulting assignment.
 Statement on Appraisal Standards No. 10 (SMT-10), which describes applicability of USPAP in federally related transactions.
 Advisory Opinion 25 (AO-25), which covers clarification of the client in a federally related transaction.
 Advisory Opinion 27 (AO-27), which addresses appraising the same property for a new client.
No. Once a report has been prepared for a named client(s) and any other identified intended users and for an identified intended use, the appraiser cannot “readdress” (transfer) the report to another party.

USPAP defines the Client as:

The party or parties who engage an appraiser (by employment or contract) in a specific assignment (bold added for emphasis).

Assignment is defined as:

A valuation service provided as a consequence of an agreement between an appraiser and a client (bold added for emphasis).

Intended Use is defined as:

the use or uses of an appraiser’s reported appraisal, appraisal review, or appraisal consulting assignment opinions and conclusions, as identified by the appraiser based on communication with the client at the time of the assignment (bold added for emphasis).

Intended User is defined as:

the client and any other party as identified, by name or type, as users of the appraisal, appraisal review, or appraisal consulting report by the appraiser on the basis of communication with the client at the time of the assignment (bold added for emphasis).

Identification of the client, any other intended users, and the intended use are key elements in all assignments. Because these identifications drive the appraiser’s scope of work decision, as well as other elements of the assignment, they must be determined at the time of the assignment. They cannot be modified after an assignment has been completed. See Statement on Appraisal Standards No. 9 (SMT-9) for further clarification.


Illustrations (AO-26)
Question #1
An appraiser was engaged by Client A to appraise a property. The appraiser delivered the appraisal report to Client A. The client has decided not to pursue the transaction that generated the need for the appraisal report. The appraiser is contacted by Client B. Client B requests that the original report be readdressed (transferred) by replacing Client A’s name with Client B’s name in the report. Is this acceptable?
No. Simply changing the client name on the report cannot change or replace the original appraiser-client relationship that was established with Client A. Therefore, this action is misleading.
Question #2
How can this circumstance be handled according to Standards?
The appraiser can consider Client B’s request as a new assignment. In so doing, the appraiser may establish a new appraiser-client relationship with Client B and appraise the property for this new client. Important considerations, i.e., confidential information and other factors are further addressed in AO-27 – "Appraising the Same Property for a New Client".
Question #3
Why might Client B want their name on the report that was completed for Client A?
Client B may want to establish an appraiser-client relationship because it provides all the rights, obligations, and liabilities such a relationship places on the appraiser.

A prudent method to establish an appraiser-client relationship is to have a written engagement letter or contract with any client at the time of the assignment.
This Advisory Opinion is based on presumed conditions without investigation or verification of actual circumstances. There is no assurance that this Advisory Opinion represents the only possible solution to the problems discussed or that it applies equally to seemingly similar situations.

Approved June 27, 2003




© Copyright 2006 - The Appraisal Foundation

 

[Carnivore]

The other reference source I use is from the OTS.(see attached) Its important to cite both(ots and occ) sources for appraisal/regulated Institutions regulations when you run into Bank employees who are ignorant of their job requirements or when they spout drivel.

Attached is for your use.

I rarely have a problem, but like another tarheel on this thread said, Regulated institutions must follow their rules as well.


Steven S, Thanks for confirming the currency of my first citation.

 

[Pamela Crowley (Florida)]

For both OCC/FDIC/etc letters:

http://appraisersforum.com/showthread.php?t=77681