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Reassignment Not Necessary?

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David S. Roberson

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Tennessee
I've seen this posted here before, and now I have a banker (not a broker-decent guy) who asked me about the regs for transferring an appraisal from one lender to another. I mentioned that I had read here that it is not necessary to change the Lender's name, that a lender could use an appraisal with another lender's name on it. He said "Really? Where did you read that?" So.......HELP! Where can I find documentation on this?
 

Terrel L. Shields

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PPS - What is requires is that they REVIEW it but not necessary to get a new cover letter. That's why they want a new cover letter. You give that away free. A Review costs them money.
 

Sheikh Yerbouti

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Jan 15, 2002
Professional Status
Certified General Appraiser
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Arizona
Next time some broker or lender you never heard of calls for a reassignment, ask him or her why they need it. When they fumble for an answer, I tell them it's because they want to secure their loan with my E&O, and for that additional liability I charge the same as for a new appraisal. They don't need their name on it to be able to use it.
 

Frederick R. Ruffell

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Jan 21, 2002
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Certified General Appraiser
State
California
Dave,
It is also my underatanding that the REPORT (not to be confused with the appraisal) is not yours (the appraiser) to give untill your original client has given you the OK to do so. This being so, I tell them to ask the original client for it, if they get it then they useually want you to change it and that is when I tell them my fee, and it is the same as a new appraisal. Sometimes the original client will send you a release of liability and the new lender wants you to provide a copy, and that is when I tell them my fee, and it is the same as a new appraisal. You see it is not so much the amount of work as the amount of liability.
 

David S. Roberson

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Certified Residential Appraiser
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Tennessee
Thank you, thank you, thank you! This site is truly an invaluable tool for any appraiser!
 

Frederick R. Ruffell

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Jan 21, 2002
Professional Status
Certified General Appraiser
State
California
David,
I believe it is also somewhere in the FNMA selling guide. There is a FNMA forum here and the moderators and posters on that forum are very good at finding the exact section(s). Just go up to the top of the page and click on the index and then on that forum and post your question.
 

George Hatch

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Certified General Appraiser
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California
PPS - What is requires is that they REVIEW it but not necessary to get a new cover letter.

The main reason they have to review it is to ensure that it meets their requirements, that is, that the appraisal was engaged by a federally regulated institution or its agent, and that the appraisal report otherwise satisfies their requirements under FIRREA. While they can accomplish these elements with a technical review by an appraiser (who can also delve into aspects of the appraisal itself), they can also accomplish all of these goals with an administrative review by a non-appraiser. Most lenders would probably go with the technical review just so they can have some confidence in an appraisal that was performed by an unknown (to them) appraiser. But if the appraisal had been performed by one of their regulars or the LTV was so low that the value wasn't an issue then they wouldn't necessarily have any reason to get a technical review.

Bottom line here is that accepting an appraisal prepared for another lender need not even cost the new lender any review fees. It just depends on the situation and how cautious the new lender is. I think that in many cases the 'need' to have their own name on an appraisal report isn't even part of their internal requirements as written, it's simply a misconception on their part. One of those urban myths in Lenderland.


George Hatch
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Yes, I really like Dave's and Frederick's replies about 4 and 5 above me here ! Have always known that Client B has full discretion to accept and use Client A's report....it's the twist involving the E&O thing that is interesting. Sure, change the name after you get that letter of consent from Client A....and charge the same full fee ! When they get all bent out of shape over that....one should remind them that...."overnight services for delivering that fee will allow me to make that change immediately and PDF the "new" report to you tomorrow" ! You want my extended liability ?... full (original) fee sounds very reasonable. Imagine, a client getting a full 1004 report with which they can "do their deal"....in 24 hours from the time of "ordering" it. Now, that, is fast service ! See how the Intended User thing is going to be a feather in our cap ! ?
 

Terrel L. Shields

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May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Here's another spot you find the answer

"So even if the appraisal is addressed to Bank A, per regulation Bank B can use it. (AO 10, Lines 51-57) "
 
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