Recertification, New Assignment or Neither

[Mark Ziegler]

Cannot change from Purchase to Refinance without it being a new assignment. The purpose of the appraisal is a pretty big deal. You can however, do a new appraisal for the sale client with the same effective date with the purpose being for a refinance, as long as the client is clear in the engagement letter. If they said Oops made a mistake want a refinance appraisal instead of a purchase appraisal, still treat it as a whole new assignment and clearly document your workfile, etc. Don't want to end up in appraiser jail because of the client's over sight.

Thanks Sadie. I'm beginning to feel maybe I wasn't clear enough. Please explain how I can do a new appraisal with the same effective date on a subject property the stated borrower didn't own as of said effective date. Seems that's "appraiser jail" for sure. Thanks.

 

[DWiley]

Cannot change from Purchase to Refinance without it being a new assignment. The purpose of the appraisal is a pretty big deal. You can however, do a new appraisal for the sale client with the same effective date with the purpose being for a refinance, as long as the client is clear in the engagement letter. If they said Oops made a mistake want a refinance appraisal instead of a purchase appraisal, still treat it as a whole new assignment and clearly document your workfile, etc. Don't want to end up in appraiser jail because of the client's over sight.

Can you show us in USPAP where transaction type is included in the assignment elements?

In appraisal terms, the “purpose” refers to the type and definition of value.

 

[Sadie]

Can you show us in USPAP where transaction type is included in the assignment elements?

In appraisal terms, the “purpose” refers to the type and definition of value.

Thanks Sadie. I'm beginning to feel maybe I wasn't clear enough. Please explain how I can do a new appraisal with the same effective date on a subject property the stated borrower didn't own as of said effective date. Seems that's "appraiser jail" for sure. Thanks.

 

[Sadie]

You can't. I think I had a reading comprehension problem. If the client wants another appraisal, I think you need to reinspect subject, have a new effective date. I would reuse the comps unless something better has popped up. Don't make their problem, your problem.

DWiley: Its SOW Rule . if you don't know that basic (Identify problem to solve, Intended Use), maybe retake USPAP.

 

[DWiley]

You can't. I think I had a reading comprehension problem. If the client wants another appraisal, I think you need to reinspect subject, have a new effective date. I would reuse the comps unless something better has popped up. Don't make their problem, your problem.

DWiley: Its SOW Rule . if you don't know that basic (Identify problem to solve, Intended Use), maybe retake USPAP.

Perhaps your copy of USPAP differs from mine. In mine the SOWR cites six assignment elements, just as it did when I helped write it. That list does not include transaction type.

 

[Sadie]

Perhaps your copy of USPAP differs from mine. In mine the SOWR cites six assignment elements, just as it did when I helped write it. That list does not include transaction type.

Perhaps I should have said intended use. The intended use for the first is purchase, for the second refinance.

 

[DWiley]

Perhaps I should have said intended use. The intended use for the first is purchase, for the second refinance.

I think that if you look at the GSE forms you will find that the same intended use statement is used regardless of the transaction type.

 

[Sadie]

Perhaps I should have said intended use. The intended use for the first is purchase, for the second refinance.

And it does go to scope of work. I bet dollars to donuts that your assignment letter for a residential appraisal for a lender includes transaction. So yeah it is USPAP SOW rule.

 

[Sadie]

I think that if you look at the GSE forms you will find that the same intended use statement is used regardless of the transaction type.

Its not just the form, its the assignment letter/engagement letter that sets your SOW. Forms are just forms. All of your engagement letters from a lender will state the purpose of the loan, refinance or purchase or something else.

I think that if you look at the GSE forms you will find that the same intended use statement is used regardless of the transaction type.

Where did the form boilerplate come into this discussions? The scope of work was determined by engagement letters.

 

[DWiley]

Its not just the form, its the assignment letter/engagement letter that sets your SOW. Forms are just forms. All of your engagement letters from a lender will state the purpose of the loan, refinance or purchase or something else.

Where did the form boilerplate come into this discussions? The scope of work was determined by engagement letters.

It came into play because you cited intended use. But when I look at appraisal reports I don’t see appraisers using a different IU statement for a refi versus a purchase. You can’t just keep citing the SOWR and then ignoring what the rule actually says. . The SOw is driven by the six items in the assignment elements list provided in the SOWR.

But I am very curious, other than analyzing a contract, what do you do differently for a purchase vs a refi?