• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Reconsideration Of Value And The Law

  • Thread starter Deleted member 130081
  • Start date
Status
Not open for further replies.
D

Deleted member 130081

Guest
I have combed through the forum looking for answers and thought it might be good to have a thread title more specific, so here it is.

I am wondering exactly what law states we must reconsider the value? Is there even one? I found the Dodd Frank that says it is not illegal for a lender to request we consider additional data to support our valuation - but that's all I found. I was under the impression, and maybe wrongly, that we were obligated to reconsider value so long as it was asked the "right" way.

I could use any insight here and I would guess others could too. Thanks!
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
It's often in engagement letter with a client that appraiser agrees to consider additional information (or however they word it)
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
I have combed through the forum looking for answers and thought it might be good to have a thread title more specific, so here it is.

I am wondering exactly what law states we must reconsider the value? Is there even one? I found the Dodd Frank that says it is not illegal for a lender to request we consider additional data to support our valuation - but that's all I found. I was under the impression, and maybe wrongly, that we were obligated to reconsider value so long as it was asked the "right" way.

I could use any insight here and I would guess others could too. Thanks!

:clapping::clapping::clapping: Thank you.

Here is the answer to your question.


Truth in Lending Act §226.42 Valuation independence.

(3) Permitted actions. Examples of actions that do not violate paragraph (c)(1) or (c)(2) include:


(i) Asking a person that prepares a valuation to consider additional, appropriate property information, including information about comparable properties, to make or support a valuation;

https://www.gpo.gov/fdsys/granule/C...2012-title12-vol3-part226/content-detail.html

and

Truth in Lending Act §1026.42 Valuation independence.

(3) Permitted actions. Examples of actions that do not violate paragraph (c)(1) or (c)(2) include:

(i) Asking a person that prepares a valuation to consider additional, appropriate property information, including information about comparable properties, to make or support a valuation;

page 618 bottom left.



https://www.gpo.gov/fdsys/pkg/CFR-2012-title12-vol8/pdf/CFR-2012-title12-vol8-part1026.pdf

It's often in engagement letter with a client that appraiser agrees to consider additional information (or however they word it)

HOW it is worded, and IF the subject is the primary dwelling of the borrower, will determine if it is within the law to even put in a letter of engagement. Just because it's an assignment condition, does not make it a legal assignment condition.


Truth in Lending Act §226.42 Valuation independence.
(c) Valuation of consumer’s principal dwelling—(1) Coercion. In connection
with a covered transaction, no covered person shall or shall attempt to directly or indirectly cause the value assigned
to the consumer’s principal dwelling to be based on any factor other than the independent judgment of a person that prepares valuations,
through coercion, extortion, inducement, bribery, or intimidation of, compensation or instruction to, or collusion with a person that prepares valuations
or performs valuation management functions.

page 475 right side, middle

https://www.gpo.gov/fdsys/pkg/CFR-2012-title12-vol3/pdf/CFR-2012-title12-vol3-part226.pdf

.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
USPAP says that client requirements, either decline the order if find unacceptable requirements, but if accept order then not fulfilling client requirement is a violation of USPAP. I dislike that part of USPAP in fact I hate it, but it exists.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
USPAP says that client requirements, either decline the order if find unacceptable requirements, but if accept order then not fulfilling client requirement is a violation of USPAP. I dislike that part of USPAP in fact I hate it, but it exists.

Wrong again J.

No one can make you contract to do something that is against the law.

By your logic, if the client has an assignment condition that you are to pick up and take all credit cards found in the home during your inspection, you would have to do that to meet USPAP Assignment condition rules.

That is wrong. you do not have to comply with anything that is illegal, or in violation of the laws and regulations that apply to you or the assignment.

Yes, you can turn the assignment down, but as we all know, those assignment conditions just happen to pop up as scope creep, so once you're in for a penny, you're in for a pound.

Stop believing AMCs have carte blanch to everything, because they don't.

Read the laws and regulations that apply to the assignment, which included more than just USPAP, and for CR lending work, included IAEG, TILA, Dodd Frank, AMC final Rule, Fannie Selling Guide, and when necessary FHA, USDA and VA guidelines.
Then try again with answering the "client requirement" kool aid crap.

.

.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
considering additional sales is against the law?? Source please for that. Making an appraisers use certain sales as comps would be against the law but asking an appraiser to look at sales is not.

Why would Dodd Frank allows it if it is "against the law"??

Read USPAP for yourself on the topic of client requirements. Of course we turn down unacceptable assignment conditions.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Reading comprehension truly is an issue for you,

Read both of my above posts and try again J.

.
 

Rick Stillman

Senior Member
Joined
Jan 19, 2014
Professional Status
Certified Residential Appraiser
State
Colorado
Here's what I use;

Considerable time and effort is put into qualifying comparable sales as they must be researched, analyzed, inspected, and verified with the parties of that transaction. (see above for more detail) Reconsideration of other sales as a comparable must have the same due diligence.

FNMA LL 2015-02 clearly states: "Before asking the appraiser to consider any alternative sales, it is imperative that the lender analyze the relevance of the sale and determine if the use of such sale would result in any material change to the appraisal report". Therefore, if the appraiser is requested to review any other sales after the effective date, the appraiser will only accept the order to review the sale(s) if the following two (2) conditions are met:

1) A summary submitted from the lender/client or AMC showing their analysis supporting the premise that their sales are superior to that of the sales used in this report, with the understanding that closer proximity or more recent date of the sale does not mean it is a better indicator of value, as clarified above.

2) The lender/client must agree to pay a fee of $50* per sale reviewed, plus a minimal $75* inspection trip fee, which may be greater depending on mileage and drive time incurred.

*These fees will be waived and the report will be revised to include additional sales IF they are found by the appraiser to be superior to the sales used in this report and their use results in a material change to the appraisal report.



My business is run on the principal that the customer can get anything they want, if applicable and legal. But I decide the price. This is fair to me, and the customer. If they want something for nothing, however, I direct them to call 1-800-Dog-Poop (it's a real number) as they give out free samples. Yes, FREEEEE ~
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Here's what I use;

Considerable time and effort is put into qualifying comparable sales as they must be researched, analyzed, inspected, and verified with the parties of that transaction. (see above for more detail) Reconsideration of other sales as a comparable must have the same due diligence.

FNMA LL 2015-02 clearly states: "Before asking the appraiser to consider any alternative sales, it is imperative that the lender analyze the relevance of the sale and determine if the use of such sale would result in any material change to the appraisal report". Therefore, if the appraiser is requested to review any other sales after the effective date, the appraiser will only accept the order to review the sale(s) if the following two (2) conditions are met:

1) A summary submitted from the lender/client or AMC showing their analysis supporting the premise that their sales are superior to that of the sales used in this report, with the understanding that closer proximity or more recent date of the sale does not mean it is a better indicator of value, as clarified above.

2) The lender/client must agree to pay a fee of $50* per sale reviewed, plus a minimal $75* inspection trip fee, which may be greater depending on mileage and drive time incurred.

*These fees will be waived and the report will be revised to include additional sales IF they are found by the appraiser to be superior to the sales used in this report and their use results in a material change to the appraisal report.



My business is run on the principal that the customer can get anything they want, if applicable and legal. But I decide the price. This is fair to me, and the customer. If they want something for nothing, however, I direct them to call 1-800-Dog-Poop (it's a real number) as they give out free samples. Yes, FREEEEE ~
:clapping::clapping::clapping:
 
D

Deleted member 130081

Guest
Wrong again J.

No one can make you contract to do something that is against the law.

By your logic, if the client has an assignment condition that you are to pick up and take all credit cards found in the home during your inspection, you would have to do that to meet USPAP Assignment condition rules.

That is wrong. you do not have to comply with anything that is illegal, or in violation of the laws and regulations that apply to you or the assignment.

Yes, you can turn the assignment down, but as we all know, those assignment conditions just happen to pop up as scope creep, so once you're in for a penny, you're in for a pound.

Stop believing AMCs have carte blanch to everything, because they don't.

Read the laws and regulations that apply to the assignment, which included more than just USPAP, and for CR lending work, included IAEG, TILA, Dodd Frank, AMC final Rule, Fannie Selling Guide, and when necessary FHA, USDA and VA guidelines.
Then try again with answering the "client requirement" kool aid crap.

.

.

Thanks for the reply. I have been coming to the same conclusion, that asking to reconsider value is not legal. However as Rick points out, FNMA has directive on the issue, so where does that fit in? Are they offering directive for activity that is actually illegal under Dodd Frank? Perhaps they have not caught up?

Second point, FNMA Selling Guide has nothing to do with the appraiser. Considering you are very good at comprehending when or when not something is applicable, I first wonder why you cite it in the post above and second wonder if you know something I don't. The Selling Guide is between the originator and FNMA. Even if an assignment condition cites it, it is irrelevant due to the nature of what it is. Asking the appraiser to "follow" it or "adhere" to it is nothing short of asking the fox to guard the chickens, as everything in there concerning appraisals are guidelines for the underwriter to test the appraisal for adequacy. Thoughts?
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks