I guess I don't really understand why, even with disagreeing and providing his own value, he would use a different effective date.
You are not alone in the misunderstanding. Let me provide you a possible reason:
In terms of an appraisal review for pre-funding of a mortgage loan, there are typically two questions which are addressed:
A. What is the quality of the work?
When evaluating the quality, the driver is based on the review SOW (what items are being reviewed) and on the effective date of the original report. So, the review must form an opinion of the original work based on what the data that was available as of the original appraisal's effective date and based on the original appraisal's SOW. I think all appraisers know this. If you are reviewing my work for a mortgage loan, you are going to tell the client how well I did in my analysis and reporting of my results.
B. What is the appraisal review's opinion of the value of the subject?
This is where the misunderstanding can arise.
If I am a lender, and I've received an appraisal I'm going to use to make a loan then, ideally, I want to make sure the value I'm using to calculate my LTV is still good right when I cut the check. To do this, I may ask the review appraiser to give me a
current value. The appraisal review has already told me what it thinks about the quality of the original appraisal report (let's assume its still my work and you find my quality to be acceptable). But I (the lender) still want to know if the value is supported. So, I ask you (the reviewer) to give ma a current valuation. That way, I can feel very confident when I pull the trigger and cut the check.
In your situation, the difference in dates is minimal and it would be unusual (but not impossible) for the reviewer to conclude a significantly different value. However, in times past (and certainly in times to come), the delay between obtaining the original appraisal and making the final loan decision could be weeks or months. When I used to do reviews for banks (and I did a lot of them), they would ask me, "Denis, tell us how well you think the original appraisal did (quality), and then tell us what you think the value is as of now (appraisal review value)."
The key is this: If I found the original appraisal work's quality to be acceptable, and I concluded a value different from the original report due to changes in market conditions or new data, my difference in value (which is based on a different effective date) could not be used as a reason to impugn the quality of the original appraisal.
And, indeed, sometimes that is what exactly happened: I found the original appraisal's quality to be fine, but due to the time-difference, I'd opine a different opinion of value.
Original appraisal report's quality: Good.
Original appraisal's OMV: $250k, as of 3/1/2007.
Appraisal review's OMV: $220k, as of 4/15/2007.
Different market conditions, usually different comparables, definitely a different effective date, and sometimes a different OMV.
Now, the GSE review form states that the effective date of the appraisal review is to be the same as the effective date of the original appraisal. But what many fail to realize is that, unlike the GSE origination forms (the 1004, etc.) the review forms have no prohibition about changing the SOW from the pre-printed text. So, a lender can use the GSE review form but instruct the review appraiser to use a SOW that is different from what is pre-printed.
When I did these reviews, I was able to convince my clients (1-bank, 1-credit union, and 1-mortgage bank) not to use the GSE review forms (which were different then anyway) and I used another, generic form. In that form, I included the review SOW so that if and when the original appraisal's appraiser received a copy, they could understand how the review worked and why it was layed-out as it was (unfortunately, few appraisers read the review and, like a loan officer, just looked at the value to see if there was a difference, and then went ballistic when they saw the comps used in the review were after their appraisal's effective date).
In summary, it is possible that the appraisal review did incorrectly value the subject under the review SOW if that SOW required the review appraiser to form an opinion of value as of the same effective date. But it is equally possible that the appraisal review did exactly what its SOW required, and did it in a manner that is fully USPAP compliant.
If I had my way, I'd make all residential appraisers take a review class even if they do not have any intention of ever doing review work. I cannot tell you how many non-issue disputes I would get into because the appraiser didn't understand that the SOW for the review appraisal's valuation was different than the SOW for the original value. For most, once they understood, their issue dissolved. Still, some would tell me,
"that's not right, you should only base your value on the same date as I did!"
When I asked how helpful was that if the lender wanted the most current value possible, the response was usually something like
"that's their problem!"
Good luck. :new_smile-l:
