Revision Request

[Fleegle]

We have all been asked, post report submission, to consider other sales. I have no problem with that, actually welcome any suggested sales. However, the AMC/Client is asking that I include my explanation of these suggested sales in a new revised report. I am happy to explain why I may or may not use their suggested sales, but I do not want to put this in a revised report. My report is for my opinion of the value on that day. It is not concerned with my evaluation of someone else's opinion. This could potentially lead to unlimited requests for resubmissions. How do you feel? They are pushing back and I wonder if I have legal precedent. Thanks.

 

[Michigan CG]

FNMA ML 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.


https://www.fanniemae.com/content/announcement/ll1502.pdf

 

[hastalavista]

To the OP:

Mich is providing an example of what he has for lenders/AMCs in cases of requests. ResGuy (and others) have similar language.
IMO, this is a business decision on their part and is their interpretation of what can be done under the current regulations. MichCG's is written so well that it almost looks like it is part of the regulation itself! You should know that there is no regulations or "legal precedent" that you originally asked for.

Now, here is the deal as far as I'm concerned:
You are not required to address the client's concerns in the appraisal. So, if you don't want to , you don't have to. Simple enough.
A likely reason the lender is requesting it be included in the appraisal is because it probably came from the borrower (or his/her agent). The lender is effectively telling the borrower, "You asked and we passed it on. It is all addressed in the report. Here's your loan based on your LTV."
Whomever made the ROV request is probably going to get your reply whether you put it in the report or not; from what you have stated, you don't have an issue responding; you just don't want to respond in the report. This is a business decision, and one that is completely up to you.

So, if your policy is not to address ROVs in appraisal reports, that is the way it is. If the client doesn't like it, so be it. If there is negative fallout because of this with the client, that's a risk (but if they were to lower your rating/assignment volume over this, maybe it isn't a client you want to keep).

Good luck!

 

[Ca Ar Independent]

from LL-2015-02

 

[hastalavista]

View attachment 35197

from LL-2015-02

That is a good excerpt, but to be clear:
That is in regard to a lender sending CU sales to appraisers.
Or, is that excerpt about all ROVs (CU, review, or outside stakeholder generated)?

And, I'm not trying to be a snark.

MichCG posts his reply to lenders: Quickly reading it, one might think it some official policy.
The excerpt you post is from Fannie itself, so it is official. But is it CU specific? Because if it is, then it may be misinterpreted to apply to all ROVs.

We don't know if the sales provided to the OP are from CU, a reviewer, or found in the bottom of the trashcan (and s/he might know where they came from either).
So all I'm pointing out is this: OP, before you take anyone's advice (mine included) make sure that advice fits the specifics of your situation.

 

[ucbruin]

Regarding the language ResGuy and MCG include in their addendums....
If I had their clients....
The only additional language I would include in the addendum...
"A minimum of 5 additional sales is required"....
$75 X 5 = $375.....

Now you're cooking with gas!!!!!

 

[TRESinc]

That is a good excerpt, but to be clear:
That is in regard to a lender sending CU sales to appraisers.
Or, is that excerpt about all ROVs (CU, review, or outside stakeholder generated)?

And, I'm not trying to be a snark.

MichCG posts his reply to lenders: Quickly reading it, one might think it some official policy.
The excerpt you post is from Fannie itself, so it is official. But is it CU specific? Because if it is, then it may be misinterpreted to apply to all ROVs.

We don't know if the sales provided to the OP are from CU, a reviewer, or found in the bottom of the trashcan (and s/he might know where they came from either).
So all I'm pointing out is this: OP, before you take anyone's advice (mine included) make sure that advice fits the specifics of your situation.

exactly this came up here just this week or last where people are taking the FNMA directive regarding CU sales and attempting to apply it to all ROV requests, which is not what it was about to begin with. denis hit the nail on the head - find out where the sales came from before you quote FNMA about CU sales being sent to the appraiser, and even them they still can provided they have analyzed them (and no, they do not have to provide the appraiser with that analysis, which sucks, but is the way it is).

 

[Ca Ar Independent]

 

[timd354]

FNMA ML 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.


https://www.fanniemae.com/content/announcement/ll1502.pdf

Mich, IMO you are setting yourself for a USPAP violation....IMO, the fact that you will waive the fee based on a certain result is a violation of the Management section of the USPAP Ethics rule, which prohibits a fee arrangement that is contingent on the attainment of a stipulated result (per the statement above, your fee is contingent upon the result of you finding the additional sales to not be superior to the sales in the report). Additionally, this type of arrangement also opens you up to the charge that you performed the assignment in a biased manner.

 

[Ca Ar Independent]

That is a good excerpt, but to be clear:
That is in regard to a lender sending CU sales to appraisers.
Or, is that excerpt about all ROVs (CU, review, or outside stakeholder generated)?

And, I'm not trying to be a snark.

MichCG posts his reply to lenders: Quickly reading it, one might think it some official policy.
The excerpt you post is from Fannie itself, so it is official. But is it CU specific? Because if it is, then it may be misinterpreted to apply to all ROVs.

We don't know if the sales provided to the OP are from CU, a reviewer, or found in the bottom of the trashcan (and s/he might know where they came from either).
So all I'm pointing out is this: OP, before you take anyone's advice (mine included) make sure that advice fits the specifics of your situation.

Excellent point Denis. It's been some time since a lender asked me to review comps KNOCK WOOD (probably since I don't work for Streetlinks and some of the others) but those of you that deal with this on a regular basis, do you ask for the source of the suggested properties for review to verify that said sales are not attempts at impacting value? I'm not being a snark either (although I love that word), but am curious who in actuality, is qualified to propose properties (not necessarily comparables) for us to review? I would think the only one even remotely qualified would be a certified appraiser with competency in our market area. Not a machine, QC clerk, offshore entity, real estate broker or the like.