Shopping homeowner wants appraisal transferred to new lender

[Tom Hildebrandt]

Doug

I understand why most appraiser think USPAP is confusing. But most appraisers are in real estate and do lending work exclusively, they often do not stop to think beyond this scope of work.

USPAP as a core document includes several other disciplines (business, personal property, mass appraising etc) and is not geared to lending per se.

Since most appraiser do this lending stuff and the various lending institutions have different addtional requirements (supplemental standards), the typical appraiser gets the impression that USPAP is the problem when in fact the confusion is from the wide range in the conflicting supplemental standards issued by these clients.

USPAP as a core document is pretty straight forward, it allows the appraiser a great deal of flexibility. However, it does place the responsibility on the appraiser for knowing and executing his work in accordance with those suppplemental standards. The majority of my posts on this forum and my comments in USPAP class are in explanation of supplemental, not core USPAP, standards issues.

This thread is an excellent example of this issue. All USPAP says is you must disclose any interest and the advisory opinions say that you should not change the title page. But the supplemental requirements confuse this simple concept. If lenders would adopt the core of USPAP, without providing supplemental requirements, all appraisers could treat the matter similarly, less confusion.

But alas, it is not a simple world. The client pays the bills, and if we do not serve the needs of the client, we will not have work. Our job is not to dictate to the client what he must have, but to provide him that service ethically and competently which is all USPAP requires.

Regards

Tom Hildebrandt GAA

 

[JeffMann]

The long and short of it is: Pamela is correct. Make sure the appraisal is noted as revised (and usually the reason for the revision) and a new date of signature.

Jeff

 

[Anonymous]

OR the really easy way out if dealing with mortgage companies, and you have already been paid...say no.

Nothing in USPAP requires you to update, recertify, etc. etc. any report you do. Tell 'em to kiss a frog. Made my day a while back when a borrower got turned down for a loan because of a lien against the vacant lot she (a realtor/borrower/builder) was trying to use for collateral. Starts in on me that I would HAVE TO send the report to Bank Z and NEEDED to up the value by $20,000 (amazingly, the exact amount of the judgment against her lot) and I said, no, lady, I don't have to do one blessed thing. End of story. (and I had already been paid by the bank who turned her down.)
ter of de ozarks

 

[Don Clark]

8)

For the record, VA Appraisals do not have to have a new lenders name in the client box when transferred from onle VA lender to another, at least not in the VA Roanoke Region.

However, even with the original clients authorization, I suggest everyone read the Appraisal Foundations thoughts on this found in the 100+ page outline of the USPAP Instructor Application at:

www.appraisalfoundation.org

Look specifically at: Scope of Work.

According to the Appraisal Foundation, in this outline, each time a report is transferred, moved, used for any purpose other than the original purpose, for the original person/party/client, a new scope of work must be developed. For that good friends, i charge a hefty fee.

Don

 

[Alan Simmons]

Not too long ago there was a paper on this subject over on the AI site (may still be there).

Basically it claimed that the Lender's Lawyers were advising them to get their name on any transferred reports. By such the Appraiser was documenting a client relationship with the Lender. Thus the new Lender is in a better position to hold the Appraiser accountable.

 

[Dee Dee]

While we're on this subject, I have a question.
One of my good friends was out 'shopping' for a loan and went to several different lenders before the last one warned her that, because of her shopping around, her credit score had dropped significantly. According to the last lender, every time her credit was checked her score dropped, and if she went any further in her shopping ventures that she would probably have a difficult time qualifying with anyone. This was news to me, I immediately assumed that the lender was just pulling a tactic to secure her as a client. When I asked one of my own broker/clients if this was true, she confirmed that it was. She said that a consumer looking for a lender could seriously damage their credit rating if they shop too much.

What say the rest of you? Any other information you can contribute to this?

 

[Pamela Crowley (Florida)]

Best idea I've come up with is for the shopper to pay for and pull their own. Then, they can copy it and give it to the lenders while shopping. Make sure the LO is EXPLICITLY told NOT to pull your credit until you've given them permission to.

LOs hate this and I just can't help enjoying it. (exception for my favorites)

 

[Dino Layton]

What about this...

Since the passage of the FIRREA laws in 1989/1990 retypes of appraisals, or the readdressing of an appraisal to a different user or client is not allowed under State and Federal Laws.

Over the past decade numerous lenders and mortgage brokers have not followed this law and as a course of daily business, regularly demanded that appraisers “retype, or readdress” appraisals from one lender’s or mortgage brokers name into a different lenders name. Ignorant or unethical appraisers have blindly followed the wishes/demands of their client in readdressing appraisals.

The FIRREA laws, Uniform Standards of Professional Practice (USPAP), Federal and State Laws allow appraisals that were created for one lender or mortgage broker to be utilized by a different lender, without the need for changing the name on the appraisal. Some individual lenders/brokers policy of retyping/readdressing appraisals appears to have been started out of ignorance on the part of the lender/broker.

Federal Government - Banking Agencies In a joint statement issued last fall by the federal financial institution regulatory agencies (the Office of the Comptroller of the Currency, the board of governors of the Federal Reserve System, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration) -
“... retypes violate the regulations of not only USPAP but those of the federal agencies listed above”.


The ASB’s January clarification on USPAP, in the form of the addition of Advisory Opinions 25, 26 and 27, stated, in part, “The intent of USPAP has never been to allow an appraiser to simply change the client’s name on a completed report and send it to a new client. These new Advisory Opinions underscore that any such report must be treated as a new assignment.” The Advisory Opinions followed a joint statement issued last fall by the federal financial institution regulatory agencies (the Office of the Comptroller of the Currency, the board of governors of the Federal Reserve System, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration).

 

[Mr Rex]

Dino is correct. Of course, the previous post was from 2002, and all of the AOs Dino referenced came after then.:new_smile-l: The other AF beat you to the punch Dino.

 

[Tina]

What about this...

Over the past decade numerous lenders and mortgage brokers have not followed this law and as a course of daily business, regularly demanded that appraisers “retype, or readdress” appraisals from one lender’s or mortgage brokers name into a different lenders name.

The currently frusterating thing is, I find myself STILL having to educate BANK LO's about this.... on COMMERCIAL jobs!

I have enough troubles keeping abreast of the regs without having to educate other "industry professionals?"

TB