Switching from FHA to conventional

[Dale Floyd]

If the 1004D is an "independent assignment"--presuming with different filename and diffeent signature date but same Effective Date--and if the appraiser who is completing the 1004D also completed he 1004, would the 1004D require notification of prior involvement???

Yes - We comply with the prior involvement disclosure requirements for all new assignments when it is applicable, including the 1004D.

 

[Zoe]

The appraiser that did the original could have got sick or been injured had family medical emergency or something. So it no big deal to do the 1004d for another appraiser.

 

[rspappraisaer]

Would this not apply? Meaning you should not do it???

Per USPAP...Once a report is provided to a client, it cannot be tampered with. Changing the name of the client (readdressing) is misleading because it falsifies the true relationship between the appraiser and the party who engaged the appraiser in that particular assignment. It’s unethical for clients to request this, and for appraisers to comply with such requests.

Note: The Appraisal Standards Board of the Appraisal Foundation has provided additional guidance on these topics. See Advisory Opinion 25, Clarification of the Client in a Federally Related Transaction; Advisory Opinion 26, Readdressing (Transferring) a Report to Another Party; and Advisory Opinion 27, Appraising the Same Property for a New Client. Also see FAQ #120 which deals with “reliance letters.” These Advisory Opinions and FAQ are published with the Uniform Standards of Professional Appraisal Practice (USPAP).

 

[Zoe]

Would this not apply? Meaning you should not do it???

Per USPAP...Once a report is provided to a client, it cannot be tampered with. Changing the name of the client (readdressing) is misleading because it falsifies the true relationship between the appraiser and the party who engaged the appraiser in that particular assignment. It’s unethical for clients to request this, and for appraisers to comply with such requests.

Note: The Appraisal Standards Board of the Appraisal Foundation has provided additional guidance on these topics. See Advisory Opinion 25, Clarification of the Client in a Federally Related Transaction; Advisory Opinion 26, Readdressing (Transferring) a Report to Another Party; and Advisory Opinion 27, Appraising the Same Property for a New Client. Also see FAQ #120 which deals with “reliance letters.” These Advisory Opinions and FAQ are published with the Uniform Standards of Professional Appraisal Practice (USPAP).

Yeah, you have privity involved which is huge legal term. Privity is huge legal term that just don't apply to appraisals.

 

[Zoe]

FYI:

Privity Definition and Exceptions in Contract Law

Privity is a doctrine of contract law that says contracts are only binding on the parties signing the contract.

www.investopedia.com

priv·i·ty
[ˈprivədē]
noun
law
privity (noun) · privities (plural noun)

1. a relation between two parties that is recognized by law, such as that of blood, lease, or service:
   "the parties no longer have privity with each other" · "a warehouseman not in privity with the government"

Origin
Middle English (in the sense ‘secrecy, intimacy’): from Old French privete, from medieval Latin privitas, from Latin privus ‘private’.

 

[Dale Floyd]

Would this not apply? Meaning you should not do it???

Per USPAP...Once a report is provided to a client, it cannot be tampered with. Changing the name of the client (readdressing) is misleading because it falsifies the true relationship between the appraiser and the party who engaged the appraiser in that particular assignment. It’s unethical for clients to request this, and for appraisers to comply with such requests.

Note: The Appraisal Standards Board of the Appraisal Foundation has provided additional guidance on these topics. See Advisory Opinion 25, Clarification of the Client in a Federally Related Transaction; Advisory Opinion 26, Readdressing (Transferring) a Report to Another Party; and Advisory Opinion 27, Appraising the Same Property for a New Client. Also see FAQ #120 which deals with “reliance letters.” These Advisory Opinions and FAQ are published with the Uniform Standards of Professional Appraisal Practice (USPAP).

That is why there must be a new assignment. There is really no such thing as a conversion. If somebody wishes to give an appraisal to somebody else, and they want to use it, there’s nothing we can do about that. But the report and our compliance to the original specifics therein does not change unless there is a new assignment.

There was a great debate a few years ago about lenders sending a letter of release allowing appraisers to relinquish the client relationship in order to just change an existing report to a different client. That’s not allowed either. (There have been many attempts at skirting the rules.). People can’t just use a divorce decree with somebody else’s names on it, and insert their names instead proclaiming their divorcement. Appraisals are no different.

 

[Zoe]

That is why there must be a new assignment. There is really no such thing as a conversion. If somebody wishes to give an appraisal to somebody else, and they want to use it, there’s nothing we can do about that. But the report and our compliance to the original specifics therein does not change unless there is a new assignment.

There was a great debate a few years ago about lenders sending a letter of release allowing appraisers to relinquish the client relationship in order to just change an existing report to a different client. That’s not allowed either. (There have been many attempts at skirting the rules.). People can’t just use a divorce decree with somebody else’s names on it, and insert their names instead proclaiming their divorcement. Appraisals are no different.

yeah, VA will transfer an appraisal to another lender if Vet want to switch but original appraiser does not change the original report. The appraiser don't go back in and change the client name. A lender sends an appraisal to a GSE. The appraisal does not change.

 

[sputnam]

Would this not apply? Meaning you should not do it???

Per USPAP...Once a report is provided to a client, it cannot be tampered with. Changing the name of the client (readdressing) is misleading because it falsifies the true relationship between the appraiser and the party who engaged the appraiser in that particular assignment. It’s unethical for clients to request this, and for appraisers to comply with such requests.

Note: The Appraisal Standards Board of the Appraisal Foundation has provided additional guidance on these topics. See Advisory Opinion 25, Clarification of the Client in a Federally Related Transaction; Advisory Opinion 26, Readdressing (Transferring) a Report to Another Party; and Advisory Opinion 27, Appraising the Same Property for a New Client. Also see FAQ #120 which deals with “reliance letters.” These Advisory Opinions and FAQ are published with the Uniform Standards of Professional Appraisal Practice (USPAP).

Only, appraisal reports can be and are revised regularly... for various reasons... and USPAP allows it. When a report is revised, it's a new report... but not necessarily a new appraisal.

 

[ZZGAMAZZ]

That is why there must be a new assignment. There is really no such thing as a conversion. If somebody wishes to give an appraisal to somebody else, and they want to use it, there’s nothing we can do about that. But the report and our compliance to the original specifics therein does not change unless there is a new assignment.

There was a great debate a few years ago about lenders sending a letter of release allowing appraisers to relinquish the client relationship in order to just change an existing report to a different client. That’s not allowed either. (There have been many attempts at skirting the rules.). People can’t just use a divorce decree with somebody else’s names on it, and insert their names instead proclaiming their divorcement. Appraisals are no different.

Sooooo, does every client Letter of Engagement need to indicate that results as expressed in a signed appraisal report cannot also be provided to other entities, possibly potential competitor clients? Or is that implied because of the appraiser's obligation to USPAP via a cert? Etc? Etc?

 

[ZZGAMAZZ]

Only, appraisal reports can be and are revised regularly... for various reasons... and USPAP allows it. When a report is revised, it's a new report... but not necessarily a new appraisal.

Sooooo, an assignment as expressed by results of an appraisal report theoretically be provided to a different client, even with the same Effective Date, as long as the filename is different? I realize that what I'm asking contradicts established appraisal protocol, but doesn't my question address your perspective???