USPAP and Fannie Mae/Freddie Mac about data usage

[Raven59]

How do MLS providers handle appraisers who share logins or access data without being members of that MLS? Is this a common practice in your area? It gives the nonpayer an unfair advantage by reducing their cost of doing business, and it is theft, in my opinion. USPAP and specific client conditions for Fannie Mae and Freddie Mac loans offer some guidance about data usage, though they focus on different aspects of the appraisal process. Here are some thoughts to consider.

USPAP Guidance
1. Ethics Rule: USPAP emphasizes ethical conduct, which includes not engaging in any unethical behavior that might compromise the integrity of the appraisal process. The Ethics Rule requires appraisers to perform assignments with impartiality, objectivity, and independence and prohibits unethical conduct, such as sharing or using data without proper authorization.

2. Record Keeping Rule: Appraisers must maintain a workfile for each appraisal assignment, including all data and information used in the appraisal process. This includes MLS data if it is part of the analysis. If an appraiser is using data obtained indirectly through someone else's MLS membership, it could raise questions about the authenticity and reliability of that data.

3. Competency Rule: The Competency Rule requires appraisers to have the requisite knowledge and experience to complete an assignment competently. Access to comprehensive and accurate data is a component of competency, and relying on secondary sources for MLS data may not meet the competency requirement if it compromises the quality of the appraisal.

Fannie Mae and Freddie Mac Guidelines
1. Data Sources: Fannie Mae and Freddie Mac have specific requirements regarding the data sources used in the appraisal process. They expect appraisers to use reliable and verifiable sources of data. Appraisers are generally expected to have direct access to MLS or other credible data sources to ensure the accuracy and credibility of their appraisals.

2. Certifications and Statements: Appraisers must sign certifications that affirm the authenticity and accuracy of the data used in their appraisals. Using data obtained indirectly may put an appraiser at risk of violating these certifications, which could have severe consequences for the validity of the appraisal report and the appraiser's professional standing.

Best Practices
- Access to Data: Ideally, all appraisers should have direct access to the MLS or any other data sources they rely on. This ensures that they can independently verify and utilize the data accurately.
- Disclosure: If an appraiser uses data obtained through another party’s MLS membership, this should be disclosed in the appraisal report to maintain transparency.

Compliance with Client Requirements: Appraisers must comply with client-specific requirements, especially for Fannie Mae and Freddie Mac loans. Non-compliance could result in the appraisal being rejected or, nowadays, a tip letter being submitted.

Professional Memberships and Fees: Appraisers are professionally responsible for bearing the costs of maintaining the necessary data access tools, including MLS memberships. Avoiding these costs using another's access could be considered unprofessional and unethical.

In the case of the nonpayer, the appraiser indirectly obtaining MLS data should seek their own MLS membership to ensure compliance with USPAP and client-specific requirements and avoid any ethical or professional conflicts. Many residential appraisers travel and work in areas without authorized MLS access, yet their reports state that as the source. I'm polling to get a consensus on MLS data sharing. I'm sorry about the long post.

 

[Bob Ipock]

Hard to file a complaint without proof. I am speaking of filing a complaint with your local Board of Realtors or MLS provider. I would file a complaint for sure and certain if I suspected MLS theft. They have the ability to see where and computers are accessing their data. I despise a thief.

 

[CGinMN]

What about appraisers who use ideas and concepts generated by ChatGPT and then pass it off as their own. Is that misleading and unethical?

 

[Terrel L. Shields]

I ask other appraisers for help sometimes and they send me the link to the public version of the MLS, not the member's copy. 90% of the info you need is available by simply typing in the address in Google. Since AR BoRs are told by their legal counsel that financing info is "confidential" they don't provide it anyway. But since these recordings are generally public, it is a matter of pulling up the mortgage and looking at the bottom - FHA says FHA. FNMA or Freddy says the same at the bottom. There is a VA rider check box. You get the amount lent, the term and usually the interest rate. And the correct name of the buyers and sellers as well as the book and page can be found on the deed, and in OK and AR you also get deed stamps. Additionally, Arkansas requires an affidavit which says the exact amount of the sale on the deed. No rounding necessary. Actually using the log in does violate BoR rules.

 

[Surf Cat]

How do appraisers handle lenders that use their appraisals to input to Collateral Underwriter? Where's the confidentiality in that?

It's hard to fly straight in real estate when everyone else is flying sideways...

 

[Tom D]

our MLS is very strict about lending out your login. but they have a n associate MLS fee that is half of my fee. they will fine you if the find out. i don't worry about appraisers cutting costs, and just like parking without paying a meter. you can do it, it's always a gamble, sometimes you get a ticket.

 

[Joe Flacco]

I don't think MLS is so expensive that appraisers are sharing accounts.

 

[Raven59]

A local MLS found five appraisers were sharing a single login. Another board found an entire office of seven sharing. Due to limited business, many appraisers from outside the area have been conducting appraisals locally, some traveling 2-3 hours away. These appraisers are not paying for MLS services but are getting the comp sheets from someone. This puts the honest local appraiser at an unfair advantage. Our local MLS is not expensive but still costs $124 per month. I unfortunately pay for six boards a month so it adds up. I am ok sharing information with fellow appraisers but not because they are dodging fees.

 

[Terrel L. Shields]

t are getting the comp sheets from someone.

The public sheets are available to the public. In fact, Realtor. com has pretty much the identical one to the public sheets. So? With that, most folks can pretty much flesh out a reasonable comp analysis with a few public records (assessor field card, deed, and mortgage) Since we have a few brokers who are not members of the MLS nor the board locally, that's how we do it if we don't know whether one of the non-members handled the transaction or it was a private deal. The MLS sheets are neither the ultimate source of data nor the required source of data. You get what you can get when you can get it during "the normal course of business."

 

[Joe Flacco]

$124 x 5 per month is a lot.

Doesn't bright cover all of WV? I use bright and it's nice how bright covers multiple states and associations.