USPAP class for the thirteenth time

[djd09]

The saying is, “you can’t teach an old dog new tricks”. Are you a dog?
I have been appraising for 33 years. I have taken almost 20(?) USPAP courses. I always learn something. I take courses and attend the Summits. I say the 95/5. 95 percent is confirming what I already know and 5 percent is, “Huh! Didn’t know that!”

I can confirm this with just recently we had a post about doing another appraisal on a property with a different lender. The OP asked about getting a letter to “transfer” an appraisal to a different lender. The OP and many of the posters didn’t know the rules of 1. Not transferring an appraisal and 2. You can do a new appraisal with no letter if the original client didn’t have a “no new appraisal clause” in their engagement letter.

CFPB Addresses ASC Appraisal Bias Hearings and Structure of The Appraisal Foundation​

Deficient conflict of interest policies. The CFPB states the Foundation’s policies and procedures governing conflicts of interest are much narrower and less specific and do not prohibit many types of conduct covered by the conflicts of interest policies applicable to federal agency employees, and do not prohibit many types of conduct covered by the federal policies. Director Chopra states that, despite claiming to have policies similar to those applicable to federal agency employees, the Foundation’s policies do not address matters like accepting gifts from industry stakeholders, working with vendors where there is a financial interest for a Foundation employee or their spouse, or giving preferential treatment to certain individuals or organizations operating within the industry.

Insular governance structure favors private interests. The CFPB states that the Foundation’s governance structure favors parties that are able to pay more, due to the method of selecting the Board of Trustees. Until a recent change in the structure, paying Sponsors selected around half of the BOT members. The remainder were elected by that same Board, and many of these elected trustees were members of Sponsors. The CFPB has found that, even after updates to the bylaws, the process has not changed substantially, and current trustees can still elect a full slate of new trustees from companies contributing financially to the Foundation.

Lack of transparency for processes, including the selection of the Foundation’s President. The CFPB states the Appraisal Foundation has stopped allowing ASC staff to attend closed deliberations of applicants to Foundation boards, and has given shifting explanations for this shift in testimony. Director Chopra states that the Foundation’s President noted that historically ASC staff attended “just about all” meetings, and that the President also conceded at his hearing appearance that . . . “we were concerned about the conduct of some ASC observers.” Both the CFPB and Director Chopra note that the Foundation is in the process of selecting a new President. Director Chopra states that although the Foundation originally sought input from ASC and an outside consultant, it now refuses to respond to feedback offered by ASC and has not given the ASC access to deliberations or any role in reviewing candidates. Director Chopra also states that while the President stated that he was “not involved in” and had “stayed out of” the process of choosing his replacement, he later admitted that he had made suggestions as to who his successor should be. Finally, Director Chopra states that the President opined that the Foundation would not seek ratification of its new President from the ASC.

Director Chopra concludes his remarks with the following:

“The Appraisal Foundation is essentially a lawmaking body that is neither accountable to the public nor subject to competitive market forces. These issues are deeply troubling as The Appraisal Foundation is one of the most, if not the most, powerful player in America when it comes to appraisals and plays a controlling role in key issues contributing to appraisal bias. As long as The Appraisal Foundation remains an insular body controlled by a small circle, operating behind closed doors, those issues will continue to go unaddressed.”

https://www.consumerfinancemonitor....gs-and-structure-of-the-appraisal-foundation/

i dont need to stick my finger in the electrical socket 13 times to know what is about to happen...

 

[Terrel L. Shields]

many appraisers still don't know USPAP

Since it is disgustingly boorish, some folks have trouble concentrating on the message. I can sympathize with that sentiment. Furthermore, the selling guide, 4000.1, and the form itself leads to a quasi-USPAP - a sort of blend between teaching techniques and teaching compliance. And USPAP facilitates that mindset by a SOW being dictated by the lenders while explaining the appraiser is in charge of the SOW...right. The FNMA is play ball with us or we'll cram the bat up your ***.

That even humans can do

And soon even robots can do - I wonder if the AI robots have to take USPAP too...

Whenever I read or hear the word "stakeholder" it seems like some serious BS is sure to follow.

Stakeholder reminds me of Count Dracula

 

[Terrel L. Shields]

For 30 years we have the sort of soup de jour on a periodic basis - Big deal in early 90s was environmental disclosures. Took environmental class for qualifying ed for CR only to have it disallowed for CG qualifying ed. So, had to take another qualifying class. Then technology took center stage until after the dotcom bust. Next was flips and frauds...dozens of classes on that. Now not so much. Then REOs REOs and all the nonsense along with that. And as the Crescendo increases towards it climax, it's all about race. And in a parallel universe, we have to bifurcation of reports, the confusion of what is the needs of the bankers, and all heading towards a new downturn that will not be blamed upon those who deserve the blame. ....those pesky stakeholders

 

[George Hatch]

The lender of GSE or other user decides what development and reporting will be meaningful and not misleading to their usage. The appraiser decides what SOW it will take to meet THOSE expectations along with whatever else they are required to do during this assignment.

These two decisions may often appear to come to the same or similar conclusions but it's still 2 different decisions being made for different purposes by 2 separate parties. The purpose of the user's decision is their usage; the purpose of the appraiser's decision is how to do right by the lender including but not limited to their internal policies. If the appraiser had no responsibility for this decision then they couldnlt be held to account for any part of it. That would directly conflict with the idea that the appraiser is responsible for everything they do.

Besides that, it isn't just the lender whose expectations apply to the assignment. The other applies-every-time test is what the appraiser's peers would do in that assignment, which for any given assignment might include additional beyond what this particular lender understands about appraising or is expecting from the appraiser.


"We only need a cost approach for this assignment" speaks to what the one user considers meaningful to their usage. But if the other users for this type of assignment expect more and/or if the appraisers peers would normally do more then THOSE are what it takes to meet both tests for the reasonableness of the SOW decision.

TLDR, "client says" isn't always enough. Even when it is enough that doesn't prove that "client says" means the client controls the appraisers SOW decisions. The appraiser's SOW conclusion is an opinion or conclusion to be developed by the appraiser, not a no-deviation dictate from the client.

 

[George Hatch]

Another illustration is when an appraiser decides to do more in their SOW, like when Bert runs amok with his MARS analysis. Nobody asks for that or expects that for this subdivision SFR appraisal but Bert has chosen on his own to add that because that's what he thinks is appropriate for this assignment. As is his prerogative as the signatory of his appraisal report.

"Nobody puts Baby in the corner. "

 

[djd09]

who ever wrote the SOW should be banished from the appraisal industry...

 

[djd09]

the best part of the lenders gse making up the SOW is...that none of the garbage they make the appraisers do applies to their appraisal waivers...client or competition or both...it is freakin unbelievable

 

[Mejappz]

Furthermore, the selling guide, 4000.1, and the form itself leads to a quasi-USPAP - a sort of blend between teaching techniques and teaching compliance. And USPAP facilitates that mindset by a SOW being dictated by the lenders while explaining the appraiser is in charge of the SOW...right. The FNMA is play ball with us or we'll cram the bat up your ***.

Well said T.

 

[Mejappz]

the best part of the lenders gse making up the SOW is...that none of the garbage they make the appraisers do applies to their appraisal waivers...client or competition or both...it is freakin unbelievable

It’s take it or leave it ; it's as simple as that.

 

[George Hatch]

who ever wrote the SOW should be banished from the appraisal industry...

I can practically guarantee that you understood even less about THE DEPARTURE RULE and how to use it than you do about the SOWR. Not because it's you but because that's the case for probably 90% of all appraisers. That's the main reason the ASB made the transition. It's easier for everyone to understand these requirements in that bottom-up orientation.

Under the DEPARTURE PROVISION (before it even became the DEPARTURE RULE) the appraiser still had to suss out the requirements related to the intended use and intended user. And yes, both of those terms existed as such in USPAP prior to the transition to the SOWR. They still had to interact with the clients to identify the specifics of that assignment; that is, unless it was an assignment type they already fully understood.

The ACME one-size-fits-all widget was never an acceptable solution for deciding what to do for a new-to-you client or user.