USPAP Confidentiality

[xm72mhd]

What does this mean?

An appraiser must not disclose confidential information or assignment results prepared for a client to anyone other than the client and persons specifically authorized by the client; state enforcement agencies and such third parties as may be authorized by due process of law; and a duly authorized professional peer review committee except when such disclosure to a committee would violate applicable law or regulation. It is unethical for a member of a duly authorized professional peer review committee to disclose confidential information presented to the committee.

Comment: When all confidential elements of confidential information are removed through redaction or the process of aggregation, client authorization is not required for the disclosure of the remaining information, as modified.

Does it mean we can't speak with intended users about our reports without the client's permission?

 

[Dennis J. Black ASA IFAS]

Client only

Yes. Unless the client authorizes such communication. Remember Intended Users may be identified by type. So unless the client grants authorization no communication.

 

[Chris Colston]

Yep, that's how I read it. We may only communicate with the client or we have violated USPAP. That's why conditions or "stips" from the underwriter get to be dicey when they are the underwriters for the FUNDING lender and NOT the mortgage broker client. You have to get permissison from the MB client to speak directly to the LENDER's underwriter.

 

[xm72mhd]

Of course that is what the first part says, but what does it say when this part is added on.

Comment: When all confidential elements of confidential information are removed through redaction or the process of aggregation, client authorization is not required for the disclosure of the remaining information, as modified.

 

[Steve Owen]

Imnsho

It means that if you send them a black page, that would be okay.

 

[xm72mhd]

It means that if you send them a black page, that would be okay.

And then discuss the blank. That should be a real savings in time.

Under some interpretations, that must be the correct response, but that sort of leaves us saying the comment is just taking up space because we are expected to ignore it.

If it wasn't there, then basically I would agree with the interpretation that we can't talk, ever. But it is there, so why is it there? What purpose is it serving other than to confuse my understanding of appraisal ethics?

 

[hastalavista]

It seems to me the unknown part of the rule is this:

An appraiser must not disclose confidential information or assignment results prepared for a client to anyone other than the client and persons specifically authorized by the client;...

(my bold)

Here's what I don't know:
Does that mean:
1. The client tells me who is specifically authorized?
2. The client on their own authorizes someone?

So, if I am the client, and I send out a loan package to 5 lenders...
Somewhere in that submission, I am authorizing them to use and verify the information, no? That would include verifying appraisal issues (in my book).

But, as the appraiser, if I don't know that is the case, how can I answer the question, even if it is legitimate? If the client tells me who its going to and who I should talk to (#1), then I'm ok. But usually, it is #2 that happens (in more ways than one!).

So, without any, "I answered these questions in good faith" exception to hang my hat on, I'm in non-compliance if I answer a question without verifying the questioner's authority first.

 

[Pamela Crowley (Florida)]

The fun part of this rediculous hoopla is that the MB/LO client that alters your appraisal report will NEVER give you permission to talk directly to the lender. If we have to ask permission, the purpose of stopping these frauds is moot.

It was 'suggested' that if one of these new, not available yet, security systems were to have a lender get a 'hit' that an appraisal was altered, that they could then send a new appraisal order to the appraiser asking for a new appraisal as of the same effective date as the altered one in their hands, probably just a 2055 instead of the 1004 this time, the appraiser could charge, oh, around $50, deliver the new report to their new lender client, and all will be well.

We still have that insane confidentiality section that says we CANNOT discuss what appears to be a CRIME with the other victim of that same CRIME???



WHAT IF:

The 'alteration' was a correction made. The lender and appraiser don't realize that and the appraiser 'forgot' to run it through that new security system again after that typo correction?

The alteration was on a report the appraiser did a whole year ago that now shows a new effective date?

So many possibilities for this not to work quite as expected....

OK, I will NOT accept the total loss of common sense without a whole lot of kicking and screaming!

 

[xm72mhd]

Well, we pretty much, except for Denis, understand part 1. I don't know what the whole thing means either and the explanation I have gotten from ASB so far says exactly what the consensus here is saying. Basically the comment must be ignored.

However, the comment is still there and hasn't gone away. And if I am ever challenged about talking to an underwriter about the report or confirming to a lender whether my report is authentic, I intend to use the comment in my defense, because I am talking to them. I certainly am not going to wait for permission from some MB who may have screwed with it. Any other conclusion seems ridiculous to me.

 

[Steve Owen]

Black not Blank

Edd, there might be instances where you could redact confidential information and discuss the rest. An example that comes to mind would be a city and regional data summary. There would be nothing wrong with using information gathered for a specific appraisal to discuss your local economy with a non-client, so long as you redact anything that might be confidential.

On the other hand, many appraisers, including some on this Forum, have taken the view that you can wipe the client's name and a couple of other bits of info from a report and send it to another lender as a sample. My point was that if you truely redact everything that is confidential, then the report will no longer be useful for that purpose. Hence, my comment that you can send them a black (not blank) sheet of paper.