USPAP violation to get on "Appraiser List"

[BlueDog007]

Couch-

It's very simple. Everyone knows addresses including owner's, etc... is public information, that's not the point. Providing an appraisal created for client A, to a 3rd party, which indicates and identifies the subject property is clearly a violation of USPAP. Therefore, it's deleted from our "Sample" appraisal reports that are provided to 3rd parties for review, application, etc...

USPAP
"Confidentiality (ETHICS RULE)
An appraiser must protect the confidential nature of the appraiser-client relationship.

An appraiser must act in good faith with regard to the legitimate interests of the client in the use of confidential information and in the communication of assignment results.

An appraiser must be aware of, and comply with, all confidentiality and privacy laws and regulations applicable in an assignment.*

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.
*NOTICE: Pursuant to the passage of the Gramm-Leach-Bliley Act in 1999, numerous agencies have adopted new privacy regulations. Such regulations are focused on the protection of information provided by consumers to those involved in financial activities “found to be closely related to banking or usual in connection with the transaction of banking.” These activities have been deemed to include “appraising real or personal property.” (Quotations are from the Federal Trade Commission, Privacy of Consumer Financial Information; Final Rule, 16 CFR Part 3."

Furthermore, I did contact one of my clients today, and requested their permission to use any reports completed for them, by me, as samples. They were happy to give me permission, however, required me to remove any identification in regards to the owner or subject property physical address. And, providing such information would not be allowed under the Privacy Act.

Wow, I'm glad to see someone in the lending profession is up to date on what they CAN'T ask for!!!

 

[BlueDog007]

Hey Vernon-

What do you think about my last post? I would like to know how you interpret the USPAP statement?

Vernon and Couch-

Example: If you completed a slam dunk appraisal for Bank A on 2/5/2008, and a new bank in town (Bank B), that will be doing a whole lot of work (EASY $$$ in your pockets!!!), request one sample appraisal from you, would you simply send them an exact copy of that slam dunk appraisal without permission from your original client? You wouldn't change the address, parcel number, or anything? Would you change the report to a retroactive report since it's now 4/22/2008?

Or would you just shoot it over to the powerful, regulated bank? .....just as requested?

 

[Vernon Martin]

I wouldn't send a work sample from the same town as the new bank.

It's been years since someone requested a work sample from me, but my standard operating procedure then was to remove all references to the client and the property owner. What was left was a report about a property.

 

[Terrel L. Shields]

I'm reminded of Groucho Marx...."I wouldn't want to join any Club whose standards were low enough to accept me."

 

[BlueDog007]

Terrel......that's good. I can't believe this is the policy of the federally regulated bank.....to request something that is against the law. If that's what they absolutely require, you're right, I don't want anything to do with them. And I will shut down my accounts with them as well.

 

[Couch Potato]

Couch-

It's very simple. Everyone knows addresses including owner's, etc... is public information, that's not the point. Providing an appraisal created for client A, to a 3rd party, which indicates and identifies the subject property is clearly a violation of USPAP. Therefore, it's deleted from our "Sample" appraisal reports that are provided to 3rd parties for review, application, etc...

USPAP
"Confidentiality (ETHICS RULE)
An appraiser must protect the confidential nature of the appraiser-client relationship.

An appraiser must act in good faith with regard to the legitimate interests of the client in the use of confidential information and in the communication of assignment results.

An appraiser must be aware of, and comply with, all confidentiality and privacy laws and regulations applicable in an assignment.*

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.
*NOTICE: Pursuant to the passage of the Gramm-Leach-Bliley Act in 1999, numerous agencies have adopted new privacy regulations. Such regulations are focused on the protection of information provided by consumers to those involved in financial activities “found to be closely related to banking or usual in connection with the transaction of banking.” These activities have been deemed to include “appraising real or personal property.” (Quotations are from the Federal Trade Commission, Privacy of Consumer Financial Information; Final Rule, 16 CFR Part 3."

Furthermore, I did contact one of my clients today, and requested their permission to use any reports completed for them, by me, as samples. They were happy to give me permission, however, required me to remove any identification in regards to the owner or subject property physical address. And, providing such information would not be allowed under the Privacy Act.

Wow, I'm glad to see someone in the lending profession is up to date on what they CAN'T ask for!!!

But you are not providing an appraisal created for client A, you are providing a new appraisal on the same property to client B with the intended use of evaluating your work. There is no prohibition on appraising a property you have previously appraised. There is no prohibition on retrospective value opinions. Simply represent your work as what it is. Use an appropriate description of the scope of work and provide a appropriately modified certification.

As long as details about the property are typical of that found in a 2055, GLB is a non-issue. It's just not that complicated to provide examples of the quality of your work; however, it is also an opportunity for an appraiser to also demonstrate their ability to think, to analyze problems and to solve those problems. An appraiser that can not figure out how to provide sample appraisals probably isn't one they want to hire.

 

[George Hatch]

The confidentiality section of the Ethics rule does not make an exception for review appraisers or for lenders who are building approval lists. It makes no difference why they are asking, the fact remains that appraisers aren't allowed to just send out assignment results prepared for one client to other parties. Unless it's by specific authorization by the client, by due process of law or to an appraisal board.

If it was an appraiser trying to talk you into violating the confidentialy section of the Ethics Rule then they are in violation themselves. The Ethics Rule applies to review appraisers and appraisers who are otherwise engaged in appraisal practice, like building approval lists.

Get permission - it's the easiest way.

BTW, the operative term in the Confidentiality section is "An appraiser must act in good faith with regard to the legitimate interests of the client..."

How can anyone know what's in their original client's legitimate interests without asking them?

 

[BlueDog007]

Couch-

Sounds like you pave your on road to make things so easy, and it doesn't bother you. I guess you re-visit each property for those samples you provide? What do you do when the new bank doesn't allow a retroactive appraisal as a sample? And they have no idea what a 2055 form is (they have never seen one before)?

I believe it's very simple. This particular bank has their back pocket appraiser's and they simply don't want to add anyone else! That's fine, I don't need them either. It would be nice, but with these sort of standards, maybe it's best we don't work together. Another note.....I have completed at least 10 appraisals for this bank within the past year, in which the loans were closed. And they still need to approve me? Come on!!! Maybe they just know I play by the book, and they don't really like that.

Couch, I'd be interested in your process in providing a sample report that you completed for another bank.

 

[BlueDog007]

George-

Well put! I asked for permission today, but received the "No, you can't due to Privacy law" from a client. THAT makes sense to me.

 

[TC]

I have 3 friends, which is rare for an appraiser, one lives in a condo, one in a detached ranch, and the other owns a duplex. Every year I update the appraisals on their property and that's what I use as samples when potential PAYING CLIENTS ask for them.

It ain't rocket surgery.

TC