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What IF this Requirement came from a Lender?

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Mike Kennedy

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Sep 28, 2003
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Certified Residential Appraiser
State
New York
In order to reduce Reconsideration of Value requests which typically cause major delays in loan processing, a major change in policy regarding interaction between Fee Appraisers and other Loan Participants has been introduced. In brief summary, the Procedure allows an opportunity for a designated “Point of Contact” to provide market evidence for the appraiser’s consideration prior to establishing the Final URAR value and delivering the appraisal report.

The appraiser MUST initiate the procedure by
alerting the Contact person that the appraised value appears likely to come in under the sales price.

The appraiser should not discuss the appraisal contents except to explain that the comparables located by the appraiser do not adequately support the sales price.

The Contact person then has two business days to provide additional sales information in support of the sales price to the appraiser PRIOR to completing and delivering each appraisal report.

Verification of closed sales is required. (Pending sales may be offered, but should only be used to support time adjustments.) Data must be delivered in a Grid format similar to the Sales Comparison Approach to Value along with other information which may impact the appraisers final value opinion.

All attempts to communicate with the designated Point of Contact must be documented to show the date of the attempt, the party’s name and phone number, and whether or not additional information was provided.


Should the appraiser determine information provided by POCs not does change the Value Opinion, analysis and comments explaining why MUST appear in each finalized appraisal report delivered.

Designated Points of Contact include the Originator, Borrower, Seller, Listing and/or Selling Agent will be included on each order and included in the SOW for each assignment. In addition, POC will provide us with comments regarding the professionalism and demeanor of appraisers during this Process.
 
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Tom Woolford

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Nov 20, 2005
Professional Status
Certified Residential Appraiser
State
Florida
I would tell them in no certain terms to stick it where the sun don't shine, and not to ever darken my doorstep in the Future. I would forward the request to the state, and offer my services to the prosecution.
 

Hamlet

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Aug 14, 2006
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Certified Residential Appraiser
State
Ohio
So much for removing points of possible influence on value.
 

leelansford

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Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
The OP has lifted a directive from the VA to VA appraisers.

As a matter of routine, I request (PRIOR TO the development of my VA appraisals) of the interested parties whether or not they have any market data that they want me to consider. Frankly, such practice eliminates most any after delivery of the appraisal request for reconsideration.
 

Hamlet

Elite Member
Joined
Aug 14, 2006
Professional Status
Certified Residential Appraiser
State
Ohio
I can imagine the hoopla on the brokers forum if they got ahold of this little gem.

If they want to provide data up front, OK fine, but the way I read this is that after the appraiser has a value, the POCs have an opportunity to provide more data, which to me smacks of pressure.
 

hastalavista

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Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
The OP has lifted a directive from the VA to VA appraisers.

As a matter of routine, I request (PRIOR TO the development of my VA appraisals) of the interested parties whether or not they have any market data that they want me to consider. Frankly, such practice eliminates most any after delivery of the appraisal request for reconsideration.

FHA has a somewhat similar requirement that if certain condition issues are observed, the appraiser is to stop and notify the DU what those issues are (the similarity is communicating to the client an issue that affects the chances of the loan happening before the appraisal is completed. I know this is not a perfect comparison, but there are similarities).

I'm not a VA appraiser so I don't know how this directive changes anything other than, as Lee points out, it puts the onus on other parties to provide data within a very restricted time frame in a very specific format that if the data warranted consideration, would improve the credibility of the report's results.

Since it comes from VA, I'd presume that the risk of appraiser pressure is not an issue.

Lee (or anyone else), could this be a case of Jurisdictional Exception- which I might term Presumptive Jurisdictional Exception? I say presumptive because if JE were in play here, it could be presumed to eliminate any USPAP violation by the appraiser who followed that policy without the appraiser necessarily being able to link the request to any specific USPAP standard? In other words, in this case, we wouldn't have to argue if such a request is a USPAP violation because, since it originates from the VA, JE is invoked and the issue is moot?


But Mike K's question is what if it came from a lender (and the implication is not a government agency such as VA)?
I think that such a request may have issues, but I'd call the lender and speak to someone in authority to discuss it. :new_smile-l: And if it came from an AMC, I'd probably decline the assignments.
 

Jan Roseberry

Senior Member
Joined
Sep 25, 2002
Professional Status
Certified Residential Appraiser
State
Ohio
Hopefully I have attached VA circular for your perusal.

http://www.homeloans.VA.gov/circulars/26_03_11.pdf

There are definite similarities in what Mike presents. In actual practice, the VA process has worked well and takes less time for me than the formal reconsideration of value that was part of the scenario prior to this. The formal reconsideration can still happen but has not for me.

Dennis -- Jurisdictional exception was definitely discussed when this was presented at our meeting.
 
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