When is Effective, Retrospective

[Ricky LaFleur]

Technically, unless we finish the appraisal and the report and sign the report that very same date day as we inspect ( if inspection date is effective date), then all effective dates are retrospective to report date signed - whether the effective/inspection date was yesterday or last year .

Those are the thoughts that I had. Then why would AO-34 mention how to phrase Retro Appraisals so that they are not misleading if all effective dates are retro to the report date? Should then all reports (except Prospective) need to be phrased in the way it suggests?

The misleading part is not doing a retrospective appraisal to a year past effective date.

Are you saying this specifically because of who the intended users are? This wouldn't be misleading in establishing a tax basis for an estate, but for a lender it would be?

The more serious misleading part is skipping the market analysis to construe that the effective date a year old as being current with recent market conditions ( when it may not be true )

This I understand and was the primary reason I did not feel comfortable with the assignment conditions.

 

[Ricky LaFleur]

you need to read the 12 cfr 1026.42 for yourself so that you can certify that your work is in compliance with USPAP, since, it applies to all residential lending assignments for primary homes, and that is the work you do.

To clarify, this was an improved farm appraisal. 1026.42 states "(a) Scope. This section applies to any consumer credit transaction secured by the consumer's principal dwelling."
Would this still apply?

you also need to read the IAEG which is applicable for all regulated lender work

Thanks!

WHERE it says that FAQs and AOs are not USPAP, are not interpretations of USPAP and do not set new USPAP standards. Then you need to understand, you are held to USPAP and USPAP is what is enforced. Consider it all the while, knowing that page 1 of USPAP says that FAQs and AOs are not USPAP.

Thanks for pointing that out to me. I do tend to take the entire document as "the law" sometimes.

 

[J Grant]

"Ignacio, post: 2992045, member: 155977"]
Those are the thoughts that I had. Then why would AO-34 mention how to phrase Retro Appraisals so that they are not misleading if all effective dates are retro to the report date? Should then all reports (except Prospective) need to be phrased in the way it suggests?

Because it is not the physical date itself that is misleading , it wold be lack of market analysis around that date (at client directive ) - with false conclusion relative to current market conditions (at client directive, be bery caretul of this client in future).
The fact a date is recent but retrospective is usually not a problem but if a significant change occured, good thing to disclose it. Regardless of how long ago we need to do analysis of the conditions when past sale to eff date comps and info is used.

Example : Eff date was one week ago, even though technically it is a retrospective date it is considered a current appraisal, since market has not changed significantly since a week ago, (unless it did )

Are you saying this specifically because of who the intended users are? This wouldn't be misleading in establishing a tax basis for an estate, but for a lender it would be?

It has nothing to do with who the intended user is , misleading is misleading, and again, it is not the retrospective date itself that is misleading , it is the instruction from client not to analyze ( and reason not to anlayze is to make a false conclusion claim that that a year old market conditions are the same as current ones )

This I understand and was the primary reason I did not feel comfortable with the assignment conditions.

Good that you trusted your instincts, now you are delving into why.

 

[DTB]

If they like the original appraisal that much and they think that it is current, let them try to use that appraisal.

If it takes more than a 30 second conversation with them to understand, run away and drop this client. They will screw you somewhere down the line.

 

[Renee Healion]

Technically, unless we finish the appraisal and the report and sign the report that very same date day as we inspect ( if inspection date is effective date), then all effective dates are retrospective to report date signed - whether the effective/inspection date was yesterday or last year .

to the OP:
The above is nonsense so no wonder you went down the wrong trail in response. No, JGrant I do not have to engage and tell you why but I can warn off the unsuspecting.
CAN is right. The client is mistaken (and cheap).
DTB is really right. Bad client.

 

[J Grant]

to the OP:
The above is nonsense so no wonder you went down the wrong trail in response. No, JGrant I do not have to engage and tell you why but I can warn off the unsuspecting.
CAN is right. The client is mistaken (and cheap).
DTB is really right. Bad client.

Did you even read my posts ? I wrote, in this thread, several times, that this is a misleading client and the client is asking for a misleading report - did you read it or not?

You extrapolated one sentence and are using it out of context. Retrospective date is not the same as a retrospective appraisal was the point and maybe not made clearly.

In any event most here agree the client is a POS

 

[J Grant]

To answer this specifically, the client is asking you to perform a misleading appraisal ( and thus grounds to turn it down )

Did you read this my post 8? Stop being so self righteous read what someone writes instead. A date prior to today's date is a retrospective date, (which does not necessarily make it a retrospective appraisal)

 

[J Grant]

USPAP says not to be misleading. The misleading part is not doing a retrospective appraisal to a year past effective date., which can be done

The misleading part would be "skipping market analysis "-(to save on fee as excuse what a sleazeball client ).

The more serious misleading part is skipping the market analysis deliberately to construe that the effective date a year old is current/contemptuous with recent market conditions ( when it may not be true )

And this Renee.

 

[Ricky LaFleur]

it is the instruction from client not to analyze ( and reason not to anlayze is to make a false conclusion claim that that a year old market conditions are the same as current ones )

"They asked if we could use the same inspection/effective date so that no new market analysis would have to be performed to save on the fee. "

New- meaning subsequent to the effective date of one year ago. That is, we had already performed market analysis for that property for the last appraisal. They were not requesting that "NO" market analysis be performed at all. So if one were to clearly specify that the one year prior effective date to be RETRO and not CURRENT, do you all still believe that, given these conditions, this would still be misleading?

A date prior to today's date is a retrospective date, (which does not necessarily make it a retrospective appraisal)

Hang on... That would only be true if market conditions have not significantly changed, correct?

Sorry if I am still misunderstanding.
I understand the whole situation is incredibly "cheap" for such a client to so intently desire the fee to be reduced to desktop-burger king appraisal fees, but I can't just reply "Idk seems wrong, but not sure why".

Bad client

You mean if they threaten to remove all future work if we don't accept that they're bad? Cuz... they did!

 

[J Grant]

Ignacio, post: 2992067, member: 155977"]
"They asked if we could use the same inspection/effective date so that no new market analysis would have to be performed to save on the fee. "

New- meaning subsequent to the effective date of one year ago. That is, we had already performed market analysis for that property for the last appraisal. They were not requesting that "NO" market analysis be performed at all. So if one were to clearly specify that the one year prior effective date to be RETRO and not CURRENT, do you all still believe that, given these conditions, this would still be misleading?

If they wanted it to be a retrospective appraisal then it would not be misleading but still might be borderline - how can a client ask no new analysis be done, what if you find out you were wrong last time or missed a sale - it happens.! But they did not want that, they were arguing it be a CURRENT MARKET VALUE per the below. So it was both, an instruction to do no new analysis for the reason of making the last year eff date value a current market value

THIS (bold type) is the misleading part - property was being sold again, and the same lender was needing another appraisal completed. They asked if we could use the same inspection/effective date so that no new market analysis would have to be performed to save on the fee. It was argued that it would still be considered "Current" market value as sometimes, say in condemnation appraisals,

I understand the whole situation is incredibly "cheap" for such a client to so intently desire the fee to be reduced to desktop-burger king appraisal fees, but I can't just reply "Idk seems wrong, but not sure why".

Cheap fee stinks but is a separate issue than client asking to fulfill a misleading assignment condition. Accepting an assignment condition that creates misleading results would need to be declined whether the fee is $100 or $1000.