Category: Uniform Standards of Professional Appraisal Practice

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New Appraisal Assignment?

An appraiser receives an assignment involving a purchase contract on a short sale. The short sale price is $150,000. The appraiser concludes an opinion of value at $180,000. A week later the lender wants the appraiser to amend the appraisal to reflect the renegotiated contract that pegs the property at $180,000. As an aside, the lender would not provide the new contract. First, is the lender’s request automatically a new appraisal assignment? AO-3 offers useful guidance: Regardless of the nomenclature used, when a client seeks a more current value or analysis of a property that was the subject of a...

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Show and Tell

Everybody complains that the states aren’t doing enough to police the profession. Appraisers are running amok. Fraud is rampant and the states are twiddling their thumbs while caseloads grow exponentially. The handful of published state disciplines nationwide are a mere droplet compared to the vast ocean of chicanery that’s rising out there. Right? My question is, where are all the settled cases from the various professional standards and ethics committees of the big appraisal organizations? There should be a generous compendium of meaty disciplines somewhere. But there isn’t. If you go to their websites you’ll find plenty of references to...

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Appraisal Management Companies Create More Problems Than They Solve

When the final chapter on this housing crisis is written, I hope that I am still around to see those who were responsible for its cause and the feeble attempts to fix it held responsible. One of the worst fixes is the Home Valuation Code of Conduct. Enacted in 2009, HVCC was spearheaded by then New York Attorney General Andrew Cuomo. His objective was to rein in appraisal abuses by the lenders sending loans to Fannie Mae or Freddie Mac. A noble goal, but by the time this so-called fix went into action many of the worst offenders were either...

USPAP 2012-2013 0

2012 – 2013 USPAP Now Available

The Appraisal Foundation (TAF) announced that the 2012 – 13 edition of the Uniform Standards of Professional Appraisal Practice (USPAP) is now available. The 2012-2013 edition of USPAP will be valid for two years, effective January 1, 2012 through December 31, 2013. According to a TAF press release “the new edition includes the standards of professional practice for all appraisal disciplines as well as guidance from the Appraisal Standards Board (ASB) in the form of USPAP Advisory Opinions and USPAP Frequently Asked Questions (FAQs).” As with the prior edition, the new edition includes the standards of professional practice for all...

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Exposure Draft: Adjusting Comparable Sales for Seller Concessions

The best way for valuation professionals and the public to make a difference in their profession is to offer comments to the Boards of The Appraisal Foundation when exposure drafts are released for comment. The Appraisal Practices Board (APB) has recently released its first Exposure Draft entitled Adjusting Comparable Sales for Seller Concessions. All interested parties are encouraged to comment in writing to the APB before the comment deadline of December 2, 2011. Written comments on this Exposure Draft can be submitted by mail, email and facsimile:

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CHASEing USPAP

Chase has turned a lot of appraisers into state appraisal boards. They’ve been responsible for nearly 20% of the Illinois caseload since 2008. The volume ebbs and flows from one quarter to the next. Not all of their complaints are good. Then again, not all of them are bad, either. All of their complaints insist that the original appraisal was too high. In their complaint submissions to us, they generally include a letter to the original appraiser that predates the complaint by months. In Chase’s complaints to us they typically include an appraisal review of some type. The standard review is a form 2000 as completed by an Illinois appraiser. Sometimes those reviews...

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Unintended Consequences – Intended Use

Intended use must be clearly stated in the report. Unintended Consequences From USPAP: INTENDED USE: the use or uses of an appraiser’s reported appraisal, appraisal review, or appraisal consulting assignment opinions and conclusions, as identified by the appraiser based on communication with the client at the time of the assignment. There can be many intended uses for one appraisal. We all understand that. An appraiser can, theoretically, complete an appraisal on an REO to find a reasonable marketing price and that same report can, theoretically, be used for mortgage purposes. Great! Two birds; one stone. But, if you utilize the Fannie Mae 1004 you have only one intended use. From the 1004: INTENDED USE: The intended use of this appraisal report is for the lender/client to evaluate the property that is the subject of this appraisal for a mortgage...

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UAD is Data Mining Nothing More

This article was published in the September 2011 issue of the IllinoisAppraiser Newsletter Blue Pill – Red Pill If you’re reading this on September 1st, you’re probably sitting in front of an unfamiliar drop-down menu on your appraisal software or frantically thumbing through Appendix D looking for an answer that isn’t there. Today is D-Day. Actually, UAD-Day. While Fannie Mae and Freddie Mac slide another deck chair over to catch a better view of the ice berg they’ve already hit three years ago, appraisers around the country are wrestling with Fannie & Freddie’s latest contribution to mind-numbing, muddled, mortgage malaise;...

Danger of 1004MC 2

Danger of 1004MC

1004MC : Danger! If you conduct appraisals for residential lending, you are familiar with the 1004MC. Many appraisers rely upon the data which populates the form for conclusions (e.g., trends for Property Values and Prices, relationship between Supply & Demand, etc.) which are later communicated on page 1 of a Fannie Mae appraisal report form. Of course, the data and analysis in the 1004MC are, in part, used by the appraiser in analysis in the Sales Comparison Approach. What could go wrong with this scenario? The correct answer is plenty, resulting in the appraiser communicating misleading opinions and conclusions. What...

VaCap Second Letter to Attorney General Cuccinelli Regarding UAD 0

VaCap 2nd Letter to Attorney General Cuccinelli RE UAD

VaCap Second Letter to Attorney General Cuccinelli Regarding UAD 08/29/2011 Kenneth T. Cuccinelli, II Office of the Attorney General 900 East Main Street Richmond, VA 23219 Re: September 1st Implementation by GSEs Dear Sir: In a letter dated July 19th, 2011, the Virginia Coalition of Appraiser Professionals (VaCAP) brought to your attention the serious concerns that we have about the impending implementation of new appraisal reporting requirements by the Government Sponsored Enterprises (GSEs), which are The Federal National Mortgage Association (FNMA) and The Federal Home Loan Mortgage Corporation (FHLMC). Since Fannie Mae and Freddie Mac control a very large percentage...

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