Gee that must be the same rationalization state regulator appraisers use whose laws require them to follow USPAP, & they don’t!…but you do raise an interesting argument.

Yet we’ve all been told at one point or another not to offer opinions on values of any kind at cocktail parties or among friends…no clients OR assignments there.

Great comments and observations by all (seriously). One possible correction. The reviewer’s client is probably not the designated lender at all, but rather the “loan officer” at the correspondent “lender”. I haven’t  given that an awful lot of thought in awhile – That’s actually who engaged the AMC and arranged for them to get paid by the borrower. Yet they always say to show the funding lender as client. At the stage of still reviewing L/O or CU alt comps, the actual lender hasn’t even seen the appraisal yet.

It used to be SO easy before all the micromanagement rules!.

Rich,

“Reviewer: Your report is well written and your opinion of value is supported. I did not see any errors in your report. I am just following the instructions given to me by my employer.”

Someone using common sense would look to intent and not see an SR3 review. Merely someone saying I didn’t have or see any issues with your work (I’m deliberately rephrasing) ‘I’m only asking you to look at this additional comparable data because my employer directed me to’.The employer violated the FNMA license agreement with that.

Then, on the other side of the aisle are our regulators. They absolutely would see it as being a review opinion (California in particular).Ask them.

They will contend that reviewer is offering his own opinion (statement) that appraisers opinion of value is supported and the report was well written..and THAT opinion constitutes a review result.

FNMA license prohibits communicating CU comps to appraiser without human determination result COULD be affected. Parking lot attendant can make that determination but none of us would listen to it. A review appraiser COULD make that determination (without an SR3 review); but he cant let anyone know, because unlike a VALUE opinion or AN EVALUATION opinion; any thoughts pro OR con or even hypotheticals of another’s work cannot be communicated for any reason without full compliance with SR1 & SR3.

Soon a peer wont be able to mentor if it entails opinions about the work of the person being mentored.

Catch-22. Capt. Yossarian & Major Major would be so proud of our regulators…

If I understand the article correctly, the reviewer’s comments regarding the quality of the report were communicated to the appraiser, not the AMC/employer/client.  I’m not speculating on what was communicated to the AMC/employer/client.  My contention is that the reviewers comments to the appraiser do not constitute a Standard 3 review.

Rich, I disagree. The reviewer is an employee of the AMC, Her position is to review appraisals; hence an assignment.  Most likely there is not a formal engagement letter, but still an assignment does exist. The client is the lender. Both client and assignment definitely exist!  She stated her employer required here to search for additional sales when the opinion of value is below contract price. That is part of the scope of work for her assignment to review the report. This is more than a technical review for USPAP compliance. If this is not a Standard 3 Review, what is it?

Mike,  please see my response to JT above.  Thank you.

JT, in the case above the reviewer told the appraiser the report was well written.  Yes, that does sound like an opinion as to the quality of the report.  If the reviewer were to have made that statement to his or her client, one could argue it would constitute a Standard 3 review.  But to have a Standard 3 review, there must first be an assignment, and an assignment must have a client.  The appraiser was not the reviewer’s client so there was no assignment.  No client, no assignment.  No assignment, no valuation service provided.  No valuation service provided, no Standard 3 review.  Be well.

“Yes.”

Hi JT (Great discussion by the way)

I didn’t say I was only mentoring unlicensed trainees where I would also be signing the report. 95% of my mentoring is for licensed and certified appraisers. Sometimes it is simply casual, to in depth peer review (in a host of forms).

Aside from which, even if I were (dealing with trainees), then I am STILL rendering an opinion which in the black and white, right or wrong, no middle ground analysis of the original article would necessarily dictate that MY opinion of another appraisers work requires an SR3 compliant review appraisal to be formed.

(Let me recheck USPAP to see if appraiser trainees are an excluded class that do not qualify as “another” or “other appraiser” somehow).

You & I don’t get to selectively parse when one ‘review’ is euphemistically called ‘proof reading or editing.’ Its a review. As a matter of fact, a review for training purposes is about as critical a review as one can undergo.

Whether USPAP is deficient in this regard, or your analysis of its requirements are,  we need to refocus on the intent of USPAP.

It is not and never was intended to cripple the process with a threat of prosecutorial-potential type extremes..To hear a USPAP Instructor advises his students to NOT perform SR3 reviews anymore due to perceptions of liability is proof the system has fallen apart; or at a minimum has lost all focus.

I cannot help thinking about a phrase that became a legal issue for a president once.”It depends on what your meaning of ‘is’ is.

Clearly it is time for every single advisor that assists in the development of USPAP, or its interpretation to go back and read Catch-22. In fact, maybe Catch-22 needs to be formalized within SR3.

To specifically define the problem is important. For many amc companies they do not understand their position is to provide insulation from biased interests. Rather, in the process of acquiring and retaining clients, they bow to the natural pressures of a commission based industry, they sell the advocacy and integrate that into everything they do.  From fees, to tats, performance stats, to reviews, to customer handling, management companies are better described as advocates of the lender whom also distribute requests and review reports. And they get feelings hurt and all upset when you don’t play the role, that’s because they truly are advocates. Entire management companies out there top to bottom are doing it as they copy the perceived business models of others. There was a blip on the radar where the amc industry adopted this position that all employees had to take the ethics class at least once. Not surprisingly that did not last long as a staple of employee training. It’s important to detail the spirit of the ethic mostly, advocacy vs non advocacy. The devil may be in the details but the spirit of the rules remain constant. We were supposed to have a management rule regarding not providing a thing of value to be the preferred selectee….  So my new tag line is that client definition is important for ethic, but the clients wishes and goals do not superseded the appraisers primary goal of protecting the public trust. We do that by being the astute professional who can call and define advocacy vs non advocacy in a heartbeat. You’d probably have a tough time understanding this is your entire career was spent as an employee.

Great reference. And if in doubt, copy the few lines you need from the early pages here.
When challenged with absurd stips, especially CU results based in the hands of dangerous rather uninformed ‘reviewers’ whom usually are anonymous to me, I just copy their total request, copy the faq’s, respond in tedious detail, providing defense rather than change. Sure back in the day I may have changed something, these review systems are helpful if you’re not there yet. You know your skills as an appraiser have increased when you can predict the review shortfalls during your report development. You tailor the report to the challenge, something not possible through heavy reliance on automation. Almost always for me it boils down to copying something from Q6 or Q8.
https://www.fanniemae.com/content/faq/collateral-underwriter-faqs.pdf

If the reviewer is asking to address additional sales, an inference is being made they do not agree with the opinion of value. In order to make that inference, a review of the report must be done, whether an official SR 3 or not. An opinion of the quality of work has been made. In the case described, the reviewer verbally states an opinion on the quality of the appraisers work. This is a standard 3 review,regardless of the reviewers intentions. My guess is there is no work file for his review. It is a shame that the AMC employee, who is a licensed appraiser in another state, does not understand the limits of what he is allowed to perform and is willing to jeopardize his license for an AMC paycheck.

Mike, I get your point, but your analogy of a trainee /mentoring situation is flawed. If you are the supervisor for a trainee you will be signing the report. In essence you are merely proofing your report before it is signed and delivered to the client. Mentoring another appraiser to upgrade licensure is also different. Depending on the level of assistance, your mentoring may have to be disclosed in the report. There is a huge difference in proofing / editing a report before delivering it to the client and when a licensed appraiser reviewer working for your client reviews your report after it is delivered. Development verses delivery.

Unfortunately, the laws in our country are based on words, and one simple word, such as “not” can change the entire meaning.  Attorneys get paid big bucks to debate those words every day.

Obviously I’ll have to stop mentoring tomorrow. If I am unable to communicate whether they have done a good job or not, whats the point of being a mentor?

Clearly we wont be taking on any trainees, since we can not tell them that all or part of the work they did was acceptable or needs improvement, or there are specific changes necessary to produce an acceptable report…Not unless we accompany it with an SR3 compliant review appraisal, right?

So by the instructional logic on display today/tonight, in order for me to mentor someone about an appraisal they are doing; I’ll have to prepare a separate SR3 compliant review appraisal and report in order to communicate opinions to them?

I don’t think so gang. Stop looking at USPAP threw soda straws and view it in it’s entirety.

It must be a very dark and dank place indeed where a lot of those heads seem to be stuffed.

Anyone remember the part of USPAP that says your work’s compliance (or mine) is measured in the context of the client’s intended use???

Rich, I think you missed a key part of the conversation., The reviewer stated the report was well written, the opinion of value is supported and there were no errors. That my friend, is an opinion on the quality of the appraisers work and brought it to the level of a  standard 3 review.

JT-based on the conversation content provided, you are correct

“Reviewer: Your report is well written and your opinion of value is supported. I did not see any errors in your report. I am just following the instructions given to me by my employer”

That does in fact constitute an opinion as to the quality of another appraisers work.

Again, it is unfortunate that USPAP has become a basis for “Gotchas” rather than meaningful application of  standards based on common sense peer agreement and practice. Honest, non critical communication is apparently no longer permitted absent an SR3 written appraisal review. The word police are watching!

USPAP and FIRREA long ago stopped protecting the public; Ya think that may be why it really has to change every two years? I mean aside from the TAF money issue.

The real issue of whether or not the other sale was relevant (OR NOT) cannot be addressed without a Philadelphia Lawyer present. Whether it was a higher or a lower sale is not the issue.

Now what the guy COULD have said was: “The buyer (seller) contests the value. The buyer (seller) has submitted the following comparable property for the appraisers consideration and says it is much more similar to the subject than the other comparables used in terms of location, size, quality and condition.”

Given the latter, I may not like doing it, but Im certainly going to respond professionally. Why? Because specific reasons were given to me as to why the party believes it is more comparable. I would either refute them or concur.

“Appraiser to add anything” is a direction that in my opinion DOES violate appraiser independence rules. I do not respond politely to “appraiser to anything…” directives. If an Underwriter that identifies himself as an Underwriter for such and such a bank with a phone number identifies a concern and then ASKS me a legitimate question, I will answer it. TELLING me to jump through hoops doesn’t get a nice reply. Not identifying himself by name, title and company doesn’t get ANY polite reply except for me to tell them what I require from them.

Id like to know why the guy you cited even thought he had other comps to be considered.

The Collateral Underwriter use license from FNMA to the AMC reviewer’s client does not permit anyone to send you additional comp requests on the basis of the CU unless they have ‘a human being has determined  the additional ‘new’ comp or comparables would likely make a difference. AMCs are not licensees on their own. They use their client lenders log in numbers to access CU to get the SSR. FNMA SAYS they want to know when their license agreement is violated.

1. That is a huge flaw in the CU system (which is now also being used to rate our work despite original assurances it would not be).

2. FNMA does not require that ‘determination’ to be made by an appraiser. For example, it can be a rural bank branch manager; local broker or (apparently) a parking lot attendant.

3. CU can be manipulated (at the actual licensed lender level) to produce different search results. It can be set for a geo mapping search, radius search and variable distances

4. In most cases, the SSR (with limited CU results) may show alternate comparable sales dating back to two years (default). That human noted above, is to screen out the obviously irrelevant stuff and only ask about the remainder IF AN IMPACT ON VALUE COULD BE LIKELY.

THAT would be an SR 3 review result. CATCH 22! No lender is willing to pay for a USPAP compliant SR3 review…particularly one that may also require  SR1 and SR2 compliance. They expect the AMC to ‘ handle it’.

In these narrow circumstances, Id file the complaint with FNMA. It will then go to the actual lender (not the correspondent ‘lender’). A couple of those complaints and I bet lender picks a new AMC. THEY don’t care about one single loan enough to violate a license. Only the broker cares about the one deal.

The trick in the issue is whether the new comps came from a CU, or were independently developed though other sources.

E. Nothing in this section shall be construed as prohibiting an appraisal management company from requesting that a real estate appraise:

1. Consider additional appropriate property information

2. Provide further detail, substantiation, or explanantion for the real estate appraiser’s value conclusion; or

3. Correct errors in the real estate appraisal report.

Words mean something. The key words in the statute are appropriate property information. For the most part, Virginia language mirrors Federal language, however the wording is more restrictive than the federal language. From 129E:
“Consider additional appropriate property information, including the consideration of additional comparable properties to make or support an  appraisal.” Virginia excluded the inclusion of comparable  properties!

Even the language in 129 E states “ to make or support an appraisal.” It does not state to support a contract price. The reviewer stated “my employer requires me to look for additional sales when the opinion of value is below contract price”

The reviewer stated there were no errors and the opinion of value was supported. So how exactly is asking the appraiser to address a sale $21,000 higher in value that is dissimilar appropriate?

If the reviewer has given an opinion on the quality of the appraiser’s work, which she has, is that not a standard 3 review?

Words mean something and when people try to read into something that is just not there, problems occur. I am in agreement with John Dorie on this.

Carl, you are 100% correct (imho).!

If the explanation is only that they are unhappy with the value-that’s not a reason.

If a real reason is provided, then I look at it and honestly evaluate it. Sometimes it is no change-others it is a change and I make it accordingly along with explanation that the information was not previously available to me for whatever the reason was.

To be honest folks, I simply don’t get an awful lot of revision requests. The guy that trained me 30+ years ago was brutally thorough and honest.