100% Liability for Information Relied Upon
…courts have ruled if the information is included in the report and relied upon, the appraiser is responsible for the information…
Last week representatives from VaCAP attended The Appraisal Foundation Advisory Committee (TAFAC) and Industry Advisory Council (IAC) joint meeting. We promised a recap of the events, however, both The Appraisal Foundation and Jonathan Miller have already released a summary and did an outstanding job. To read about the event, simply follow this link.
The one thing every appraiser needs to understand about the new hybrid product is their liability; specifically the appraisers has 100% liability for the report and the information in the report.
Peter Christensen shared concerns on the use of third party data in which an appraiser must base his conclusions. In similar case law, courts have ruled if the information is included in the report and relied upon, the appraiser is responsible for the information.
Will the use of extraordinary assumptions relieve you of your liability when you have photos of the property in your report? Who wants to be the appraiser that finds out?
While we were in DC, VaCAP was invited to meet with representatives from Fannie Mae to discuss appraisal modernization. A summary of the meeting will be shared shortly.
Highest and Best Use Reminder:
Standard 1-3 requires appraisers to develop an opinion of highest and best use.
Standard 2-2 requires appraisers to summarize the support and rationale for the opinion of highest and best use.
Checking the box on the 1004 form is insufficient. Don’t get yourself in trouble over this.
Do you have past due invoices?
We are hearing of major financial trouble concerning several appraisal management companies. Virginia statute requires the amc to pay the appraiser within 30 days of the initial submission. Please share with us any issues with non-payment by amcs.
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We would love to publish articles from our members. If you want to share an idea, thought or just get something off your chest, we will be glad to assist in publishing your story. Contact us at info@vacaponline.com.
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Oh yes, we will look forward to the minutes of that meeting. What’s up with all the corporate buzz words, ‘modernization’. Why exactly should it be modernized in the first place. What we have works, if only they’d stop meddling with the details and structure of engagements in an obvious effort to circumvent effective checks and balances systems. If there is any modernization of the process to be had, I think there should be clear disclosure regarding outsourced services which clearly bring more risk to the consumer. Such irresponsible operations do not currently need to be disclosed by the appraisers. The new FNMA form should have language regarding whom inspected exactly, who typed up exactly, defining of any assistant services were foreign or domestic, the charges paid for that service, etc. Also to include consumer protection for unearned fees, a mandatory slot for consumer billing and appraiser billing alike, all to be filled by the appraiser. Open the curtains and let the light in on these nefarious industry practices.
Modernization can not happen as long as AMC’s are in the middle. They are the root of most of the issues in todays environment. Get rid of them and then the profession can move forward, otherwise it is just a continuation of the race to the bottom.
The appraisal process is not broken. It is the lender process that is broken. We do not have issues with private clients. Nor do we have issues when lenders order direct. The problem is the amc. They do not add any value to any entity; In fact, they create a liability for lenders, investors and consumers
Amcs are supposed to be a firewall. Why are they hiring staff appraisers? Why are they talking to Congress? Why are they talking to Fannie and Freddie? Why are they talking to Moody’s? Why are they developing alternative products? Who gave them any authority? Do amcs think they are industry disruptors?
Fannie Mae is in consvertorship because of poor decisions on their part. Are they really the best source to initiate change of the appraisal process? Shouldn’t their priority be to get their own house in order? What makes them the authority on the appraisal process anyway? Certainly not their colossal disaster they call Collateral Underwriter. Why isn’t Fannie focusing on fixing Collateral Underwriter?
AMCs and AMS are only the facilitators of the very long term published goals of MISMO.org and their advocates in TAF.
1. hybrids are required in order to lower the standard of acceptability for what is considered ‘an appraisal’
2. First SFRs, then income property
3. Then narrative commercial (elimination of all charts and graphs).
4. The ELIMINATION of hybrids and conversion to full online automated valuation.
This isn’t guesswork. Its all spelled out in available MISMO publications already. As long as the powers that be can divert out attention from the real issues and threats, they will keep shaving away at ALL appraisal credibility.