Voluntary Appraiser Disciplinary Action Matrix Based on 2014-15 edition of USPAP

A very interesting document provided by the Appraisal Foundation to state boards. Not mandatory, just information for them. State boards vary dramatically in how they handle discipline. Fortunately, I am in California, which has never had a state board (Governor of CA at that time did not want to increase any expenses, including advisory boards). Investigators are all state employees.

3 examples:

An appraiser states in his certification on an appraisal that he inspected the interior and exterior of the subject property, when in fact he only drove by the property.
As a result, he stated that the subject property was in average condition when it was actually in poor condition and essentially uninhabitable. He did not use any extraordinary assumptions or hypothetical conditions in the assignment. He knew that the lender required an interior inspection.

An appraiser accepted an appraisal assignment in an area where he is not geographically competent, failed to notify the client that he was not geographically competent and failed to take the necessary steps to become competent. As a result, he produced an appraisal that was not supported by market data.

In the sales comparison approach, an appraiser simply adds the adjusted value of the three comparable sales used and divides by three for an indicated value, even though some sales were far better indicators of value than others.

Note: These are the simple examples. There are more commercial appraisal examples and more complicated residential examples.

Click here to download from the Oklahoma state regulator web site.

My comment: Well worth reading. What does your state board do?

Thanks to Long Time Reader and author Doug Smith in Montana for this great link!!

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Alternative Valuation Products and USPAP

Appraisal Foundation issues Draft White Paper – Alternative Valuation Products and the Uniform Standards of Professional Appraisal Practice

Excerpts:
“At the request of its Industry Advisory Council, The Appraisal Foundation has drafted the attached white paper on Alternative Valuation Products and the Uniform Standards of Professional Appraisal Practice (USPAP).“

“The white paper is intended to provide information to assist appraisers, users of appraisal services, and others, with a greater understanding of Alternative Valuation Products and their use in the marketplace. The paper also attempts to view these products in light of an appraiser’s USPAP obligations.“

“All interested parties are encouraged to comment in writing before the deadline of December 31, 2013. Respondents should be assured that each comment will be thoroughly read and considered.“

Included are BPOs, AVMs, CMAs,
– Appraiser Price Opinions (APOs)
– Reconciliation Review Non-Standard Desktop Valuations/Field – – Reviews Full inspection proprietary appraisal form (non-GSE form)

My comment: lenders have been looking for an alternative to an appraisal report for a long, long time. For many fee appraisers, the issue is a low fee, even if it is uspap compliant. FYI, the Industry Advisory Council is composed of representatives from lenders, AMCs, etc. Of course, it is not the total fee, but the per hour billing, that is most important. If you get $400 for a report and spend 8 hours (including travel time, stips, etc.) you make $50 per hour. If you spend 4 hours for a $250 appraisal fee, you also make $62.50 per hour. Don’t make the mistake of focusing on the total fee.

Click here to read the 36-page document. The first 13 pages is the main section. The remainder is mostly excerpts from state laws.
https://appraisalfoundation.sharefile.com/download.aspx?id=sf61dc8e04054957a#

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