Appraisers' Free Forum

Otis · by **Otis** on Sat Oct 06, 2007 7:20 pm

Goodpasture wrote:
Otis Key wrote:[font=Comic Sans MS] However, in reference to Bill's question, I would strongly suggest that he get a firm "written" response to this particular question from his state board. [/font]

I doubt the state board has any regulations requiring licensing of any kind. Remember, he is not being asked to provide an opinion of value. Just an opinion on the credibility of the report. I, for one, applaud the Bank for taking this out of the underwriting/processing department, and hiring someone with a fundamental knowledge of appraising.

I agree with you on the applause for the Bank taking this step. However, I don't see anywhere where he said, or did not say, that "he is not being asked to provide an opinion of value". What he said was:

Never thought much about working for a bank. Therefore, I need some opinions from the forum posters.

My license level is Licensed Residential and if/before I accept a job from a bank, I have a few questions.

If, I am competent to review commerical and the review does not require an opinion of value, but the transaction value exceeded $250,000, would I be performing an assignment not allowed at my license level?

I looked in USPAP and DPOR (Virginia) and still am not certain. Contacted (e-mail) DPOR, no reply yet and just figured I would post here for insight and opinions.

Also, I wonder what most probably would/could/should/should not happen with and/or to my relationship with my local (somewhat small town/region) peers?

I would look at that (Licensed reviewing CG) very similar to "skippy" reviewing my work, and not certain I would like being in that position. Therefore, I post this question in hopes of getting serious replies.

So based upon that, I'd fall back to the state to provide me some sort of written guidance and KEEP that forever. I'd also clarify up front what the "bank requirements" would be for that position.

OTR - the OU/TX game was good..............even tho OU should have kicked their butts right off from the kick off!

Goodpasture · by **Goodpasture** on Sat Oct 06, 2007 7:44 pm

Otis Key wrote:
Goodpasture wrote:
Otis Key wrote:[font=Comic Sans MS] However, in reference to Bill's question, I would strongly suggest that he get a firm "written" response to this particular question from his state board. [/font]

I doubt the state board has any regulations requiring licensing of any kind. Remember, he is not being asked to provide an opinion of value. Just an opinion on the credibility of the report. I, for one, applaud the Bank for taking this out of the underwriting/processing department, and hiring someone with a fundamental knowledge of appraising.
I agree with you on the applause for the Bank taking this step. However, I don't see anywhere where he said, or did not say, that "he is not being asked to provide an opinion of value". What he said was:
Never thought much about working for a bank. Therefore, I need some opinions from the forum posters.

My license level is Licensed Residential and if/before I accept a job from a bank, I have a few questions.

If, I am competent to review commerical and the review does not require an opinion of value, but the transaction value exceeded $250,000, would I be performing an assignment not allowed at my license level?

I looked in USPAP and DPOR (Virginia) and still am not certain. Contacted (e-mail) DPOR, no reply yet and just figured I would post here for insight and opinions.

Also, I wonder what most probably would/could/should/should not happen with and/or to my relationship with my local (somewhat small town/region) peers?

I would look at that (Licensed reviewing CG) very similar to "skippy" reviewing my work, and not certain I would like being in that position. Therefore, I post this question in hopes of getting serious replies.
So based upon that, I'd fall back to the state to provide me some sort of written guidance and KEEP that forever. I'd also clarify up front what the "bank requirements" would be for that position.

OTR - the OU/TX game was good..............even tho OU should have kicked their butts right off from the kick off!

If an opinion of value is required, then appraisal licensing is applicable....an appraisal is an opinion of value, right? If an opinion of value isn't required, then licensing isn't applicable.

Otis · by **Otis** on Sat Oct 06, 2007 8:01 pm

Goodpasture wrote:
If an opinion of value is required, then appraisal licensing is applicable....an appraisal is an opinion of value, right? If an opinion of value isn't required, then licensing isn't applicable.

Agreed! Stop "pissing into the wind"! He did not indicate if the bank would or would not require that! And that was my point!

Now go back to the real football games - Buckeyes against Purdue! LOL - you won your last one. :lol:

Corporate Lackey · by **Corporate Lackey** on Sat Oct 06, 2007 9:05 pm

STANDARD 3: APPRAISAL REVIEW, DEVELOPMENT AND REPORTING

In performing an appraisal review assignment, an appraiser acting as a reviewer must develop and report a credible opinion as to the quality of another appraisers work and must clearly disclose the scope of work performed.

Comment: Appraisal review is the act or process of developing and communicating an opinion about the quality of all or part of the work of another appraiser that was performed as part of an appraisal, appraisal review, or appraisal consulting assignment. The reviewers opinion about quality must encompass the completeness, adequacy, relevance, appropriateness, and reasonableness of the work under review, developed in the context of the requirements applicable to that work.

The COMPETENCY RULE applies to the reviewer, who must correctly employ those recognized methods and techniques necessary to develop credible appraisal review opinions and also avoid material errors of commission or omission. A misleading or fraudulent appraisal review report violates the ETHICS RULE.

Appraisal review requires the reviewer to prepare a separate report setting forth the scope of work performed and the results of the appraisal review.

Appraisal review is distinctly different from the cosigning activity addressed in Standards Rules 2-3, 5-3, 6-8, 8-3, and 10-3. To avoid confusion between these activities, a reviewer performing an appraisal review must not sign the work under review unless he or she intends to accept the responsibility of a cosigner of that work.

Standard 3 - opinion about the quality of the work applies. Not necessarily value.

Otis · by **Otis** on Sat Oct 06, 2007 9:42 pm

And again "Corporate Lackey" I say "the OP did not say what the bank would or would not require". I agree with you both, but there is a lack of details pertinent to the question is all I keep coming back to, before we can really provide an educated and honest response.

Agreed?

Corporate Lackey · by **Corporate Lackey** on Sat Oct 06, 2007 10:36 pm

Absolutely Otis. My point is that as soon as the reviewer is asked to opine to quality, it needs to be Std 3. As such, my take would be that competency would apply. Now this can be scoped away in part with the permission and understanding of the reviewers employer (the bank), but it could be a slippery slope. Bill needs clarification from his state board. Or, perhaps if Bill is a member of the AI he can avail himself of Stephanie Colemans help on this one, as she really knows of what she speaks

Edd Gillespie · by **Edd Gillespie** on Sun Oct 07, 2007 8:54 am

So let me see. The bank is thinking of hiring a licensed appraiser to review appraisals that may be beyond his license level. The implication is that if they are beyond his license level then they are beyond his competency level as well (maybe not, but maybe so). That is my logical conclusion since the regs require the licensed apraiser to have a qualified co-appraiser sign off and help.

Now why doesn't the bank hire appraisers o reviewer that are licensed at the level required by the subject being appraised? 1. There are no appraisers available at that level. 2.
There are no competent reviewers at that level. 3. The can hire a licensed appraiser cheaper than they can hire a certified appraiser. 4. The bank doesn't know the difference and just needs an appraiser to sign off on apraisals after they meet the reviewers concept of quality.

I too am glad the bank is hiring a reviewer who is an appraiser, even though they are doing the profession's job at their cost. At least they are a step ahead of out sourcing it to India.

Bill Caudell · by **Bill Caudell** on Sun Oct 07, 2007 10:11 am

To those that have the opinion, I did not make a statement in my original post, in regards to a value opinion or not, please read this sentence and explain to me what you think it means.

Clearly written in my post:

"If, I am competent to review commerical and the review does not require an opinion of value"..........

If the review did require an opinion of value, that becomes an entirely different question (I know the answer to that question), IMO.

P.S. State is closed on Monday, hope they respond on Tuesday, as I have already inquired, just waiting for them to get back with me.

My guess will be, that the state contact response will be, it most probably wil have to be a full board decision.

State Appraiser Investigater (talked with him by phone) believes regulations will not apply, as it will be considered a 'Valuation Service" for an employer that will fall outside of USPAP.

I do not know, but will soon.

Yes, I want it in writing.

Pina Colada · by **Pina Colada** on Sun Oct 07, 2007 10:18 am

They can't get you when you operate outside of USPAP,

Yes, but if you are "an appraiser," you are NEVER operating outside of Uspap.

State Appraiser Investigater (talked with him by phone) believes regulations will not apply, as it will be considered a 'Valuation Service" for an employer that will fall outside of USPAP.

There you go. Sometimes when they can't read, it's a good thing. It's funny, because in 2005 the ASB changted AO-21 to include diagrams I suggested that are careful to shows that valuation services outside Uspap are something done by NON appraisers.

Yes, a concern is resentment

Another concern might be making a very basic error and being completely undressed by the rebuttal.

USPAP does not address license levels. It does address competency.

This point is made often and it is technically correct as far as it goes. However, states are equating license level to competency with laws that prevent lower license levels from engaging in appraisal practice while making no limits on a general license. The fact that USPAP does not address license levels does not rule them out of a societal or legal benchmark of competency.

If however, you are an employee of the bank and they understand that point, then there may not be a problem with it

If I had to take someone to task, it wouldn’t matter to me who his or her client is, nor do I see any distinction in the law or Uspap.

If an opinion of value is required, then appraisal licensing is applicable

All of the licensing laws that I have looked at (about 6) address appraisal practice in a very broad way and don’t make the mistake of limiting regulation to opinions of value only. I wouldn't want the job of convincing a trier of fact that the appraisal laws and other laws regulate only a portion of appraisal practice rather than the whole thing.

Corporate Lackey · by **Corporate Lackey** on Sun Oct 07, 2007 10:23 am

Bill, please re-read my post. Opinion of quality doesn't necessitate opinion regarding value. As soon as you render an opinion of quality, you are completing a review and you will need a standard 3 document in your workfile.

Goodpasture · by **Goodpasture** on Sun Oct 07, 2007 10:29 am

Pina Colada wrote:
If however, you are an employee of the bank and they understand that point, then there may not be a problem with it
If I had to take someone to task, it wouldn’t matter to me who his or her client is, nor do I see any distinction in the law or Uspap.

Nor would it matter their license level. In explaining why something was done the way it was done, clarity is essential, and if it is not clear to the lender/non-appraiser, then it should be addressed in a rebuttal. Challenging a stip by saying the reviewer doesn't know what they are doing because of licensing level indicates a bad appraisal, and the appraiser should be put on the do not use list. Those rebuttals that explain why they went 2 miles for the comparables are acceptable. The ones where the rebuttal begins with a "The reviewer doesn't have competency in this area" or "The reviewer is known for cutting appraisals" are the ones that frequently get sent to the state.

Bill Caudell · by **Bill Caudell** on Sun Oct 07, 2007 10:39 am

Corporate Lackey wrote:Bill, please re-read my post. Opinion of quality doesn't necessitate opinion regarding value. As soon as you render an opinion of quality, you are completing a review and you will need a standard 3 document in your workfile.

I agree and do not believe I ever disagreed

Pina Colada · by **Pina Colada** on Sun Oct 07, 2007 10:46 am

Challenging a stip by saying the reviewer doesn't know what they are doing because of licensing level indicates a bad appraisal, and the appraiser should be put on the do not use list. Those rebuttals that explain why they went 2 miles for the comparables are acceptable

That's exactly what I mean, setting yourself up to get undressed. If the job is reviewing commercial appraisals, a residential appraiser is already on society's do not use list - because, in part - comparables are not necessarily on the same continent as subject. "Two-mile" logic is residential logic.

Goodpasture · by **Goodpasture** on Sun Oct 07, 2007 10:56 am

Pina Colada wrote:
Challenging a stip by saying the reviewer doesn't know what they are doing because of licensing level indicates a bad appraisal, and the appraiser should be put on the do not use list. Those rebuttals that explain why they went 2 miles for the comparables are acceptable
That's exactly what I mean, setting yourself up to get undressed. If the job is reviewing commercial appraisals, a residential appraiser is already on society's do not use list - because, in part - comparables are not necessarily on the same continent as subject. "Two-mile" logic is residential logic.

Now you are arguing semantics.........of course commercial comparables are not necessarily within two miles, what a stupid observation. If that is the main objection to my statement, why did you bother writing? As I do predominately residential reviews I was using an example that "lives" in my world and is easily understandable to others reading this thread.

This gets back to the issue of competency. Licensing levels do not equate competency. Education and training does. Regardless of the complexity or size of a subject, fundamentals are still fundamentals. And whether it is an appraiser, an underwriter, or a dog catcher who is looking at the report, if the report is not clear and understandable, the appraiser should expect to write a rebuttal.

Pina Colada · by **Pina Colada** on Sun Oct 07, 2007 11:17 am

Now you are arguing semantics.........of course commercial comparables are not necessarily within two miles, what a stupid observation

.That's exactly what I thought when I read it. However, the larger instructional point for the open-minded is that it is only matter of time before a residential appraiser blows it reviewing a commercial appraisal.

This gets back to the issue of competency. Licensing levels do not equate competency

And no matter how many times you say it, it's still a losing argument. You can squawk all day about how licensing level is not a 100% predictor, but that still leaves the 90% of the time that it is. Make one misstatement in your review and you are within the 90% most likely and not the 10% exception. That's the problem with wag-the-dog logic. You can't force the other side or a trier of fact to make the same mistake. Once you make the practical error that dovetails with the lack of paper credential, better you would have saved everyone the trouble put the noose around your own neck and jumped.

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