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#163064 - 02/24/04 03:28 PM
Customer provides bank with their appraisal.
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Junior Member
Joined: May 2003
Posts: 25
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Are we required to give the customer the disclosure "Right to Receive Copy of Appraisal" if the customer provides us with a current appraisal?
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#163065 - 02/24/04 03:42 PM
Re: Customer provides bank with their appraisal.
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Anonymous
Unregistered
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From jointly issued guidance on appraisals dated 10-28-03 "Independence is compromised when an institution uses an appraiser who is recommended by the borrower or allows the borrower to select the appraiser from the institution's list of approved appraisers. Institutions may not use an appraisal prepared by an individual who was selected or engaged by a borrower" I would question if you should even use this appraisal, unless another bank ordered it for them.
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#163066 - 02/25/04 05:54 PM
Re: Customer provides bank with their appraisal.
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Anonymous
Unregistered
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Having sat in on the ABA appraisal independence phone seminar yesterday, it was very apparent that banks shouldn't be accepting appraisals being brought in by the borrower. No one involved in loan production can even order or choose the appraiser.
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#163067 - 02/25/04 06:55 PM
Re: Customer provides bank with their appraisal.
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Junior Member
Joined: May 2003
Posts: 25
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#163069 - 02/25/04 10:11 PM
Re: Customer provides bank with their appraisal.
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Power Poster
Joined: Jun 2003
Posts: 7,658
Florida
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Quote:
Having sat in on the ABA appraisal independence phone seminar yesterday, it was very apparent that banks shouldn't be accepting appraisals being brought in by the borrower.
Are there any guidelines for third party originations??
Mortgage brokers usually obtain appraisals and shop the applications to several lenders. The broker has a vested interest in the loan closing, and it may not be the same interest as the banks'.
Was there guidance on broker provided appraisals? Thank you.
_________________________
Integrity. With it, nothing else matters. Without it, nothing else matters.
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#163070 - 02/25/04 10:46 PM
Re: Customer provides bank with their appraisal.
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10K Club
Joined: Aug 2002
Posts: 34,318
under the Lone Star
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Jax:
It all depends on who the broker is acting as agent for. If for the customer, you cannot use the appraisal if the customer or broker ordered it. If the broker orders an appraisal as your bank's broker, that is OK.
_________________________
Societies that do not find work in and of itself "pleasing to God and requisite to Man," tend to be highly corrupt.
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#163072 - 02/26/04 06:56 PM
Re: Customer provides bank with their appraisal.
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New Poster
Joined: Jan 2004
Posts: 21
Indiana
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Thanks, for the info. One of the attendees to the seminar "heard" that the lender should not be the person to order the appraisal, or look at the appraisal. I'm thinking how can they make a decision without looking at the appraisal. Again thanks for your update.
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#163073 - 02/26/04 07:13 PM
Re: Customer provides bank with their appraisal.
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Anonymous
Unregistered
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Quote:
Thanks, for the info. One of the attendees to the seminar "heard" that the lender should not be the person to order the appraisal, or look at the appraisal. I'm thinking how can they make a decision without looking at the appraisal. Again thanks for your update.
No one said that they can't ultimately "look" at the appraisal, or for that matter use the information contained within for making lending decisions. The guidance sets up that the appraiser needs to be engaged by an unbiased individual that is independent of the loan process. Upon receipt of the appraisal, it needs to be reviewed by a qualified individual who is also outside of the loan production process. Once the review is completed and the appraisal is found to be in compliance, the loan officer is allowed to use the appraisal for information in making a lending decision.
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#163074 - 08/12/04 12:23 PM
"reassigned appraisals"
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100 Club
Joined: Apr 2002
Posts: 100
Silver Spring, Maryland, USA
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The question has come up from our in-house attorney regarding appraisals received from brokers.
We are a savings bank regulated by the OTS. We have executed broker agreements that state the broker is acting as an agent of the bank. To establish our link with the apprasiser, the broker is ordering the appraisal, then providing us with a cover letter stating that they are re-assigning the appraisal to us when they send us the package for underwriting.
I don't think we have a problem, but I can't find supporting documentation for my opinion. The in-house attorney is expressing concern becuase the OTS recently sent out a CEO bulletin "clarifying" the existing reg....
help?
_________________________
IMNSHO, FWIIW
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#163075 - 08/12/04 01:23 PM
Re: "reassigned appraisals"
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Anonymous
Unregistered
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I didn't think it was permissible to use a re-assigned appraisal.
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#163076 - 08/12/04 03:40 PM
Re: "reassigned appraisals"
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Anonymous
Unregistered
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Quote:
I didn't think it was permissible to use a re-assigned appraisal.
I think you may have confused the terms "re-assigned" and "re-addressed". An appraisal can't be readdressed, but lending institutions are allowed to issue assignment letters permitting another lender to be able to rely on the assignment and make contact with the appraiser.
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#163077 - 08/12/04 04:50 PM
Re: "reassigned appraisals"
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Anonymous
Unregistered
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Quote:
I think you may have confused the terms "re-assigned" and "re-addressed". An appraisal can't be readdressed, but lending institutions are allowed to issue assignment letters permitting another lender to be able to rely on the assignment and make contact with the appraiser.
Ah ha. That's what I was thinking of. Thanks for clarifying.
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#163078 - 08/12/04 09:03 PM
Re: "reassigned appraisals"
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100 Club
Joined: Apr 2002
Posts: 100
Silver Spring, Maryland, USA
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So the question is; does 'make contact with the appraiser,' mean receiving a new cover sheet or is that only mean readdressing?
_________________________
IMNSHO, FWIIW
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#163079 - 08/12/04 09:33 PM
Re: "reassigned appraisals"
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Anonymous
Unregistered
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Quote:
So the question is; does 'make contact with the appraiser,' mean receiving a new cover sheet or is that only mean readdressing?
The regulations restrict against ever getting an appraisal readdressed. If it was ordered by Lender "A", but the appraisal is now being used by Lender "B", it will remain addressed to Lender "A". There is never to be a reiussing of the cover sheet or letter of transmittal with the new lender's name.
Without the proper assignment, the appraiser doesn't have authorization to speak to the new lender. The client relationship continues with the first lender until it's assigned.
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#163080 - 08/13/04 12:31 PM
Re: "reassigned appraisals"
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100 Club
Joined: Apr 2002
Posts: 100
Silver Spring, Maryland, USA
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I agree -- but can you give me a cite for that? Especially since you are responding anonymously?
_________________________
IMNSHO, FWIIW
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#163081 - 08/13/04 02:11 PM
Re: "reassigned appraisals"
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10K Club
Joined: Aug 2002
Posts: 34,318
under the Lone Star
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CHT:
It is a function of 323.5(b) and the USPAP. It is not ethical for an appraiser to readdress an appraisal done for one financial institution to another that (s)he did not receive the engagement from. It is your responsiblility to review the appraisal to determine it meets your standards and is otherwise acceptable. Since you did not engage the appraiser (s)he should not be willing to be contacted by your bank since you did not engage.
_________________________
Societies that do not find work in and of itself "pleasing to God and requisite to Man," tend to be highly corrupt.
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#163082 - 08/13/04 03:29 PM
Re: "reassigned appraisals"
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Anonymous
Unregistered
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You may want to read the guidelines that were issued in October 2003.
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#163083 - 08/13/04 08:32 PM
Re: "reassigned appraisals"
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100 Club
Joined: Apr 2002
Posts: 100
Silver Spring, Maryland, USA
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clarification: we are not "readdressing" the appraisals -- the original broker cover letter is included. We are currently having the broker assign the appraisal to us.
_________________________
IMNSHO, FWIIW
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#163084 - 08/13/04 08:52 PM
Re: "reassigned appraisals"
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10K Club
Joined: Aug 2002
Posts: 34,318
under the Lone Star
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CHT:
Have we been discussing residential real estate appraisals ? If so, please look at 323.3(a)(9)(ii)--at least that is the cite for FDIC regulated banks. For the OTS, look at 564.3 --- I believe it is the same. Residential real estate transactions are exempt from the appraisal rules as long as your bank uses appraisals that conform to FNMA or FHLMC. Doesn't this exemption make your question moot. The broker has been acting as your agent and you can use the appraisals as long as they conform to the above FNMA guidelines. Does this help ? I think your attorney needs to step back and take a deep breath.
_________________________
Societies that do not find work in and of itself "pleasing to God and requisite to Man," tend to be highly corrupt.
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#163085 - 08/18/04 03:49 PM
Re: "reassigned appraisals"
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Anonymous
Unregistered
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Just as a further point based on what a previous poster said - an appraiser can't even disclose the appraised value to anyone other than the client who retained his services. That's why it's so important to obtain an assignment letter from the engaging bank. Would you really want to rely on an appraisal and yet not even be able to ask the appraiser to verify the value?
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