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LSI Video Learning Series
Mandatory Training Module
USPAP “Avoidables”Violations that can be easily avoided
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Complaints are on the rise
Formal complaints to state boards have risen significantly in recent years.
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Complaints are on the rise
This is primarily due to:
•Declining home values
•Scrutiny of non-performing loans
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Obligations of State Boards
Regardless of the nature of the complaint, a state board is required to review for full USPAP compliance
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“Avoidables”
Appraisers are often sanctioned for USPAP offenses that are unrelated to the actual allegations in a complaint. This is often avoidable with little effort.
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Sales History
USPAP requires an appraiser to analyze any prior sale of the subject that occurred in the past three years and to report the results.
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Sales History
Analyze:to examine carefully and in detail so as to identify causes, key factors, possible results, etc. From Dictionary.com
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Reconciliation
Many reports do not contain an explanation of how the final value was derived from the value range indicated by the analysis
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Reconciliation
Two types of reconciliation are required:
1. Reconciliation of the approaches.
2. Reconciliation within each approach
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Reconciliation
Example:
•Sale 1 is given most weight because of its proximity and similar size.
•Sale 3 is given less weight because of the sale date.
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True Copies
The workfile must contain true copies of all reports
In USPAP, the report is defined as the thing transmitted to the client.
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True Copies
In the case of revisions, there are often multiple reports transmitted to the client.
Must have access to trues copies of all versions.
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True Copies
For a UAD report, the true copy is the MISMO file
Always retain copies of the MISMO files for the required time period.
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Adjusting for Concessions
Must employ recognized methods and techniques. SR 1-1(a)
Should NOT be adjusting on a pure dollar-for-for dollar basis.
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Adjusting for Concessions
Comparables are adjusted based on the effect on their price
What is typical in the market is irrelevant
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Exposure Time
Effective 01/01/2012, reports for market value appraisals must specifically identify the exposure time associated with the value opinion.
From the entire team at LSI
Thank You!!
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