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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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