Valuation Firm Opposes New Rule from USPAP
Advisories issued by the Uniform Standards of Professional Appraisal Practice could result in consumers who use third-party originators having to pay more for their appraisals, said an executive with eAppraiseIT here.
Under the new USPAP regulations, appraisers can no longer do a "retype" of the appraisal document, substituting the name and address of the purchasing lender for the selling broker or lender, explained Anthony Merlo, executive vice president and chief operating officer of eAppraiseIT during a media teleconference held by the company.
The USPAP action follows a joint statement from the Office of the Comptroller of the Currency, the board of governors of the Federal Reserve System, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration made last fall. This statement said retypes violate the regulations of not only USPAP but those of the above bodies as well.
Until now, brokered or closed loans sold to lenders could have the appraisal form merely "retyped" in the buyer's name. There was no additional fee or work associated with this.
However, Mr. Merlo said, USPAP prohibits this practice because under its interpretation the buying lender "is not the client" that ordered the appraisal.
As a result, a new order has to be made, and there will be a financial impact on some party in the transaction, he said.
Right now, eAppraiseIT is absorbing the fee for its clients, but that situation will be changing shortly. "We can't do that for the long term," he explained.
It becomes an issue, whether the loan seller or the loan buyer will be responsible for the additional fee. Like the appraisers who will be doing the work associated with the new order, "we too want to be kept whole," Mr. Merlo said.
But when it comes down to it, he continued, "usually it is the consumer at the end of the line" that will end up bearing the costs of this new regulation.
Furthermore, although this new regulation has been in effect since the start of the year, he noted that many mortgage originators are finding it to be news to them.
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