Jeff Dickstein, Pro Teck’s Chief Compliance Officer, is responsible for Pro Teck’s adherence to all state, federal and industry regulations. With Notes from the Regulatory Road, Jeff provides timely commentary on what is happening in the industry.
Last month, The Appraisal Foundation released a new video on YouTube explaining the new changes to the 2018-19 version of Uniformed Standards of Professional Appraisal Practices (USPAP).
The revised USPAP guidelines, which are industry recognized ethical and performance standards for the appraisal profession in the U.S., have gone through various iterations over the years. The final version was released on Oct.1 and the changes are expected to go into effect on January 1, 2018.
The 32-minute video, published Oct. 19, features Appraisal Standards Board Chair Margaret Hambleton and Director of Appraisal Issues at The Appraisal Foundation, John Brenan, explaining each change in detail.
USPAP touches on many discipline, following are the specific changes that have to do with Residential Appraisal Services:
- Revising the definition of Report and edits to the ETHICS RULE and RECORD KEEPING RULE — The Board adopted proposed revisions in the Third Exposure Draft to clarify the definition of Report, as well as edits to the ETHICS RULE and the RECORD KEEPING RULE applicable to the communication of assignment results. As put forth in the Third Exposure Draft, the Board did not adopt revisions related to communications of assignments results prior to the completion of the assignment other than the ethical and record keeping requirements that appear in that section. Although there was support for specifically addressing draft reports, the Board also learned that there were significant unintended consequences that might occur with the adoption of any such requirements.
- Creating a definition of Assignment Conditions, revising the definitions of Assignment, Intended Use and Intended User, and related edits to the COMPETENCY RULE — The Board created a definition of Assignment Conditions, a term that had only been previously referenced in the SCOPE OF WORK RULE. The Board also adopted revisions intended to clarify the definitions of Assignment, Intended Use, and Intended User, as well as making related edits to the COMPETENCY RULE to clarify an appraiser’s obligations prior to agreeing to perform an assignment. Although the Board did not revise the language “at the time of the assignment,” the Board did receive comments expressing concern with its meaning. Therefore, in the near future the Board intends to issue guidance to assist in clarifying the intent of that terminology.
- Removing the definition of Assumption and revising the definition of Extraordinary Assumption — The Board deleted the definition of Assumption, as its use is not intended to differ from the generally accepted meaning of the word. The Board also adopted a revised definition of Extraordinary Assumption, with administrative edits, in an effort to clarify that term and its applicability.
- Revising the definition of Appraisal Review, and dividing STANDARD 3, Appraisal Review, into STANDARD 3, Appraisal Review, Development and STANDARD 4, Appraisal Review, Reporting — The Board adopted changes proposed in the Third Exposure Draft to edit the definition of Appraisal Review to include its use as an adjective. The Board also adopted the proposed revisions to divide STANDARD 3, Appraisal Review, into STANDARD 3, Appraisal Review, Development and STANDARD 4, Appraisal Review, Reporting. The edits are intended to improve consistency with the other development and reporting standards.
- Revision to illustration in Advisory Opinion 21, USPAP Compliance — The Board adopted the addition of a new graphic in Advisory Opinion 21, USPAP Compliance, as proposed in the Third Exposure Draft, and it will replace the chart beneath the longstanding “ovals.” The new chart better illustrates the relationship between Valuation Services and Appraisal Practice.
- Creation of Advisory Opinion 37, Computer Assisted Valuation Tools — The Board created Advisory Opinion 37, Computer Assisted Valuation Tools, as proposed in the Third Exposure Draft. The new Advisory Opinion addresses an appraiser’s obligations when relying upon adjustments, trend analyses, or other information generated by software or various online services.
- Revisions to Advisory Opinion 31, Assignments Involving More than One Appraiser — The Board adopted revisions to Advisory Opinion 31, Assignments Involving More than One Appraiser, as proposed in the Third Exposure Draft, to help clarify guidance related to significant appraisal assistance.
- Revisions to Advisory Opinion 1, Sales History — The Board adopted revisions to Advisory Opinion 1, Sales History, as proposed in the Third Exposure Draft (with deletion of lines 1749-1752), to help clarify guidance related to an appraiser’s proper analysis and reporting related to a subject property’s prior and pending sales and current listings.
Click here to read each revision in greater detail.
Pro Teck will continue to monitor this situation, and as always will make sure our clients are compliant with all state and federal law.
Jeff Dickstein, Pro Teck’s Chief Compliance Officer, is responsible for Pro Teck’s adherence to all state, federal and industry regulations. He’s active with a number of industry boards and is currently Chairman of The Appraisal Foundation’s Industry Advisory Council. Jeff has been in the mortgage industry for 36 years, with more than 29 years of experience as an appraiser (he is a Certified Residential Appraiser in 17 states).