But I Paid For The Appraisal!

Many times when speaking with a borrower, we are asked the question “Will I receive a copy of your report?” The answer to that is mostly yes but not in the way that most are expecting. Lenders have specific guidelines as to when and how a borrower receives a copy of the appraisal. In short, for first lien mortgages, lenders are required to provide a free copy of the appraisal report promptly after the report is completed and no later than 3 days prior to the loan closing. However, since the borrower is not our client, that report will not be sent by us.

USPAP is very clear about our responsibilities as an appraiser. For those who are not aware, USPAP stands for Uniform Standards for Professional Appraisal Practice. Prior to our applying for a trainee license, we are required to take a 15 hour course on this document. Then every 2 years we need to take a 7 hour update class. This document is the basis for how appraisers are to conduct themselves professionally and by state law, we must adhere to the principles and procedures contained in it.

 USPAP defines the client as “the party or parties who engage, by employment or contract, an appraiser in a specific assignment”. When the assignment is for lending purposes, it is either the lender who directly contracts the appraiser to perform the assignment and, more often than not as of this writing, an AMC (Appraisal Management Company) contracts the appraiser. An AMC is a vendor for the lender in order to more easily comply with Appraiser Independence Requirements that were initiated around the time of the 2007 mortgage crisis. USPAP is very clear as to the obligations we as appraisers are to adhere to when it pertains to our client and conversely prohibits us from those same obligations to anyone who is not our client. Nowhere in the definition of client does it refer to who paid for the appraisal.

 I could get on my soapbox about how the lender should be covering the cost of the appraisal for the reason that the lender is using the report for the sole purpose of making a business decision. The report is for their specific intended use and for them specifically as an intended user. The borrower named on the report is often clearly indicated within the report to NOT be an intended user and therefore, I feel the lender should be paying for the report. But I digress and with that said, since the borrower is not the client, we cannot provide the report nor discuss the report with them even if they paid for it. Yes it is their property, or will potentially be their property. Yes they might have paid for it. Yes they might even disagree with the conclusions contained in the report. But in short, they are not the client and therefore, any and all information they would like to receive about that appraisal needs to come from the lender.

 In closing, if you have received a copy of your appraisal and would like to speak to the appraiser who completed it, you need to go through the lender. We typically instruct any borrower who calls our office with questions or complaints to contact their lender who in turn will then contact us to discuss any issues you might have. We agree- you might have already paid for it. But we also must adhere to our guidelines and remember who the client is.