Late Appraisal: USPAP Violation?



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Late Appraisal: USPAP Violation?
By Isaac Peck, Editor

In a move that outraged many Oregon appraisers last Sept., the Oregon Appraisal Board warned its appraisers via email that failing to submit an appraisal on time “can be” considered a violation of USPAP. According to many, this is a very creative interpretation of the Uniform Standards of Professional Appraisal Practice (USPAP)! The controversy has been simmering ever since. However, the AQB recently issued an FAQ on the subject, settling the matter once and for all.

In the email to the Oregon appraisers in Sept. mentioned above, Gae Lynn Cooper, the Administrator for the Oregon Board, writes that the Board “has been receiving an increasing number of calls regarding ‘past due’ appraisal reports.” Lynn’s email stresses that an appraiser should communicate with the client if there are unforeseen circumstances that prevent a timely submission of the report and adds that “accepting an assignment is also accepting the associated assignment conditions. Failing to adhere to the assignment condition can be an actionable violation of USPAP and Oregon Statute.”

When an appraiser questioned Cooper how missing a due date could be a violation of USPAP, Larry Noe, an Investigator of Appraisal Compliance for the Oregon Board, responded in an email that, “A due date is an assignment condition and as such it is the appraiser’s responsibility under the Scope of Work Rule (Problem Identification) to comply with all assignment conditions. In some cases (rare cases) it could be an Ethics violation (see line 249 on page U-7 in USPAP). Also, ORS 674.140(13)(a) involves actions that constitute ‘bad faith’.”

The Board’s email announcement understandably inspired a great deal of controversy among Oregon appraisers. It also inspired a response from Scott Dibiasio, Manager of State and Industry Affairs at the Appraisal Institute. In an email to the Board, Dibiasio eloquently disagrees with the Board’s position and argues that there is nothing in USPAP that says that a violation of an assignment condition is a violation of USPAP. “What USPAP does say is that accepting an assignment condition that precludes an appraiser’s impartiality, limits the scope of work so that the assignment results aren’t credible, or limits the content of a report so that it’s misleading, is unacceptable. (Scope of Work Rule, U-14, Lines 441-442.) By accepting, and not meeting, an agreed upon Due Date an appraiser has not automatically done anything that would compromise their impartiality, the credibility of the assignment results, or limit the content of a report to such an extent that it is misleading,” writes Dibiasio.

In other words, Dibiasio explains, “If an appraiser misses a Due Date but maintains impartiality, produces credible assignment results, and does not limit the content of the report to the point that it is misleading, then no violation of USPAP has occurred.”

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Dibiasio goes on to disagree with the Board’s interpretation that missing a Due Date means that the appraiser has performed that assignment in a “grossly negligent manner.” “Missing a Due Date does not have any direct impact on the credibility of the assignment results,” Dibiasio argues.

Dibiasio also takes issue with the idea that a late appraisal submission constitutes “an act or conduct…that constitutes or demonstrates bad faith, incompetency, or untrustworthiness, or dishonest, fraudulent or improper dealings.” Dibiasio points out that the second part of 674.140(13) from Oregon law states that an act must be “substantially related to the fitness of the applicant or holder of a certification, license or registration to conduct real estate appraisal activity” in order for a violation of the statute to have occurred.”

“We do not believe that missing a Due Date in any way impacts the ‘fitness of the applicant or holder…to conduct real estate appraisal activity’ which is defined in Oregon State Legislature 674.100(1)(b) as the ‘preparation, completion, or issuance of an opinion as to the value of real property or an interest in real property.’” writes Dibiasio.

While granting that missing a Due Date may be “a contract issue and a poor business decision,” Dibiasio maintains that “It is in no way substantially related to the ability of an appraiser to prepare, complete or issue a credible appraisal.”

Appraisal Foundation Weighs In
When the controversy first arose, the Appraisal Institute requested that the Appraisal Standards Board (ASB) of The Appraisal Foundation (TAF) issue a “Frequently Asked Question” to clarify whether missing a due date is a violation of USPAP.

Nearly five months later, on February 10, TAF issued a FAQ inspired by and addressing this very issue. Settling the debate once and for all, the FAQ states unequivocally that missing a due date is not a violation of USPAP.

FAQ 2016-08: Is Turnaround Time an Assignment Condition?
My state’s appraiser regulatory agency sent out a newsletter that says a due date is an assignment condition, and that failing to adhere is a violation of USPAP. Is this true?

Response: “Assignment due dates are contractual obligations, but are not assignment conditions under USPAP. Turnaround times and similar items are business practice issues, and are outside the scope of USPAP.

Assignment conditions are addressed in the Problem Identification section of the SCOPE OF WORK RULE (Lines 421-425). The Rule states in part:
Assignment conditions include assumptions, extraordinary assumptions, hypothetical conditions, laws and regulations, jurisdictional exceptions, and other conditions that affect the scope of work. Laws include constitutions, legislative and court-made law, administrative rules, and ordinances. Regulations include rules or order, having legal force, issued by an administrative agency.

However, an appraiser failing to comply with contractual obligations could potentially be subject to civil penalties.”

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Behind the Curtain: Public Trust
In an interview with Working RE, James Baumberger, Chair of the Oregon Appraiser Board and President of Synergy Appraisal Services, offers some context to help appraisers understand what led to the Board’s email warning about due dates and USPAP. Baumberger was quick to note that he is speaking only for himself, and his comments do not necessarily reflect the opinion or stance of the Board.

Baumberger explains that when the email was sent Oregon was one of a few states where there was a very strong demand for appraisal services. “Over the summer of 2015, turn times on appraisals were getting extended and appraisal fees were going up rapidly. Much of what occurred was simply supply and demand and that’s not an issue that the Board is concerned with,” Baumberger said. “However, a trend began where appraisers would take assignments, agree to the due date, and not deliver an appraisal. The real problem is that some appraisers were going dark and not answering their phones, nor responding to emails, and not updating websites/portals. So there were a lot of sales transactions where people were being negatively affected,” says Baumberger.

Before sending out the email warning, Baumberger reports that the Board checked with as many as 11 other state appraisal boards, to ask if they thought this might be a violation. To Baumberger’s knowledge, only a couple of the boards thought that it was not a USPAP violation, so there was consensus that it might be a violation.

The increase in the number of complaints and the number of people affected by the delays and the lack of communication caused the Board to begin to view the problem as one which was negatively affecting the public trust. “While I’m not authorized to speak for the Board, I can tell you that an important part of the Board’s vision in Oregon is to protect the public trust. When the public has negative impressions of real estate appraisers, when the public begins to view appraisers as unprofessional and unreliable, then the public trust in the appraisal function begins to erode and that negatively affects financial institutions, credit systems and the countless families involved,” argues Baumberger.

Under Pressure

The pressure on the Board from lenders, AMCs, home buyers, and even state and federal legislators continued to intensify as a backlog of appraisals were delaying closings around the state. “Lenders and AMCs were up in arms and we received calls from families who were living in hotels with their possessions in a moving truck because they were waiting for an appraisal and the closing date had been missed,” Baumberger said. “The Board also was contacted by several state legislators, and one federal legislator, who were hearing from their constituents that it was difficult to impossible to get an appraisal and that people could not buy and sell homes because a minority of appraisers were being unprofessional,” says Baumberger.

The most important aspect to the Oregon Board’s email warning, according to Baumberger, is to stress that communicating with the client is absolutely key for appraisers and that failing to do so has very real effects not only on people’s lives, but also on the public’s perception of the appraisal profession as a whole. “The Board’s email was an attempt to encourage appraisers to communicate with clients. It was very important that the Board issue some kind of notice because there were many families adversely affected. Nobody is faulting the appraiser if the agent/broker wants to delay the inspection, or the seller misses an inspection appointment. It’s our genuine hope that most appraisers are shaking their heads because they already run their businesses like professionals, and hopefully those appraisers who have been unprofessional will take it as a warning. It doesn’t help any appraiser if the public has a negative view of appraisers. All the Board and the public need is for appraisers to communicate with their clients,” says Baumberger.


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About the Author
Isaac Peck is the Editor of Working RE magazine and the Director of Marketing at, a leading provider of E&O insurance for appraisers, inspectors and other real estate professionals in 49 states. He received his Master’s Degree in Accounting at San Diego State University. He can be contacted at or (888) 347-5273.

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Comments (24)

  1. Is it legal to request a RUSH on an appraisal in OR and what are the concerns in doing so and how do they determine cost on a RUSH is there a percentage% over the amount that is standard??? Comments

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  2. Maybe lender should start ordering the appraisals at the point of application instead of 5 days before they need it. To me they don’t allow enough time for the appraisal to be completed appraisals take longer than they ever did

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  3. The real issue is NOT whether a late turn time is a USPAP violation or not. The issue that should concern ALL appraisers and even state legislators is that Oregon’s Appraisal enforcement division did not KNOW the answer in the first place!

    Clearly THEY lack the COMPETENCY to properly enforce USPAP compliance. Worse than that though is they checked with eleven OTHER states that ALSO lack competency! This then becomes a case of the blind leading the blind. THAT is what is achieved by having organizations such as AARO for state regulators!

    Oregon is not the only state that doesn’t know USPAP sufficiently to enforce it properly. TO attempt to rationalize their improper actions, they claim ‘they were under pressure.’ Well, welcome to the world of real estate appraisal Oregon!

    Lenders and AMCs created conditions that produced a TEMPORARY shortage of appraisers; coupled with lending inducements to increase volume and now they are upset about long turn times and what THEY claim is lack of communication! Lenders will send as many as three or four notices a DAY for past due reports! Of COURSE appraisers stop responding. If they didn’t, they’d spend all day holding their clients hands and telling them the same thing they told them the day before; and the day before that, and the days before that!

    Its increasingly clear across the country, that regulators lack either the training, or the funds to properly review assignments for USPAP violations. It is also increasingly clear that there is a need for an appraiser volunteer peer council in every state that to review ALL complaints prior to referral for censure or penalty.

    Regulators have increasingly become revenue generation sources for their states, rather than protectors of the public interest.

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    • You raise a very good point about competency on the side of the regulators. I believe that the Appraisal Foundation did have a metrics for violations and how sanctions should follow, and that there is available training.

      Anyone who sits on a state board, be it as an appraiser member, or a member from the community, should have specific training and expertise. After all, they are dealing with the very livelihoods of those they are charged with regulating.

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  4. How long are you talking about? – Late for 3 weeks- while a family has to go to a hotel? – or 2 days? Maybe if you are talking about weeks you may have something, but anything under a week or 10 days – should be business as usual.

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    • Dave, in 1986 the waiting period before the appointment was even made was 3 to 4 weeks from time or order. Then it was another couple weeks. Lenders want two day service. They are ALSO seeking ‘reasons’ to start utilizing authority they already have in not ordering appraisals at all for deminimus transactions.

      IF I tell a client I need three years income and operating expense history and that I cannot go further until I have it and they take a month to provide it, who’s at fault? Same with permits, C of O’s, etc..

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  5. This is unbelievable. Do state agencies police attorneys for being slow to turn out legal work? Are CPA’s fined or disciplined for being slow to do audits or prepare tax returns? Are medical doctors disciplined for making us wait in their lobby for an hour past the promised appointment time? No, none of these other “professions” get any heat for the way the treat the public. But let an appraisal be late by one day when it is a complex assignment then the AMC wants to reduce the fee and a state appraisal board contemplates the lateness being a USPAP violation. It’s hard to make this stuff up!

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    • by Robert Lawrence, retired

      Some of this is true since many boards and staff are of the bureaucrat ilk and “just doing the job”. The real problem lies in the “Public”, who is usually lenders who rely on the appraisal and want theirs to be first. The natural inclination is to offer incentives to be first as in rush fees. This is followed by product producers (appraisers) who allow their regular work to be sidelined for the rush fees. This is ethically problematic. In my career, it was standard business practice to take care of the steady regular work as usual and place the added workload into the over-time category, where, just as in 40 hour week jobs, overtime gets a bonus. “Losers” in all of this can turn out to be borrowers who may face all sorts of fall-out from late assignments. I have no quick-fix to offer. But appraisers should plan on this occurring from time to time and adjust accordingly. In the end, doing the job well and right is foremost and will ensure that we are paid professionally for our work product and effort.

      - Reply
  6. Ladies & Gentlemen: What does ETA mean. My understanding is “ESTIMATED TIME of ARRIVAL”, with extra emphasis on estimated. I no longer include an ETA with any bid for services, as, 2 week later, the AMC has not found a lower price, but try to assign the report, with the same ETA. which is before the date of assignment.
    The AMCs, which are “supposed to be” operating under USPAP & Dodd-Frank, are “dictating” 1-2-3 day turn times, contact borrower in 2-4-6-12 hours of accepting assignment, etc. I understand that “time is of the essence”, however, the AMCs QC department will then contact me 2 weeks later with revision/clarification request (questions usually already contained in report) & the Lender UW 2-6 weeks later (questions usually already contained in report). It appears that “time is of the essence” is only for the appraisal/Appraiser.
    By “dictating” these conditions, they are Advocating for the Lender, based on what their sales people have “guaranteed” the Lender, that they can deliver “Credible” reports, under these draconian conditions. No body bothered to check with the individual Appraiser to see if these conditions were even attainable. These conditions make the requested report a “Contingent Assignment”, which, could be considered a violation of USPAP, is a probable violation of Dodd-Frank, as it places the Appraiser under undue duress.
    As per Customary & Reasonable Fees, the AMCs & the respective Lenders need to be educated that not all appraisals are not “cookie cutter” assignments & C&R Fee & ETA are a variable that needs to be considered, especially after the implementation of TRID Regulations.
    All We, as a Profession, can do is say NO, Enough is Enough.

    - Reply
    • by Robert Lawrence, retired

      Yep, the beat goes on and this war is not going to be over soon. The fact appears to be that appraisers are held out as necessary evils and their product is priced accordingly. Further, too many report producers are not in it for the professionalism but for the profit and easy money. This is really not that kind of a business most of the time but one reason I got out of it. Our clients wanted it fast and cheap and that is what they have been receiving. Of course, at the end of the “day/week/lona life”, the shoddy effort blame goes onto the lap of the profession. Those who chose to do it right get to suffer along with the rest of the school of fish while the sharks poach away.

      - Reply
  7. The boards are over reaching as usual. Any way they levy fines to get money. They lack working on most important issues. I tell AMC’s 7-10 days after inspection if there are no problems. 99% of the time I run into some type of problem(s). Trying to verify data, trying to reach Realtors, etc. Working to get the report to reconcile and make sense with very limited sales. I tell them ETA is just what it means estimated time of arrival so please do not rush me if you need a rush then get someone else.

    - Reply
  8. A appraiser can not guarantee a due date for many reasons,

    1. Not all properties are on MLS or online data bases , so you don’t know the property

    2. People change the homes , could have a fire, flood etc, so without inspection you don’t know.

    3. You can gurantee a due date until the property has been fully inspected, we have come up on beautiful homes on the outside and the inside is just studs.. we deal with metal houses, earth burm houses etc.. Our market is not a cookie cutter market over half have no zoning.

    Trying to hold the appraiser to specific time period is pressuring the appraiser to skip critical steps possibly in order to make a dead line. People should see the emails and snarky messages we get from AMC’s to get it done , they are supposed to be the go between , however they are becoming higher paid per appraisal then the appraiser and will do anything to keep the client aka the lender happy.

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  9. Unrealistic turn times. Dealing with occupied homes with people who have restraining orders. Non-cooperative owners (losing their home) tenants, realtors who need to contact owner/tenants before appraisal can be set up, owner out of town, state or country, missing mls/lock boxes. Complex properties. If I had one and only one appraisal or even two or three appraisals to do. All deadlines “maybe” met. However, if I had only 1-3 appraisals to do. I wouldn’t be an appraiser. Three day d/b deadlines set by the AMC a 24hr turn time after the inspection “time” (over weekend and holidays). I can hear a giant sucking sound as people will bolt from this profession. God forbid you get sick, have an accident, your family member becomes sick or gets into an accident. The owner has a family crisis. This doesn’t even bring in the AMC “shopping for the cheapest appraiser.” I know of a property I’m presently working on the AMC sat on it for 13 days shopping for an appraiser for a Marine waterfront large gla home on acreage. They didn’t want to pay my fee. Now after shoped around and killed 13 days of the borrowers 21 day lock; I’m at fault if a deadline isn’t met? Even notifying the AMC/Client you get “why Mr./Ms. Appraiser” can’t you meet the turn time “we set”?

    - Reply
  10. So an appraiser takes on an assignment due in two days and as many of us know the client or lender later during the assignment adds on to the assignment. The famous “creep” is on. The two days are outside the original assignment SOW. The state board now is hollering, “Your late on the due date” They (State regulators) must be smoking the notorious stuff in Oregon.

    - Reply
  11. by David Wakefield

    It always seems to come down to the appraisal, when we are the last thing ordered
    they have signed the contract some time ago and until all other paperwork is completed to send the order out, if you need faster service please order the appraisal when you get the order , let something else be the last thing you order so that it can be there fault for a change.

    - Reply
    • by Cynthia Sulamo

      This is so spot on! Appraiser’s need sufficient time to complete a well documented and researched appraisal. Often a “late” appraisal is due to agent’s or lenders not providing needed information in a timely manner. If you order the appraisal LAST you will always be waiting for it. Ordering the appraisal in a timely manner is the professional thing to do, not squeeze it in at the last minute and expecting it to just be a necessary evil to support the contract. The appraiser may find something unexpected that needs research. Communication thru some AMC’s are so difficult it is crazy.

      - Reply
  12. If they want to speed up the process, eliminate the need for in-season comparable photo’s or original comparable photo’s all together. The need to drive-by homes with the current technology and available on-line photo’s seems to be a big waste of time. In the area’s I work 90% of the time I have to included a MLS photo anyway because the home is either in a gated community and/or not seen from the road.

    - Reply
    • Wow. Another appraiser that thinks DOING HIS JOB PROPERLY is a waste of time! Yesterday I was in Porter Ranch (biggest natural gas blow out in American history). Sitting on my butt in my office reviewing the more than 300 photos that I also reviewed did not help me interview residents (4); OR to see the collapsing cliffs and earth movement that may or may not be related to the gas leak and underground storage of natural gas. It would not have identified the extensive cracks in the recently slurry coated streets all through the neighborhood. Now, I already knew about the 5mm soil movement a year due to being on a fault line because I DID MY JOB, but how all these factors fit together would not have been evident except by driving the subject area; its neighborhood and all around ALL of the comparable sales. Maybe that’s the real difference between charging for what my work is worth versus only being paid what the bottom end of service is worth.

      - Reply
  13. There is NOTHING in USPAP that talks about due dates !
    When are the guys that sit on the other 49 state boards going to
    “man up” like Louisiana did. Fine for not paying customary and reasonable fees
    and quit worrying about these petty USPAP violations. Because an appraiser didn’t
    cross a “t” he gets disciplined and his E & O doubles, driving him out of the business.
    Wise up guys.

    - Reply

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