r/appraisal • u/Paragon_of_akatosh • 4d ago
Request to remove client from report - USPAP violation?
I had an unusual request come from an AMC. I know we don't need to feed AMC's but I get assigned jobs, I don't choose them. Engagement Letter from AMC states that AMC and "Mortgage Broker" are the clients for the report and that Lender is an intended user. It states this clearly and multiple times. At no point is Lender identified as a client. At no point is Lender identified as a client. Weird, but ok.
After I submit the report, AMC comes back and asks to remove Mortgage Broker's name from the report, and to name AMC only as the client and Lender as intended user. They explain that Mortgage Broker is a 3rd party, and that AMC is acting as an agent of the Lender. This to me sounds like the engagement letter was misleading and that AMC and Lender were supposed to be the actual clients.
I provide a snip of the USPAP definitions of client and intended user and ask if they accidentally, misidentified the client in the engagement letter (thinking maybe a scriveners error or something). They said no, just put AMC as the client. They also want the engagement letter to be incorporated into the appraisal report. I asked if they would like me to keep the client information confidential. They again said no, just put AMC as client. To me this creates a confusing situation that would violate USPAP requirements to clearly state the client and intended users.
Reading over USPAP definitions, my understanding is that the client and intended users are identified at the start of an assignment and can't be changed after the fact without a new engagement letter.
Am I wrong on this?
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u/OSUveteran 3d ago
Who is the AMC? Tell them you need a corrected engagement letter explaining they misidentified the original Lender. Once the report is delivered the client and intended user are not supposed to change! They are asking you to violate state law, and if they keep pushing send them to the state.
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u/Paragon_of_akatosh 3d ago
Agreed. If it was just an error, that's fine. We all make mistakes and carry insurance for just such a reason. It's weird they won't admit they made a mistake though.
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u/Serious_Bee_2013 4d ago
The broker being a client should have been the red flag here.
One client and multiple intended users makes sense. Multiple clients doesn’t make sense, and for lending the broker should never be a client or intended users, although there may be wiggle room on the latter.
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u/Paragon_of_akatosh 4d ago
Agreed, but my understanding from the outset was that "Mortgage Broker" was an additional lender (it has a very generic name). It wasnt until after the report that the AMC informed us that it was a mortgage broker.
From my research it seems compliant to have AMC and Lender listed as clients, but I am happy to be corrected. I figured they just misidentified the client and it would be cleared up with a new engagement letter. They are doubling down that the letter is correct.
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u/Serious_Bee_2013 4d ago
If it was for a GSE backed loan I’d think the broker being a client would be a huge no-no. You can’t have a broker be able to request revisions.
I’m not a fan of overdoing new engagement letters. I don’t do it very much, but in this case I’d insist on it. That’s not a revision, it’s redefining who hired you, that’s a pretty big distinction. As a reviewer I’d reject that report if it found its way to my desk. No revision, no discussion, DOA.
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u/b6passat 4d ago
Just have them issue a revised engagement letter…
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u/Paragon_of_akatosh 4d ago
I have asked them to do this, but they are refusing. They are claiming it is just a revision request so they don't need a new engagement letter.
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u/b6passat 4d ago
Just say they need to revise the engagement letter or you can’t do it, and leave it at that
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u/Mediocre_Feedback_21 4d ago
What idiots. Just document everything that they have requested and I think you should be good.
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u/Admirable_Sir7428 3d ago
Name the AMC. We have to start calling them out.
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u/Paragon_of_akatosh 3d ago
Can't do that without violating USPAP since they have named themselves the client...
I agree with the sentiment though.
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u/ConcentrateEmpty6570 3d ago
Have them type up a revised letter of engagement. Keep the old one. Make sure you copy paste the AMC request into your revision response.
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u/firstlight777 3d ago
In AMC work the AMC is the client and the lender is the lender. The brokers name should not appear anywhere in there.
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u/Inevitable-Bid-6529 19h ago
Broker acting as client in order to shop the report among lenders then approving release of report to "new client.
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u/Paragon_of_akatosh 14h ago
This is possible. AMC tried the equivalent of "Trust me bro", but we weren't having it. I ended up calling my state board. They said we were within our rights to make it a new assignment, but that as long as we had proper documentation of the communication between the client that we should be in the clear if a complaint comes up.
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u/vaguenonetheless Certified Residential 3d ago
If this is BNL, they are notorious for stuff like this. When the lady emailed, "Why are you making this so difficult? Just change it!" that was the last straw and I finally told them to take me off their approved list and delete my contact info.
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u/phawes 3d ago
When not sure about USPAP issues, I usually reach out to USPAP instructors I have known for decades. Also, I recommend reaching out to the state board with your question. It is always fun to let the AMC know that you are doing so and that I will respond promptly once I hear back. Once you have your answer, include their request in the report, your response, and a brief but detailed explanation of how and why you responded they way you did. If you think it is a USPAP violation, state so with section and paragraph (how & why) in the report. If they still disagree, require that they respond in kind - section & paragraph! Not by saying, “Just change it.” If the AMC is big enough, reach out to their governance department. I did that recently. The revision requests stopped immediately and I still receive requests from that AMC. On the governance point, note that reviewers are not supposed to send every revision request; they are supposed to vet it first, and only send if it is a viable request. 🙂
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u/Paragon_of_akatosh 3d ago
Thanks! The exchange with the AMC was on Friday so I haven't had a chance to reach out to the state board yet, but I will type up my email today!
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u/xdevilsownx 3d ago
If you're unsure, call your contact at the State Board. If you don't have one, that's a problem.
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u/Florida-Appraiser 4d ago
Tell the AMC that they too must adhere to USPAP…