I am very concerned of the appraiser's liability for such appraisal products. The person performing the hybrid appraisal inspection is unregulated, not under the control of the Licensed Appraiser, and does not relieve the appraiser from the liability of the hybrid inspector. What are the qualifications of the hybrid inspector? There are no regulations in place for the hybrid inspector to reduce the liability of the appraiser. USPAP is very clear the appraiser in responsible for the actions of others for his or her appraisal reports. Regardless of any disclaimer an appraiser may write in his or her report does not shield the appraiser from liability for the actions of others and out of full control of the appraiser. For this reason alone hybrid appraisal should be regulated in the State of Virginia. At a minimum The General Assembly should pass and the Governor should sign legislation regulating the hybrid appraiser and grant licensed appraisers immunity for the actions of others not under direct control or supervision of the licensed appraiser.
Bad loans and the S & L crash of the late 1980s created regulation and licensing of the professional appraiser. Then we saw the meltdown in the late 2000s for runaway values and again the valuation profession saw tighter scrutiny of the appraisal profession and an increase in the scope of work required by the lenders and appraisal management companies. Could history repeat itself and have another crash in home values? This world be devastating to Virginians and the State's economy.
As the board knows appraisers can remove their USPAP compliant hat and perform valuations that may not be USPAP compliant. I have ask several AMCs about performing this type of assignment as a valuation service and not under USPAP. They all said no, Must be under USPAP! Again all the liability is on the Virginia licensed appraiser.
The use of this type of appraisal report could and likely will lead to an increase in mortgage fraud, law suits against appraisers and higher E & O insurance premiums.
This is bad business for the citizens of the Commonwealth and should be banned or under direct supervision of the appraiser as required by USPAP.