A prior client asks the appraiser to 'readdress' last year's report to a new lender by swapping the client name. The appraiser should:
Correct Answer
D) Explain that a new assignment with the new client is required
Do not substitute a new client name in the old report as if that party engaged the original assignment. Establish a new assignment for the new client, identify its intended use/users and appropriate effective date, and perform the work needed. The new effective date need not automatically be current if a valid retrospective opinion is requested. Prior research may be reused appropriately while protecting confidential information and results. Authorized delivery of a prior report is a separate issue and does not itself create a new client relationship.
Why This Is the Correct Answer
Option D is correct because the new lender did not engage the original assignment, so swapping its name into last year's report would misrepresent the client relationship. A new assignment for the new client is needed, with its intended use, users and an appropriate effective date identified. Prior research may be reused where appropriate, while protecting confidential information and assignment results.
Why the Other Options Are Wrong
Option A: Change the name for a small administrative fee
Option A, changing the name for a small administrative fee, is still readdressing. Charging a fee does not change the fact that the new lender would be shown as a client although it did not engage the original assignment.
Option B: Change the name but add the current date beside it
Option B, changing the name and adding the current date beside it, makes the problem worse. It misrepresents the client and suggests a current analysis that was not performed.
Option C: Forward the old report directly to the new lender as a courtesy
Option C, forwarding the old report to the new lender as a courtesy, is wrong because delivering a report to another party is a separate issue that requires proper authorization and does not create a new client relationship. A courtesy transmittal also risks disclosing assignment results without the original client's consent.
New client, new assignment
A client name cannot be swapped like a label. A different client means a different assignment.
How to use: Use this whenever a question asks about changing the client or lender name on an existing report.
Exam Tip
Answers that change the name on the old report, with or without a fee or new date, are the same prohibited act in different wording.
Common Mistakes to Avoid
- -Believing a small fee makes readdressing acceptable
- -Assuming the new assignment must have a current effective date in all cases
- -Forwarding the old report to a new party without proper authorization
Concept Deep Dive
Analysis
This question tests the concept of readdressing a report. Changing the client name on an existing report misrepresents who engaged the appraiser. The appropriate response is to treat the new lender's request as a new assignment with its own client, intended use and effective date.
Background Knowledge
The client is the party that engages the appraiser in a specific assignment, and the report identifies that client. Readdressing a report to another lender after the fact misstates that relationship. A new client requires a new assignment, though the appraiser may draw on prior research where appropriate and may provide a retrospective opinion if that is what is requested.
Real-World Application
A borrower switches lenders and asks the appraiser to put the new bank's name on last year's report. The appraiser explains that the new bank would need to engage her in a new assignment, which she can perform using her prior research where appropriate.
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