1. What’s an Appraiser to do? Life Beyond Fannie/Freddie Forms
Presented by:
Craig M. Capilla
181 Waukegan Road, Suite 205
Northfield, IL 60093
Phone:
ICAP – Summer Seminars - Lisle
August 20, 2018

2. Appraisal Choice? Reporting Options via USPAP Oral Reports
SR2-2(a):  Appraisal Report – content described
SR2-2(b): Restricted Appraisal Report – content described
Oral Reports
USPAP Standard 2 still applies
Hybrids? Limited? Summary?
STOP IT!
ICAP – Summer Seminars - Lisle
August 20, 2018

3. USPAP 2018 Definition of REPORT ETHICS RULE RECORD KEEPING RULE
Changes to whom the written/oral communication may be transmitted
“or a party authorized by the client”
ETHICS RULE 
Now explicitly references communication of assignment results in misleading or fraudulent by appraiser or other person
RECORD KEEPING RULE 
Incorporates communication of assignment results
WORKFILE
Workfile for Restricted Appraisal Report or oral appraisal report must be sufficient…
ICAP – Summer Seminars - Lisle
August 20, 2018

4. Hybrids? What is a Hybrid? Why Hybrids? Risks? No more than normal!
An Appraisal Report!!!
Opinion of Value –Typically Sales Comparison Approach
Reliance on 3rd Party Data
Otherwise simplified
Why Hybrids?
Presumably less detailed/less expensive
Sufficient for sophisticated clients
Risks?
No more than normal!
ICAP – Summer Seminars - Lisle
August 20, 2018

5. Hybrids Cont’d
Extraordinary Assumption: reliance on 3rd Party data and the appraiser has no reason to believe it is untrue/incorrect!
Restricted Appraisal Report?
When possible/appropriate.
New USPAP ideas?
Hybrid Workfile requirements
Still an Appraisal
Don’t get complacent here…
ICAP – Summer Seminars - Lisle
August 20, 2018

6. USPAP AO21 What hat are you wearing? Can you take off that hat?
Appraisal or “acting as” an appraiser – USPAP applies.
Can you take off that hat?
Client expectations.
ICAP – Summer Seminars - Lisle
August 20, 2018

7. BPO/CMA
(225 ILCS 458/5-5):
(c) This Act does not apply to a person who holds a valid license as a real estate broker or managing broker pursuant to the Real Estate License Act of 2000 who prepares or provides a broker price opinion or comparative market analysis in compliance with Section of the Real Estate License Act of 2000.
Must turn to Real Estate License Act language for permitted actions
Unintended consequences?
ICAP – Summer Seminars - Lisle
August 20, 2018

8. BPO - Act Language (225 ILCS 454/10-45)
(7) a statement in substantially the following form: "This is a broker price opinion/comparative market analysis, not an appraisal of the market value of the real estate, and was prepared by a licensed real estate broker or managing broker, not by a State certified real estate appraiser.“
Appraisers CANNOT perform BPOs/CMAs?
Not the intent – possibly the effect
Language amendment to Real Estate License Act?
Remove the clause?
Other changes?
ICAP – Summer Seminars - Lisle
August 20, 2018

9. Waiver
(225 ILCS 458/5-5)
(e-5) For the purposes of this Act, valuation waivers may be prepared by a licensed appraiser notwithstanding any other provision of this Act, and the following types of valuations are not appraisals and may not be represented to be appraisals, and a license is not required under this Act to perform such valuations if the valuations are performed by… 
IDOT forms
Longstanding exemption to Act
ICAP – Summer Seminars - Lisle
August 20, 2018

10. Assessment
(225 ILCS 458/5-5)
(e) This Act does not apply to a county assessor, township assessor, multi-township assessor, county supervisor of assessments, or any deputy or employee of any county assessor, township assessor, multi-township assessor, or county supervisor of assessments who is performing his or her respective duties in accordance with the provisions of the Property Tax Code. 
Proposed expansion of this language: (h) This Act does not apply to an Illinois licensed attorney at law when performing an evaluation of real property or filing of documentation in conjunction with a real estate tax assessment challenge or appeal of real property under the Property Tax Code as the representative of the property owner/taxpayer. This amendatory act of 2017 shall be construed as declarative of existing law and not as a new enactment.
ICAP – Summer Seminars - Lisle
August 20, 2018

11. Evaluations Interagency Guidelines
Threshold increased to $500,000 on commercial properties (as of 4/9/18)
First increase since creation in 1994
Commercial only
State Licensed or State Certified appraisers permitted to perform Evaluations by Rule
Contents of Evaluation established by Rule    
ICAP – Summer Seminars - Lisle
August 20, 2018

12. Evaluations – Act change?
(225 ILCS 458/5-5)
(g) This Act does not apply to an employee, officer, director, or member of a credit or loan committee of a financial institution or any other person engaged by a financial institution when performing an evaluation of real property for the sole use of the financial institution in a transaction for which the financial institution would not be required to use the services of a State licensed or State certified appraiser pursuant to federal regulations adopted under Title XI of the federal Financial Institutions Reform, Recovery, and Enforcement Act of 1989…
(a) It is unlawful for a person to (i) act, offer services, or advertise services as a State certified general real estate appraiser, State certified residential real estate appraiser, or associate real estate trainee appraiser, (ii) develop a real estate appraisal, (iii) practice as a real estate appraiser, or (iv) advertise or hold himself or herself out to be a real estate appraiser without a license issued under this Act…
“Acting as” = AO21
ICAP – Summer Seminars - Lisle
August 20, 2018

13. Bio-Contact Information
Craig Capilla is a trial lawyer, concentrating his practice in a wide range of civil litigation, including professional liability and commercial claims. He has successfully defended residential and commercial appraisers and appraisal firms accused of negligence or improper activity in their valuation services. Craig has also represented numerous licensed professionals in Illinois state licensing matters including real estate brokers, real estate appraisers, and medical doctors, process servers, mortgage loan originators and brokers. He has represented clients in both state and federal lawsuits and has appeared in various judicial circuits across Illinois and in Wisconsin. He has also assisted professionals with licensing proceedings in Wisconsin, Iowa, Minnesota, South Dakota, and Missouri. Craig earned a B.A. from the University of Michigan in 2004, majoring in History and Political Science. He then earned a Juris Doctor from the DePaul University College of Law in Craig is authorized to practice law in Illinois, Wisconsin, and is a member of the trial bar of the United States District Court for the Northern District of Illinois. Craig can be reached at
ICAP – Summer Seminars - Lisle
August 20, 2018