Appraiser-Client Confidentiality SMT-5

This section is to explain the appraisers role in client confidentiality as described in USPAP.
(Uniform Standards of Professional Appraisal Practice)

SUBJECT: Confidentiality Section of the Ethics Rule

Confidentiality:

An appraiser must protect the confidential nature of the appraiser-client relationship.

An appraiser must act in good faith with regard to the legitimate interests of the client in the use of confidential information and in the communication of assignment results.

A appraiser must be aware of, and comply with, all confidentiality and privacy laws and regulations applicable in an assignment^.

An appraiser must not disclose confidential information or results prepared for a client to anyone other than the client and persons specifically authorized by the client; state enforcement agencies and such third parties as may be authorized by due process of law; and a duly authorized professional peer review committee except when such disclosure to a committee would violate applicable law or regulation. It is unethical for a member of a duly authorized peer review committee to disclose confidential information presented to the committee.

Comment: When all confidential elements of confidential information are removed through redaction or the process of aggregation, client authorization is not required for the disclosure of the remaining information, as modified.

^NOTICE: Pursuant to the passage of the Gramm-Leach-Bliley Act in 1999, numerous agencies have adopted new privacy regulations. Such regulations are focused on the protection of information provided by consumers to those involved in financial activities "found to be closely related to banking or usual in connection of the transaction of banking". These activities have been deemed to include "appraising real or personal property". (Quotations are from the Federal Trade Commission, Privacy of Consumer Financial Information; Final Rule, 16 CFR Part 313)

For additional opinions by the ASB (Appraisal Advisory Board) click here.

WARNING!

(ARM) Adjustable Rate Mortgage Holders!

New credit reporting criteria!

A new credit-scoring system that rates borrowers based on the type of mortgage they have could cause people with adjustable mortgages to pay higher interest rates on everything from credit cards to car loans.

Some financial experts, however, say this system bears a close resemblance to so-called universal default, which allows a credit card company to raise a customer's interest rate if he makes a late payment with another creditor.

"This is pretty much going to be all that credit card companies, student loan companies, auto lenders and other banks need to charge customers higher rates solely based on the kind of mortgages they have," said Lynnette Khalfani, a former reporter for t e Wall Street Journal and CNBC, and author of "Zero Debt." "Folks who were teased and seduced to sign up for ARMs just two years ago are paying for that decision in ways they never imagined," Mrs. Khalfani said. "You could never fathom it would cause higher rates on credit cards and higher payments too. That smacks of unfairness to the consumer." Not everyone with ARMs is struggling to make ends meet.