Wells Fargo Bank, NA 

wellsfargo.com 

November 28, 2012 

Appraisal Subcommittee 

1401 H Street NW, Suite 760 

Washington, DC 20005 

webmaster@asc.gou 

RE: Docket No. AS12-16 

Honorable Members of the Appraisal Subcommittee, 

Thank you for the opportunity to comment on proposed changes to the ASC statement published in the 

Federal Registry August 30, 2012. Wells Fargo has reviewed the changes suggested and respectfully request 

that Statement 5 be retained except as it must be changed to meet the requirements of Dodd Frank. 

Specifically we request the following actions: 

1. The term "technical review" be replace with the term appraisal review, and 

2.The following statement be retained: 

"The ASC, however, has concluded that for federally related transactions the review 

appraiser need not register for temporary practice or otherwise be subjected to the 

regulatoryjurisdiction ofthe State agency in which the appraisal was performed, so long as 

the review appraiser does not perform the technical review in the State within which the 

property is located." 

We understand the word "technical review" has different meaning and has resulted in misunderstanding the 

function being performed. This term is not defined in USP AP. Rather than removing the entire language, 

we recommend replacing "technical review" with "appraisal review" which is defined in USP AP as "the act or 

process of developing and communicating an opinion about the quality of another appraiser's work that was 

performed as part of an appraisal, appraisal review, or appraisal consulting assignment." Doing so will 

eliminate confusion as to the scope of work being discussed. 

The second area of concern is the proposed elimination ofthe following: 

"The ASC, however, has concluded that for federally related transactions the review 

appraiser need not register for temporary practice or otherwise be subjected to the 

regulatoryjurisdiction ofthe State agency in which the appraisal was performed, so long as 

the review appraiser does not perform the technical review in the State within which the 

property is located." 

We were informed some ofthe rational for deletion of Statement 5, in addition to Dodd Frank compliance, 

is FIRREA does not specifically state or grant the authority for the statement referenced above. A review of 

FIRREA, the Federal Registry publication of FIRREA, and subsequent clarifications are clear the 

requirements for certification/licensing are silent as to the certification/license being specific to the 

property's state. FIRREA requires individual states establish license/ certification programs and it is these 

state programs that limit activity of appraisers to individuals licensed/certified by that state. Additionally, 

at least one of the original drafters of FIRREA has publically stated FIRREA's silence as to an appraiser 

having to be licensed/certified by the state in which a property is located was deliberate on the part of the 

drafters. We believe the removal of this section of Statement 5 potentially will result in states requiring a 

reviewer be certified/licensed in the property's domicile state even when that reviewer is physically located 

elsewhere and has not entered the property's state as part ofthe review process. 
Such a requirement potentially will materially extend the time to complete a review as reciprocity is sought 

and will be detrim.ental to commerce by causing undue delay or by providing a competitive advantage to 

institutions located in the property's state. This in turn may result in financial institutions using noncertified/licensed individuals to perform reviews and/or conduct those reviews only for compliance matters 

not including value. 

Alternatively this will potentially force the use of outside [fee] reviewers in states where an institution 


doesn't have local staff; thus adversely affecting the quality of reviews as they will be accomplished by 


individuals lacking specific understanding of the rUik concerns and parpmeters of the institution. 


While a federally regulated institution may not be subject to these state requirements based "preemption", 

state licenses or certifications are held by individuals who are not covered by preemption; and thus, the 

institution would not have the desire or capability to proceed, 

At the risk ofbeing redundant we have bullet pointed our concerns below! 

• 	 Removal of Statement 5 expands the opportunity for states to require certification/license for review of 

properties located within a state by individual not in state. 

• 	 Such a. provision if enforceable would slow processing ofloan transactions while temporary 

certification/license is sought, 

• 	 Since license/ce'ctification is an individual's property, not a corporate qualification, even if"federal 

preemption" was relevant it would not protect the licensee from potential disciplinary action. This would 

put the staff appraisel' in an untenable position. 

• 	 Limit a financial institutions use of in-house staff in favor of fee reviewers located 'within a specific state. 

This could lead to a lessening of quality ofreviews as individuals not affiliated with an institution are not 

necessarily cognizant of the institutions risk considerations, may be hesitant to criticize a vendor they 

know personally, and likely aren't experienced in appraisal review for lending purposes. 

• 	 For highly complex/specialized real estate, particularly in less urbanized states, the change could limit the 

financial institutions access to a reviewer with property' type expertise 

(I Strictly from the appraisal perspective, the rationale for reqUiring local certification/licensing is 

geographic expertise. Ifthe financial institution hires a competent fee appraiser, the docmnent provided 

and other sources of information available through pay and open interne are more than sufficient to 

provide the reviewer with needed geogtaphic expertise, while maintaining the institutions ability to 

require risk analyses and property type expertise a11ailable through using internal staff, 

(I Requiring a reviewer to be locally certified or obtain temporaIY practice permits will increase the cost to 

the borrower and the. time for closing a lending transaction. 

• 	 For transactions with national 01' regional botl'owing potential, i. e. the borrower has the ability to solicit 

multiple lenders outside the immediate property's location; it will provide a competitive advantage to local 

institutions without regard to timing, pricing or capability. This will restrict the competitive environment 

for securing and pricing ofloans. Net effect will be to reduce competition and restrict interstate 

commerce. 

• 	 Many of the original drafters of FlRREA also developed the ASC statements. They have opined FIRREA 

was specific jn its not requiring certification of the appraiser in the property's state for purposes of a 

Federally Related Transaction and satisfying FIRREA. And relative to the review ofappraisals specifically 

clarified that in the ABC Statements. 

Thank you for your consideration of these comments in making your final decision. 

Sincerely, 

Fmfton H, Cross, MAl, MRlCS 

Group Head, RETECHS Group Head, Residential Valuation Services 

ChiefAppraiser ChiefAppraiser