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Can I appraise the home my brother is purchasing?

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by mcgarland, Feb 8, 2009.

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  1. mcgarland

    mcgarland New Member

    0
    Aug 18, 2007
    Professional Status:
    Licensed Appraiser
    State:
    Maryland
    My brother is in the process of purchasing his first house, which is a new home. The lender hired me to appraise the property. It is an FHA loan.
    The lender is aware that I am related to the borrower. Is it ok for me to complete the appraisal? The only thing I could find in researching this is the following line under the Appraisers Certification in the 1004:

    "I have no present or prospective interest in the property that is the subject of this report and I have no present or prospective personal interest or bias with respect to the participants in the transaction."

    I just want to make sure I am compliant with USPAP as well as FHA guidelines.

    Any help appreciated with this!
     
  2. leelansford

    leelansford Elite Member

    45
    Mar 29, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    Let me ask this: If later, someone were to question your appraisal and the issue of "bias" were to arise, do you see how someone could wonder about your abilility to be completely impartial?
     
  3. Delta85

    Delta85 Elite Member

    6
    Sep 22, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Connecticut
    At a minimum you'd have to disclose in the report what your relationship is to the borrower. Then when the UW sees that they may red flag it and decline to allow it anyways.
     
  4. Thomas Fiehler

    Thomas Fiehler Senior Member

    2
    Jun 2, 2003
    Professional Status:
    Certified General Appraiser
    State:
    Ohio
    MC-When in doubt, the answer is usually NO.
     
  5. mcgarland

    mcgarland New Member

    0
    Aug 18, 2007
    Professional Status:
    Licensed Appraiser
    State:
    Maryland
    That is a great point Lee, and I do understand the issue of "bias". It is a straight forward "cookie cutter" appraisal. A townhouse in a new neighborhood with lots of similar recent comps. I'm thinking I should keep the order but assign it to one of my FHA appraisers.
     
  6. Tom Woolford

    Tom Woolford Elite Member

    32
    Nov 20, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Florida
    CAN you do it; yes. SHOULD you do it: no.
     
  7. Mike Kennedy

    Mike Kennedy Elite Member

    80
    Sep 28, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    New York
    "I'm thinking I should keep the order but assign it to one of my FHA appraisers."

    define "my" ?????


    I suggest the following excerpt applies to one of "your" staff or IC appraisers accepting / completing the assignment at YOUR request no differently than if you did the assignment yourself.

    I have no (or the specified) present or prospective interest in the property that is the subject of this report and no (or the specified) personal interest with respect to the parties involved.

    I have no bias with respect to the property that is the subject of this report or to the
    parties involved with this assignment.

    ------

    IMO, the "well, the borrower wasn't my brother just the brother of my Boss / the Appraiser who assigned me the order and required that it be published under His Firm's Name - defense doesn't, and won't, pass muster as credibly Independent, Objective, and Unbiased.
     
    Last edited: Feb 9, 2009
  8. Roseann Dufala

    Roseann Dufala Sophomore Member

    0
    Jan 4, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    South Carolina
    In this world of litigation, I would say that the answer is NO, you should not do this appraisal. You might want to check your E and O provider, too.
     
  9. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    302
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    E & O would frown on it.
    Not worth the risk.
    UW will flag it.

    I got rejected once on an appraisal for having the same last name as a borrower who was neither kin nor had I ever met him. He was a reject from H & R Block because they thought I was lying apparently. I had a statement in the report that avered I was no kin nor even acquainted with them.
     
  10. Walter Kirk

    Walter Kirk Senior Member

    11
    Jun 24, 2003
    Professional Status:
    Licensed Appraiser
    State:
    New Jersey
    You certainly have a bias. The buyer is your BROTHER, you either love him or you hate him.
     
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