New 1004D Requirements / Update

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by Elliott, Jan 28, 2010.

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  1. Elliott

    Elliott Elite Member

    5
    Apr 23, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Oregon
    I know one of the AMCs sent the new requirements out, but
    can't seem to find them. As I recall, the update requires griding
    new comparables, exterior inspection w/photos.

    Anyone have them?
     
  2. Denis DeSaix

    Denis DeSaix Elite Member

    44
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    This is news to me?
    Whose requirements are these?

    (I assume we are talking about something different from completing the 1004d update in a USPAP compliant manner vs. having additional assignment-conditions for a GSE-eligible loan?)
     
  3. Elliott

    Elliott Elite Member

    5
    Apr 23, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Oregon
    I guess I'll answer my own question, searched my emails and found this from STARS (12/15/09),

    An important update from STARS regarding the FHA adoption of the Appraisal Update and/or Completion Form (1004D for FNMA):

    Effective with case numbers issued January 1, 2010 or after, all FHA Approved Lenders and FHA Roster Appraisers are to be aware that FHA is adopting the use of the Appraisal Update and/or Completion Report, which is often referred to in the industry as the "442 Form". This form has two purposes. The first is to extend the validity date of the original appraisal, and the second is to report the completion of required repairs.

    The adoption of the Appraisal Update and/or Completion Report is another step FHA has taken to standardize forms commonly used in the industry. This form provides a comprehensive method for appraisers to communicate and certify appraisal updates and completion information for lenders.

    Below is an overview of the use of the Appraisal Update and/or Completion Report:

    Summary Appraisal Update Report (Part A of the 1004D/442 Form)

    • The Update Report may be used when an appraisal is due to expire before a loan closes and the lender does not want to order a new appraisal report.
    • The validity period for the Appraisal Update is 120 days from the date the appraiser performed the Appraisal Update, not to exceed one year from the date of the original appraisal report.
    • The Update Report may not be used if the property value has declined.
    • The appraiser must be able to certify from an exterior inspection of the property that he/she can observe the improvements that contribute value to the property. In addition, at the time of update the exterior inspection does not reveal any significant changes or deficiencies that were not observed during the original appraisal assignment.
    • The original FHA appraiser is the only person that can perform the Appraisal Update, and the appraiser must be in good standing with FHA at the time the Appraisal Update is performed.
    • The appraiser must update their research and analysis of current market data to validate that the subject property has not declined in value from the original appraisal date. The appraiser must certify that there has been no decline in value on the Update Report form.
    • The appraiser must provide a photo of the subject property from the street and photos from as many angles that are visible from a public way.
    Completion Report (Part B of the 1004D/442 Form)

    • The Completion Report is used to report the completion of required repairs to the property per the original appraisal report.
    • The Completion Report may be performed by any FHA Roster Appraiser.
    • If the repairs required in the original appraisal report were not satisfactorily completed, the appraiser must comment on the impact to the property's value.
    • The Completion Report may not be used in lieu of a Compliance Inspection Report (form HUD-92051), which is required for new construction and manufactured housing.
    • This synopsis is intended as a "snap-shot" of the ML 2009-51, but should not be substituted for the entire contents of the actual Mortgagee Letter published by HUD.
    (This information was provided by AllRegs, the leading information provider for the mortgage industry.)

    To access the HUD mortgagee letter 2009-51 referencing this information, please click on the link below: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-51ml.pdf

    Please note: As a reminder to all FHA Roster Appraisers, please remember to add the FHA Case # on all FHA Appraisals. In addition, please comment when there is no hook-up/access to public water/septic and be sure to add comments regarding comparables used that exceed distance or age requirements. This will greatly minimize our requests for addendums going forward.

    Thank you,


    STARS Vendor Management
     
  4. Denis DeSaix

    Denis DeSaix Elite Member

    44
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    Ok, but there is no additional "grid new comps" requirement, right?

    (Although the appraiser would have to do some level of comparative analysis to ensure that the benchmark value of the prior appraisal can be supported or refuted. That work needs to be kept in the work file).
     
  5. Elliott

    Elliott Elite Member

    5
    Apr 23, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Oregon
    The appraiser must update their research and analysis of current market data to validate that the subject property has not declined in value from the original appraisal date.

    I dunno. Guess it depends on what peers do or do not do.

    I had a request for a 1004D and told the lender the fee would be higher. So I call
    HO and he has no interest in letting me in (condo), but its required in the request.
    HO says he's closed on the loan, making payments. A few days later he calls back
    and says, "go ahead, pick up a key." So I guess some loans don't close right away.
     
  6. Mike Kennedy

    Mike Kennedy Elite Member

    27
    Sep 28, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    New York
    B4-1.2-01, Age of Appraisal or Age of Property Inspection
    (04/01/2009)​
    Introduction​
    This topic contains information on the age of appraisal and the age of the property inspection.
    • Age of Appraisal or Age of Property Inspection
    • Updating the Original Appraisal Report
    • Updating the Original Appraisal Report or Property Inspection
    • Completing an Appraisal Update​
    Age of Appraisal or Age of Property Inspection​
    Properties must be appraised or inspected (if that is the level of property fieldwork recommended
    for a loan casefile underwritten through DU) within the 12 months that precede the date of the
    note and mortgage.​
    When… Then …​
    appraisal reports are more than four months
    old on the date of the note and mortgage
    —regardless of whether the property was
    appraised as proposed or existing construction
    appraisers must perform an update which
    includes:
    • inspect the exterior of the property and
    • review of current market data to determine
    whether the property has declined in value
    since the date of the original appraisal.
    a property inspection report for a loan casefile
    underwritten with DU mortgage is more than
    four months old on the date of the note and
    mortgage,
    appraisers must prepare a new DU Property
    Inspection Report (​
    Form 2075).
    Part B, Origination Through Closing
    Subpart 4, Underwriting Property
    Chapter 1, Appraisal Guidelines, Appraisal Document Standards,
    Report, and Property Inspections
    April 1, 2009

    Printed copies may not be the most current version. For the most current version, go to the online version at
    http://www.efanniemae.com/sf/guides/ssg/. 431​
    Note: ​
    The inspection and the appraisal update must occur within the four months that
    precede the date of the note and mortgage.

    Updating the Original Appraisal Report​
    The following table details requirements for determining appraisal update requirements:​
    If … Then …​
    the appraiser indicates the property value has
    declined
    the lender must obtain a new appraisal for the
    property.
    the appraiser indicates the property has not
    declined in value,
    the lender should request the appraiser to
    provide an update to the appraisal, based on the
    appraiser’s exterior inspection of the property
    and knowledge of current market conditions.
    The inspection and the appraisal update must
    occur within the four months that precede the
    date of the note and mortgage.​
    Updating the Original Appraisal Report or Property Inspection​
    Updates can be reported in the following formats:
    • Appraisal Update and/or Completion Report (​
    Form 1004D),
    • Uniform Residential Appraisal Report (
    Form 1004), or
    • in a letter.
    See B4-1.2-06, Appraisal Forms and Report Exhibits, for more information.

    Completing an Appraisal Update​
    The original appraiser should complete the appraisal update; however, lenders may use substitute
    appraisers.
    When updates are completed by substitute appraisers, the substitute appraiser must review the
    original appraisal and express an opinion about whether the original appraiser’s opinion of
    market value was reasonable on the date of the original appraisal report.
    The lender must note in the file why the original appraiser was not used.
    Part B, Origination Through Closing
    Subpart 4, Underwriting Property
    Chapter 1, Appraisal Guidelines, Appraisal Document Standards,​
    Report, and Property Inspections
     
  7. Denis DeSaix

    Denis DeSaix Elite Member

    44
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    Then feel free to count me in the "don't provide grid if not asked prior to acceptance" group. :laugh:
     
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