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Request to change sales price after submission

Discussion in 'FHA/HUD and VA' started by Toni Boyd, Jul 9, 2010.

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  1. Toni Boyd

    Toni Boyd New Member

    0
    Oct 13, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    South Carolina
    Good morning,

    I completed FHA report on 07/01 for purchase with sales price of $90,000. The appraised value was $85,000 and the report was submitted. The contract/sales price was ammended and sales price was changed to the estimated value of $85,000 which was signed after the appraised date. I added an addendum stated the contract price had been adjusted to $85,000 and stated the signiture date. The AMC is still requesting the sales price to be changed in the body of the report.

    It is my understanding that the FHA report can not be changed after submital, only minor corrections can be made.

    What are your suggestions of a response to the AMC. Should I simply state that the report can not be changed? Can you point me to the wording in HUD manuals that state the report can not be changed? Or am I mistaken?

    Please be nice as you can see I haven't posted much, if at all. I am well aware how everyone feels about AMC and I do share your feelings, but as many others I have a family to feed.

    Thank you for your responses!:peace:
     
  2. RSW

    RSW Elite Member

    17
    Feb 18, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Tennessee
    I believe your actions were correct. You can only make corrections to an appraisal for errors after it has been submitted to the lender. Stand your ground.

    There is a conflict between what the ASB has said and what the FHA protocol says. The ASB in a Q&A says you can make the change. But, the FHA protocol says you can't.
     
  3. Doug Meyer

    Doug Meyer Senior Member

    0
    Sep 13, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Indiana
    Per HUD in Atlanta: An Appraisal management company has the responsibility of assigning the work, however doesn't have the authority to make judgements about the content of the appraisal.

    That is enough for me. The direct endorsement underwriter is to make any requests, not the AMC. This is more of an underwriting issue and not an appraisal issue.
     
  4. NC Appraising

    NC Appraising Senior Member

    0
    Apr 28, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    This is from the NC Appraisal board Newsletter
    http://www.ncappraisalboard.org/bulletins/Feb2010.pdf




    """UPDATE OF AN APPRAISAL
    The Board receives a lot of inquiries about appraisal updates.
    Updates generally fall into two categories. Some are done
    when the original appraisal has been done subject to
    completion, and the work is now finished. Others are done
    when an appraisal was performed and the lender wants new
    data or a more current effective date. Both types of updates
    present problems for appraisers.
    The first type of update is generally done for new
    construction or renovations. After completion, the client may
    ask the appraiser to complete a “satisfactory completion
    certificate” or other document attesting that the construction
    is done. Often the client will also ask if the value has
    remained the same as in the original appraisal, and if there
    are changes, to explain. If the update refers only to whether
    the construction was completed as planned, the request is
    actually for a recertification. If the update request includes
    any reference to value, it is an appraisal, and you must
    comply with USPAP reporting requirements. Even if all the
    client wants is a statement that the value has not changed, it
    is still an appraisal
    Even though an update is a new assignment, this does not
    mean you have to start from scratch. You don’t have to
    duplicate all the steps taken in the first assignment. And you
    don’t have to have as much detail in an update, depending on
    how you report it. Your scope of work may be less. You may
    be able to do a drive by inspection instead of an interior
    inspection. You cannot, however, use confidential
    information from the first assignment, including value, for
    anyone except the original client and persons authorized by
    that client.
    Some types of updates typically seen by appraisers are
    requests for a change of lender or borrower, or a change in
    the contract price. Sometimes after an appraisal is
    transmitted, the contract price may be lowered. Appraisers
    should be very careful not to just change the information in
    the report and keep the same effective date and signature
    date. If the contract was changed after the effective date of
    the appraisal, the effective date cannot be any earlier than the
    date of the new contract. The earlier contract should also be
    mentioned in the updated report. Of course, if the lender
    changes, it is a new assignment and should be treated as
    such.
    On some occasions the property may be appraised for

    refinance, but it is also listed for sale. When the appraiser
    notes the current listing in the report, the client may tell the
    borrower to take the property off the market, and then ask
    the appraiser to remove the reference to the listing. The
    appraiser must have a new effective date for the updated
    report. Although Standards Rule 1-5(a) requires that the
    appraiser must analyze all current listings of the subject
    property, if the subject was on the market and was just
    withdrawn, this information is relevant to the appraisal
    problem and must be considered in the analysis. FAQ 126 in
    USPAP covers this topic.
    Clients may request clarification of items in the report, an
    explanation as to why certain information was not provided,
    or corrections of errors in the report. This is part of the
    original assignment, not an update. A request for more
    comparable sales or listings, while keeping the same
    effective date, is a new appraisal assignment, not an update.
    The appraiser is free to charge whatever he or she chooses
    for this assignment, or may charge no fee at all.
    Advisory Opinion 3 outlines how to handle an appraisal
    update. AO3 makes it clear that when a client seeks more
    current value of the property that was the subject of a prior
    assignment, the request is not an extension of that
    assignment. It is a new assignment and must be treated as
    such. This Advisory Opinion gives examples of three ways
    to comply with USPAP when doing an update.
    1. You can do a new report that contains all necessary data.
    2. You can do a new report that incorporates some of the
    data from the prior report by attaching that data to the
    update.
    3. You can do a new report that incorporates by attachment
    information or analyses from the first report. This can
    only be done if it is the original appraiser or an appraiser
    from that appraiser’s firm doing the update, and the same
    client and intended users are involved. It is assumed that
    the client and intended users have a copy of the original
    report.
    An appraiser may perform an update of an appraisal
    performed by another appraiser even if the first report was
    not done by an appraiser in the same firm. In this case, the
    appraiser doing the update can only use one of the first two
    options above to perform the update.
    Even though an update is a new assignment, it is up to the
    appraiser and client to decide what the compensation should
    be. Some appraisers believe that they must charge the same
    amount for each appraisal assignment, which is not true. If
    you do perform an update, you must make sure to retain a
    copy of the original report in the work file, along with copies
    of updates."""
     
    Last edited: Jul 9, 2010
  5. NC Appraising

    NC Appraising Senior Member

    0
    Apr 28, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina


    Doug,

    Do you mind if I use that as my tag line?

    Thanks,:clapping:
     
  6. Toni Boyd

    Toni Boyd New Member

    0
    Oct 13, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    South Carolina
    I updated AMC telling them the addenda has been added stating the updated sales price and contract date. As of the date of inspection/appraisal the sales price was $90,000 and the body of the report can not be changed. I also told them that the change they are requesting is illegal and I can not /will not do it. :nono:

    Thanks again for your responses!!!
     
  7. Doug Meyer

    Doug Meyer Senior Member

    0
    Sep 13, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Indiana
    That information is on a stick note in this section. Be sure to send me a monthly fee....:new_multi: :rof: Ole, Doug can use the money!!
     
  8. Doug Meyer

    Doug Meyer Senior Member

    0
    Sep 13, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Indiana
    Toni, have the HUD DEU send that request and not the AMC! It is not illegal, just has to be done correctly. Again, it is more of an underwriter issue not appraisal.
     
  9. Toni Boyd

    Toni Boyd New Member

    0
    Oct 13, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    South Carolina
    The LO actually called me directly yesterday because the underwritter wanted the perfect comp, within 1 mile/past 90 days/that does not exceed guidelines. He wanted to clairify what the underwritter was looking for and to also let me know he had uploaded the contract addenda which now had signitures. I stated to him I would add addenda stating new contract price and sales date in the addenda, but could not change the report as the sales price was $$ on the date of appraisal. He didn't seem to have any problem with that, this seems to be coming from AMC. Should I just wait for further response?

    If they want the body of report changed I need to do new inspection date, correct? So that the signiture date of contract is before valuation.

    I'm sorry but I'm a bit confused now as to how to handle.

    In my opinion, based on your responses, the report can be changed at the request of the underwriter, maybe not changed, but re-done with new inspection. Am I correct?
     
  10. Doug Meyer

    Doug Meyer Senior Member

    0
    Sep 13, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Indiana
    If this is an FHA, you should NOT be adding any additional sales unless the FHA direct endorsement underwriter tells you to. I would have that in writing from the underwriter. Did you not read the quote in #3 that I had received from HUD on a similar case as yours? If you are not sure what to do, call your Home Ownership Center. Which center are you under? They have an appraisal hot line, so call them, they will tell you what needs to be done. The Atlanta appraiser hotline number is
    1.800.225.5342
     
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