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  #1  
Old 07-09-2010, 07:22 AM
Toni Boyd Toni Boyd is offline
 
Join Date: Oct 2007
Location: St.Matthews
State: South Carolina
Professional Status: Certified Residential Appraiser
Posts: 36
Default Request to change sales price after submission

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!
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  #2  
Old 07-09-2010, 07:54 AM
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RSW RSW is offline
 
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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.
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  #3  
Old 07-09-2010, 08:30 AM
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Doug Meyer Doug Meyer is offline
 
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State: Indiana
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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.
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  #4  
Old 07-09-2010, 08:34 AM
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NC Appraising NC Appraising is offline
 
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Location: Greenville
State: North Carolina
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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 by NC Appraising : 07-09-2010 at 01:13 PM.
  #5  
Old 07-09-2010, 08:35 AM
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NC Appraising NC Appraising is offline
 
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State: North Carolina
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Quote:
Originally Posted by Doug Meyer View Post
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.


Doug,

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

Thanks,
  #6  
Old 07-09-2010, 08:48 AM
Toni Boyd Toni Boyd is offline
 
Join Date: Oct 2007
Location: St.Matthews
State: South Carolina
Professional Status: Certified Residential Appraiser
Posts: 36
Default

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.

Thanks again for your responses!!!
  #7  
Old 07-09-2010, 08:53 AM
Doug Meyer's Avatar
Doug Meyer Doug Meyer is offline
 
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Location: Central Indiana
State: Indiana
Professional Status: Certified Residential Appraiser
Posts: 3,743
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That information is on a stick note in this section. Be sure to send me a monthly fee.... Ole, Doug can use the money!!
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  #8  
Old 07-09-2010, 08:56 AM
Doug Meyer's Avatar
Doug Meyer Doug Meyer is offline
 
Join Date: Sep 2003
Location: Central Indiana
State: Indiana
Professional Status: Certified Residential Appraiser
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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.
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  #9  
Old 07-09-2010, 09:08 AM
Toni Boyd Toni Boyd is offline
 
Join Date: Oct 2007
Location: St.Matthews
State: South Carolina
Professional Status: Certified Residential Appraiser
Posts: 36
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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  
Old 07-09-2010, 09:33 AM
Doug Meyer's Avatar
Doug Meyer Doug Meyer is offline
 
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Location: Central Indiana
State: Indiana
Professional Status: Certified Residential Appraiser
Posts: 3,743
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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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