Occupancy Determination (CHECK BOX)

[AnonApprsr]

Mike, the scope of work indicated a single family residence, refinance with secondary market (fannie mae) guidelines. No mention of occupancy. It's implied that the scope of my work includes determining occupancy, due to the request of a 1004 URAR.


Update: I decided to stick with my original appraisal report, as sent to the client, with Tenant checkboxed and the explanation in the addendum. We will see if anything more comes of this, or if this hurts my relationship with the client. I assume not, due to this being my best client and having had no "fights" that ever lead to the implication, nor actuality, of any effect on business in the past. The senior loan analyst, who this hasn't gotten to yet, has told me that I am his favorite appraiser because my reports are so well written. That, of course, can change when some originator starts flipping kittens over something. We'll see.


Please, continue the discussion. I'm sure others will learn from it, and may even decide that what I did was wrong.

 

[Mike Kennedy]

Mike, the scope of work indicated a single family residence, refinance with secondary market (fannie mae) guidelines. No mention of occupancy. It's implied that the scope of my work includes determining occupancy, due to the request of a 1004 URAR.


Single Family, owner-occupied, Residence? :new_smile-l:

 

[AnonApprsr]

No. Didn't mention owner-occupied anywhere!

 

[Mike Kennedy]

Did you confirm prior to Accepting the order? Always a wise thing to do and necessary during the SOW discussion with a client.

 

[Peter LeQuire]

Sometimes! I try to keep the cleaning crew out of the interior pictures... :icon_mrgreen:

That's quite a feat - those folks can flat get 'er done - but at least their images would be blurred because they're moving so fast.

 

[residentialguy]

Many homes rent out a room, yet the owners stay there. Would you consider that owner occupied? And if you do consider it owner occupied, how do you know that is not the case with OP?

 

[residentialguy]

I did that, and the lender has decided that they would like to proceed with the Owner Occupied checkbox checked. Do I simply reply that the property was occupied as a tenant at the time, and based on the occupancy at that time, on the effective date, that tenant check box must be checked. Common sense brings up all the issues brought up here as to occupancy determined by appraiser.

What if you were to check the box and then make it clear that this is a client request and a tenant was staying there at the time, however it is only for two months.

EDITED: I see it is a little late for that, but still up for discussion.

 

[Peter LeQuire]

Anon -

Based on what you reported about the property on the day you looked at it, I believe the propery occupancy status is tenant: the key was left for you by a tenant whom the owner said was in the property. QED All of the other hypothetications are immaterial to the question raised. You don't write in a value at the client's request; you don't call a house complete when it isn't at the client's request when it isn't, & etc. as Ducky pointed out: why would you misrepresent occupancy?

If the client told you not to proceed with the appraisal if occupancy was other than owner-occupied, that might be a scope of work issue. Of course, if the client is in collusion with the owner to misrepresent occupancy status, you sure as stink don't want to be any part of that.

IMNTBHO reporting it as tenant occupied was proper.

 

[AnonApprsr]

What if you were to check the box and then make it clear that this is a client request and a tenant was staying there at the time, however it is only for two months.

EDITED: I see it is a little late for that, but still up for discussion.

I agree with Webbed that checking one thing, than saying another in an addendum is misleading.

 

[residentialguy]

Ok, I'll work on you a bit more, and with Brother Folken's most recent post (Thank You Brother Folken) for an aid we'll get this going in the right direction.

Under your logic, then again, you should mark all your 2-4 family properties to be owner occupied due to month to month tenancies. Afterall, those are technically "short term" also.

Consider what we are playing with here. This borrower/owner, most assuredly, marked the lending application as owner occupied, maybe even under the instructions of a loan officer to do so. We move to the last few years of FBI investigated prosecution of loan officers, property owners, and yes... appraisers on this matter.

"- Falsifications on Loan Applications "

http://www.hg.org/article.asp?id=4996

http://www.statelibrary.sc.gov/scedocs/C7665/000475.pdf

"misrepresenting investment property as owner-occupied property, ... Also in this report, the FBI indicated South Carolina is one .... and false credit reports to obtain a mortgage loan in the straw buyer's name. ..... such activity is illegal, and can result in federal prosecution for a knowing ..."

Ok then Brother ResGuy..... imagine yourself telling an FBI agent how one lone tenant told you it was "short term' so that is why you knowingly misrepresented the occupancy status other than what you knew it to be on the day of your inspection.......

I think we are confusing a Fannie publication with marking owner occupied if occupied by an immediate relative with if occupied "short term" by a unrelated tenant. Then failing to appreciate we just used a EA that the property owner is not renting to "short term" tenants all the time.

P.S. Plus, in your innocent belief it was all ok, it is right in your work file that you first reported it as tenant occupied and then you changed it upon request.

You're mis-representing what I said. If the homeowner stays there for 10 months and rents it for 2 months, it is primarily a owner occupied property. A decision to mark it as owner occupied, with an explanation that it is rented for 2 months is not misleading. I don't see how that is more of a misrepresentation then you saying that a home occupied by owner for 10 months is a tenant occupied property just because you appraised it during those 2 months. I understand your position, but I think this is a case of is the glass 1/2 full or 1/2 empty. Problem is that FNMA does not indicate whether they mean "that day" or "most of the time"