2055 & USPAP

[residentialguy]

You're reading too much into it, Peter. You can use an extraordinary assumption about the interior, if credible assignment results can still be developed

 

[Scott R Marshall]

I'm foreseeing the epic debate of whether one can do a credible 2055 form ever versus those that believe they can.

Next you'll be telling me I need to verify permits. Or letting me know ES Appraisal Services is behind on their payments.

 

[TxArmadillo]

Or letting me know ES Appraisal Services is behind on their payments.

:Eyecrazy: What?? :Eyecrazy:

 

[Peter LeQuire]

You're reading too much into it, Peter. You can use an extraordinary assumption about the interior, if credible assignment results can still be developed

There are circumstances in which I do 2055s on the current form: information about what I don't see myself I take from all the sources recited in the 2055 SOW - I get all that. But I have taken the position that the requirement to verify information from "disinterested sources" that don't have an interest in the current transaction severly limits the number of properties for which verification can be obtained and relied upon.

In a refinance, it certainly isn't the owner; in a sale, it's not the buyer or seller or any of the real estate agents involved. For a refinance transaction, I might rely on a recently expired or closed listing, and verify with the listing agent, since s/he doesn't have an interest in the current transaction.

If an EA about condition or room count or functioning utilities turns out to be contrary to fact, how can assignment results be credible? The SOW says the appraiser must be able to obtain adequate information from reliable sources: if the information reflects something contrary to fact, the default presumtion is that the information wasn't adequate and/or the sources weren't reliable. Perhaps the people who use these appraisers and their shills argue that these can be done and comply with USPAP and GSE requirements, but they are the same ones telling me I can't wish away the certs, limiting conditions and SOW, and I can't EA away something that I am elsewhere bound by the SOW, certifications and limiting conditions to verify.

Regardless, to my admittedly limited way of thinking, the weight of the process - a process in which the second step (after receiving a complaint or notice or whatever) requires me to notify my E&O carrier, prepare to pony up its $1,000 deductible to defend my it - the E&O carrier - against any claim, and then try to find an attorney who understands the nuances of appraisal roulette - far outweighs anything to be gained by accepting these assignments. You may have a different thought process - - great. I'll still let you buy me a dollop or two of McAllan's - 25 years old, preferably

 

[residentialguy]

If an EA about condition or room count or functioning utilities turns out to be contrary to fact, how can assignment results be credible? The SOW says the appraiser must be able to obtain adequate information from reliable sources: if the information reflects something contrary to fact, the default presumtion is that the information wasn't adequate and/or the sources weren't reliable.

Sure it's credible, if you have reason to believe it's credible. The report is based upon limited knowledge and you let the client know this with EA. It's a SOW, which brings with it risk that it might not be as you believe. Client beware.

 

[Rlong]

So no 2055 exterior is ever "as is"...

That is an interesting take, i had not heard before. Find it a little hard to believe, if it has been ordered knowing it is to be an exterior inspection...

Bob in CO

 

[Peter LeQuire]

Sure it's credible, if you have reason to believe it's credible. The report is based upon limited knowledge and you let the client know this with EA. It's a SOW, which brings with it risk that it might not be as you believe. Client beware.

I'm first baritone in the chorus singing that lenders put on their big boy pants when they order valuation products that are limited in scope. But, most of my lender clients have significantly deeper pockets than I; have lawyers on staff and on retainer; and can cause my business, my reputation, my pocketbook and my career a great deal of harm making me prove to them, the REAC and my E&O carrier that I complied with what I say I complied with when I undertook one of these assignments.

It doesn't matter that I wind up right - the cost of getting there is, for most of these assignments, not worth the downside risk.

 

[EddieB]

So no 2055 exterior is ever "as is"...

That is an interesting take, i had not heard before. Find it a little hard to believe, if it has been ordered knowing it is to be an exterior inspection...

Bob in CO

That is what I read into the OPs question. Obviously I should have quoted the current USPAP though:laugh:

 

[Mr Rex]

2055s for mortgage purposes are a no go unless a recent sale with info on MLS ( I still refuse) For pre foreclosure or similar, I slow down just enough so the photo ain't blurred and cash the check. SOW and intended use yada yada

 

[Doug Trites]

I have now received 2 calls about this file. The head people are telling me that the Head appraiser has talked to USPAP, Fannie and Freddie, and that it is not a USPAP violation to use EA and still mark the report "AS IS" I believe some USPAP instructors on this form have said that since they have added the 3rd box stating the EA portion, this is the box that must be used. The firm is now saying that they may not be able to pay if the report is no marked "AS IS" since the lender requires the report to be completed only "AS IS". Any comments about this.