2055 & USPAP

[Don Clark]

I would suggest re-reading the pre-printed 2055 form, then for clarification re-reading Advisory Opinion 2 and FAQ #144 from USPAP

You are correct. USPAP does not require that a property be inspected, from the street or any manner. That allows for exterior only inspections, and desk top appraisals. They can be perfectly USPAP compliant if one does them correctly and does not violate any client requirements require otherwise. In many past USPAP 7 Hour UpDate courses this was used as examples. Also, in such courses that I have taught, examples allowed an appraiser to only inspect 1 or more units, but not all in inspecting such things as apartment buildings, 2-4 Family, etc.

There is no "one size fits all" in USPAP compliance. I suggest that those who disagree stop taking online USPAP courses and sit in a live class where such things can be discussed.

 

[Sunshine in VA]

A good article on the FNMA 2055

http://appraisalnewsonline.typepad..../taking-stock-of-the-2055-appraisal-form.html

 

[23Degrees]

If this is for mortgage finance... the EA of regarding the interior (similar to the interior of the walls with a 1004) has already been taken care with the scope of work on the pre-printed form.

This logic tries to bring the interior condition of the home under the umbrella of Statement 4 within the report (statement 5 on the 1004). That dog will not hunt if push ever comes to shove.

You are correct. USPAP does not require that a property be inspected, from the street or any manner. That allows for exterior only inspections, and desk top appraisals. They can be perfectly USPAP compliant if one does them correctly and does not violate any client requirements require otherwise. In many past USPAP 7 Hour UpDate courses this was used as examples. Also, in such courses that I have taught, examples allowed an appraiser to only inspect 1 or more units, but not all in inspecting such things as apartment buildings, 2-4 Family, etc.

There is no "one size fits all" in USPAP compliance. I suggest that those who disagree stop taking online USPAP courses and sit in a live class where such things can be discussed.

My bold above -

All arguments regarding the 2055 always inevitably have the "USPAP does not even require an inspection" angle. That is nice but in this case, so what. With this abomination of a form someone who EA'd away the interior condition on a CB1 report for a client other than Fannie Mae on one of her pre-foreclosure assignments HAS violated client requirements. Not that it will ever matter. Again, the odds at this point that anyone will ever get called to the carpet on this are slim to none and Slim just ran off to Bali with his secretary.

 

[Don Clark]

This logic tries to bring the interior condition of the home under the umbrella of Statement 4 within the report (statement 5 on the 1004). That dog will not hunt if push ever comes to shove.


My bold above -

All arguments regarding the 2055 always inevitably have the "USPAP does not even require an inspection" angle. That is nice but in this case, so what. With this abomination of a form someone who EA'd away the interior condition on a CB1 report for a client other than Fannie Mae on one of her pre-foreclosure assignments HAS violated client requirements. Not that it will ever matter. Again, the odds at this point that anyone will ever get called to the carpet on this are slim to none and Slim just ran off to Bali with his secretary.

What client requirements have been violated? Read the Scope of Work in the 2055. The client MAY require more than what is required by USPAP but I do not see where the "client" who uses the 2055 has required more. SOW requires information from Public or Private sources, similar to what an appraiser would obtain for a comparable. Do you inspect the interior of comparables? Then what is different when you do not inspect the interior of a subject property as long as your verification is "similar to" what you would do for comparables?

 

[23Degrees]

What client requirements have been violated? Read the Scope of Work in the 2055. The client MAY require more than what is required by USPAP but I do not see where the "client" who uses the 2055 has required more. SOW requires information from Public or Private sources, similar to what an appraiser would obtain for a comparable. Do you inspect the interior of comparables? Then what is different when you do not inspect the interior of a subject property as long as your verification is "similar to" what you would do for comparables?

My bold above -

No but I can get verification of the interior of these properties without violating certification 10.

If the client requests use of the 2055 and appraiser completes it then the SOW on that form are now client requirements. If anyone believes that one can EA away the interior condition on a CB1 report on that form then they might want to re read the SOW and certs on that form, convoluted as it is.

 

[Don Clark]

My bold above -

No but I can get verification of the interior of these properties without violating certification 10.

If the client requests use of the 2055 and appraiser completes it then the SOW on that form are now client requirements. If anyone believes that one can EA away the interior condition on a CB1 report on that form then they might want to re read the SOW and certs on that form, convoluted as it is.

And how is past MLS data for the subject, if available, from a source that has nothing to do with the current assignment, not from a disinterested source? How is verification by public record, not from a disinterested source? You are over reading the certification #10.

 

[Webbed Feet]

And how is past MLS data for the subject, if available, from a source that has nothing to do with the current assignment, not from a disinterested source? How is verification by public record, not from a disinterested source? You are over reading the certification #10.

LOL..... This is too easy! Forever and always here, all of us are speaking to assumptions of the interior condition whenever this POS form comes up! Rarely anything else other than how all the preprinted stuff relates to that.

Pray tell, how does the appraiser then avoid the unspoken use of an EA that the past MLS data regarding interior condition is still applicable to the effective date of valuation? Since when did public records ever verify interior condition as of a specific date? The past, and on-going, standards of this trade when it involves a subject, versus a comp, are completely different for GSE form driven assignments.

It is completely comical. Within weeks of the 2005 year version of the 2055 coming out appraisal publications, state appraisal board members and administrators, USPAP instructors, CE instructors, all pretty much came forward and declared the new version to represent something not possible to be accomplished the majority of the time. Today, years later, this trade goes on massaging itself into a state of stupefied bliss every chance it gets.

The solution should have never been a bunch of self-massages. It should have been trade wide outrage that forced Fannie to fix the POS.

m2:

 

[23Degrees]

And how is past MLS data for the subject, if available, from a source that has nothing to do with the current assignment, not from a disinterested source? How is verification by public record, not from a disinterested source? You are over reading the certification #10.

Certification 10 says what it says. If past "recent" MLS data is available for the subject then that does put one on an even keel with the data available for the comparable sales in many instances. If you want to encourage relying on any and all prior MLS regardless of how long ago the sale of the subject was then I would call that bad advice but I'll let you clarify your statement in terms of the expiration date of MLS data with regard to verifying the interior condition of a subject property. In my experience having "recent" - less than one year - MLS data on a subject for a refinance assignment is the overwhelming exception not the rule. As for public records verifying for the interior condition of the property - that might work in some areas but relying on PR for anything beyond the basic parameters of the home would be a huge mistake where I work.

This argument is exasperating and not worth it considering that I've already conceded that the lenders and Fannie either don't need this line of attack or don't realize that they have it at their disposal. The fact that this form was created, continues to exist in its present form, and is supported with self serving logic by a large number of folks with varying degrees of credentials and experience does help expose some of the underlying reasons why this industry as a whole just might not be worthy of very much respect.

Done with the 2055 in 2006. Done with 2055 threads in 2013.

 

[Don Clark]

Certification 10 says what it says. If past "recent" MLS data is available for the subject then that does put one on an even keel with the data available for the comparable sales in many instances. If you want to encourage relying on any and all prior MLS regardless of how long ago the sale of the subject was then I would call that bad advice but I'll let you clarify your statement in terms of the expiration date of MLS data with regard to verifying the interior condition of a subject property. In my experience having "recent" - less than one year - MLS data on a subject for a refinance assignment is the overwhelming exception not the rule. As for public records verifying for the interior condition of the property - that might work in some areas but relying on PR for anything beyond the basic parameters of the home would be a huge mistake where I work.

This argument is exasperating and not worth it considering that I've already conceded that the lenders and Fannie either don't need this line of attack or don't realize that they have it at their disposal. The fact that this form was created, continues to exist in its present form, and is supported with self serving logic by a large number of folks with varying degrees of credentials and experience does help expose some of the underlying reasons why this industry as a whole just might not be worthy of very much respect.

Done with the 2055 in 2006. Done with 2055 threads in 2013.

I agree. If a MLS listing, sale, etc of the subject is more than a year old it is likely worthless. But, it could be worthless even if recent. No one can know exactly what the condition of any property actually is unless they inspect it. But, that is not what the SOW requires. It requires the same level of information that one uses for the comparables. USPAP does not even require that. I am certainly not a defender of Fannie Mae or any other secondary market participant. I do however believe in common sense. I can inspect a property today, and it can be trashed tomorrow. The world is not perfect, but some appraisers think they are or have to be.

 

[Fritz in NY]

I like the comps that have burnt down, flowed down river or were tear downs the best.