Extraordinary assumption notation in report...

[robertwells]

Hi all, I'm just double checking myself... I'm handling a refi appraisal of a home that has some settling and I reached out to the AMC and sent them a photo for their input on the most appropriate way to handle/address for this particular lender, so he gave me his input and I'm going this direction (extraordinary assumption). It is appropriate for me to make note in my discussion in the appraisal that I'm handling it as an extraordinary assumption for the reasons I am (and some input from the agent to the lender), yes? There would be no reason for me not to note that in the appraisal, correct? It provides support and rationale for the approach I took...? Thanks, in advance...Bob

 

[J Grant]

Hi all, I'm just double checking myself... I'm handling a refi appraisal of a home that has some settling and I reached out to the AMC and sent them a photo for their input on the most appropriate way to handle/address for this particular lender, so he gave me his input and I'm going this direction (extraordinary assumption). It is appropriate for me to make note in my discussion in the appraisal that I'm handling it as an extraordinary assumption for the reasons I am (and some input from the agent to the lender), yes? There would be no reason for me not to note that in the appraisal, correct? It provides support and rationale for the approach I took...? Thanks, in advance...Bob

How bad in your observation and opinion is the settlement?

is the AMC going to sign on the report along with you ..we know answer is no, meaning they will have zero liability, all on you

If settling is significant enough that you think it is cause for concern, then make appraisal subject to inspection for settlement by licensed engineer or contractor. If you think settlement is minor/typical for older homes , then describe it as that is what was visually observed and recommend an inspection

Appraisers can not add an EA on a URAR report, ( the certification page instructs no EA or other changes to pre printed assumptions )

 

[Renee Healion]

JGrant says above:
"Appraisers can not add an EA on a URAR report, ( the certification page instructs no EA or other changes to pre printed assumptions )"

This is not correct. I disagree that we cannot use an EA in a URAR form report. The fourth checkbox is specifically for an extraordinary assumption and the preprinted text says so explicitly.

The point of EAs (and HCs) is that they are conditions to the opinion of value. They are the context in which our opinion is to be understood. We have to disclose them prominently. I would not soft-pedal the disclosure, if that is the OP's question. Disclose it and come back to it in your reconciliation.

 

[J Grant]

This is not correct. I disagree that we cannot use an EA in a URAR form report. The fourth checkbox is specifically for an extraordinary assumption and the preprinted text says so explicitly.
The point of EAs (and HCs) is that they are conditions to the opinion of value. They are the context in which our opinion is to be understood. We have to disclose them prominently. I would not soft-pedal the disclosure, if that is the OP's question. Disclose it and come back to it in your reconciliation.

We can not ADD an EA or HC to the URAR, we can only use the URAR pre printed HC or EA on the form (which have requirements such as an inspection or completion tacked on to them )

The fourth checkbox is an EA made SUBJECT TO REQUIRED INSPECTIOn

which is different than appraiser adding their own EA...(if that is what OP is thinking of doing )

 

[glenn walker]

Just remember if that bad boy has serious foundation issues a borrower could make a claim that your value was off and that he-she was not fully aware of the situation. Even many appraisers have a hard time differentiating between extraordinary from hypotheticals. Personally i would check the repair-inspection box and recommend the lender obtain an- inspection from a licensed contractor in engineer.

 

[Carnivore]

If you appraise a subject that is vacant and utilities are not "ON" In other words you don't know if something works or not. Then someone tell me why you can't add an EA in a FNMA Series Report noting that fact at the time/date of the Inspection? Maybe you just state that Utilities were not on and you were not able to check to see if they were functional.

 

[J Grant]

If you appraise a subject that is vacant and utilities are not "ON" In other words you don't know if something works or not. Then someone tell me why you can't add an EA in a FNMA Series Report noting that fact at the time/date of the Inspection? Maybe you just state that Utilities were not on and you were not able to check to see if they were functional.

because fannie said so is why...)

Utilities are on or not on, if they are not on, that is fa ct , why try to EA weasel around it? (For a non URAR can add an alphabet soup of EA and HC- but URAR has its own rules )

If utilities are not on, we make report subject to turn them on and re inspect . We don't make an EA that utilities were not on but we assume everything works (for conv URAR use)

 

[bnmappraisal]

I'm handling a refi appraisal of a home that has some settling

There would be no reason for me not to note that in the appraisal, correct?

Correct, I would definitely note what you observed at time of your inspection (i.e. potential settling)
Personally, I agree with Glenn and

Personally i would check the repair-inspection box and recommend the lender obtain an- inspection from a licensed contractor in engineer.

put it on them to state the extent of the settlement

 

[Carnivore]

because fannie said so is why...)

Utilities are on or not on, if they are not on, that is fa ct , why try to EA weasel around it? (For a non URAR can add an alphabet soup of EA and HC- but URAR has its own rules )

If utilities are not on, we make report subject to turn them on and re inspect . We don't make an EA that utilities were not on but we assume everything works (for conv URAR use)

OK, seems like I should know this(and I do) but was just thinking about it. So in the case of utilities be off its always a check box #3 and let the client decide what they want to do. (ftr, FHA is a different animal, so if they tell me they are on but on arrival there not on, Oh Well ...mo'money' trip back out.

It does and has taken some of our service to client out of the business, but it doesn't matter anymore because we don't communicate directly with Clients ...in most cases that dang AMC surrogate bottleneck gets in the way. Its a shame!

 

[CANative]

We can make all the EA's we need to make. But EA's have to be subject to verification that our assumption (that no changes are needed) is true. Hence the CB4.

To do otherwise in these form reports would be misleading.