1004D Appraisal Update - Certification question

[V. Nightshade]

I'm doing an appraisal update on the 1004 D using the Summary Appraisal Update Report section on top. My conclusions are that the value has declined. I'm including a narrative showing how I determined this. My question relates to the certification.

"3. I have updated the appraisal by incorporating the original appraisal report,"

What does this mean?

 

[Terrel L. Shields]

"3. I have updated the appraisal by incorporating the original appraisal report,"

What does this mean?

It means that the original report is a part of the report... In fact, I would attach that report to the 1004D.

You can "update" a report one of 3 ways.
1. Write a whole new report
2. Incorporate by attachment the report as part of the new report
3. Incorporate BY REFERENCE those portions of the report that is appropriate.

For all those who do "final inspections" using the 1004 D on property that was originally appraised by someone lese.... the landmine is that you just co-signed someone else's report. Did you even get to see it all?

And option 3 is explicit. You must be the one who did the report and the original client has to be the one who gets that report.
Option 2 is also tricky. Can you do so with someone else's report? Don't you basically add your name to the report in effect?

Just asking... AO 3 has your answer.

 

[V. Nightshade]

I did the original report just over 3 months ago. It is in an area of very low sales volume (unincorporated area of county). I'm basing my new conclusion on running several flavors of MC1004s --all of which show the same trend, as well as comparing the periods, and looking at trends for the area in general. I will read Ao3 and attach my original report. For some reason the loan didnt get funded. Since I think the value has most likely declined, do I need to do anything else?

 

[Mike Kennedy]

"USPAP 2010 FAQ

240. FANNIE MAE UPDATE REPORT FORM 1004D/FREDDIE MAC FORM 442

I have been asked to provide an update of a previous appraisal assignment and to
report the results on Fannie Mae Form 1004D/Freddie Mac Form 442. The form
asks me to check yes or no in response to the question “Has the subject’s market
value declined since the original appraisal date?” I have the following two questions.

Question: (1.) Does this constitute a new appraisal of the property?

Response: Yes; this is a new appraisal with a new effective date. Additional guidance can be found in
Advisory Opinion 3, Update of a Prior Appraisal.
http://www.USPAP.org/2010USPAP/AO/ao01_10/ao_03.htm

Question: (2.) How much of my analysis must I include in the report?
Response: Form 1004D is labeled as a Summary Appraisal Report. Therefore, the appraiser
must provide a summary of the analysis conducted in the assignment.

The analysis will vary from assignment to assignment, so the information required in the report
will also vary. In some cases it might be possible to summarize the analysis using the three lines
provided on the form itself. If the space provided is insufficient, then the appraiser must
supplement the form.

As with any written appraisal report, the appraiser is also required to include a signed certification.
For Fannie Mae Form 1004D, which would be used for a real property appraisal assignment, the
signed certification must be similar in content to that required in Standards Rule 2-3. If the
certification included on the preprinted form does not cover all of the points required in Standards
Rule 2-3, the appraiser must supplement the certification."


Also suggest reviewing an excellent summary by T.J. McCarthy - http://www.icapweb.org/pdf/Icap_Update_Article.pdf

FANNIE REQUIREMENTS 2010

https://www.efanniemae.com/sf/formsdocs/forms/1004d.jsp

 

[Riick]

For some reason the loan didn't get funded. Since I think the value has most likely declined, do I need to do anything else?

Learn to duck low-flying missiles and rafts of **it, as all parties will be ticked-off at you unless the LTV was very low.

 

[Terrel L. Shields]

Since I think the value has most likely declined, do I need to do anything else?

You will be asked to re appraise it most likely to reflect this new lower value...

 

[V. Nightshade]

Thanks all for input and resource material. When I dug into my data analyisis and drilled down into specifics, things weren't so clear cut on both a macro (overall market) and micro (actual subject comparables) level. McCarthy article really good. I have to admit it has taken years for me to wrap my head around some of these concepts.

 

[Webbed Feet]

I'm doing an appraisal update on the 1004 D using the Summary Appraisal Update Report section on top. My conclusions are that the value has declined. I'm including a narrative showing how I determined this. My question relates to the certification.

"3. I have updated the appraisal by incorporating the original appraisal report,"

What does this mean?

If you don't know what that means, you have no business touching the 1004d with more than a pinky while wearing thick leather gloves!

P.S. Have you figured out that the top portion of the 1004d is a completely new real estate appraisal that must comply with all applicable sections of USPAP...... and that form fails to do so as far as Standard Two and required minimum certifications?

 

[Mile High Trout]

Incorporating means by attachment or by reference.

Sometimes it's better to limit the 1004d to repairs. By attachment means that it's attached, by reference means it's stand alone. With FHA, there is a requirement to use it by attachment.

So if value has declined how does the attached 1004d recertification of lower value opinion relate to the attached appraisal report with a conflicting value opinion? That is why many feel the new assignment is more appropriate and straightforward.

 

[CANative]

by reference means it's stand alone.

No. "By reference" means that the client already has a copy of the original appraisal. The "Incorporation by reference" option can only be used when the update is for the appraisers original client.