1004D Inspection

[Monkeyfan]

I have made an appraisal subject to an inspection of the foundation and any required repairs in the inspection report. If the inspection doesn't require any repairs and states the foundation is okay, does the lender need a 1004D? Thanks.

 

[Riick]

>> If the inspection doesn't require any repairs and states the foundation is okay, does the lender need a 1004D?
If the lender orders a 1004d they need it to complete the loan package.

 

[Mile High Trout]

http://www.toonpool.com/user/589/files/unwritten_rules_742905.jpg

 

[Monkeyfan]

Thanks for the reply!

 

[hastalavista]

I have made an appraisal subject to an inspection of the foundation and any required repairs in the inspection report. If the inspection doesn't require any repairs and states the foundation is okay, does the lender need a 1004D? Thanks.

No, they do not. The appraisal is made subject-to the EA that everything was fine once inspected, and everything is fine per the inspection.
The lender shouldn't need anything.
However, for whatever reason, some lenders want something.
If they are asking you for a 1004D to affirm the condition has been satisfied, I'd request a copy of the report that says everything is fine, and then complete the 1004D very carefully, citing that I'm relying on the report to make that conclusion.

But, first I'd try to talk them out of requiring me to complete the 1004D (it is a waste of time and money).

Good luck!

 

[Webbed Feet]

I have made an appraisal subject to an inspection of the foundation and any required repairs in the inspection report. If the inspection doesn't require any repairs and states the foundation is okay, does the lender need a 1004D? Thanks.

I think post 5 is a pretty good answer, but I cannot agree with all of it partially in nuances and partially in substance. I agree the lender does not need a 1004D. This is about shifting the liability onto your shoulders and off the lender and underwriter. Obviously, you must have observed something about the foundation that you did not like. Otherwise you'd not of used an EA with an inspection condition. However, you DID use an EA with an inspection condition as YOU are not qualified to determine if what you observed was a detrimental condition representing a structural hazard. If this is not so, why else did you use an EA with an inspection condition? The answers to these questions now set us up for taking a hard look at that 1004D form.

I'll assume, as you didn't bother to tell us, that the lender is not interested in the top portion of the 1004D and is only seeking the bottom half "Certificate of Completion" to be filled out. With that, we need to read the Intended Use, Intended User statement, the question under that, and then most importantly the Appraiser's Certification. Did you read them? If so, or if not, go back and read them again, slowly. Now, stop and consider that somebody that didn't give a bloody wit about YOUR liability attempted to design a multipurpose certificate of completion and did one terrible rotten job of it. The form itself ONLY makes sense if you called for an actual repair that YOU are qualified to call for and qualified to determine if the final repair is satisfactory or not. Once any other type of action is called for, say an inspection that you are not qualified to perform, the 1004D certificate section not only no longer makes any sense, it is a misleading form report that causes you to take liability for an inspection that you are not qualified for in the first place. Think I am wrong? Ok, I can live with that. But ask yourself if YOU can live with signing a certification that says that YOU revisited the subject property and visually did your own inspection that confirmed that the conditions and requirements of the original appraisal have been satisfied.

While I appreciate Brother DeSaix suggesting a statement that says one relied on the professional inspection report of someone else, it doesn't stop the fact that the appraiser signed a certification saying just the opposite. This is no different than a supervisory appraiser signing on the right taking 100% responsibility for the appraiser that signed on the left of an appraisal report. My opinion? You sign that certification and you just figuratively signed on the right of that third party inspection report. Others can think I am all wrong about this, but I'll just suspect very few, to none, of them has bothered showing the 1004D to an attorney for an opinion on it. The real question is, are you willing to live with your signature on a liability time bomb just to make some lenders staff happy? A staff that should be able to comprehend that having obtained the positive third party inspection report itself satisfied the appraisal condition and that no completion certificate is needed as nothing was changed? Think it over.

 

[hastalavista]

While I appreciate Brother DeSaix suggesting a statement that says one relied on the professional inspection report of someone else, it doesn't stop the fact that the appraiser signed a certification saying just the opposite.

I agree with your caution on this, Barry. I couldn't argue with an appraiser deciding not to complete the 1004D. However....
Unlike the 1004, there is no prohibition whatsoever about modifying the pre-printed SOW, etc., for the certification of completion. While I (or others) might not see any significant additional risk completing a 1004D under the circumstances the OP described (and using the process I described, another group may assess the risk differently, and decide it isn't wise to provide the service. I wouldn't argue against that decision, even though I might handle it differently.

Think it over.

Good advice!

 

[VolcanoLvr]

While I generally agree here with my west coast brethren, everyone needs to understand that GSE forms are designed for one purpose: to facilitate processing a mortgage loan when an appraisal is required.

"The form itself ONLY makes sense" Thus, the forms we use don't always 'make sense.' In the strictest sense, the 1004D is one form that really needs to be revised, but it won't be....at least as long as the GSE's remain in control.

By the way.........because you have indicated a 'Subject to' condition, the lender probably will want to have a 1004D in their file so that they can avoid any possibility of loan buy-back on a procedural error.