2055 & USPAP

[HouseWear]

...is to make them read the report..

So I would challenge them to prove Fannie is contradicting her own forms. Fannie herself preprinted that an EA cannot be added and then CB1 used. Regardless, many state boards consider a report that says a thing in one place of the report, and then contradicts itself somewhere else in the report, to be a violation of the USPAP as a misleading report.

Again, I would suggest the solution is to allow reporting on the 1996 year version 2055 form that does not prohibit the addition of EA or HC when done outside of the use of check boxes 2, 3, and 4.

So how do you suggest an exterior pre-foreclosure gets done without interior access?

I know Landsafe/Wells Fargo/Chase/All other lender order 2055's on the new form for asset valuations. If that is the case, then there are millions/billions of reports out there that have violated USPAP?

I've been doing tons of research on this topic, and have only found conflicting answers(100's of them).

 

[Scott R Marshall]

So how do you suggest an exterior pre-foreclosure gets done without interior access?

I know Landsafe/Wells Fargo/Chase/All other lender order 2055's on the new form for asset valuations. If that is the case, then there are millions/billions of reports out there that have violated USPAP?

I've been doing tons of research on this topic, and have only found conflicting answers(100's of them).

See post #19.

While I guess one could not say with absolute certainty that Fannie or Freddie will never get their hands on your asset valaution appraisal, the fact is the appraisal you have done is not for lending purposes but you have a clueless leinholder that needs the report on the current form. Sometime in UAD format even.

Could your state still come after you? Sure. But if Fannie or Freddie ever came a calling, they were not an intended user of the report. Now if Fannie or Freddie hired you directly to do the same, then you may have some issues.

 

[Terrel L. Shields]

It is not clear to me that the OP means this is a Fannie mae project. If it is, then the selling guide I recall explicitly requires the appraiser obtain information regarding the interior from some party - Realtor, recent MLS pix, client, owner, whomever. I do not see how you EA that requirement away though fannie is happy for you to do so.

If the loan goes south, then all they need to do is point this out and force the lender to take the loan back en toto and clawback the money....Your appraisal is not credible because you did not follow fannie guidelines. The 2009 FM "Guidence for Lenders and Appraisers" explicitly says you must upgrade to 1004 if the appraiser is unable to determine the condition or view the property from the street. That does not really leave any room to EA away the interior inspection. You must have a source for the interior conditoin and frankly, it best be correct...

But for the non-fannie mae report, the question in my mind is can this fannie mae exclusive form be used in a non-fannie mae situation without being misleading? Doesn't the certs say it is for fannie mae?

Frankly, I've never seen a place for the 2055...ever. The form is inadequate. The certifications inappropriate for a simple driveby and frankly, they are more work and I charge more for them.

 

[Mr Rex]

Fannie Mae uses the 2055 for their pre-foreclosures. Ironic huh?

 

[Webbed Feet]

So how do you suggest an exterior pre-foreclosure gets done without interior access?

I know Landsafe/Wells Fargo/Chase/All other lender order 2055's on the new form for asset valuations. If that is the case, then there are millions/billions of reports out there that have violated USPAP?

I've been doing tons of research on this topic, and have only found conflicting answers(100's of them).

There are no conflicting answers. There are people capable of reading what they sign their names to and people that are not capable of that. There are people capable of understanding that undocumented phone calls to individuals that will never be around to later document what they said isn't any sort of intelligent basis for putting their signature on something they shouldn't have.

Oh, and there are people that comprehend all too well the unbelievable numbers of members of this trade that are more than willing to sew their lips to the rears of as many paying customers as they can find regardless of anything else ... like ethics.

 

[HouseWear]

Ultimately, it comes down to the state board member who might receive this report. I would call your USPAP compliance guy for your board. Present him with a hypothetical situation that you described, while not stating you did it, and get his advice. I did that recently with a problem I had, and got a "I think it is supposed to be done this way" response.

Anymore when I'm in doubt, I call him first and get his opinion, and do it his way. Then I'll ask my peers what they would do and try and figure out the reasoning(he didn't go to in-depth, I'm sure he is busy busting appraisers). Ultimately though, he is the one who would be making the call, and I prefer to do it that way, even if I disagree with his answer.

 

[Webbed Feet]

Ultimately, it comes down to the state board member who might receive this report. I would call your USPAP compliance guy for your board. Present him with a hypothetical situation that you described, while not stating you did it, and get his advice. I did that recently with a problem I had, and got a "I think it is supposed to be done this way" response.

Anymore when I'm in doubt, I call him first and get his opinion, and do it his way. Then I'll ask my peers what they would do and try and figure out the reasoning(he didn't go to in-depth, I'm sure he is busy busting appraisers). Ultimately though, he is the one who would be making the call, and I prefer to do it that way, even if I disagree with his answer.

Have you tried reading all of the ACLB's archived publications to appraisers? They answer, even if only by inference, practically everything you've asked in the last month on here.

 

[HouseWear]

I must admit I haven't. I think I will though. Thanks for the point in the right direction!

 

[23Degrees]

Fannie Mae uses the 2055 for their pre-foreclosures. Ironic huh?

And if my recollections are correct, somewhere buried in all the Fannie Foo (I hope that term has not been trademarked) that is the one instance where they specifically allow for the interior to be EA'd away in a CB1 report. And by stating that specifically it is fairly clear that they know that potential "problems" exist with the use of this form. Do that (EA away the interior with CB1 checked) on a report for a lending client and as has been noted they will have cause to shove back if things go south on a loan.

But after all of these years with the "new" 2055 I have not heard of this line of attack being used in a buy back situation yet.

As for state boards nailing appraisers for this I hope that considering the convoluted nature of the language and the overwhelming use of the form in this way that they would refrain from using that to crush someone. If they do though, saying you talked to so and so about it at some point will probably be about as useful as an Armani suit would be to a chipmunk - unless you got it in writing. The bigger concern would be if either Fannie decided to use this for buybacks or if the lenders wised up to the built in land mines on this form and started coming after appraisers E and O for losses in cases where it turned out the interior was not "average" and the attempted EA used on a CB1 report was proven to be wrong. But considering the history that does not look likely at this point.

 

[Sunshine in VA]

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. If you were unable to provide a credible report without more knowledge of the interior, the appraiser is to turn down the assignment.

Amen