2055 & USPAP

[rowdydog]

check with your E&O, they will have final say, as they will be the ones to cover your backside. Get name, date, and person you talked to @ E&O.

 

[HouseWear]

Ok. So I called the state board. From what I gather from the conversation, you can do an as-is appraisal based upon an extra-ordinary assumption checking the as-is box so long as you disclose it accoridngly. He said Fannie Mae cannot expect you (and will not), to complete a form that is based upon only an exterior inspection, and hold you accountable for the interior condition when clearly the form says EXTERIOR ONLY written all over it(every page). I will be including a statement such as:

"The value in this as-is report, is based upon an extra-ordinary assumption that the data relied upon is correct, and that interior of the property is in average marketable condition. No items were noted from the street which would require repairs and none are assumed to exist. If information is discovered to the contrary, value could be impacted, either positively or negatively.

I then would include the definition of an EA.

Ultimately though, one must remember this is an "EXTERIOR" inspection only, and some assumptions must be and can be made.

 

[hastalavista]

Ok. So I called the administrator for the state board. You can do an as-is appraisal based upon an extra-ordinary assumption checking the as-is box so long as you disclose it accoridngly. He said Fannie Mae cannot expect you (and will not), to complete a form that is based upon only an exterior inspection, and hold you accountable for the interior condition when clearly the form says EXTERIOR ONLY written all over it(every page). I will be including a statement such as:

"The value in this as-is report, is based upon an extra-ordinary assumption that the data relied upon is correct, and that interior of the property is in average marketable condition. No items were noted from the street which would require repairs and none are assumed to exist. If information is discovered to the contrary, value could be impacted, either positively or negatively.

I then would include the definition of an EA.

Ultimately though, one must remember this is an "EXTERIOR" inspection only, and some assumptions must be and can be made.

I'm frankly shocked that the administrator of your state board is telling you to contravene the pre-printed certification and go ahead and modify what that certification states cannot be modified.

My advice is to include his/her name, position, and phone number in the report as your citation for doing so. This way, if the client complains that you are not following the certification and they make a complaint, it will probably be sent to the guy who told you not to worry about it.


Good luck!

 

[HouseWear]

I'm frankly shocked that the administrator of your state board is telling you to contravene the pre-printed certification and go ahead and modify what that certification states cannot be modified.

My advice is to include his/her name, position, and phone number in the report as your citation for doing so. This way, if the client complains that you are not following the certification and they make a complaint, it will probably be sent to the guy who told you not to worry about it.


Good luck!

Basically, what i gathered was a 2055 exterior is an assumption itself. And what I posted was my interpretation of the conversation, which could be wrong. LOL


And I don't think it was the admin which is why I changed it. In any case, the debate goes on!

 

[HouseWear]

I honestly don't see how you could do a 2055 Dennis without assuming something? If you don't see the inside, how could you not assume? Unless you hire a notary to go into the property, it would be tough to do an appraisal with no assumption, as of the day of inspection unless by chance the property was listed for sale the morning of the day of inspection, and you verified condition with a realtor, hoping your not a potential customer so he tries to talk the property up so he can make a sale. What are the odds?

 

[hastalavista]

Basically, what i gathered was a 2055 exterior is an assumption itself. And what I posted was my interpretation of the conversation, which could be wrong. LOL

For the 2055 exterior, I would say there is no assumption of an interior inspection. In this regard, I agree with the administrator, which is to say:
They (the client) are ordering an exterior and know you are not going to view the interior... how can they reasonably hold you accountable for the inside condition as long as you preform an appropriate level of due diligence?
The above is what I would assume.
Where I disagree is with the advice to also include an EA that assumes the inside is "OK" (or, consistent with whatever you decide to rate it).
You don't need an EA (to assume something extraordinary) in an assignment where the underlying presumption is that the interior condition is unseen and you've taken the appropriate steps to confirm that your rating is consistent with your research.

The EA could be interpreted as a substitute for the appropriate research: and I think that is why (I'm pretty sure that is why; because that's what they said when this thing was rolled out in 2005) the GSEs put language in the reports that limited the modifications to the SOW; this limitation extends to the kinds of EAs and HCs one can use.

If you have a source on your board that advises you to do something, I'd follow that advice (this advice isn't patently absurd or wrong... I just see a significant contradiction and I don't see the need to use an EA; rather, expanding your comments about your inspection and verification process.. which is allowed... should solve this problem.); I'd just cite his guidance as the reason for your action.

Personally, I don't think the person who responded to your question thought the question all the way through. But, I could be wrong. And since I don't regulate appraisers in the Great State of Oregon, and the guy who you spoke to does, listen to him! :laugh:

Good luck!

 

[HouseWear]

For the 2055 exterior, I would say there is no assumption of an interior inspection. In this regard, I agree with the administrator, which is to say:
They (the client) are ordering an exterior and know you are not going to view the interior... how can they reasonably hold you accountable for the inside condition as long as you preform an appropriate level of due diligence?
The above is what I would assume.
Where I disagree is with the advice to also include an EA that assumes the inside is "OK" (or, consistent with whatever you decide to rate it).
You don't need an EA (to assume something extraordinary) in an assignment where the underlying presumption is that the interior condition is unseen and you've taken the appropriate steps to confirm that your rating is consistent with your research.

The EA could be interpreted as a substitute for the appropriate research: and I think that is why (I'm pretty sure that is why; because that's what they said when this thing was rolled out in 2005) the GSEs put language in the reports that limited the modifications to the SOW; this limitation extends to the kinds of EAs and HCs one can use.

If you have a source on your board that advises you to do something, I'd follow that advice (this advice isn't patently absurd or wrong... I just see a significant contradiction and I don't see the need to use an EA; rather, expanding your comments about your inspection and verification process.. which is allowed... should solve this problem.); I'd just cite his guidance as the reason for your action.

Personally, I don't think the person who responded to your question thought the question all the way through. But, I could be wrong. And since I don't regulate appraisers in the Great State of Oregon, and the guy who you spoke to does, listen to him! :laugh:

Good luck!

Maybe that's how I interpeted it. I'm a bad listener, even moreso when speaking to authorities LOL. Either way, in my opinion, you are assuming something when doing a 2055. The tough part is finding the right way to admit it I guess


And I see where your coming from using disclosure of the extent of the inspection.

 

[ctapraser]

Ok. So I called the state board. From what I gather from the conversation, you can do an as-is appraisal based upon an extra-ordinary assumption checking the as-is box so long as you disclose it accoridngly. He said Fannie Mae cannot expect you (and will not), to complete a form that is based upon only an exterior inspection, and hold you accountable for the interior condition when clearly the form says EXTERIOR ONLY written all over it(every page). I will be including a statement such as:

"The value in this as-is report, is based upon an extra-ordinary assumption that the data relied upon is correct, and that interior of the property is in average marketable condition. No items were noted from the street which would require repairs and none are assumed to exist. If information is discovered to the contrary, value could be impacted, either positively or negatively.

I then would include the definition of an EA.

Ultimately though, one must remember this is an "EXTERIOR" inspection only, and some assumptions must be and can be made.

My bold,

You may want to reword this part. If the outside is a piece of #$%t why would the inside be in average marketable condition? ...and if you roll up on the Taj Mahal, the inside could be way above "average marketable condition" If your going to assume something why not assume the interior has been maintained as well as the exterior, the part you actually inspected.

Just my 2 cents

 

[HouseWear]

My bold,

You may want to reword this part. If the outside is a piece of #$%t why would the inside be in average marketable condition? ...and if you roll up on the Taj Mahal, the inside could be way above "average marketable condition" If your going to assume something why not assume the interior has been maintained as well as the exterior, the part you actually inspected.

Just my 2 cents

I knew that was coming after I typed it.

I'll use "commensurate with the exterior".

 

[HouseWear]

Dennis, if you give it a condition rating, how could you state C3 or C5 when there "could" be repairs needed making it C5 or C6 using your approach?