Addendum or 1004D?

[Mary Tiernan]

Completed report in April - owner's name in public records (Equalization) was XX Bank due to title errors (borrower had purchased property 8 months prior, however, the title company had utilized the wrong legal description and Equalization would not process the deed). FYI -- new title company just compounded the error and utilized incorrect legal description argh.

So, after a bunch of back and forth, an Affidavit of Scrivner's Error has been filed at the Register of Deeds office, and the property now has correct owner name, as of 05/27/2008, with correct legal description. Equalization has confirmed they will change owner name from XX Bank to borrower's name effective 5/27/2008.

Of course, client wants original report corrected, which I cannot do as the owner name was XX Bank as of the date of appraisal - right?

I would like to offer my client a solution, and my first thought is to remove signature on original report, put SEE ATTACHED under owner's name, and add more commentary on progress of owner name issue, and that it has been resolved. More or less an addendum to appraisal. (I typically do this with underwriter stips, state original report signed and sent to client on this date, detail modifications to report, then resign and resend, indicating no other changes made.)

I did not make the report subject to, just reported owner's name and reason owner's name had not been changed - reported the facts and let them deal with it - FYI - they didn't - I had to hold their hand and show them the error of their ways.

Or, can I provide a 1004D with the same commentary and state original report was completed as is and then explain what happened . . . owner name is now corrected at the county?

Or, is there another solution?

 

[CANative]

Does it really matter how you do this (other than on appraisersforum)?

 

[Mary Tiernan]

Yes, I don't want to provide something that is not industry accepted.

But, thanks for making me feel foolish for asking.

 

[CANative]

I'm sorry Mary. I didn't mean it that way. I think the client would be happy as a clam and no one would fault you if you just added a post-report date comment addendum with the additional information. That's what I would do.

 

[SANDY]

This will be interesting to see what different opinions there are. Two different approaches as I see it-one is to change the original report and prominantly disclose the reason for the change in an addendum-other way is to never change original report but explain what happed in an addendum.

Many clients wants a clean looking report for their purposes and don't care if what they want might be later construed as a mis-leading report.

 

[RSW]

I would not change the original report as the it asks for the owner of public record in the subject section. I would think this is what was recorded as of the effective date of the original appraisal report. I would add an addendum with comments about the current owner and what happened, date it, and sign it.

 

[SANDY]

But this change request is a little different if I understand it correctly- although this is a request to change a report to reflect new information received after the effective date it is a change to the report to reflect a correction in erroneous information that was available to the appraiser at the time of the report. Much different than being asked to change a report to reflect a change in sales price etc....
I think I would have no problem changing the original report with an addendum explaining it all.

 

[jeanwillick]

I would like to offer my client a solution, and my first thought is to remove signature on original report, put SEE ATTACHED under owner's name, and add more commentary on progress of owner name issue, and that it has been resolved. More or less an addendum to appraisal. (I typically do this with underwriter stips, state original report signed and sent to client on this date, detail modifications to report, then resign and resend, indicating no other changes made.)
Or, is there another solution?[/QUOTE]


I agree with your first idea -- just be sure to date the addition of this new comment on the Addendum to separate it from the original report.

Many times our first thought is the right one.

 

[Marcia Langley]

I would not change my report. It reflects the owner of record as of your effective date as it should.

They don't really need anything at all from you. Their documentation from the title company will cover all their bases. Anything you could do would be secondary and superfulous to the "real" documentation they get from the title company.

If you do feel obligated to do something, I would not do more than a letter saying I was in receipt of the new documentation and/or that as of the new date the recorder had recorded a correction. That's the most I would do. (Definitely not a 1004D which is not designed for this purpose.)

Like Greg says, you could do it any way you like. Me, I'd do nothing.

 

[SANDY]

The original appraisal done was wrong-not because appraiser made an error but because someone else made an error-but whoever made the error it does not change the fact that the appraisal was wrong. The owner was not the bank at the time of the appraisal even though that is what the public records indicated. I would correct original report and note in addendum what happened.