What if the order wasn't for an FHA Origination, instead it was an refinance where the client specifically indicated an "as is" value was necessary, and this was communicated on the engagement letter at the time of inspection? Not exactly "impossible." That's why reviewing the engagement letter and asking questions before completing the assignment is so important.
This post is still bugging me. The implication is that appraisals performed for making a refinance lending decision are somehow different, or not subject to the same guidelines as those performed for making a purchase lending decision.
Whether the transaction is for a purchase or a refinance makes
not one whit of difference in the developing/reporting standards that must be adhered to.
In the present case, the important factor is whether the appraiser has accepted an order that is expected to conform to GSE/FHA guidelines.
GSE guidelines are the mortgage industry default. As such, the importance of stating compliance with them in the report as a
client requirement has been neglected by many appraisers. Also, that industry default has caused the client's contact person's to not understand it as a client requirement.
Depending on the mortgage industry default status of GSE requirements used to keep everyone on the same page (presumably). The industry has morphed into thinking if they order a Freddie/Fannie form, they have ordered a GSE compliant appraisal.
If that is what the industry's typical client thinks, then any exceptions to that have to be clearly differentiated in the report.
If the client understands the ramifications of ordering an appraisal that is
not expected to comply with GSE guidelines, and is clear that that is what they want, then he clearest way to differentiate is to use a different form. I like to use the old Freddie/Fannie forms for lending purposes and general forms for nonlending purposes.
If the client insists on a current GSE form but also insists on non-compliance with GSE guidelines, then that is an exception to industry expectations and should be clearly and prominently stated in the report. Both in the client requirement section and in the reconcilliation section which is near the opinion of value.
This is simply a most basic scope of work item; to report the client requirements that shape the scope of work that renders a credible appraisal.
All of this is true whether the mortgage-related appraisal is for a purchase or a refi transaction and whether it is for GSE or FHA compliance.
