Changing borrower name issue:

[Zoe]

Just ask for a copy of the title opinion from the bank. It will identify the owner name and legal description. The subject being owner occupied or not not could be a problem for the bank. The bank has to go with whatever the title opinion says.

You don't need the whole title opinion (insurance policy). You just need the pages that identify the owner and the legal description. Insert it in your appraisal report by pdf, jpg, scan, or however.

 

[sputnam]

Just ask for a copy of the title opinion from the bank. It will identify the owner name and legal description. The subject being owner occupied or not not could be a problem for the bank. The bank has to go with whatever the title opinion says.

You don't need the whole title opinion (insurance policy). You just need the pages that identify the owner and the legal description. Insert it in your appraisal report by pdf, jpg, scan, or however.

The thread is about changing the name of the borrower. not about the owner of the property. sure... could be the same... or maybe not.

 

[Zoe]

True. Usually a borrower can't mortgage a property unless they are at least part owner. There are exceptions.

The lawyer doing title insurance and title opinion for a bank handles that so they know the bank has a clean mortgage on the property. It could be first mortgage, 2nd mortgage, 3rd lien, etc on the subject.

 

[J Grant]

It's not just the name change; they sent a new, completely different budget than the one they had me analyze before. Right now, I'm on my 4th new budget from them. There are still missing items in the budget, like permits, inspections for plumbing, electrical, HVAC, etc. This is a gutted home, down to the studs on the inside, that had a fire. But now there is no electrical, no plumbing, and none of the 4 budgets accounted for any permits from the city or city inspections for electrical, HVAC, or plumbing. To assemble a kitchen, their budget was $4000. I guess that was supposed to include cabinetry, countertops, and appliances. Their budget for plumbing fixtures for the whole home was $400. Every new budget they send me keeps going higher in value, and I have to reword a lot of my appraisal to accommodate the new budget, so no, it is not just a simple thing with this lender. I'm assuming that the owner or lender knows very little about budgeting to rebuild a home from the studs in. So far, the range on their "Budgets is about 35K.

The budget, if it changes the features enough to impact value, is a more important issue to see if it warrants a new assignment- of more concern than a borrower name change.

Permits are hard to get but cheap to obtain - usually a few hundred dollars or less - so they might not be line itemed out. But yeah, plumbing fixtures are usually more than $400. We are not construction experts wrt breaking down each component but the budget should make sense for the level of work done.

 

[Zoe]

The budget, if it changes the features enough to impact value, is a more important issue to see if it warrants a new assignment- of more concern than a borrower name change.

Permits are hard to get but cheap to obtain - usually a few hundred dollars or less - so they might not be line itemed out. But yeah, plumbing fixtures are usually more than $400. We are not construction experts wrt breaking down each component but the budget should make sense for the level of work done.

Yeah, you can't do it all on cost approach. Sales comparison approach may come in way higher or way lower than cost approach.

 

[Tom D]

I'm not sure that's why I'm asking. Just wondering how it is USPAP compliant to do an appraisal on a property as of a certain date, then later, when the entity that didn't exist before suddenly is requested by the lender months later to change the name of the borrower, to one that did not exist at the time of the original inspection. Is that even allowed? Or would it require a new inspection so that the borrower LLC is in existence at the time of an inspection? I know what to do with a lender change; that's easy, it's a new assignment.

It's called the signature date page for any changes after the inspection. You just note it, if you are the nervous type. Or just keep in work file. Long ago there was only the inspection date. This change has no affect on value, it is a change of a fact of info.

Long ago when i did a lot of new development construction, there were always work order changes. But i had direct lenders then who payed me well enough to do those changes.

 

[Tom4value]

So you saying you need to do another new appraisal to make a name change ? The LLC may be the same person but the lender is normally the client.

Correct!
Adding/changing intended users (i.e., borrowers) is not an issue. It is only when you alter clients do you need to have a new assignment. Lenders do it to me all the time. Due to underwriting changes, borrowers are added/subtracted from the loan and they want the report to coincide.

 

[Sadie]

The thread is about changing the name of the borrower. not about the owner of the property. sure... could be the same... or maybe not.

Usually with a prelim ordered by a lender, the borrower name is included.

 

[Sadie]

1. if you are using the F/F form, part of your SOW is to conform to F/F guidelines. 2. F/F says its ok to change borrower name if there was a typo or the entity is the same
AI response, (although not sure if it holds up) "Changing a borrower's name on a Fannie Mae appraisal report typically requires a new assignment or a formal revision by the original appraiser, as it violates USPAP rules to simply edit the name. While minor typographical corrections may be allowed, replacing one borrower with another usually requires the lender to request a new report to ensure independence, as appraiser independence requirements (AIR) prohibit influencing appraisal reports."

But your case is a little different. Look up the new borrower and see if the principals are the same as with the original borrower. If they are, I would probably still create a new assignment with new effective date that was after the creation of the LLC or whatever you are using. You can do it internally and keep yourself out of potential appraiser jail. use the request to change the name as your engagement letter?

 

[DWiley]

1. if you are using the F/F form, part of your SOW is to conform to F/F guidelines. 2. F/F says its ok to change borrower name if there was a typo or the entity is the same
AI response, (although not sure if it holds up) "Changing a borrower's name on a Fannie Mae appraisal report typically requires a new assignment or a formal revision by the original appraiser, as it violates USPAP rules to simply edit the name. While minor typographical corrections may be allowed, replacing one borrower with another usually requires the lender to request a new report to ensure independence, as appraiser independence requirements (AIR) prohibit influencing appraisal reports."

The proper USPAP-based response has been provided in post 7.