Confirm That Utilities Are "on And Working"

[residentialguy]

In such a case I would be coming up with my own ideas about what the client means. The client or someone else could contest my interpretation.

I understand where you're coming from. That's why many won't do FHA. However, when all of your peers are doing it that way, they wouldn't have leg to stand on. If something were so important that they wanted something done differently than status quo, they would have to spell that out.

GSE's love their double edged swords. They give you just enough rope to hang yourself. FNMA's instructions alone is enough to make one's report misleading.

 

[TRESinc]

That's not correct, Tres. I have put this clarification (not a modification) in all of my reports to show exactly what the ambiguous language in Cert 23 means.

Clarification of Item #23 of the certifications listed on the pre-printed part of this report - page 6 of 6.
This certification is NOT to be interpreted as the appraiser is granting permission for use by other parties not identified as the intended user. The lender is to be the only intended user. This is NOT intended for any purchaser to rely on the appraisal to influence the purchaser’s decision to buy the appraised property, nor is it intended to influence the homeowner or be relied upon in any decision regarding the property or financing. Certification #23 applies to the buyer or homeowner only in the sense that they are the mortgagor, therefore they rely on the appraisal to fulfill the requirements of the lender; however the intended use and user never changes. While other lending institutions may decide to rely on the report, however the intended use and intended user never changes. Appraisers are not required to adhere to specific assignment conditions, terms, or requirements that were not disclosed at the time of engagement by the named client or client's agent. In the event that this appraisal is used by a different lender(s) that the loan is transferred to or sold to, this appraisal may not adhere to their specific requirements and/or may not understand the format order by the client/intended user. The appraiser is not responsible to have met any lender requirements other than those disclosed prior to completion of the appraisal, nor is the appraiser responsible to clarify the terminology or report format requirements to other parties than the client/intended user. This appraisal report is intended for the use of the client and other identified intended user(s) listed and once completed cannot be reassigned or readdressed to another party. No other users are identified, intended or inferred by the appraiser, (including the borrower and/or homeowner) and no other intent of use for this appraisal is to be inferred. The scope of work is set by the appraiser. Once completed and delivered, it cannot be changed by the appraiser for another lender or use. "Transferring" by one lender to another lender does not transfer the contractual relationship between the appraiser and the client/intended user stated in the appraisal. Nothing set forth in this appraisal should be relied upon for the purpose of determining the amount or type of insurance coverage to be placed on the subject property or any other purposes other than lending, as defined in this report. Should any terms and clarifications stated in this report be unacceptable, this report must not be used and a new report with acceptable terms must be acquired.

that's a great paragraph but it means nothing with regard to what my post was directed at, and quoted, from tom4value.

You should also be adding that your client and ONLY your client should rely on your report for the purpose of making a lending decision.

tom wasn't talking solely about intended user/use as you are. the intended user/use was never in question. both intended user and intended use are clearly spelled out on page 4. cert 23 states that people other than the defined intended user may rely on the appraisal as part of a mortgage finance transaction provided they are a party to the transaction. tom wanted to change that so that ONLY his client could rely on the report, which directly contradicts cert 23, and is not allowed.

 

[Have Laser-Will Travel]

I understand where you're coming from. That's why many won't do FHA. However, when all of your peers are doing it that way, they wouldn't have leg to stand on. If something were so important that they wanted something done differently than status quo, they would have to spell that out.

You make an excellent point about peers-very sharp!

In the many times I have vetted these types of issues , I find it usually just comes down to a matter of how safe I want to be instead of any finding any ultimate truth.

 

[Have Laser-Will Travel]

I understand where you're coming from. That's why many won't do FHA. However, when all of your peers are doing it that way, they wouldn't have leg to stand on. If something were so important that they wanted something done differently than status quo, they would have to spell that out.

GSE's love their double edged swords. They give you just enough rope to hang yourself. FNMA's instructions alone is enough to make one's report misleading.

Giant thumbs up!

 

[residentialguy]

What I really think should happen is that the lender should be asked to clarify what it means. But, then my concern becomes that it will generate another vague stipulation that might include turning appliances, a light in every room, etc.-none of which we should be doing in the first place.

McKissock has given some very insight>

First, the Handbook now states specifically what is considered an appliance. The list includes “refrigerators, ranges/ovens, dishwashers, disposals, microwaves, and washers/dryers.” This definition was previously unclear; some appraisers had thought “appliances” could include spas, trash compactors, sound systems, intercoms, security systems, automatic garage door openers, etc.

Second, the Handbook now clarifies when appliances are required to be operational. The revised Handbook states, “Appliances that are to remain and that contribute to the market value opinion must be operational.” The Handbook goes on to state, “The Appraiser must note all appliances that remain and contribute to the Market Value.”

So, an appliance is required to be operational only if: (1) it remains with the property; and (2) it has contributory value and is included in the market value opinion (i.e. if it has value and is included in the appraisal).

Simply put, if an appliance is not included with the sale, it is not required to be operational. The better news for appraisers is that if the appliance is not included in the appraiser’s market value of the property, then it is not required to be operational. For example, appraisers generally do not include free-standing appliances in FHA appraisals because they are considered personal property and lenders do not want to make mortgage loans on personal property. The bottom line is that if the appliance is not real property, the appraiser is not required to operate it.

 

[Have Laser-Will Travel]

McKissock has given some very insight>

Oh, but this is only a conventional.

 

[residentialguy]

tom wasn't talking solely about intended user/use as you are. the intended user/use was never in question. both intended user and intended use are clearly spelled out on page 4. cert 23 states that people other than the defined intended user may rely on the appraisal as part of a mortgage finance transaction provided they are a party to the transaction. tom wanted to change that so that ONLY his client could rely on the report, which directly contradicts cert 23, and is not allowed.

You missed his operative word: "should". That's just advice, not changing anything. Nothing wrong with that.
Cert 23 is not giving permission to rely on it, other than it's use with the intended user.

 

[residentialguy]

Oh, but this is only a conventional.

Goes true with FNMA as well. We aren't required to test appliances and include them in our report, etc. Where are you getting that? Did I miss a memo.

 

[residentialguy]

In the many times I have vetted these types of issues , I find it usually just comes down to a matter of how safe I want to be instead of any finding any ultimate truth.

CYA's are very important, imo. Courts have sided with the appraiser in many cases because of them. Take my clarification on post 37. These things need to be pointed out. Yeah, it makes for a longer report....Oh well! If they don't like a 50 page report, don't put us in the position to where they're needed.

One of these days, I'll write a book on how to arm an appraisal.

 

[Have Laser-Will Travel]

Goes true with FNMA as well. We aren't required to test appliances and include them in our report, etc. Where are you getting that? Did I miss a memo.

You were talking about the handbook which sounds like you meant the FHA handbook.