Conventional loan/Flood

[Fernando]

What don't you understand here? You are appraising "the entire site". The lenders flood determination covers "the improvements" which might require flood insurance. You don't require flood insurance on raw land, there is nothing to be rebuilt if it floods. It's just easier for the lender to pressure the appraiser to change the first page of their appraisal than it is to go through the additional documentation steps required when the appraisal doesn't match the flood certification. You were manipulated. I was in a continuing education class one time when the instructor told the tale of a 10 acre site where the appraiser did precisely as you did. Later, the borrower decided to build a nice shop down by the dry creek bed where all the pretty trees were. Of course, it was washed away shortly thereafter. She pulled out her appraisal where it clearly indicated that her property was not located in a flood hazard zone and the appraiser (along with the lender) were sued because she contended that she would have never bought that property if she knew that she didn't have full use of the entire 10 acres. Not sure how that one turned out, however, think about that the next time you decide to offload your responsibilities onto a third party.

Why make appraiser the expert?
All appraiser had to do was make comment on what FEMA maps indicate on subject and what 3rd party Flood Company indicates.
And mentioned that client wanted to override FEMA. Put disclaimers that we are not flood experts.

 

[Mike Ault]

Why make appraiser the expert?
All appraiser had to do was make comment on what FEMA maps indicate on subject and what 3rd party Flood Company indicates.
And mentioned that client wanted to override FEMA. Put disclaimers that we are not flood experts.

The problem we seem to be having here is that you don't understand "what" the lenders third-party flood company was determining. That company was determining the need for flood insurance on the present improvements, not the likelihood of portions of the site being flooded. That is the standard you will be held to if problems ever arise with that file. Or we could wait for GSE artificial intelligence to comb through old files and file complaints with the state over issues like that, shouldn't be much longer.

 

[Fernando]

The problem we seem to be having here is that you don't understand "what" the lenders third-party flood company was determining. That company was determining the need for flood insurance on the present improvements, not the likelihood of portions of the site being flooded. That is the standard you will be held to if problems ever arise with that file. Or we could wait for GSE artificial intelligence to comb through old files and file complaints with the state over issues like that, shouldn't be much longer.

Mike, I know you're a smart guy. Ignorance can have its bliss.
The more you indicate how you know about these flood stuff, the higher expectation that you're an expert.
As appraiser, just state what we know and don't be the last determinator of what the flood area should be. If your wrong, you'll be drag into a lawsuit.

 

[Surf Cat]

The problem we seem to be having here is that you don't understand "what" the lenders third-party flood company was determining. That company was determining the need for flood insurance on the present improvements, not the likelihood of portions of the site being flooded. That is the standard you will be held to if problems ever arise with that file. Or we could wait for GSE artificial intelligence to comb through old files and file complaints with the state over issues like that, shouldn't be much longer.

Just drop it Mike.....Fernando's going to kowtow to the client's whims and you're going to make informed decisions. Just leave it at that.....

 

[Mike Ault]

Mike, I know you're a smart guy. Ignorance can have its bliss.
The more you indicate how you know about these flood stuff, the higher expectation that you're an expert.
As appraiser, just state what we know and don't be the last determinator of what the flood area should be. If your wrong, you'll be drag into a lawsuit.

I don't practice law, medicine, or animal husbandry. But I am certified by the state as an appraiser, and expected to perform that duty in a competent manner. Understanding the pitfalls of filling out the first page of the URAR improperly, is part of that. That's why I decided to grill you over this matter today. Nothing personal. I simply recognized that your client probably pulled a fast one on you as lenders have tried with me on multiple occasions, and didn't want that potential liability to befall anybody else who might be reading this thread.

 

[Tawfik Ahdab]

Fernando, I don’t know if you’re being obtuse on purpose.

Mike is right.

If any portion of the site is in the floodplain, it must reported as such. And that’s what the form asks.

Now if the improvements are outside the floodplain, and the lender has the documentation from the third-party, the lender will probably waive the requirement for flood insurance. But that’s the lenders prerogative based on information relating to the specific location of the improvements on the site.

Meanwhile, our job as appraisers is to identify if the property is in the floodplain. If any portion of it is, then we report it as such.

There’s no contradiction between a third-party determination and the FEMA map, since the third-party determination relates to the location of the improvements on the site while the FEMA map determination relates to the entire site.

This has nothing to do with any expertise on the part of the appraiser. You just report and move on. If the lender insists that you consider the third-party determination, then you can mention it in an addendum or the revision without altering the FEMA Map determination.

See? Problem solved.

 

[Fernando]

I don't practice law, medicine, or animal husbandry. But I am certified by the state as an appraiser, and expected to perform that duty in a competent manner. Understanding the pitfalls of filling out the first page of the URAR improperly, is part of that. That's why I decided to grill you over this matter today. Nothing personal. I simply recognized that your client probably pulled a fast one on you as lenders have tried with me on multiple occasions, and didn't want that potential liability to befall anybody else who might be reading this thread.

In CA, purchases require a Natural Hazard Disclosure from a 3rd party which would indicate if subject is in a flood zone.
Usually the seller pays for it and this NHD is shifting liability from seller and agent to the 3rd party in disclosing any hazardous situations in environment including being in a flood zone.
So again, it's not our pay scale to have final say whether subject is in a flood zone.

 

[Mike Ault]

In CA, purchases require a Natural Hazard Disclosure from a 3rd party which would indicate if subject is in a flood zone.
Usually the seller pays for it and this NHD is shifting liability from seller and agent to the 3rd party in disclosing any hazardous situations in environment including being in a flood zone.
So again, it's not our pay scale to have final say whether subject is in a flood zone.

So, FEMA said it was, and this form said it wasn't? Why would you change your appraisal to match the opinion of some fool who filled out that form? What possible reason would you have for doing so? Don't you think that the borrower had a right to know that there was a disagreement?

 

[Fernando]

So, FEMA said it was, and this form said it wasn't? View attachment 77568Why would you change your appraisal to match the opinion of some fool who filled out that form? What possible reason would you have for doing so? Don't you think that the borrower had a right to know that there was a disagreement?

Why would a lender rely on an appraiser when you have specialized 3rd party companies in determining flood areas?
It would be foolish for lender to rely on appraiser who is not an expert.

 

[Mike Ault]

Why would a lender rely on an appraiser when you have specialized 3rd party companies in determining flood areas?
It would be foolish for lender to rely on appraiser who is not an expert.

It would be foolish for an appraiser to do everything the lender requests. Especially in cases like this. I've already explained to you "why" lenders do things like that, now explain to us why you did. Especially in the absence of an official "flood hazard determination" from a reputable third-party company. I thought you had documentation from one of those showing an official flood map, not some cheesy "seller's disclosure" like the California form above you are bragging about.