Driveby 2055 on Purchase

[V. Nightshade]

Summary: Are drivebys common for purchase transactions? What's your experience with this? Did I shoot myself in the foot?

I just turned down an order for a driveby on a purchase. When I saw that it was listed, and they wanted a driveby, I called the rep and said I thought it should be a 1004. She got snippy and said that that was what the client wanted. The property was NOT a cookie cutter tract home; it was a 1-bath small house 1/2 block from an arterial adjacent to where they are widening a freeway. I didn't like anything about this, most of all the fee, since I could imagine my diligent self doing hours of work on this. So I turned it down. Is it common for drivebys to be ordered for purchases? I've never experienced this. I thought that lenders were trying to make better lending decisions. The down payment was about 45%, so within that scope of work, in theory, I could come up with a range of value. But I'm not allowed to come up with a range of value per FNMA. I have to do a full appraisal well supported. Therefore, there's a double standard. They can cut corners, but I can't.

 

[Randolph Kinney]

2055 appraisals can be appropriate on purchases.

From the lender's point of view, a 45% down payment qualifies for a 2055.

From the appraiser's point of view, it does not matter what the amount of the down payment is. What matters is if the purchase is on an existing home with at least a recent source for the data. The MLS listing may qualify especially if it has photos of the interior and exterior. You can verify by talking to the listing agent.

As for the market conditions and comparable sales, that problem exists on either a 1004 or 2055.

The only question left is the fee and turn time.

 

[The Warrior Monk]

We used to see drivebys on purchases for WAMU, except the LTVs were a whole lot higher.

It comes down to a matter of credibility...can you produce a credible appraisal with no interior inspection? If you can't, then a driveby is not sufficient.

 

[V. Nightshade]

Ok, fair enough. I probably could produce a credible report, but the amount of work would be the same as for a 1004. So yes, fee was too low and turn time too short. I probably shot myself in foot.

 

[Terrel L. Shields]

can you produce a credible appraisal with no interior inspection? If you can't, then a driveby is not sufficient.

if you can get verifiable info on the interior you can do it.

the amount of work would be the same as for a 1004. So yes, fee was too low and turn time too short.

That is the rub. For me, I can look inside the dwelling and get a measure of the house in less time than I can find someone reliable to describe in detail the condition of the interior which I considered to be an absolute necessity if doing a "driveby" appraisal. I know I know there are lots of folks telling and teaching that driveby means to caveat the condition away.. EA but I dont' read fannie mae to make that exception frankly. and if push came to shove (i.e.- the house goes into foreclosure) I want documents in my file indicating I had a pretty good idea what the interior looks like.

BTW, I charge extra for the 2055 and I have had some idiots upon rare occasion insist upon using it...ok with me.. $500 is a nice fee. I only get 400 for a URAR.