Extent of the FHA SOW in a Form Report?

[ZZGAMAZZ]

Lots of info and advice exists pertaining to the appropriate "intended use" and "intended user" HUD/FHA verbiage, but little if anything is posted of which I am aware concerning the extent to which the SOW in a form report for a HUD/FHA insured loan should reflect inspection and reporting requirements specific to HUD/FHA, especially those that might differ or supercede FNMAE reporting standards.

 

[RSW]

I would go back to USPAP and read the SOW section. We are not only supposed to tell what we did, but, what we didn't do too. I would consider my FHA appraisal SOW to be very similar with a few additions when compared to a non FHA lending appraisal.

Scott

 

[ZZGAMAZZ]

RSW: Does your FHA SOW describe the treatment of specific conditions that if observed require follow-up expert inspections; or the specific treatment of excess land, mandatory remaning economic life and site value regardless of whether the CA is completed, manufactured engineering cert, the 01/01/78 lead based paint threshold, response to utilities that are not engaged, etc., etc.

I am learning as quickly as possible how to treat the specific issues but I'm not sure if the SOW needs to describe the FHA-mandated treatment regardless of whether they exist or not, because the SOW would be generated prior to the beginning of the assignment.

 

[RSW]

I have a pretty indepth SOW in my reports but I don't go to that extreme. I think that the SOW rule is an ever changing thing. It is going to be to the point that we appraisers are going to be held liable for our SOW. We may be putting ourselves at risk by making our SOW too complex.

 

[Marcia Langley]

ZZ,

In general, by showing "Compliance with FHA Published Guidelines" as a client requirement in your basic scope of work, you have incorporated all of those guidelines by reference. This is comparable to the way you incorporate all of the requirements of USPAP when you claim to be in compliance with that. If the guidelines are published and generally accepted and understood in the industry and are not unique to a given assignment, it is not necessary to enumerate the contents of those guideliines in your scope of work.

Items like:

the specific treatment of excess land, mandatory remaning economic life and site value regardless of whether the CA is completed, manufactured engineering cert, the 01/01/78 lead based paint threshold, response to utilities that are not engaged, etc., etc.

Speak more to the way an element is treated than they do to what actions you took (IE: what you did to look at and verify the physical and economic attributes of the property. The scope of work is more about what actions you took.


However, if your assignment contains an element that you feel needs further explanation it may be more clear if you cite the guidelines when you explain your treatment of that element.

 

[RSW]

Marcia,

I am very impressed with your ability to communicate. You said what I wanted to say but could not find the proper words.

Thanks.

 

[Mary Tiernan]

I don't know, the Scope rule specifically states that you must detail what you did as well as what you did not do. I would be very careful.

ZZ, the scope is not "determined before you begin" an assignment. Read the rule again, it may change over the course of the assignment. I have a summary of what I did in the addendum, but my scope of work is extended throughout the report, and I consider the comments to sales comparisons to be part of my scope too as I go into more detail here where I searched for comps and why, what the result of the search were, and how I used those results - all part of the scope of work for the particular assignment.

A statement in the report that it is prepared in compliance with FHA guidelines may be sufficient, and then when there are issues with the property - reporting the issues and what you did and did not do to ascertain their extent would be in order.

 

[RSW]

I don't know, the Scope rule specifically states that you must detail what you did as well as what you did not do. I would be very careful.

ZZ, the scope is not "determined before you begin" an assignment. Read the rule again, it may change over the course of the assignment. I have a summary of what I did in the addendum, but my scope of work is extended throughout the report, and I consider the comments to sales comparisons to be part of my scope too as I go into more detail here where I searched for comps and why, what the result of the search were, and how I used those results - all part of the scope of work for the particular assignment.

A statement in the report that it is prepared in compliance with FHA guidelines may be sufficient, and then when there are issues with the property - reporting the issues and what you did and did not do to ascertain their extent would be in order.

I also believe the SOW is throughout the entire report. But, I have a section in my report that is called Clarification of the scope of work which gives a detailed explaination of items pertaing to what I did and did not do.

 

[Marcia Langley]

you must detail what you did as well as what you did not do

Mary,

Absolutely.

http://appraisersforum.com/showthread.php?p=1572129#post1572129

 

[CANative]

Doesn't the text in the SOW rule have this comment:

Comment: Proper disclosure is required because clients and other intended users rely on the assignment results. Sufficient information includes disclosure of research and analyses performed and might also include disclosure of research and analyses not performed.

My bold.