FHA 1004D Certification of Completion for Different Client

[RNMOVR]

I completed an FHA 1004 for Client A/Lender A in Feb subject-to FHA required repairs. I have been contacted by Lender B whom the loan has been transferred to. Lender B is requesting me to reinspect and complete a 1004D Certification of Completion for the required repairs. I understand that per USPAP this a new assignment, but here in lies my quandry.

Per HUD’s FAQs – ML 09-51 Adoption of the Appraisal Update Report

Can a second lender, not the lender who was identified as the intended user in the original appraisal report, request the appraiser who
performed the original appraisal report to update that report by using
the Appraisal Update Report?
As stated in the Appraisal Standards Board’s Advisory Opinion 3 (AO-3),
Update of a Prior Appraisal, all appraisal updates are considered new
assignments. If the appraiser who performed the original appraisal report
updates that report using the Appraisal Update Report and incorporates the
original report by reference only, the Appraisal Update Report can only be
performed for the original intended user(s), as stated in AO-3. If, however,
the appraiser who performed the original appraisal report updates that report
using the Appraisal Update Report and incorporates the original report by
attachment, the Appraisal Update Report can be performed for an intended
user who was not identified as an intended user in the original appraisal
report, since it is a new assignment under USPAP.


I looked throught AO-3 and the USPAP FAQ section and did not find any answers. I am of the opinion that regardless of what ML 09-51 states this is a violation of the ETHICS rule (especially attaching the original report and sending it to a lender B). Client A was an AMC and the Lender A is a large national bank. So trying to coordinate this through the original client would be unrealistic. Lender B has offered to provide a letter of transfer from lender A and they should be able to provide verification through FHA that the loan has been transfered. However, that takes care of FHA but not USPAP. Any feedback with verifiable sources would be appreciated.

Thanks RNMOVR

 

[Meandering]

Lender B needs to provide

A letter of engagement hiring you to inspect a property for specific items that they detail. And you could send them a narrative about the inspection without ever addressing any appraisal report. But you will still need to comply with the Standards but do not imply anything toward value or market conditions. simply the inspection, and nothing more.

 

[Jim Onderisin]

The text you posted indicates you, supported by a letter from Client A which authorizes transfer of your original appraisal to Client B, may update that appraisal for Client B by attachment of the original appraisal. What do you think? Am I missing something?

 

[CANative]

The bottom portion of the 1004D is not an appraisal and as far as I know contains no confidential information nor assignment results.

You can inspect the property and complete the bottom portion for a different client. There are no SR's to deal with.

It's a valuation service that falls under appraisal practice but not appraisal, appraisal review or appraisal consulting.

 

[Punalava]

Your reference to USPAP pertains to an appraisal update, but you are being asked to provide a certificate of completion. Even though they are on the same form, they are not the same thing.

 

[sputnam]

Punalava is correct.

 

[Meandering]

You are both wrong,

Read the first line on the form next to intended use.

If this is a new client, you have not completed an appraisal report for this new client.

 

[CANative]

They're not wrong. The OP is discussing a completion report, not an update but is citing the requirements for an update.

If he wants to he can just re-inspect to confirm the conditions have been met and issue the 1004D. He could do it 6 times a day for 6 different clients.

 

[Meandering]

You cannot reference the original report that was created for a different client. That is part of the preprinted 1004D form that has to be signed. Transferance of ownership of the report, does not tranfer the client relationship. Signing the 1004D referencing a report not created for the client becomes misleading, unclear and any other thing the state board deems appropriate.

 

[CANative]

That's for an update. I could ask the OP for a 1004D on that property and he could send it to me.

The reference is to an appraisal report. It doesn't have to include incorporating the original appraisal.

As I stated earlier this is a valuation service provided by an appraiser. It's appraisal practice but not an appraisal, appraisal review or appraisal consulting.