FHA-new purchase agreement amendment

[Terrel L. Shields]

appraisers to know the requirements that apply to assignments, and act in accord with those requirements,

If appraisers spent all their time trying to keep up with the nuances of government appraising, they'd have to set aside a full day every week and then figure some way to keep that all straight in their head and even then, it won't stop clients from being as ignorant as the appraiser of those tidbits of ever changing edicts, a problem that USPAP shares with their wholly unnecessary, pointless, and inscrutable regulations...So in 94 we need six reporting options and those were self-contained, summary, and restricted and each can be either limited or complete - all of which was nonsense as one ARA/MAI instructor noted - what is "self-contained" - a history of the world? One report I saw in Arkansas started by saying Hernando (not to be confused with our Fernando) De Soto was the first European... blah blah blah. Gimme a break

Now we've almost unraveled those six options down to 2 reporting options. We've created, then destroyed, then added piffle without really any perfecting of the practice. Do you think that a report prepared under 1992 USPAP would arrive at a different value than under 2020? Or, that if it did, there would be any certitude that it was more "accurate" (whatever that means in an opinion.)

Other standards and their acronyms

Government Appraisal Standard Practice (GASP)
Government Requirements of Appraisal Standard Practice (GRASP)
Government Ordered Operating Practice (GOOP)

They need something catchier than USPAP... perhaps we should form a company and recreate a standard so we can sell the government on the idea of adopting by reference and making appraisers buy it every other year...

 

[Terrel L. Shields]

because of a stubborn appraiser

The problem is the byzantine rules are so convoluted and ever changing, the appraiser is not sure that they can do this without violating USPAP at the same time, they can have zero faith that the AMC or the client actually can be relied upon to tell them correctly what the course of action is. These clients demand instant action and even if you were to consult the direct endorsement underwriter, you'd best record the phone call or get it in writing if they spell out what you can do. Trust but verify and document it.

 

[glenn walker]

In general USPAP rarely has anything to do with FRT -Agencie- GSE- FHA-VA Guidelines My position is if I can document the UW request in a saved e-mail etc I will keep that in my work file and make the change and be done. The bigger USPAP risk is for the Lender or FHA borrower to file a complaint and thats when tje State Board looks for USPAP issues which may not even be related to the complaint. A big lender like the Mighty Chaser or HUD who insures the FHA loan can make a lot of trouble for the poor little appraiser .

 

[Tom D]

i see no issue on the front page: a new sale price, original sale price $000,000 was amended 00/00/00. you have the fr..kin addendum in your work file.
glen is right, the state will find 10 other mistakes you made when someone complains. i'm sure a USPAP jury & judge will find you innocent. oh wait, they don't exist you dope.
and goodbye client.

 

[DWiley]

The problem is the byzantine rules are so convoluted and ever changing, the appraiser is not sure that they can do this without violating USPAP at the same time, they can have zero faith that the AMC or the client actually can be relied upon to tell them correctly what the course of action is. These clients demand instant action and even if you were to consult the direct endorsement underwriter, you'd best record the phone call or get it in writing if they spell out what you can do. Trust but verify and document it.

The USPAP rules related contract analysis have not changed in 25 years. The requirement is to analyze the contract in place as of the effective date. Anything else you do (e.g. analyzing a contract that came into place on another date) is just additional analysis.

 

[alebrewer]

Here is Fannie Mae's guidance on the issue as well –

Contract Changes After the Appraisal is Completed​

If the contract is amended after the effective date of the appraisal in a way that does not affect the description of the property, then the lender is not required to provide the amended contract to the appraiser nor obtain a revised appraisal. Some examples of amendments that do not require the lender to provide the amended contract nor obtain revisions to the already-completed appraisal report include:

• sale price,
• transaction terms,
• financing concessions,
• seller-paid closing costs,
• names or initials,
• closing date, and
• correction of minor clerical errors such as misspellings.

B4-1.1-05, Disclosure of Information to Appraisers (12/06/2016)

selling-guide.fanniemae.com

​

That is usually what I start with - both on the vendor side (when I'm the appraiser) - as well as the lender side - when I'm the SME for the lender.

 

[Terrel L. Shields]

Anything else you do (e.g. analyzing a contract that came into place on another date) is just additional analysis.

But is it clear in FHA and Fannie rules what they want and require vs what USPAP says?

As far as I am concerned regardless the rules banks operate under, any post-report stip that is not to correct a mistake of the appraiser is subject to an additional fee and frankly, contract concerns and modification should never be asked of an appraiser - why does it matter? Bank rules...who cares what USPAP says...except the appraiser....

The change makes ZERO difference in the value. It is a POST-REPORT change that only consumes more time for the appraiser - no one else. And when was the last time anyone was able to scratch ten bucks extra for going back and pulling up a report and make the additional unnecessary comments?

 

[Mike Ault]

It used to be quite important to clients who were bent on mortgage fraud to control what was on the front page of the report. They claimed it was for the sake of having a "clean file" that would sail through their investors underwriting when in fact they didn't want any evidence that the sales price had been manipulated after the appraisal was submitted. As long as you would change the value on the front page they could deal with any pesky addendum's you might throw in detailing who did what and why. Customer service does not include enabling fraud and that is why the wise appraiser leaves the original sales price untouched on the front page.

 

[DWiley]

It used to be quite important to clients who were bent on mortgage fraud to control what was on the front page of the report. They claimed it was for the sake of having a "clean file" that would sail through their investors underwriting when in fact they didn't want any evidence that the sales price had been manipulated after the appraisal was submitted. As long as you would change the value on the front page they could deal with any pesky addendum's you might throw in detailing who did what and why. Customer service does not include enabling fraud and that is why the wise appraiser leaves the original sales price untouched on the front page.

What fraud would be facilitated in the case described by the OP? You keep referring to increasing the sale price, as if you did not read the OP. Home appraised for less than the contract price, and the contract was revised to match the appraised value.

 

[Mike Ault]

What fraud would be facilitated in the case described by the OP? You keep referring to increasing the sale price, as if you did not read the OP. Home appraised for less than the contract price, and the contract was revised to match the appraised value.

I wasn't confining my observations to the scenario outlined in the OP. My dissension was over the concept of "customer service", being a "good businessman" and doing whatever those people that were sending you the check wanted you to do. I think that is a bad precedent to set and I have seen the potentially fraudulent aspects of it in action over this very issue.