FHA Refi/REO's 'as repaired' - no FHA case number...

[Farm Gal]

Any requests like this?

Order for a FHA 'Refinance' Appraisal. HUD is not the client.
House is listed for sale. Call to realtor indicates long marketing time to date. Realtor speculates lender is checking her CMAvalue considerably less than list.
All normal FHA required repairs to be listed on VC.
Appraisal value to be "as-repaired" (!?!),
with addendum stating values 'as is', 'subject to repairs' 'quick sale as is', and 'quick sale as repaired' .
No normal FHA number assigned... they say their 'loan number' suffices...

LOGICAL DISCONNECT on several counts!!!

1. FHA REO values are supposed to be 'as is'.
2. FHA Sales are "subject to repair conditions per VC sheet".
3. REO can be subject to whatever the client wants...with full disclosure and if they want 4 values OK, but it's gonna cost extra...

I requested clarification: _REO or _FHA? Pick one

I suggested they ask for "FHA quality inspection and reporting", but regular REO...

Am I looking at this wrong?

(edited because I incorrectly identified the original order as REO: when order actually showed as a FHA Refi.. hence my major confusion upon contacting relator and being told it was a vacant/REO...)

 

[Doug Walters]

Lee Ann:

Take a look at Mortgagee Letter 00-27 (www.hudclips.org). It contains the procedural guidelines for appraisal of REO properties together with Handbook 4150.2.

The FHA case number for the REO appraisal is ususally the same one that was issued for the original financing on the now foreclosed property.

HUD hires marketing and management (M&M) contractors to handle their REO properties. The M&M contractors in turn hire the appraisers to perform REO appraisals. The property should not be placed on the market until the REO appraisal has been completed.

Ask the client to state the purpose of the appraisal and to identify the intended users. This my help clear up some of the confusion. If the property has been on the market for longer than one year, that may be the reason they want it appraised again. The validity period may have expired.

Doug

 

[Farm Gal]

Doug:

I recognise most of the valid M&M contractors and neither the immediate client, nor the end client is one of them...

Appears that the lender just wants a FHA quality appraisal done?!?! I think they are asking for FHA appraisers so they know they get the whole story(?) Never seen this before...

Ask the client to state the purpose of the appraisal and to identify the intended users. This my help clear up some of the confusion.

I did ask: it didn't clarify anything water is muddier than ever... Appears that the lender just wants to know what to do with the marketing of this reposessed property, and is ordering a FHA appriasal to that end...

If the property has been on the market for longer than one year, that may be the reason they want it appraised again. The validity period may have expired.

Not applicable(?) no indication property was sold FHA origninally (per our pretty darn acurate MLS record..)

Still very confused... and digging for clues...

Thanks for your effort though...

 

[AC King]

You may wish to consider completing the appraisal as an hypothetical situation by stating that if your were completing the appraisal as an FHA assignment, the noted deficiencies are as listed on the VC Addendum. Note on the VC Addendum that it is provided for informational purposes only and does not actually represent FHA minimal property requirements since you do not have an FHA Case Number.

You could then complete the appraisal with a "subject to" and as "as is" value subject to the client's marketing time requirements.

I have completed numerous appraisal assignments for investors who wanted to know what the FHA requirements would be so they could rehabilitate the property for marketing. As long as you explain what you are doing, you should be able to satisfy the client's needs and still be in compliance with USPAP and HUD requirements.

 

[Farm Gal]

Thanks to all!!

Case solved: Client will accept a "normal REO but to FHA standards of inspection and reporting".

I called HUD and was 'sort of' advised not to do a VC sheet 'because it might be misleading... although you COULD...'

On the other hand I personally 'sort of' see no problem with complying with a clients desires as long as it is not misleading and I can paste all over the form that it is not an 'official' FHA and HUD is not an intended user....

On the other other hand: I have a fairly low comfort level of doing 'this sort' of report on 'those' forms. :?