FHA Work And Fees

[CANative]

While I agree with you in spirit, that type of limited inspection is only acceptable when the appraiser can not fully enter the crawl. I would wager that is what happens on 99.9% of crawlspace inspections but that is counter to what they expect. I have sat through two 1-day seminars that FHA has held here locally. They did not leave any doubt with what they expect and basically stated that those not following protocol should leave the panel.

Again, I agree with your point. Most of what they expect should fall outside of the appraisal inspection protocol.

Handbook says H&S will suffice so that's what I do (unless it's easy and safe to go in, which is rare.) Same with the crawl space. Same with other stuff on the property.

This is why FHA is so easy. Black and white protocols, reasonable, no changes in 80 years or so.

 

[Tom4value]

Ok, so let's say you do 200 conventional loan appraisals per year and you are asked to convert 4 of them to FHA. Let's do the math. Let's say it takes you 10 minutes longer to do the FHA stuff. That is 2,000 minutes or 33 33 hours of time. Now let's say you had to go back out and do the MPR inspection on the 4 that is being converted to FHA at 1 & 1/2 hours each. That is only 6 hours. You are doing about 27 hours of work you are not being paid for. Doesn't make sense to me.

If I get sued because I missed a leaking roof because I didn’t check the attic even though I saw water stains on the second floor ceilings, what are my chances if I say, “well, this was a conventional loan appraisal so I don’t have to check the attic.”?

 

[EddieB]

Handbook says H&S will suffice so that's what I do (unless it's easy and safe to go in, which is rare.) Same with the crawl space. Same with other stuff on the property.

This is why FHA is so easy. Black and white protocols, reasonable, no changes in 80 years or so.

That is not what it says Greg. We've had this discussion before. Trust me the instructor from FHA did not say "only when its' easy and safe"

H&S is the way my supervisor taught me and the way I did for many years. H&S is acceptable only there is not adequate access. That doesn't mean anything lower than your 5' stature.

 

[Tom4value]

It seems impossible to inspect ALL areas of the attic or crawl space by simply opening the scuttle and snapping a photo. Please explain how that’s done.

You specify that you “performed a head and shoulders visual inspection of the attic and observed no issues”.
FHA is fine with just “head and shoulders” with scuttles.

 

[Tom4value]

Are you providing FHA reports with an effective date prior to the case number order date??


Have you ever had a private appraisal specify they want you to drive by the comps??? I never have.... calling that lazy is silly. Doing work above and beyond the scope of work is silly

 

[EddieB]

You specify that you “performed a head and shoulders visual inspection of the attic and observed no issues”.
FHA is fine with just “head and shoulders” with scuttles.

Again, it does not say that.

 

[ICT RE]

https://www.appraisalinstitute.org/assets/1/7/Update_FHA_New_4000_1_Handbook.pdf

 

[Tom4value]

Pushinvalue-
To your first point, depends on what the client says. True, most will say the effective date needs to be on or after the date of the case number so I will go back out (and charge accordingly). I have had times where the client says the original date is fine and I note it in the report.

For your second point, what do your disclosures say? If you say you inspected the exterior of the comps and you don't, that is fraud. I do a lot of private deals. No one has told me, "nah, you don't have to look at the comps".

I am reading that you feel that private deals are easy because you don't have to do as much work. I can tell you the big difference between private work and lender work. With lender work, the homeowner is only interested in if the value allows them to get the loan. With a private deal, they are writing the check to me. They look over the report with a fine tooth comb. THEY actually go out to see the comps I use. I don't want to be asked why I didn't mention that comp 2 was next to a gas station and I didn't mention it. That puts me in the position of the client doing more work on the appraisal than me. Who is silly now?

 

[RSW]

If I get sued because I missed a leaking roof because I didn’t check the attic even though I saw water stains on the second floor ceilings, what are my chances if I say, “well, this was a conventional loan appraisal so I don’t have to check the attic.”?

I call for an inspection by a qualified professional when ever I see water damage in the ceiling.

 

[Tom4value]

I call for an inspection by a qualified professional when ever I see water damage in the ceiling.

Wow. So that is the extent of your scope of work, eh?
Here is how I am wired. I have learned that underwriters ask questions. Some of them are from their own noggin. Others are from the owner. Knowing what questions are going to be asked will cause me to ask questions that I will want to answer on the spot. I see a water stain on a second floor ceiling. I ask myself "is this new or old?". I check the attic. I see a puddle, I know it is active. I see a dry attic (floor and ceiling), I state, "water stains noted on second floor ceilings. Visual inspection of the attic reveals no evidence of recent water/wetness". Underwriter can call for an inspection or can let loan close. Either way, I am covered.

Your way, owner tells underwriter that "water stain was from 5 years ago. I replaced roof 4 years ago. Appraiser never asked me, never checked attic". Underwriter, through lack of input from you, only sees that you are calling for an inspection. Says that "since the appraiser did not look at the attic, I can only go by what appraiser calls for." Loan dies. Sure, you are covered. But are you really earning your fee?