Final Inspection and prior disclosure

[netappr]

Does FNMA require a disclosure when completing a final inspection of a property if we have completed an appraisal on the property within the past 3 years. I have never disclosed that as I have always considered the final to be an extension of the appraisal. Of course, an AMC is requesting this.

 

[Mr Rex]

IIRC its covered in the latest USPAP FAQs.

 

[netappr]

found it, thanks

 

[VolcanoLvr]

And the answer from the FAQ was what?

There are really two parts to the 'final completion' and it depends on who actually does it.

The final inspection is an extension of the original appraisal. It is not a new assignment because it merely asks if the property has had the completion done per the indicators in the original appraisal. The original appraisal report should have had a certification statement from the original appraiser about prior assignments at that property.

So, the prior appraisal is 'incorporated by reference' if the original appraiser does the final inspection. IMHO an additional disclosure about prior service would not be necessary in this situation.

However, if another appraiser does the final, the original report should be 'attached' to the 1004D (or vice versa). IMHO in that case, the second, non-original appraiser would be wise to include a prior service disclosure statement on the 1004D.

 

[Noreen]

I have been making a statement on my final inspections that..."This is a second service performed on the subject property, for the same lender. Original report signed XX/XX/2012. Prior to that inspection, no additional services, in any capacity, have been performed by the appraiser other than the original assignment dated XX/XX/2012." There are too many screwballs sitting as judge and jury and I don't want to get caught up in a misinterpretation, never knowing who is looking for anyone to make a mistake..... can you say Paranoid????

 

[VolcanoLvr]

"can you say Paranoid????"

Yes.

The point of the disclosure requirement in USPAP is to help clients involved with the lending valuation process understand who has done what in the past at the property when involved with a current appraisal assignment.

A completion certificate 1004D is not a valuation process in its purest definition.

Thus, IMHO, a comprehensively written prior service disclosure statement applied to the 1004D is not necessary. No need to ride the paranoia wagon into oblivion.

 

[incognito]

Vol, could you define a "valuation process", because it is not a term I have ever heard. To the OP, it is not a FNMA issue, it is a USPAP issue. In my opinion, ANY prior service performed on the subject property, whether or not it is appraisal or "valuation" related (even if you mowed the lawn), must be disclosed. Paranod? No.

 

[Terrel L. Shields]

The point of the disclosure requirement in USPAP is to help clients involved with the lending valuation process understand who has done what in the past at the property when involved with a current appraisal assignment

and when the same lender was involved... pointless stupidity. I had to search several records recently.... I had done the property 3 times in 3 years...each for the same client...do you think they didn't know?

The valuation process is the appraisal process..
Here is how it works in vetting...

 

[VolcanoLvr]

Incognito....
You apparently have not followed this post closely.

The issue is whether or not to put the 'prior disclosure' certification statement required in the USPAP Ethics Rule into a 1004D Certification of Completion.

I used the term 'valuation process' meaning everything involved with the mortgage loan, including the appraisal. The appraisal (the actual original report) is part of that, and that is what the USPAP prior service statement applies to in terms of a valuation service assignment.

To repeat, the 1004D Certification of Completion is not a full-blown appraisal report, and is not a Valuation Service - except in a very limited sense if the items to be completed are not completed. Therefore IMHO it does not require the prior service certification if the original appraiser completes it....because that certification is already in the original report. See my post #4.

By the way folks....."Valuation Service" is a term used in the USPAP definition of 'Assignment' on page U-2.

 

[CindyR]

this came up just today in USPAP class. If the final inspection was included in the original letter of engagement, such as proposed construction, then there is no need to disclose the prior service. if the final inspection was not included in the original assignment then, yes, a prior service disclosure must be prepared. Also noted that the notice to the client (prior to acceptance of the order) must be documented in the workfile. That's what we learned today.