FNMA and Permits and Extraordinary Assumptions

[glenn walker]

P.S. By the way those Friendly Folks at HUD will send you a letter if they do a review and see you did not include them as a intended user : )

 

[Lee Lansford]

So with that thought in mind, adding FHA as an intended user on an FHA assignment on an FNMA 1004 is a no-no.

Uuuhhhh...that is not correct.

 

[Lee Lansford]

I am pretty sure my internet works just like yours, so feel free to provide current citation that FNMA does not allow them

Look at the paragraph immediately prior to the SCOPE OF WORK paragraph in the Fannie/Freddie form report. The only way to have an EA in a "F/F" form report is via the check-box at the bottom of page 2 of (for example) the 1004/URAR.

 

[Sadie]

I asked about the modifying the intended user. You should re-read the statement on page on of the preprinted addendum. I copied and pasted it here for your convenience.

"This report form is designed to report an appraisal of a one-unit property or a one-unit property with an accessory unit; including a unit in a planned unit development (PUD). This report form is not designed to report an appraisal of a manufactured home or a unit in a condominium or cooperative project.

This appraisal report is subject to the following scope of work, intended use, intended user, definition of market value, statement of assumptions and limiting conditions, and certifications. Modifications, additions, or deletions to the intended use, intended user, definition of market value, or assumptions and limiting conditions are not permitted. The appraiser may expand the scope of work to include any additional research or analysis necessary based on the complexity of this appraisal assignment. Modifications or deletions to the certifications are also not permitted. However, additional certifications that do not constitute material alterations to this appraisal report, such as those required by law or those related to the appraiser’s continuing education or membership in an appraisal organization, are permitted."

So I ask you the question about adding FHA as an intended user on the FANNIE form. According to the above statement, the answer is no.

However. if your scope of work includes FHA/HUD/USDA who ever, then yes you can because it is in the scope of work. You can't take them out or add random individual XX if not in the original scope of work. Change of the scope of work creates a new assignment.

 

[Lee Lansford]

Is that true within the 1004 or just the 2055 and desktops?

EA is allowed (here assuming that compliance with Fannie/Freddie requirements is integral to the assignment) ONLY...only...when X'ing that check-box at the bottom of page 2 (of the 1004/URAR).

 

[Sadie]

Look at the paragraph immediately prior to the SCOPE OF WORK paragraph in the Fannie/Freddie form report. The only way to have an EA in a "F/F" form report is via the check-box at the bottom of page 2 of (for example) the 1004/URAR.

I did and included it. Does it say no extraordinary assumptions? No it doesn't. It refers also the the Statement of Assumptions at the bottom of the page.
STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS: The appraiser’s certification in this report is subject to the following assumptions and limiting conditions:
I think we have determined that FNMA does allow extraordinary assumptions, and now the discussion in when and where.

 

[Lee Lansford]

I did and included it. Does it say no extraordinary assumptions? No it doesn't. It refers also the the Statement of Assumptions at the bottom of the page.
STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS: The appraiser’s certification in this report is subject to the following assumptions and limiting conditions:
I think we have determined that FNMA does allow extraordinary assumptions, and now the discussion in when and where.

Did you happen to read any of the comments by Danny Wiley--a 'higher'up' at Freddie and also past Chairman of the ASB--where he explains how it is that you are wrong in what you are asserting here? The only allowable EA (where adherence to Fannie/Freddie is a given of the assignment) is when the appraiser X's that box on page 2 of the URAR/1004 (by way of example).

 

[DWiley]

It is absolutely correct to say that the GSEs allow for use of EAs. It is even more correct to say that they allow EAs only when requiring some sort of inspection and using CB4 in the reconciliation section.

One cannot, for example, just insert an EA in a text addendum, because doing so is contrary to the SOW statement that says that one cannot add assumptions (an EA is an assumption). This is an intentional construct - as risk cannot really be managed if one allows for the addition of unlimited assumptions.

 

[Carnivore]

It is absolutely correct to say that the GSEs allow for use of EAs. It is even more correct to say that they allow EAs only when requiring some sort of inspection and using CB4 in the reconciliation section.

One cannot, for example, just insert an EA in a text addendum, because doing so is contrary to the SOW statement that says that one cannot add assumptions (an EA is an assumption). This is an intentional construct - as risk cannot really be managed if one allows for the addition of unlimited assumptions.

That's the main reason right there. Risk Management. This poses a problem for AS-IS only report requirements. Not for me so much, but the Lender Client Intended Use.

We appraisers are not Home Inspectors. Some appraisers may be both. If they are I doubt they want to go out on the limb and risk their license.

Dare I inject the FNMA/Freddie Mac 2055 assignment and Scope of Work into this discussion. Also and especially Certification #10.

 

[Sadie]

Did you happen to read any of the comments by Danny Wiley--a 'higher'up' at Freddie and also past Chairman of the ASB--where he explains how it is that you are wrong in what you are asserting here? The only allowable EA (where adherence to Fannie/Freddie is a given of the assignment) is when the appraiser X's that box on page 2 of the URAR/1004 (by way of example).

Look at DWiley's last post (#58)