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FNMA September revised FAQs

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Mike Kennedy said:
Thanks for asking Denis.

FAQS do not revise or replace FNMA requirements:

Part B, Origination Through Closing
Subpart 4, Underwriting Property
Chapter 1, Appraisal Requirements, General Appraisal Requirements
April 15, 2014

B4 1.1-04 Unacceptable Appraisal Practices (04/15/2014)

Introduction
This topic contains examples of unacceptable practices, many of which are reflected in the appraiser’s certifications on the appraisal reports.

Unacceptable Appraisal Practices
The following are examples of unacceptable appraisal practices:
• development of or reporting an opinion of market value that is not supportable by market data or is misleading;
• development of a valuation conclusion based either partially or completely on the sex, race, color, religion, handicap, national origin, familial status, or other protected classes of either the prospective owners or occupants of the subject property or the present owners or occupants of the properties in the vicinity of the subject property;
• development of a valuation conclusion based on factors that local, state, or federal law designate as discriminatory, and thus, prohibited;
• misrepresentation of the physical characteristics of the subject property, improvements, or comparable sales;
• failure to comment on negative factors with respect to the subject neighborhood, the subject
property, or proximity of the subject property to adverse influences;
• development of or reporting an appraisal in a manner that is inconsistent with the requirements of the USPAP in place as of the effective date of the appraisal.

Highest and Best Use
Fannie Mae will only purchase or securitize a mortgage that represents the highest and best use of the siteas improved. If the current improvements clearly do not represent the highest and best use of the site as an improved site, it must be indicated on the appraisal report.
The appraiser determines highest and best use of a site as the reasonable and probable use that supports the highest present value on the effective date of the appraisal.

For improvements to represent the highest and best use of a site, they must be legally permitted, financially feasible, and physically possible, and must provide more profit than any other use of the site would generate. All of those criteria must be met if the improvements are to be considered as the highest and best use of a site.

USPAP 2014-15

Ethics Rule, Conduct
An appraiser must perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interests

An appraiser:
must not perform an assignment with bias;
• must not advocate the cause or interest of any party or issue;
must not use or communicate a report that is known by the appraiser to be misleading or fraudulent;
• must not knowingly permit an employee or other person to communicate a misleading or fraudulent report;
• must not perform an assignment in a grossly negligent manner.

Competency Rule
Competency requires:
Being Competent
1. the ability to properly identify the problem to be addressed; and
2. the knowledge and experience to complete the assignment competently; and
3. recognition of, and compliance with, laws and regulations that apply to the appraiser or to the assignment.

Scope of Work Rule
Acceptability
The scope of work must include the research and analyses that are necessary to develop credible assignment results.

SR 1-1 (b) (c)
SR 1-2b (e) (e) identify the characteristics of the property that are relevant to the type and definition of value and intended use of the appraisal,

(i) its location and physical, legal, and economic attributes; including:
(iv) any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, or other items of a similar nature;

SR 1-3
(b) develop an opinion of the highest and best use of the real estate.
Comment: An appraiser must analyze the relevant legal, physical, and economic factors to the extent necessary to support the appraiser’s highest and best use conclusion(s).

SR 2-2 (a)
(iii) summarize information sufficient to identify the real estate involved in the appraisal, including the physical, legal, and economic property characteristics relevant to the assignment;
Comment: The real estate involved in the appraisal can be specified, for example, by
a legal description, address, map reference, copy of a survey or map, property sketch,
and/or photographs or the like. The summarized information can include a property
sketch and photographs in addition to written comments about the legal, physical,
and economic attributes of the real estate relevant to the type and definition of value and intended use of the appraisal.
(x) when an opinion of highest and best use was developed by the appraiser, summarize the support and rationale for that opinion;

SR 2-3 Appraiser's Certification
"I certify that, to the best of my knowledge and belief, my analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice."


[FONT=&quot]Appraisal of RE 12th Edition
"HIGHEST AND BEST USE[/FONT][FONT=&quot]
The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability."[/FONT]
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Mike this is so tiring, not everyone lives in the world of nazi code enforcement and building inspectors. The new FAQs recognize that different parts of the country act in different ways. There are many places that do not care what you build as long as they can tax it.

AND, just because something does not have a permit does not make it illegal. You have been preaching to a NATIONAL forum what you believe to be the ABSOLUTE truth when it simply does not apply to many areas of the country.
 
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People violate laws. Inanimate objects cannot violate laws.

You should refrain from posting things until you know what you're talking about.

§ 275-9 Violations and penalties.
[Amended 10-16-2006 by Ord. No. 06-017]
A.
A violation of any of the provisions of the Michigan Building Code shall be deemed a municipal civil infraction, and subject to the payment of a civil fine determined in accordance with the following schedule:
(1)
First violation within a two-year period: $100.
(2)
Second violation within a two-year period: $250.
(3)
Third or subsequent violation within a two-year period: $500.
B.
The two-year period referenced in Subsection A shall be determined as of the date of the first violation. For illustrative purposes only, if the first violation occurs on July 1, 1999, the two-year period shall be from July 1, 1999, to June 30, 2001.
C.
Each day that a violation exists, occurs or continues constitutes a separate offense and shall be subject to the penalties or sanctions provided herein as a separate offense.
D.
Whoever violates this chapter shall also be subject to such additional sanctions, remedies, and judicial orders as are authorized and provided for under Michigan law.
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illegaladditions dot com... :rof:

Stop. Yer killin' me.

You really don't get it do you. For a long time I thought you were just stubborn. But there really is a chasm in your understanding.
 
Mike Kennedy said:
Michigan

http://www.ecode360.com/12407184

http://www.ecode360.com/12412772#12412772

BUILDING PERMITThe written authority issued by the Building Official permitting the construction, removal, moving, alteration or use of a building in conformity with the provisions of this chapter.
http://www.ecode360.com/12411054?highlight=additional,additions,addition#12411054
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:rof:

Now look up all the townships and then move here and see how much some of them care about building codes, permits or illegal structures. You tend to forget that this is a national forum

You also seem to forget that just because something is built or altered it is not necessarily illegal.

I can show you an entire street of homes where most of the former garages were converted to living area and no one cares including the building inspector, the building department, the zoning officer, the mayor or the dog catcher. But they do tax those improvements as living area and they do sell all the time. I would suggest you look at the FAQs originally posted and accept that we don't all live in the world or nazi-type enforcement.

Mike, THEY DON"T CARE!
 
Location: Hopland, CA
Mendocino County CA

“The Code Enforcement Division within the department receives violations from many sources, including r eferrals from other public agencies such as health, fire or police agen cies, confidential complaints submitted by members of the public or observations by Department personnel while conducti ng field inspections.

(1) a "Notice to Appear" citation may be issued which could impose fines by the Justice or Municipal courts,

(2) a "Notice of Violation and Lien" hearing may be conducted, at which time, a lien may be recorded against the property. The Notice of Violation would not be released until all fees and penalties have been paid and/or the violation abated; or

(3) the violation may be referred to the Mendocino County Counsel's office for filing of a civil action lawsuit seeking court orders and monetary judgments to compel compliance.

If you are in violation of a code section covered by the Infraction Citation Procedure, you will be is sued a "Notice to Appear" citation. You will be allowed 21 days to correct the violation without any penalties being assessed by the Courts. If the violation is corrected during this period and you obtain a "Certification of Correction" from the Code Enforcement Division and present proof of correction to the court, the citation may be dismissed.

If the violation is not corrected prior to your court appearance date, the courts will assess appropriate fines and penalties. Penalties for infractions are set by the court and may be up to $1,000 for each offense. Nonpayment of any penalty may cause a warrant to be issued for your arrest by the appropriate Justice or Municipal Courts.

Examples of code sections that are covered by the Infraction Citation procedure may include construction without a required building permit, failure to comply with a STOP WORK ORDER issued for un-permitted construction, occupancy of a structure prior to or without a Certificate of Occupancy, or establishing a use not permitted pursuant to County Zoning Codes.”

http://www.co.mendocino.ca.us/planning/pdf/Code_Enforce_FAQ.pdf
 
Michigan CG said:
:rof:

Now look up all the townships and then move here and see how much some of them care about building codes, permits or illegal structures. You tend to forget that this is a national forum

You also seem to forget that just because something is built or altered it is not necessarily illegal.

I can show you an entire street of homes where most of the former garages were converted to living area and no one cares including the building inspector, the building department, the zoning officer, the mayor or the dog catcher. But they do tax those improvements as living area and they do sell all the time. I would suggest you look at the FAQs originally posted and accept that we don't all live in the world or nazi-type enforcement.

Mike, THEY DON"T CARE!
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Kindly post a recognized definition of Highest and Best Illegal Use. Thanks.
 
Don't try to make a "they don't care" argument with him. It gives him room to navigate and highlight things he copies and pastes. And he doesn't have a good grasp of HBU.

Not getting a permit does not equal an illegal use and that is where the primary concern is. Illegal uses. You can't get a permit for an illegal use... that should be obvious.

Read the local codes. There are uses that are referred to as "allowed uses" or in some jurisdictions "use by right" or even "allowed by right." These types of uses don't require a use permit because it is a use that is allowed. Then there are "permitted uses." These are uses that require a use permit. Then there are uses which require a "conditional use permit" and there might be several variations of those types of permits. These require special permits that the jurisdiction has to decided on a case by case basis.

And then we have "building permits." Almost all uses, anywhere, will require a building permit. That's a separate issue.

If a SFR is allowed in the "R1 - 6,000" district then you don't need a use permit to build an SFR. Just a building permit. The use is legal by right. If you add a family room that is also a "use by right" because it just makes the SFR bigger (assuming you follow the other requirements such as set backs, building codes, density limits, etc., etc.

Not getting a building permit does not make those uses illegal even though it violates the CIVIL code to build without getting the permit. The laws was broken by the person, not the property.
 
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