Hurricane inspections / reports info

[Pamela Crowley (Florida)]

First, I apologize for being so late to do this post.

I've been asked to help TX appraisers with what should / should not be done regarding lenders asking for 'hurricane inspections' and I am doing some copy and paste from the FL forum about these.

First and foremost, I very firmly believe that the form 1004D should NOT be used for these! A letter is what is appropriate as there is no applicable form. Your company letterhead is best.

Here is one of the posts about a place that does have storm damage:

On August 13, 2004, September 4, 2004 and September 25, 2004 the southwest and central part of Florida, which includes the City of xxxx in Brevard County, was struck by Hurricane Charley, Frances and Jeanne. The category 3 hurricane, category 2 hurricane and category 3 hurricane, respectively, left wide spread destruction of varying degrees. The counties of Brevard, Charlotte, Citrus, Collier, Desoto, Dixie, Duval, Glades, Hardee, Hendry, Hernando, Highlands, Hillsborough, Indian River, Lake, Lee, Levy, Manatee, Marion, Martin, Monroe, Okeechobee, Orange, Osceola, Palm Beach, Pasco, Pinellas, Polk, St. Lucie, St. Johns, Sarasota, Seminole, Sumter and Volusia have been declared Federal disaster areas. This declaration allows homeowners to receive Federal funds from FEMA and special financing from HUD.

The property noted above was appraised, by me, on xxxxx,2004 . As of the date below I have been asked, by the client, to revisit the property to determine if there is any visible hurricane damage. I have observed the roof, from ground level for any visible signs of water infiltration or damage. I have observed the exterior of the property for any signs of leakage, undue settling or shifting that was not noted at the time original appraisal visit. I have observed the interior for any signs of leakage and water infiltration.

On the date noted below the following damages were noted:
High water on the floor in the enclosed foyer, aluminum gutters damaged, some damage to the aluminum storm shutters, damage to the screen porch and screens, the kitchen ceiling has collapsed from a leak in the roof.* See the attached photos.* A roof inspection is recommended to determine the total extent of the roof damage.

I am not a home inspector, roofing contractor or a structural engineer and am not qualified to report on any hidden damage that was not obvious at the time of my visit. Should a more thorough inspection be required, by the client, it is suggested that a home inspector, roofing contractor or structural engineer be contacted.

Repair estimates can not be determined without a thorough roof inspection. There have been no closed sales of hurricane damaged properties so the affect on the subject's value or marketability has yet to be determined.

This gives you some ideas of how these reports should be done. I will be working on finding more examples to post here.

 

[Pamela Crowley (Florida)]

Please do not let yourself get bullied into making changes to what you write that should not be changed. Here's another post I think is good:

I got a call yesterday from a mortgage broker that I had completed a hurricane assessment on. The first inspection, after Frances, there was damage. The broker had a hissy fit because I reported it. They wanted me to take the statement out about roof shingles missing. I said, "NO WAY....it's obvious in the photos both front and rear." So apparently the borrower replaced the missing shingles after Jeanne and they sent me out again. This time there was no VISIBLE damage. I can't say what it's like underneath those replaced shingles.

So I state that on such and such date there was no visible damage and then the statement about not being a roof inspector, etc. I got the same type of call about having to remove that statement and that they would not be able to fund the loan. I told her I would not remove the statement, that is falls under competency and in my opinion it would be a violation of USPAP if I removed it.

I guess they were trying to sell the loan to XXXXX, cuz she used the exact same wording you have been hearing. About 2 hours later she called to tell me they worked it out another way. They had the borrower sign and get notorized statements about the condition, damage and repairs completed. Puts the responsibilty back on the borrower.

XXXX, to answer your questions about photos... as many as I need to support what I'm trying to convey. If there is no visible damage I might take 3 interior photos just to prove I was there and I take them at a different angle than what was in the original report, or I'll set the camera to date stamp the photo.

 

[Pamela Crowley (Florida)]

regarding using the 442 form:

Here are some more examples for various questions.

I just wanted to trot this pony past you all and see what ya thought...

I just got an order to do a 442 interior and exterior. Looked at the address and knew it wasn't anything I had ever appraised. Called the LO and said it wasn't mine, they said that's ok - do it anyway. Curious, I called the HO to find out if there was damage. Yes, part of the roof was gone and there is water damage.

Well, I'm not gonna touch this with a 10 ft pole (never intended to) so I call the lender back and say no way. She says the 442 is not a certification of value, its just a report to document damage and/or certify completion. Could I just document all damage and later confirm completion to code? I told her to get a building inspector, not an appraiser. If you want an appraisal, send an order for a 1004 not a 442. I will not confirm value on a report I didn't write.

Here's the question: Is a 442 an appraisal?

I say yes. The word "value" is on the form & in my book that is an appraisal. Other cohorts say that it's not an appraisal if you state that it's not. Huh? I say you cannot complete a 442 on a property you did not appraise. Others say you can. Humm..

What say you AF jury?

Some clients are also requesting that I state whether the damage will cause any adverse marketablity. I would think so, if the damage is not repaired, but IMNSHO it is really too early to tell. I think we are going to see list prices on damaged, non-repaired homes go down. I think we may also start to see addendums on purchase agreements that might have been place prior to the hurricanes. Sellers may want to sell and buyers may want to buy but the roof is damages and there are no roofers in sight for 3-4 months....(that's how long I'm told I will have to wait.) What would you do if you were the seller, in that scenerio? Take a lesser price? Hold back on the sale until you get your insurance settlement check and fix the roof? Take the settlement check and let the buyer fix the roof?

Yes, it is true, anybody, even a bank employee can do a 442. Just be sure you have a copy of at least the first page of the original appraisal. You are not attesting to value, you are attesting to VISIBLE damage.

Personally, I will not use the 442 for Hurricane inspections and the pre-printed wording on that form is the reason.

"The appraisal report was subject to: "

and

"I certify that I have reinspected subject property, the requirements or conditions set forth in the appraisal report have been met, and any required repairs or completion items have been done in a workmanlike manner.

Itemized below are substantial changes from the data in the appraisal report, and these changes do not adversely affect any property ratings or final estimate of value in the report."

I'm very uncomfortable with those statements when using this form for a Hurricane inspection, especially when it would involve someone elses appraisal report.

Just my own personal opinion. I would do a letter.

I received a call yesterday for a final due to Hurricane Jeanne. From my understanding there was a field review done on my appraisal and they noted that the windows had been blown out from the winds.

The broker called and said that the lender is looking for a statement that says the damage is under 3% of the appraised value or under $5,000. Whichever is lowest

The loan has already funded and the lender is looking for the cost to cure.

Should the appraiser be doing this or a home inspector?

I wouldn't put a number on it without some estimates in writing from licensed contractors.

In all my reports since the hurricanes, I've been adding a disclaimer that just because I didn't see any damage doesn't mean there isn't any and if subsequent inspections reveal storm related damage, it might affect the value of the property, but I'm not an engineer, contractor, etc.

What I was wondering is, how long to keep that statement in future reports? Theoretically, forever, but that's not realistic. Six months, three years?

At least a year from the last storm. Some of my neighbors are just now discovering additional damage and new mold blooms. Additional damage to such items as A/C compressors and air handlers, pool pumps and mold in attics.

After Andrew we kept disclaimers in our reports for 3 years for properties in Miami-Dade County.

I use several disclaimers....one in the neighborhood section on page 1:

The subject is located in close proximity to XXXX and XXXX, providing adequate access to employment, shopping and other residential linkages. The neighborhood is in the stability stage of its life cycle. There are no known conditions in the local area that would adversely affect marketability. The neighborhood is typical of similar competing neighborhoods, in the same price range, in terms of support amenities. Commercial uses are confined to the main thoroughfares. The neighborhood is located in Brevard County, which was declared a Federal Disaster Area after Hurricane Charley (8/13/2004), Hurricane Frances (09/04/2004) and Hurricane Jeanne (09/25/2004). Economic impact from these three natural disasters has yet to be determined and may take several years to fully determine.

And my standard disclaimer in the addendum:

On August 13, 2004, September 4, 2004 and September 25, 2004 the southwest and central part of Florida, which includes the City of zzz in Brevard County, was struck by Hurricane Charley, Frances and Jeanne. The category 3 hurricane, category 2 hurricane and category 3 hurricane, respectively, left wide spread destruction of varying degrees. The counties of Alachua, Baker, Bradford, Brevard, Broward, Charlotte, Citrus, Clay, Collier, Columbia, Desoto, Dixie, Duval, Flagler, Gadsden, Glades, hamilton, Hardee, Hendry, Hernando, Highlands, Hillsborough, Indian River, Lake, Lee, Leon, Levy, Liberty, Manatee, Marion, Martin, Miami-Dade, Monroe, Okeechobee, Orange, Osceola, Palm Beach, Pasco, Pinellas, Polk, Putnam, St. Lucie, St. Johns, Sarasota, Seminole, Sumter, Volusia and Wakulla have been declared Federal disaster areas. This declaration allows homeowners to receive Federal funds from FEMA and special financing from HUD.

As of the effective date of the appraisal, no hurricane damage was obvious or visible.

I am not a home inspector, roofing contractor or a structural engineer and am not qualified to report on any hidden damage that was not obvious at the time of the appraisal inspection. Should a more thorough inspection be required, by the client, it is suggested that a home inspector, roofing contractor or structural engineer be contacted.

The addendum disclaimer includes some of the language suggested by XXXXX, mostly including all of the names of the declared counties. Since FEMA still has Disaster Recovery Centers open I'll keep naming the counties.