I'm Conflicted - Should I Do These Reports?

[Meandering]

It doesn't really say that.

How do you address functional ob, if you have not been inside the property?

EA away!

Condition?

EA away!

Qualtiy?

EA away!

GLA?

EA away!

Basement size?

EA away!

Size of the finished portion of hte basement?

EA away!

Heat and AC working?

EA away!

Water and sewage not leaking?

EA away!

Diswasher/Oven/Disposal all working?

EA away!

Windows painted shut?

EA away!



None of these things, and many more, don't impact your value opinion, until the loan amount is $250,000 or more. Sure you can produce "credible" for lending, cause none of these items are addressed by the GSEs/FHA/USDA/VA/IAEG.

All those government initals just don't think they are important to your value for a lending appraisal.

 

[TRESinc]

From a technical standpoint, In some states, you could have the inspector being accused of performing appraisal practice without a license.

Yeah, but she is not inspecting a property as part of “appraisal practice” and calling it an “appraisal”. A drone can do the same thing as your wife, but it is not classified as an appraisal.

the entity performing the inspection is not calling it an appraisal. it is an inspection. how do you come up with these insane assumptions??

 

[residentialguy]

EA away!

Yes, EA. If an appraiser cannot verify a certain condition that is critical to the valuation, but which he has no reason to doubt is true, then the condition is an extraordinary assumption. The appraiser must comply with appropriate Standards having to do with both the development and reporting of the condition as an extraordinary assumption.

You act as if it is not part of appraisal terminology. Have you never done an appraisal without an interior inspection?

 

[residentialguy]

Sure you can produce "credible" for lending

That's the lenders decision for what they require for their risk on loaning their money. They can loan out their money without an appraisal if they want, and they often do that.

 

[Meandering]

Yes, EA. If an appraiser cannot verify a certain condition that is critical to the valuation, but which he has no reason to doubt is true, then the condition is an extraordinary assumption. The appraiser must comply with appropriate Standards having to do with both the development and reporting of the condition as an extraordinary assumption.

You act as if it is not part of appraisal terminology. Have you never done an appraisal without an interior inspection?

USPAP
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.

IAEG
An institution should obtain an appraisal that is appropriate for the particular federally related transaction, considering the risk and complexity of the transaction. The level of detail should be sufficient for the institution to understand the appraiser's analysis and opinion of the property's market value. As provided by the USPAP Scope of Work Rule, appraisers are responsible for establishing the scope of work to be performed in rendering an opinion of the property's market value. An institution should ensure that the scope of work is appropriate for the assignment. The appraiser's scope of work should be consistent with the extent of the research and analyses employed for similar property types, market conditions, and transactions. Therefore, an institution should be cautious in limiting the scope of the appraiser's inspection, research, or other information used to determine the property's condition and relevant market factors, which could affect the credibility of the appraisal.


According to USPAP, appraisal reports must contain sufficient information to enable the intended user of the appraisal to understand the report properly. An institution should specify the use of an appraisal report option that is commensurate with the risk and complexity of the transaction. The appraisal report should contain sufficient disclosure of the nature and extent of inspection and research performed by the appraiser to verify the property's condition and support the appraiser's opinion of market value. (See Appendix D, Glossary of Terms, for the definition of appraisal report options.)


You can't verify, the condition with an EA.


Institutions should be aware that provisions in the Dodd-Frank Act address appraisal requirements for a higher-risk mortgage to a consumer. [37] To implement these provisions, the Agencies recognize that future regulations will address the requirement that the appraiser conduct a physical property visit of the interior of the mortgaged property. [38]


So back to USPAP and scope of the work.

Your EA's aren't credible for the intended use of the report.


.

 

[residentialguy]

We're not talking FNMA. If this is a GSE assignment, then we have to use the GSE forms. They won't even accept this.

 

[Meandering]

That's the lenders decision for what they require for their risk on loaning their money. They can loan out their money without an appraisal if they want, and they often do that.

Nope.
That's your problem.

appraiser must not allow assignment conditions to limit the scope of work to such a degree that the
assignment results are not credible in the context of the intended use.
Comment
modify the assignment conditions to expand the scope of work to include gathering the
information; or
If relevant information is not available because of assignment conditions that limit
research opportunities (such as conditions that place limitations on inspection or information
gathering), an appraiser must withdraw from the assignment unless the appraiser can:
• use an extraordinary assumption about such information, if credible assignment results
can still be developed. (IAEG does not allow for EA of condition, hence for the intended use, the results are not credible)
An appraiser must not allow the intended use of an assignment or a client’s objectives to cause the assignment results to be biased. (you are biased toward "Average" Conditon, based on someone else's opinion/photo taking)

 

[Meandering]

We're not talking FNMA. If this is a GSE assignment, then we have to use the GSE forms. They won't even accept this.

Where does a LENDER have to use a GSE form?

The IAEG does not cover GSEs seperately. It is the LENDING regulation for LENDERS regulated by the interagencies and the OCC.

.

 

[residentialguy]

With EA, this allows the appraiser to presume as fact. No verification is necessary...it is fact and if not true, they know it may affect value. If they accept it, then they have discarded their own regs. The appraisal is not misleading and is very clear that it is just a desktop appraisal with no interior inspection.

 

[timd354]

USPAP
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.

IAEG
An institution should obtain an appraisal that is appropriate for the particular federally related transaction, considering the risk and complexity of the transaction. The level of detail should be sufficient for the institution to understand the appraiser's analysis and opinion of the property's market value. As provided by the USPAP Scope of Work Rule, appraisers are responsible for establishing the scope of work to be performed in rendering an opinion of the property's market value. An institution should ensure that the scope of work is appropriate for the assignment. The appraiser's scope of work should be consistent with the extent of the research and analyses employed for similar property types, market conditions, and transactions. Therefore, an institution should be cautious in limiting the scope of the appraiser's inspection, research, or other information used to determine the property's condition and relevant market factors, which could affect the credibility of the appraisal.


According to USPAP, appraisal reports must contain sufficient information to enable the intended user of the appraisal to understand the report properly. An institution should specify the use of an appraisal report option that is commensurate with the risk and complexity of the transaction. The appraisal report should contain sufficient disclosure of the nature and extent of inspection and research performed by the appraiser to verify the property's condition and support the appraiser's opinion of market value. (See Appendix D, Glossary of Terms, for the definition of appraisal report options.)


You can't verify, the condition with an EA.


Institutions should be aware that provisions in the Dodd-Frank Act address appraisal requirements for a higher-risk mortgage to a consumer. [37] To implement these provisions, the Agencies recognize that future regulations will address the requirement that the appraiser conduct a physical property visit of the interior of the mortgaged property. [38]


So back to USPAP and scope of the work.

Your EA's aren't credible for the intended use of the report.


.

Sorry, Marion, but GSE transactions are not considered federally related transactions and any transaction under $250,000, whether or not a fedeally related transaction, does not even require an appraisal. Additionally, very few mortgages (none of which the GSE's will purchase in any case) are high risk mortgages as defined by D-F