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LBP inspection report

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MostlyLurk

Thread Starter
Freshman Member
Joined
May 10, 2005
Professional Status
General Public
State
Oregon
I've searched for this situation several different ways and haven't found it addressed directly so I'll just ask:

Regarding damaged paint in a house pre-1978, if I'm reading the regs right an appraisal must be conditioned on its repair even if the appraiser is given a clean LBP inspection report. Am I mistaken?

(I haven't been given this report yet, so I don't know precisely what it says, but the homeowner claims to be forwarding one and I want to be ready in case it's as advertised. I'm actually surprised this has never come up before.)

Is this the kind of thing where I do it subject-to and figure that the UW can make proper use of the LBP report? Or am I really going to have to force a CIR on a property which actually might have no need for it?
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
You do not have the ability to force anything. Under FHA requirements you must report what you observe. The underwriter has the authority to decide what they would like to have performed. The ball as they say is in the underwriters court. Your job is to observe and report.
 

MostlyLurk

Thread Starter
Freshman Member
Joined
May 10, 2005
Professional Status
General Public
State
Oregon
Bad choice of words, maybe

But if my value's not valid without correction of damaged paint, isn't that forcing a CIR?

(I know that probably sounds naive about the attention UWs pay to conditions of appraisals, but hey...)

Edit: But I hear what you're saying, that an LBP report is neither here nor there as far as the appraisal is concerned.
 
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Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
Unless there is severe deterioration of the paint and widespread throught the property, I doubt that the reported value is impared by some peeling paint. You main focus is whether the paint contains lead. The first issue is that the property is built prior to 1978. Lead based paint was banned in 1978.

In regard to the report, you basically have three options by which to condition your report 1) subject to completion 2) subject to repairs and 3) subject t inspection. Based upon the situation you described, you would condition your report subject to an inspection.

The Underwriter then has options. They may choose to have an inspection report performed. If so, there is no requirement to have the appraiser re-inspect or document further. FHA regulations state that anyone appropriately qualified may perform the inspection and then the Underwriter may document the results. Or they may elect to waive your inspection requirement altogether.

Once again, your function is to just observe and report.
 

Jerry Bone Jr

Senior Member
Joined
Feb 23, 2004
Professional Status
Licensed Appraiser
State
Oregon
"VC-12-b Evidence on exterior of defective paint surfaces, including: peeling, scaling, or chipping paint. The home was built before 1978, which may indicate a lead paint hazard. Correction is required to all defective paint in or on structures and/or property improvements built before January 1, 1978 in accordance with 24 CFR Part 35."

I normally use the exact verbiage found on the VC form. It is a yes or no question. Then, LBP report or no, it's out of your hands.
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Unless there is severe deterioration of the paint and widespread throught the property, I doubt that the reported value is impared by some peeling paint. You main focus is whether the paint contains lead. The first issue is that the property is built prior to 1978. Lead based paint was banned in 1978.

In regard to the report, you basically have three options by which to condition your report 1) subject to completion 2) subject to repairs and 3) subject t inspection. Based upon the situation you described, you would condition your report subject to an inspection.

The Underwriter then has options. They may choose to have an inspection report performed. If so, there is no requirement to have the appraiser re-inspect or document further. FHA regulations state that anyone appropriately qualified may perform the inspection and then the Underwriter may document the results. Or they may elect to waive your inspection requirement altogether.

Once again, your function is to just observe and report.


According to HUD/FHA protocol you would not make the report subject to an inpsection of LBP. You are to call for the correction of the problem if the dwelling was built pre-1978. The UW has the ability to wave the condition, not the appraiser.
 

MostlyLurk

Thread Starter
Freshman Member
Joined
May 10, 2005
Professional Status
General Public
State
Oregon
I didn't know they had that option

"Or they may elect to waive your inspection requirement altogether."

Agreed with RSW in that there's no way to read ML-48 to suggest that it can be "subject to inspection." That's why I find the requirement odd, but I also find the idea that

"The UW has the ability to wave the condition"

odd considering that, using the FNMA 1004, the verbiage is

"This appraisal is made subject to completion etc. etc."

It's not that I think the value will change, it's that (from what I understand) my signature on an opinion of value doesn't in fact take effect until the completion is done (or while the hypothetical condition is still a possibility). How does the UW have the ability to end-run my certification? I'm not talking about FHA requirements, even, but basic appraisal principles.
 
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RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
"Or they may elect to waive your inspection requirement altogether."

Agreed with RSW in that there's no way to read ML-48 to suggest that it can be "subject to inspection." That's why I find the requirement odd, but I also find the idea that

"The UW has the ability to wave the condition"

odd considering that, using the FNMA 1004, the verbiage is

"This appraisal is made subject to completion etc. etc."

It's not that I think the value will change, it's that (from what I understand) my signature on an opinion of value doesn't in fact take effect until the completion is done (or while the hypothetical condition is still a possibility). How does the UW have the ability to end-run my certification? I'm not talking about FHA requirements, even, but basic appraisal principles.


That would be a decision for the UW to make. If they want to rely on an appraisal that is not valid since all of the conditions were not met, then that is their problem, not the appraiser's problem.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
RSW said:
The UW has the ability to wave the condition, not the appraiser.

Where did I indicate that the appraiser waives any conditions?

MostlyLurk said:
my signature on an opinion of value doesn't in fact take effect until the completion is done (or while the hypothetical condition is still a possibility).

This is not correct. The delivery of the report conveys your opinion of value. That value may be based upon certain conditions or assumptions, but the reported value is still valid.

MostlyLurk said:
How does the UW have the ability to end-run my certification?

What end run? You provided a service that included certain conditions. No where is there a requirement that you and you alone have to be the one to acknowledge that those conditions are met.
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Where did I indicate that the appraiser waives any conditions?



This is not correct. The delivery of the report conveys your opinion of value. That value may be based upon certain conditions or assumptions, but the reported value is still valid.



What end run? You provided a service that included certain conditions. No where is there a requirement that you and you alone have to be the one to acknowledge that those conditions are met.





Your prior post was in error as you stated that there are three options and the last option being subject to an inspection. That is not correct. That is what I was making a statement about. You need to read 4150.2 and ML 2005-48 as well as the revised appendix D before you make statements like that.

Try not to get so defensive on this forum. It will cause your blood pressure to get high.
 
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