• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

New Fannie Mae announcement

Status
Not open for further replies.

Red Blumenstock

Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Florida
Hi all,

I am wondering what you think of the following message that was included in the Metropolitan Phila. Chapter of the Appraisal Institute end of year newsletter. How can one comply with the USPAP if we do not change the certification to comply with Standard 2-3? It is apparent that Fannie cares not one bit about our requirements. Does this mean that we can no longer do work that will be sent to Fannie Mae without violating the USPAP? TRhis is a honey.

David B. Snyder, Esq. of Fox, Rothschild, O’Brien & Frankel LLP, in an article in The Appraiser included the following:

“Specialized disclaimers or limiting conditions can be extremely helpful in limiting liability exposure and aiding in your defense, should you become involved in a lawsuit. I have reprinted in this column samples of such limiting conditions that have proven successful in the past.

However, Fannie Mae has recently announced that it now prohibits alteration of the limiting conditions on appraisals for mortgage transactions that Fannie Mae ultimately purchases or securitizes.

In its announcement , Fannie Mae first acknowledged that it is often recommended to appraisers that they add specific limiting conditions and explained:
‘Our appraisal report forms include standard appraiser certification and limiting conditions. These required certifications and limiting conditions are intended to serve our needs in underwriting a mortgage by telling us what the appraiser did and did not do in the assignment and defining those areas for which the appraiser should and should not be held responsible. From time to time, appraisal trade associations and others recommend that appraisers add special limiting conditions to their appraisal reports to limit the appraiser’s liability.’
However, the Fannie Mae announcement went on to declare that additional limiting conditions went on to declare that additional limiting conditions are now expressly prohibited in transactions in which it is involved. Fannie Mae stated, ‘Although we permit an appraiser to add some certification to our appraisal report forms, we will not purchase or securitize a mortgage for which the appraiser has added, modified or deleted a limiting condition on the appraisal report.’ Further the announcement requires a lender to assist in the compliance with this policy. The announcement stated, ‘The lender must review the appraisal report to verify that no additional limiting conditions have been added and that none of the standard
limiting conditions has been modified or deleted.’

Notwithstanding this announcement, there are other ways that you can continue to protect yourself in preparing appraisals in conjunction with transactions involving Fannie Mae. For example, Liability Insurance Administrators, a firm that has been endorsed by the Appraisal Institute, has recommended that appraisers add any additional language in the comment section or under a ‘scope of work’ section in the addendum to the appraisal report. Any added language can be considered to be a clarification of the scope of your work and not an additional limiting condition. At this point, it does not appear that Fannie Mae objects to this concept.”
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Red:

I jumped up and down and got face to face with some folks following that announcement...

Seems that you can essentially can 'limit' through the scope as suggested by LIA. Same stuff, different label. You should effectively define what you did and how you did it and whether or not the cleint agrees (by implication if not in fact) ...

The problem comes in that we as appraisers have for a very long time 'assumed' that certain things should and would be done in performing due dilligence within your normal work coverage area. Sort of a local convention for work processes: we all know a few folks who cut corners here or there, and a few who ALWAYS go an extra mile, but within most geograpical areas I suspect that folks are somewhere between the fenceposts...

The problem comes with the 'new forms' and very specific client instructions and varying scopes of work: do you take the time to define EVERY step that you take, and more importantly every step that you did NOT take in developing a fairly standard issue report? Problem with this method is that by specifically defining your steps and thoughts, you can set yourself up for major criticism by anyone coming in behind you!

Or do you do the minimalist approach, and ASSume that the reader, user and anyone coming along behind with an attitude is going to find LESS to toss rocks at if you K.I.S.S.! Fact is sometimes the less you write the less there is for anyone to hang you!

Advice from most of the folk I interviewed (some of which were pretty in your face WHAT AM I SUPPOSED TO DO NOW!! :eek:nfire: kind of discussions universally resulted in "we don't know quite yet how this is going to work, but the answer is all in how you write your scope :roll: :?: :?

Ah well next year will likely bring more and better ideas on this matter.

Maybe it is time to start donig more reviews again.

BOILERPLATE :twisted:
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Again, I am confused. What is the big deal???? Use the USPAP ID Form and add all the stuff you want...just don't change the Certification Page.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Fannie Mae Guidelines that went into effect 6/30/2002: Section 206 - Certifications and Statements of Limiting Conditions, last paragraph. "The appraiser may not make a change or a deletion to the appraiser's certifications, although he or she may make additional certifications on a separate page or form."

So as Mike G said, add an additional addendum, his software appears to call it a USPAP ID form, I use the USPAP Compliance addendum form in my software.
 

Red Blumenstock

Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Florida
Ron,

Sorry, I tried to find it in the Fannie Mae Web Page but was unsuccessful. However, since I trust the writer, I have no reason to believe that it doesn't exist. I just did not have time to find it.

Mike,

The big deal to me, is primarily as a USPAP Instructor, and the fact that Fannie Mae is stating that no changes or limitations to their 10 year old form are allowed. I think that is very risky for the appraiser who may find himself/herself subject to a visit from the USPAP police. The USPAP has changed many times over the past 10 years. For Fannie Mae to declare that their forrm is "god" is nothing but pure arrogance in my opinion.

The following is the most appropriate section.

"However, the Fannie Mae announcement went on to declare that additional limiting conditions are now expressly prohibited in transactions in which it is involved. Fannie Mae stated, ‘Although we permit an appraiser to add some certification to our appraisal report forms, we will not purchase or securitize a mortgage for which the appraiser has added, modified or deleted a limiting condition on the appraisal report.’ Further the announcement requires a lender to assist in the compliance with this policy. The announcement stated, ‘The lender must review the appraisal report to verify that no additional limiting conditions have been added and that none of the standard limiting conditions has been modified or deleted.’
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Red,

That FNMA lingo has been around long before the current announcement. The certification has never been allowed to be modified.

So you just throw all of your required current USPAP nonsense on some exhibit forms in the report and let it fly....no one reads them anyway. It's just there in case the report goes to the state, if a complaint is filed. So we kill lots of trees to make paper just to make the state appraisal board happy.

And yes, their forms are "God" and they state it so on their website..that they all conform to USPAP. What year I don't know.

And to me..personally... I don't care because Fannie a'int gonna turn me in if'n I fill-out their "God-like" forms and make them happy..

PS.. Want a good laugh. I know VA appraisers that just send the URAR in with no current USPAP addendums whatsoever so they're basically USPAP 1993 compliant. Think VA cares??

Now, if we had the Ben V version of USPAP, all of this worry and silliness could be avoided. Page One of USPAP, if you're completing the appraisal for FHA, VA, FNMA. FHLMC,please follow their appraisal guidelines/instruction books and read no further. USPAP has now been voided by a higher authority that knows what they're doing. :lol: :lol:

Ben
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks