Old appraisal update options...

[Econobot]

...I have a good client, in house loan that needs to be updated, the customers apparently have some income issues and so the client is trying to identify the cheapest solution for them. Additionally, the property is remote and they're trying to avoid wasting my time with travel. I have performed an appraisal for a secondary market lender on the same porperty as well so I really have no desire to hit the owners for a full fee appraisal after I've done 3 in the past two years (construction, and 2 post completion). Is there a limitation on how long an old appraisal with a recertification of value can be used for? If I did the appraisal 2 years ago can I simply perform a summary update appraisal and certify that the value has not decreased? Thanks in advance, I'm not seeing anything preventing me on the form?

 

[CANative]

The minimum for a 1004D Update section is an exterior inspection with a photograph of the front of the subject property.

As to time limits, here is the selling guide on it:

Age of Appraisal and Appraisal Update Requirements

When an appraisal is obtained, the property must be appraised within the 12 months that precede the date of the note and
mortgage.

When an appraisal report will be more than four months old on the date of the note and mortgage, regardless of whether the
property was appraised as proposed or existing construction, the appraiser must inspect the exterior of the property and
review current market data to determine whether the property has declined in value since the date of the original appraisal.
This inspection and results of the analysis must be reported on the Appraisal Update and/or Completion Report (Form
1004D).

• If the appraiser indicates on the Form 1004D that the property value has declined, then the lender must obtain a new
appraisal for the property.

• If the appraiser indicates on the Form 1004D that the property value has not declined, then the lender may proceed
with the loan in process without requiring any additional fieldwork.

Note: The appraisal update must occur within the four months that precede the date of the note and mortgage.
The original appraiser should complete the appraisal update; however, lenders may use substitute appraisers. When updates
are completed by substitute appraisers, the substitute appraiser must review the original appraisal and express an
opinion about whether the original appraiser’s opinion of market value was reasonable on the date of the original appraisal
report. The lender must note in the file why the original appraiser was not used.

You don't HAVE to charge for any "full fee."
You have to go back anyhow.
There is no such thing as a "recertififcation of value." (It's simply a new appraisal assignment.)
"summary update appraisal" is a summary appraisal report.

I've found that by the time you hit all the SR1 and SR2 bars and then try to stuff it into a 1004D, you might as well start over and clone one of the prior reports and freshen it up. It's too easy to miss something trying to fast track it.

 

[Econobot]

The minimum for a 1004D Update section is an exterior inspection with a photograph of the front of the subject property.

As to time limits, here is the selling guide on it:

Age of Appraisal and Appraisal Update Requirements

When an appraisal is obtained, the property must be appraised within the 12 months that precede the date of the note and
mortgage.

When an appraisal report will be more than four months old on the date of the note and mortgage, regardless of whether the
property was appraised as proposed or existing construction, the appraiser must inspect the exterior of the property and
review current market data to determine whether the property has declined in value since the date of the original appraisal.
This inspection and results of the analysis must be reported on the Appraisal Update and/or Completion Report (Form
1004D).

• If the appraiser indicates on the Form 1004D that the property value has declined, then the lender must obtain a new
appraisal for the property.

• If the appraiser indicates on the Form 1004D that the property value has not declined, then the lender may proceed
with the loan in process without requiring any additional fieldwork.

Note: The appraisal update must occur within the four months that precede the date of the note and mortgage.
The original appraiser should complete the appraisal update; however, lenders may use substitute appraisers. When updates
are completed by substitute appraisers, the substitute appraiser must review the original appraisal and express an
opinion about whether the original appraiser’s opinion of market value was reasonable on the date of the original appraisal
report. The lender must note in the file why the original appraiser was not used.

You don't HAVE to charge for any "full fee."
You have to go back anyhow.
There is no such thing as a "recertififcation of value." (It's simply a new appraisal assignment.)
"summary update appraisal" is a summary appraisal report.

I've found that by the time you hit all the SR1 and SR2 bars and then try to stuff it into a 1004D, you might as well start over and clone one of the prior reports and freshen it up. It's too easy to miss something trying to fast track it.

Hey thanks CAN, much obliged!

 

[Econobot]

New question, similar topic, different assignment....appraisal was completed on plans and specs, original report is now 4 months old, lender is needing a recert of value and a cert of completion, can I do both of these at the same time? I mean can I do them on the same form? I don't readily see why I can't but this is a first time request.

 

[glenn walker]

New question, similar topic, different assignment....appraisal was completed on plans and specs, original report is now 4 months old, lender is needing a recert of value and a cert of completion, can I do both of these at the same time? I mean can I do them on the same form? I don't readily see why I can't but this is a first time request.

So you want to do them both on 1004-D at same time ? Interesting I would probably do the Completion on a separate 1004-D and attach the photos to it. Then do the Update Re-certification on separate 1004-D and attah a photo of the front and street . That to me would be less confusing to the Underwriter or reader than trying to put multiple issues onto one 1004-D. And its not going to take any more time- far as the fee that's up to you but I would probably charge one fee like say $100.00 each and be done.

 

[Econobot]

So you want to do them both on 1004-D at same time ? Interesting I would probably do the Completion on a separate 1004-D and attach the photos to it. Then do the Update Re-certification on separate 1004-D and attah a photo of the front and street . That to me would be less confusing to the Underwriter or reader than trying to put multiple issues onto one 1004-D. And its not going to take any more time- far as the fee that's up to you but I would probably charge one fee like say $100.00 each and be done.

I want to be compliant and credible, having not ran across this particular situation before. I've got a call into their appraisal desk to discuss, was hoping someone on here has run into the same situation before. I guess I could do two but I did check Alamode's reaction...added the 1004d minor, checked both completion and recert, ran the E & O and it was ok with both being checked. This leads me to believe there's nothing stopping me from doing both on the same form...will see. Thanks for the input.

 

[CANative]

The selling guide sez you can do both. But please, in a forum that is appraiser-centric versus loan salesman-centric, stop using the term "recertification of value." A "recertifcation of value" is performed to confirm whether or not the conditions of a prior appraisal have been met and does not change the effective date of the appraisal... e.g. a 1004D Certificate of Completion. Refer to AO-3.

 

[CANative]

But agree with Glenn. I'd just sell them on a do-over. Cleaner and easier.

 

[Econobot]

The selling guide sez you can do both. But please, in a forum that is appraiser-centric versus loan salesman-centric, stop using the term "recertification of value." A "recertifcation of value" is performed to confirm whether or not the conditions of a prior appraisal have been met and does not change the effective date of the appraisal... e.g. a 1004D Certificate of Completion. Refer to AO-3.

Keep in mind CAN that this has nothing to do with Fannie or the selling guide, in house work, I can't go to the lender with "fannie says", they might laugh at me but it's definitely not applicable to what a local lender is doing...

 

[CANative]

If they insist on the Fannie forms then we should consider GSE underwriting as the default. How many loans can they keep in house and for how long?

OTOH... if they truly don't care then this conversation is moot and you are free to report it on a napkin with some xerox pictures.