Pre-foreclosure......which form?

[Bobby Bucks]

We had a lengthy and heated discussion at the ranch last Friday. I had a few visitors and the
subject was which form(s) to use for an exterior inspection on a pre-foreclosure or property in
delinquincy if you will. Present for the powwow were 3 R-guys and 1 G-Man. The resident
USPAP guru said for any residential exterior pre-foreclosure the only acceptable form ever is the
1004. No ifs and or buts. R-man #2 believes that the 704 is also acceptable if you add a USPAP
compliance addendum. R man #3 and yours truly have used the 2055 Fannie, 2055 Freddie, 704
and the 1004 at various times and believe that as long as we clearly state our data source, that the
inspection was from the street only, etc., etc., etc. we were okay. Our resident G-man said any exterior
pre-foreclosure should be narrative.....naturally he expected to get the same fee he gets for highrise hotels with a 15 month TAT. Opinions?

 

[Tom Hildebrandt]

Bobby

I am of course a "g man" and think a summary in a narrative format is the way to go. But I suppose a 1004 would be ok if you have sufficient comments in the addendum expalining the intended use of the report. I would not like to see this work product on any form that would be more abbreviated than the 1004.

Regards

Tom Hildebrandt GAA

 

[Jo Ann Meyer Stratton]

I am a "R-Lady" since I am residential. I weigh in with the 2055 exterior view only if the client does not want the appraiser to contact anyone or observe the interior. The 704 is a very out dated form and not acceptable by either Freddie or Fannie. When a client calls and requests a 704, I quote a fee $100 more than a 2055 because the 704 would require so many more additional comments to be made USPAP compliant. Have not done a 704 since 1996 because all of a sudden the 2055 sounds just like what they need, since it would be cheaper than a 704. If the client wants observations only without any "estimated costs to cure", a 2055 interior view might be sufficient. If the client wants very detailed lists of each damaged or destroyed or missing item with costs to cure, then a 1004 would be required. And the estimated costs to cure would be subject to the opinions of a licensed contractor or professional engineer, etc because the appraiser is NOT a home inspector or licensed contractor or registered engineer, etc. So it all depends---except that the 704 is a no-no. Oh yes, of course, regardless of form, a 3-5 page addendum would be attached explaining anything and everything.

 

[bradellis]

Bobby,

The form is irrelevant- any will work or a narrative, if you can get paid for that much reporting.

It is not the form- it is the content.

Oh, and for the record, our firm probably does more pre-foreclosures and foreclosures than anyone in the country- hundreds every month (we like them because the client really wants to know the value). We always use the 2055 for the pre-foreclosure drive-by and the 1004 or 1025 or condo(depending upon property type) for the inspected post foreclosure assignment.

But, suit yourself.

Brad Ellis, IFA,RAA

 

[Doug in NC]

The 1004 is not a driveby form, it came out before the driveby gained popularity. An addendum would be required to explain that an interior inspection was not performed. Also, it asks for other details of the interior which you would not know unless you went inside. I side with the 2055.

 

[Tom Hildebrandt]

Brad Ellis

Good points, after I posted I realized I had forgotten to make the very point you made, but did not get back in time.

The key issue is the development of the work (the credibility of the appraisal under Std 1), the communication (the report) content of the appraisal is the last step in the appraisal process, and the content of the report, not the form is the key element in the report.

Had no idea you did so many of those foreclosures, wow!.

Regards

Tom Hildebrandt GAA

 

[Anonymous]

>>any will work or a narrative, if you can get paid for that much reporting.

It is not the form- it is the content<<

Hey, if you can get more pay for it , go with the narrative!! They are going to lose their shirt anyway... Actually, after fine tuning it for 10 years, I feel like my summary narrative is less (at least no more) work than a form. I created templates and keyboard merge files that simply replicate what a form does. I have neighborhood files for individual towns, any canned comment you make in a form can be canned in a Word or Word Perfect, etc...Not to mention I create tables, removed the lines (usually) so they appear as columns, and create everything from NPV calculations to depreciation tables and tables that calculate the way Boeckh Ag and commercial books do...
Ter