First, the term recertifications of value is no longer used in Fannie Mae's newest guidelines that went into effect 6/30/2002 (Section 201 - Age of Appraisal). The words recertification of value does NOT appear anywhere in current Fannie Mae guidelines. For mortgage purposes, recertifications of value do not exist. In USPAP since 1995, recertifications of value have been called Updates to an appraisal because the effective date of the opinion of value has changed. USPAP from 1995 to 2002 considered updates an extension of the original report. Fannie Mae's new guidelines also calls updates an extension of the original report, that changes the effective date of the opinion of value to reflect a current date. Fannie Mae will accept an update reported either in an appraisal report form like a 2055 or 1004 for example or a letter.
Now we get to 2003 USPAP. Make a copy of Advisory Opinion 3 from the link provided in the previous post. USPAP now considers an update to an appraisal a new assignment and not an extension to the original report. The new assignment may be reported in one of three ways.
Option 1. A completely new report could be prepared. That report would contain everything because it is not an extension and does not incorporate a prior report. It could be for example, a 1004 or a 2055.
Option 2. A completely new report could be prepared that could have some items blank because the prior report would be attached to the new report and the information from the prior report would be incorporated into the new report. It could also be for example, a 1004 or a 2055.
Option 3. A report (either a standardized form like the 2055 or 1004) or a letter that would incorporate by reference the prior report because all the original people or firms would be involved. The original client and the original appraiser/appraisal firm would all have copies of the original report. If a letter is chosen as the type of report, the letter is required to have at least the seven items listed included in the letter.
Now to the part about reporting current market activity, regardless of reporting option, wouldn't it be logical to at least drive by the subject (it might have burned down or they doubled the size since the original effective date, personally I like to at least walk through the subject) ? Then to research and select new comparables could be done in office, but how would you know if those new sales/pendings/actives are really comparable to the subject without driving by them? And then to make the determination of whether the value is the same, more or less than before, those comparables would need to be analyzed.
So yes, re-inspection is recommended and if there is new activity it would need to be reviewed. When a lender/client orders a "recert", they are ordering a new assignment, a new appraisal, a new report, etc.
And the most important paragraph of AO-3 is the section on Confidentiality!
