REO- No Utilities

[Doug Wegener]

How do you deal with this?

Bank owned newer REO with no utilities on. Bank wants an "as is" value but utilities not on.
1004 says no assumptions permitted in the limiting conditions.


??????????????

 

[Kevin Mc]

Report it

Most REOs I deal with (99.99%) have the utilites shut off. Just report it as it is.

 

[JonGalt]

Bring a really good flashlight to all REO's as the power is almost always off. I also mention in the report that the utilities were not working.

 

[CURT VAN HOOSER]

Note it in the report and recommend inspection of utilities in the REO addendum

 

[Greg Bell]

STATE: Utilities were of at the time of inspection , SYSTEMS CHECK RECOMMENDED...

 

[Szal US]

Winterized utils need CTC on REO addendum for system flush and start-up,
not winterized needs re-inspection with utils on - on REO addendum.

 

[Doug Wegener]

Inadequate

How do you deal with this?

Bank owned newer REO with no utilities on. Bank wants an "as is" value but utilities not on.
1004 says no assumptions permitted in the limiting conditions.


??????????????

The statement "no assumptions permitted" makes the form inadequate for an "as-is" appraisal
of an REO with the utilities off.

 

[Mztk1]

The statement "no assumptions permitted" makes the form inadequate for an "as-is" appraisal
of an REO with the utilities off.

We make assumptions every day in an appraisal. The question is whether we are adding to or subtracting from the Fannie Mae limiting conditions statement. If we are adding to those assumption than it is an EA and we should check CB4, but if it is covered under LC5, than we are not adding to the assumptions already made in the report, just explicitly stating one, and there is no issue.

Also, we can add an extraordinary assumption and make the report "as is" if the report is not being made to Fannie Guidelines. The lender would simply not be able to use that report for selling the loan in the secondary market. On an REO appraisal, I really think they could care less. Just state the assumption boldly.

Further, I think if the utilities were off and there was a problem with the electric, plumbing, gas or systems, those problems would have been unobservable at the time of inspection and the defects would have been effectively hidden. I don't think that is necessarily adding to the assumptions and limiting conditions.

 

[Doug Wegener]

I dont think they could care less either. However, technically, the Fannie Mae form 1004 is not suitable for an "as is" REO with utilities not on, since you are making an assumption that the electric, plumbing, and gas systems including heating and cooling are functioning.

But what the heck, nobody cares.

 

[CURT VAN HOOSER]

I dont think they could care less either. However, technically, the Fannie Mae form 1004 is not suitable for an "as is" REO with utilities not on, since you are making an assumption that the electric, plumbing, and gas systems including heating and cooling are functioning.

But what the heck, nobody cares.

So Doug...why not just use the old 1004?