Safety Issues

[Pamela Crowley (Florida)]

This thread is all about how the appraisers on this forum handle health and safety issues noted during an appraisal observation of a subject property. Additional comments that might or might not be related to that issue are always added.

A gross generalization is where some theory, idea or fact is attributed to ALL involved instead of stating that it relates to 'most' or 'many' or even 'a few'. We all recognize this.

CathCoy, The vast majority of residential appraisers deal with loan officers every day for about 99% of their business. As such, we have learned that the 'vast majority' of loan officers that are paid on a commission basis will do just about anything to close the loan - including pressuring the appraiser for values and to ignore problems with a property. We have also learned that the loan officers that are paid a salary where the loan closing doesn't affect their pay check rarely ever pressure an appraiser to do something that, for us, is either unlawful or unethical (or both).

In general, the vast majority of residential real estate appraisers believe that the problems with fraud in real estate loans would be greatly diminished if loan officers were either banned from having anything to do with ordering the appraisal or talking to the appraiser at all, ever - or - were paid a salary so that there would be no reason for them to apply that pressure to an appraiser. This situation exists - for the 'vast majority'.

You, as the loan officer that was not there while the appraiser was, might not be getting the whole story of what really happened. I do hope you keep an open mind. I don't know what really happened either.

No gross generalizations here - just very strong opinions of appraisers that are based on their experiences, most with many years in this business.

Regarding the subject of this thread. I do report health and safety issues on appraisals. Most are necessary to be repaired for FHA - up to the Underwriter to decide on conventional loans. I did report to the health department a baby I saw on a bare wood floor of an old manufactured home crawling among feces. We all do what we feel we must. It is not up to the loan officer to decide what goes in the appraisal.

Please, this is not the thread to argue a specific issue that is already well debated on another thread.

 

[wyecoyote]

Cathcoy,

I did not mean to make the comment that I deal with Credit Unions and Banks personel that are paid hourly not on commision deragatory towards you. The reason I stated this is that the people that I deal with care less about closing the loan and more about protecting the bank or members (in the case of a credit union). Hence, I put everything good and bad I see in the report and I do not get questioned about the statements or asked to change the report after the report is delivered.

The original post about yours dealt with a safety issue, how that particular appraiser handled it and your question about the dealing of said issue. I stated when I started this thread as a side bar from yours. I was interested in how other appraisers dealt with these issues, I wanted some input from appraisers and perhaps scenarios. I did not intened to get this off track and onto other issues or rehash what was a well debated issue in your original thread.

So please do not take what I said as an attack or affront to your person or chosen proffesion. I was not trying to talk about the same issue of yours behind your back. Hope this clears up for you why this thread was started. Please if you have any more questions either specific appraisal issues or general questions please come back and ask in the future. Most appraisers are willing to give you some ideas on how it may be handled. But as you have seen most appraisers handle things somewhat differently.

Ryan

 

[Verne Hebert]

Fortunately I am still learning almost every day. The way I have handled this issues is different recently than in my early days of appraisal.

On the fringe of the thread for a moment. FHA MPR, VA, and FNMA are not grossly different; alot of people seem to think so just because FHA and VA are more EXPLICIT in their requirements................so if HUD takes over the explicit specifying I don't see any real differences in what should be looked at in terms of FNMA.

Now, I used to make the safety issues "subject to". Now I run it "as-is" and begin the condition of improvement section in bold and clearly state the safety issues..........then I refer back in the condition of appraisal section.

I hadn't thought alot about it, but I made this change after reviewing section 304 of FNMA which said,...........the lender is responsible for the loan. I did my job. If you want to squeak it through underwriting, God Bless them------don't call me about it.

Bottom line, be clear on your inspection process!

If in doubt note it.

I hope this is of some help to you.

Hey George-- the roof is a soundness (or structural) issue----may become a safety issue however.



CathCoy- You are way off the thread. Run a new thread.

 

[jtrotta]

Just a thought;

it has always been my understanding we're the eyes of the "Client" when inspecting property; that said-I believe we become responsible in some regards with respect to; Safety; Sanitary and structural, after all within the confines of FNMA and common sense these issues fall. Now we are not (some maybe) are licensed, but if railings are missing, how do you not see it :?: If you smell raw sewage, do you walk around with a close pin on your nose :?: If when you enter a dwelling and close the door-noteing the wall moving (even slightly)(this did happen in a Forclosure Property I did for a major Lender some years back-ohhh what fun that was-I got to meet the Vice Pres.of that Bank & his Chief Appraiser-and I stuck by my numbers to all the pressure-on top of which there were severeal other major violations-how about an "Illegal" dock, can you say violation of Coastal Area Management :?: believe me these were not happy folks when I finished-millions were lost) then I believe it's a resonsibility to make mention of it. Where it goes from there is not my concern, as that is NOT my job; nor is how much it will cost (you can have several variations of cost here), but if I do not mention it, I will guarantee you I will be the first point of action anyone takes if it becomes a problem.

secondly, there is a Risk involved in any loan, we are by nature responsible for a portion of that risk; IF there is a Safety Issue and we do not report it, we become as liable (if not more) as the Bank (Lender) as the Insurance Company will be interviewing you at a deposition; and similarily on the other two S. S. issues.

Lastly, I believe we need to put our best foot forward as often as we can, because somewhere along the line we are destin to make a mistake, and will need all the support we can muster at that time. It is the nature of the business and the amount of work we do.

8)

 

[Frank Bertrand]

I try to avoid commenting on actions that should be employed to mitigate unsafe conditions. Simple declaritive sentances serve me well:

"Well in active cattle pasture"

"gas exhaust on water heater disconnected at wall"

"mold infestation on drywall"

"fire damage on rafters and 3 layers of shingles present"

I take plenty of pictures and let the client sort it out. I'm not paid for advice on what to do.

I'm not an engineer or home inspector!!

 

[Verne Hebert]

Frank-

I'd be careful on this format. If you are adament, put it in bold so it stands out. I think I would comment on whether it is safety, soundness, or sanitary issue.

If anyone picks it up, you are looking, at least, at a clarification letter. Some of these loan people sold blenders or cell phones last week. And underwriters have periods of high volume.

...............unless you are making enough money to give up some time for litigation--whether it is a valid inquiry or not.