Significant Appraisal Assistance (1004p)

[J Grant]

There's nothing preventing the appraiser from making their own disclosures. USPAP establishes a minimum that we expect of everyone - it doesn't establish an upper limit of conduct or performance.

and what if appraiser discloses the name of inspector the client will make them take it out, / engagement letter instruct appraiser not to put the inspector name in.report.

If what Danny says is the protocol, it is deliberate that they want to omit the name of who inspected, so why would a client allow appraiser to add the inspector's name in report?

They might allow a bland disclosure such as appraiser did not inspect the subject, another party did blah blah.

 

[mike32716]

and what if appraiser discloses the name of inspector the client will make them take it out, / engagement letter instruct appraiser not to put the inspector name in.report.

If what Danny says is the protocol, it is deliberate that they want to omit the name of who inspected, so why would a client allow appraiser to add the inspector's name in report?

They might allow a bland disclosure such as appraiser did not inspect the subject, another party did blah blah.

I think it is helpful to have an overview of the protocol for getting to a 1004P in the first place. FNMA must first have the neighborhood data. Second they must have a recent (within 6 years?) appraisal with which they run a PIW. If they have the data but don't have a recent appraisal then they give the option of ordering an inspection. The inspection data is fed to FNMA so I assume they may know who the inspector is or maybe they have just agreed with the vendor that the vendor is responsible for the data.

FNMA takes the inspection data and feeds it into their AVM. If FNMA's AVM does not hit the number (range with confidence intervals) needed to waive the appraisal then the option for the 1004P desktop is permitted (It is an option to the borrower). Then, and only then, does the appraiser see the order.

This is the current protocol. It may very well be that if FNMA is successful with the 1004P (it is currently only permitted for high quality borrowers) then we could probably see that getting pushed further down the line WRT risk (just my opinion).

As an aside I have seen six of these 1004Ps for actual loan purposes, and only one of them hit the number needed to make the loan (a renovated house). My takeaway from this is that FNMA is only doing these on homogeneous housing with lots of data (cookie-cutters), and it is unlikely that any type of appraisal would hit the number (except for example the renovated house).

So in the end the borrower is stuck with an appraisal that can not be sent anywhere else, and once Realtors figure out that the 1004P is not a 1004 will not be accepted for price re-negotiation purposes.

 

[J Grant]

Thank you Mike!

 

[CANative]

"Just say no."

~Nancy Reagan

 

[George Hatch]

and what if appraiser discloses the name of inspector the client will make them take it out, / engagement letter instruct appraiser not to put the inspector name in.report.

If what Danny says is the protocol, it is deliberate that they want to omit the name of who inspected, so why would a client allow appraiser to add the inspector's name in report?

They might allow a bland disclosure such as appraiser did not inspect the subject, another party did blah blah.

So to be clear, we're back to attributing the problems a user might be creating for the appraisers to the users and not to USPAP, right? 'Cause in USPAP we have an app for when a client establishes unreasonable assignment conditions that would undermine the credibility of the workproduct.

 

[George Hatch]

I think it is helpful to have an overview of the protocol for getting to a 1004P in the first place. FNMA must first have the neighborhood data. Second they must have a recent (within 6 years?) appraisal with which they run a PIW. If they have the data but don't have a recent appraisal then they give the option of ordering an inspection. The inspection data is fed to FNMA so I assume they may know who the inspector is or maybe they have just agreed with the vendor that the vendor is responsible for the data.

FNMA takes the inspection data and feeds it into their AVM. If FNMA's AVM does not hit the number (range with confidence intervals) needed to waive the appraisal then the option for the 1004P desktop is permitted (It is an option to the borrower). Then, and only then, does the appraiser see the order.

This is the current protocol. It may very well be that if FNMA is successful with the 1004P (it is currently only permitted for high quality borrowers) then we could probably see that getting pushed further down the line WRT risk (just my opinion).

As an aside I have seen six of these 1004Ps for actual loan purposes, and only one of them hit the number needed to make the loan (a renovated house). My takeaway from this is that FNMA is only doing these on homogeneous housing with lots of data (cookie-cutters), and it is unlikely that any type of appraisal would hit the number (except for example the renovated house).

So in the end the borrower is stuck with an appraisal that can not be sent anywhere else, and once Realtors figure out that the 1004P is not a 1004 will not be accepted for price re-negotiation purposes.

Thanks for posting that - I didn't know most of those things about Fannie's protocol.

 

[DWiley]

and what if appraiser discloses the name of inspector the client will make them take it out, / engagement letter instruct appraiser not to put the inspector name in.report.

If what Danny says is the protocol, it is deliberate that they want to omit the name of who inspected, so why would a client allow appraiser to add the inspector's name in report?

They might allow a bland disclosure such as appraiser did not inspect the subject, another party did blah blah.

Deliberate? Huge leap. . They are publicly acknowledged that they are testing. I assure you that including the property report as part of the final appraisal report has been recommended by some who are testing. And, even if notpart of the formal protocol, there is nothing stopping it - just like the appraiser can include the tax card and/or MLS listing now, if the appraiser chooses.

 

[DWiley]

I think it is helpful to have an overview of the protocol for getting to a 1004P in the first place. FNMA must first have the neighborhood data. Second they must have a recent (within 6 years?) appraisal with which they run a PIW. If they have the data but don't have a recent appraisal then they give the option of ordering an inspection. The inspection data is fed to FNMA so I assume they may know who the inspector is or maybe they have just agreed with the vendor that the vendor is responsible for the data.

FNMA takes the inspection data and feeds it into their AVM. If FNMA's AVM does not hit the number (range with confidence intervals) needed to waive the appraisal then the option for the 1004P desktop is permitted (It is an option to the borrower). Then, and only then, does the appraiser see the order.

This is the current protocol. It may very well be that if FNMA is successful with the 1004P (it is currently only permitted for high quality borrowers) then we could probably see that getting pushed further down the line WRT risk (just my opinion).

As an aside I have seen six of these 1004Ps for actual loan purposes, and only one of them hit the number needed to make the loan (a renovated house). My takeaway from this is that FNMA is only doing these on homogeneous housing with lots of data (cookie-cutters), and it is unlikely that any type of appraisal would hit the number (except for example the renovated house).

So in the end the borrower is stuck with an appraisal that can not be sent anywhere else, and once Realtors figure out that the 1004P is not a 1004 will not be accepted for price re-negotiation purposes.

Yes. As Brother Phil has been preaching, if appraisers market correctly, there could actually be an increase in work.

 

[glenn walker]

Can't fix stupid !!!!

 

[Michigan CG]

Wanna bet?

I would LOVE to bet. Not all clients put the name of the inspector in what is sent to the appraiser.