SOW Modification not allowed. Right?

[Rufus]

I'm doing a field review of an appraisal which is for a proposed new construction and was completed on a form 1004. The borrowers own the land and the assignment type on the report is Other - Construction Loan. Client is a bank.

Besides factual errors such as incorrect parcel number and reporting that the private road is public, I am concerned about this statement on the text addenda:

This report may contain comments, conditions, and/or certifications added by the signing appraiser including, but not limited to, this Supplemental Addendum. These items shall supersede and take precedence over all other language, requirements, or conditions contained in any preprinted and/or third-party forms or documents included in, or incorporated by reference into, the appraisal report.

This is in conflict with the pre-printed statement on page four that modifications, additions, or deletions are not permitted. This the first time I've seen an appraiser put in such a disclaimer. Is the following statement the correct way for me to address this?

Paragraph nine on the supplemental addenda contains statements which are in conflict with the pre-printed requirements of paragraph two on page four of the Uniform Residential Apprraisal Report (Fannie Mae Form 1004 March 2005) and may render the appraisal ineligible for funding though certain entities such as Fannie Mae.

Or, because the purpose of the appraisal is for a construction loan, is this not an issue which needs to be addressed?

 

[Mztk1]

I may be wrong but doesn't the form state that the modifications, additions or deletions are not permitted to the use, user, definition of market value, assumptions and limiting conditions, only? The scope of work can be added to.

I think what he says is fine depending on what he does. If anywhere in the Supplemental Addendum he changes, adds or substracts to one of those things then you have an argument. But if there are no changes, or if his overrides do not pertain to those items, there is nothing there to set off the alarms.

 

[Jerry Bone Jr]

Possibly, the client requested the change. IMO, if the report is not intended for FannieMae, change is acceptable.

 

[Rufus]

Possibly, the client requested the change. IMO, if the report is not intended for FannieMae, change is acceptable.

While they possibly did request the change, I doubt it since this a boilerplate style addenda.

The appraiser also states he performed an interior and exterior inspection. I find this a bit difficult to believe since they have not broken ground yet. However, later in the verbage the appraiser states he performed an inspection of the visible and accessible areas only, so I reckon that clarifies it. :Eyecrazy:

 

[Renee Healion]

Boilerplate overdose.

 

[hastalavista]

My opinion is that the addendum comments conflict with the pre-printed certification; that conflict results in significant ambuigity that questions the clarity of the report and therefore the credibility.

If a client requires a non-fannie certification, the appraisal would be easier understood if reported on a non-fannie form without the conflict.

How credible are results if the SOW and limiting conditions are unclear?

 

[Ray Miller]

My opinion is that the addendum comments conflict with the pre-printed certification; that conflict results in significant ambuigity that questions the clarity of the report and therefore the credibility.

If a client requires a non-fannie certification, the appraisal would be easier understood if reported on a non-fannie form without the conflict.

How credible are results if the SOW and limiting conditions are unclear?

Agreeded. Would have used the AI form for preconstuction and added in the SOW as using this forum

 

[JSmith43]

Just because we can't flesh this out based upon the limited information Rufus presented doesn't give me the confidence to be judgmental....yet.

If the appraisal is not destined to Freddie/Fannie or any other entity that says don't change the form, I believe the form can be changed. However, it is an up hill battle to change the certifications and limiting conditions in a clear manner.

Unless the appraiser has the software to strike out the conflicting comments or to otherwise notate the pages, hopefully, in color, I believe a replacement set of conditions are in order & need to be noted on the various pages.

Better to use a different report, unless one has a highly conditioned client that wants certain things in certain fields for data collection or so the UW won't miss it, etc. That is a reasonable justification to use the base form and custom conditions, all clearly labeled.

Next thing, someone will complain when a PA boilerplate item is crossed out and someone had the nerve to write in a replacement:icon_mrgreen: