sqft in 2055 exterior only

[eric mccay]

Not saying I disagree, but there is a good chance the lawyer won't think it's worth the lawsuit if there isn't a policy to offer a quick settlement. Having an E&O policy makes you a target just as much as it protects you.

Maybe you should just tell the lawyer that you don't own any property and you don't have E&O insurance. :Eyecrazy:

I agree, what can they get from him personally?

 

[Webbed Feet]

So my situation is a pre-foreclosure driveby with no public record data and no MLS history. The lender cannot supply a previous appraisal. I have written instructions and a written confirmation to estimate it as best I can.

I have colleagues and competitors that do it all the time. I have lost a nice chunk of work because of my refusal to do the same thing. My creditors may not soon appreciate my reluctance to accept an otherwise routine assignment.

I don't see anything in the pre-printed conditions that would prohibit me from a statement about the dubious source of the GLA, and a long disclaimer about how this is not going to be as accurate as a full 1004.

Lobo,

Sorry man, it doesn't work like that. A wild *** guess is not an estimate... it's an Extraordinary Assumption. Wrapping a tape measure around a house is an estimate. And client provided information would fall under Certification 10 because I would bet your client has a financial interest in the sale or financing of the subject property.

Webbed.

 

[timd354]

I think that statement merely repeats things already on the 2055 form.

quote]

Mr. Wiley,

I agree that it does, it just does it in bold lettering and in a more prominent place.....thus, it makes it much more difficult for some user of the report or his attorney to argue that somehow the SOW was not disclosed to him because it was included in the "boilerplate" preprinted language of the forms.

 

[timd354]

Per the Scope of Work developed by the appraiser and agreed to by the client, the appraiser was not required to make an interior inspection of the subject property nor measure the subject property improvements.

Actually, demanded by the client and agreed to by the appraiser.

C'mon Mike, I have no problem doing an exterior only appraisal when appropriate and have never been forced to accept that SOW when not appropriate. The fact is that most clients, when informed that I charge $350 for a typical 2055 versus $400 for a typical 1004 go ahead and upgrade the assignment to a 1004. Of the few clients who want to save the extra $50, I have never had one who did not agree to upgrade the SOW and report to a 1004 when I told them that an exeterior only SOW was not appropriate due to the lack of data on a certain property or beacuse of the age or apparent condition of the improvements.

In any case, this discussion probably has ceased or will cease to have much relevance in the mortgage related appraisal world, since very few lenders are ordering anything less than an appraisal with a typical interior/exterior FNMA form 1004 SOW.

 

[Webbed Feet]

To me it would be an ordinary assumption if you trust that the data sources are accurate. You can trust the source and therefore render a credible opinion. However, if you have reason not to trust those sources as being accurate then you are in EA territory.

Hamlet,

I really believe we are trying all very much too hard to parse a difference between "assumption" and extraordinary assumption" that is the incorrect difference here.

An "assumption," if later found to be false, should not alter the appraisers opinions and conclusions. An EA, if later found to be false, can alter the appraisers opinions and conclusions.

So an "assumption" that county data that says three bedrooms is correct, when that appraiser would not make any adjustements if the subject actually turned out to be a two or a four bedroom, would be an assumption that found later false did not alter the opinions of that appraiser.

An "assumption" that the county information the GLA is 1,800 is correct, only later it turns out the GLA is really 2,800 was not just an assumption, it was an extraordinary assumption. The fact it was false later affected the appraisers opinions and conclusions.

My opinion? The Fannie rep that said assuming GLA from a source believed to be correct, when it comes to GLA, to be ordinary and not extraordinary, when the typical standard for SFR mortgage work is to measure, and a seriously incorrect GLA DOES alter an appraisers opinions..... was someone that never understood the nature of an EA in the first place.

Webbed.

 

[timd354]

Hamlet,

I really believe we are trying all very much too hard to parse a difference between "assumption" and extraordinary assumption" that is the incorrect difference here.

An "assumption," if later found to be false, should not alter the appraisers opinions and conclusions. An EA, if later found to be false, can alter the appraisers opinions and conclusions.

So an "assumption" that county data that says three bedrooms is correct, when that appraiser would not make any adjustements if the subject actually turned out to be a two or a four bedroom, would be an assumption that found later false did not alter the opinions of that appraiser.



An "assumption" that the county information the GLA is 1,800 is correct, only later it turns out the GLA is really 2,800 was not just an assumption, it was an extraordinary assumption. The fact it was false later affected the appraisers opinions and conclusions.

My opinion? The Fannie rep that said assuming GLA from a source believed to be correct, when it comes to GLA, to be ordinary and not extraordinary, when the typical standard for SFR mortgage work is to measure, and a seriously incorrect GLA DOES alter an appraisers opinions..... was someone that never understood the nature of an EA in the first place.

Webbed.

Webbed, as is often the case, you nailed this one and you are exactly correct. That is exactly why I have taken the position that the preprinted language regarding the certifications, SOW, etc in the Fannie Mae form does not prevent me from making and disclosing that very EA every time I complete a 2055. USPAP requires that I disclose all EA's used in the development and reporting of an appraisal and any Fannie Mae preprinted langauge that says otherwise just simply does not apply to EA's which are required by the Fannie Mae drafted SOW and USPAP. If that is not the case, then using the 2055 form with that preprinted language is an unacceptable assignment condition under USPAP. This brings me back to one of my original points, that is if a state board is going to try hang me out to dry over diclosing this exact EA in a 2055 beacuse of the preprinted language in the form, then they must also rule that all exterior only appraisals reported on a Fannie Mae 2055 are not USPAP compliant unless an appraiser actually measures the subject property himself.

 

[DWiley]

An "assumption," if later found to be false, should not alter the appraisers opinions and conclusions. An EA, if later found to be false, can alter the appraisers opinions and conclusions.

It is very common for appraisers to use a lot of "ordinary assumptions" that, if later found to be false, could alter the appraiser's opinons and conclusions.

In virtually every assignment we do we assume there are no hidden or unapperent conditions. What if there is toxic waste in the crawl space?

Whether or not an assumption affects assignment results is not the distinguishing factor. It can't be - all assumptions affect assignment results.

The thing that makes an assumption and extraordinary assumption is the fact that it is specific to the assignment, and is not one of those things typically assumed.

 

[Mike Kennedy]

C'mon In any case, this discussion probably has ceased or will cease to have much relevance in the mortgage related appraisal world, since very few lenders are ordering anything less than an appraisal with a typical interior/exterior FNMA form 1004 SOW.

It's about time Common Sense prevailed. Having gotten burned by the avhum, BPO, and "don't ask don't tell" Exterior trash they finally want the truth. Only cost cupple Trillion and hundreds of thousands of jobs (including Appraisers). How sad.

p.s. i have OFTEN posted a logical alternative - bring back the OLD 2055 INTERIOR w/measurement to replace the 2055EXT and the 1004.

 

[timd354]

Mr. Wiley, it seems from your post that you would contend that the appraiser's assumption that the GLA listed in the public records for the subject property is accurate would be an "ordinary assumption" (assuming that is the appraiser's source of the GLA used in the report).

However, the comment to the definition of EXTRAORDINARY ASSUMPTION found in USPAP seems to disagree with this point of view: here is the exact quote from the USPAP comment (emphasis added by myself):

Comment: Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.

A fair reading of this comment seems to me to indicate that the appraiser's assumption that there is not toxic waste hidden in the yard or crawl space would be an "Extraordinary Assumption" as would his assumption that the data source for the GLA of the subject property in a typical 2055 exterior only report, per USPAP's definition of the term.

Thus, I will go back to my original argument....that is in order to do a USPAP compliant exterior only 2055 appraisal report, the appraiser must either personally measure the subject property or disclose the use of the extraordinary assumption that he must have surely used that the GLA in the public records or some other data source is accurate. Failure to clearly and accurately disclose this assumption is a violation of Standards Rule 2-1(c).

 

[DWiley]

In any case, this discussion probably has ceased or will cease to have much relevance in the mortgage related appraisal world, since very few lenders are ordering anything less than an appraisal with a typical interior/exterior FNMA form 1004 SOW.

In areas with a lot of REO activity there are many cases of lenders who need appraisals but have no legal right to provide access. Should we just be like that guy on Seinfeld? - "No appraisal for you!!"

It might be necessary to estimate the GLA in some circumstances. One would need to report the results in a format that did not prohibit using and disclosing such an EA. As Mike suggested, the old 2055 might be a better format for such an asisgnment.