The "proper" use of the 1004D

[Webbed Feet]

underwriter SHOULD HAVE stipped the appraisal to be altered to using CB3 with HC's an

Thank you all for your input. Now I am awaiting a call back fro my client, it is an
AMC acting as an authorized agent for the lener. I am talking with their head appraiser and will let you know what happens. I did mark the use in the original report as Legal, as the use of the property is and was represented to me as Single Family. I think now, in hind sight, I should have marked it as an Illegal use. Go ahead rip away.

I am right there with MN Mark on this one. F.R. .. READ the signed certification in the 442 section of the 1004D !!!!!! What conditions or requirements "Stated" in the "Original Appraisal" ?????

Immediately, signing that 442 becomes misleading per the certification being signed! Come on people! What do YOUR state boards say about signing certifications when what you are doing is NOT what the certifications say you are doing??? Any of you ever hear "Do what you say and say what you do" out of any of your state administrative staff before?

MN Mark is absolutely correct. The assignment, if supposedly to Fannie Mae guidelines, was not completed in compliance with those guidelines in the first place... It was supposed to have been "Subject To" the correction of the illegal additional unit due to the lack of proof the illegal kitchen was not a safety hazard. Going back now and using the same effective date with a new value "as if" the second kitchen was not there, when it was on that date, would also be a Hypothetical Condition.

IF... homes with illegal additional units were market acceptable, THEN the appraisal should have been chalk full of comps with illegal additional units to prove it! Therefore, no functional adjustment would have been needed. Per Fannie Mae folks, she takes illegal units on a SFR... but ya gotta have the comps to prove market acceptability! And if it's market acceptable, there IS NO FUNCTIONAL CONCERN. If the illegal units are NOT market acceptable Fannie does NOT lend on them and they have to be decommissioned to be acceptable to Fannie!.... That would mean the Intended Use would require what? ... Gosh, CB3 huh?... or CB4 with the property owner required to prove the unit is legal and done to code?

F.R.

Your first post about just using a letter to confirm the removal of the second kitchen, with no "certifications" that will set you up for a fall, is the ticket. The ding bat underwriter SHOULD HAVE stipped the appraisal to be altered to using CB3 with HC's and a value opinion per the HC's. THEN later asked for a 442! .. or the Intended Use should not have involved Fannie Mae.

P.S. This entire issue was caused by NOT revisiting the "INTENDED USE" with the AMC before completing the assignment! If the intended use involved selling the loan to Fannie Mae.. . the "as-is" requirement became an unacceptable assignment condition if illegal units could not be proven to be market acceptable.

 

[CANative]

Web, all...

We all know what to do and what not to do regarding forms.

But it comes down to this in the end...

Click the little speaker in the attached pdf of the eyemortgage logo (make sure your speakers are on)

 

[Webbed Feet]

G.B.

So just send back a sound bite that says "Fine, be my guest!"

 

[Mike Boyd]

Wasn't the homeowner fraudulently maneuvered into paying PMI unnecessarily? And weren't you a party to that?​

Not all fraud is a consumer defrauding the mortgage company. There are two parties in the transaction, and either may defraud the other.​

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Rather than present a hypothetical issue, let's stick to the original condition.

Assume that you, as the appraiser, were aware that permits had not been obtained to add the 2nd kitchen and block the access. Therefore, you gave that amenity NO VALUE. Maybe even called it an over-improvement.

Is it still fraudulent? I think not. Lenders have the right to require specific property integrity. They want the 2nd kitchen removed and access restored. AND, after informing the borrower that this must be done if they wanted the loan they were offering, they ask you to go back out to insure the work has indeed been completed and they are willing to pay you for this service. The lender owns your report because they hired you to do it. They are not changing your report, they're are making a loan condition that the borrower must mitigate. They are requiring a condition that you did not require. This is their option, not yours to arrogantly refuse to do the job. Of course, you can refuse but be aware that you will be seen as un-cooperative and will not likely give you anymore work. Frankly, I would not blame them. IF they ask you to re-value the property and change the effective date, then, I would agree, it is a new assignment.

 

[MN Mark]

They want the 2nd kitchen removed and access restored. AND, after informing the borrower that this must be done if they wanted the loan they were offering, they ask you to go back out to insure the work has indeed been completed and they are willing to pay you for this service. The lender owns your report because they hired you to do it. They are not changing your report, they're are making a loan condition that the borrower must mitigate. They are requiring a condition that you did not require.

Okay, so if they are not changing the report, and are instead making a loan condition, a condition which you did not require, then how is the 1004D relevant? If the condition is merely a loan condition, and not an appraisal condition, then the OP should NOT be acting as an appraiser for the "re-inspection". But how can you use the 1004D, while at the same time claiming that you are not acting as an appraiser? You can't.

Of course, you can refuse but be aware that you will be seen as un-cooperative and will not likely give you anymore work. Frankly, I would not blame them.

Clients who are willing to disregard the proper protocol in favor of the path of least resistance, are clients I can do without.

 

[Webbed Feet]

M.B.

I whince whenever I hear an appraiser say, or post, that some appraiser gave some portion of real estate no value.... It's funny how some forget the image we are to be reflecting is not one of ourselves.

Perhaps the word arrogant is applied in the wrong sentence by mistake. It seems to me that signing certifications that would be misleading, just to propagate a continued pipe line of work, is where the word arrogant should be applied.

 

[Frederick R. Ruffell]

I never said I was unwilling to re-inspect and take photos etc. just that I do not believe that the 1004D is the appropriate form AND I would be setting myself up for a possible law suit. I think I can re-inspect and add the photos to the original report with a label that states that this is the condition of the property subsequent to the effective date. Write and date an addendum explaining the lenders requirement and my role as the appraiser asked to re-inspect.
Of course now the AMC is trying to remove their head appraiser rom the conversation.
I will keep you posted.
Oh funny thing, I just inspected a second property with the exact same situation for this AMC. It is an FHA loan so I am sure we are going to have to hash this issue out.

 

[Mike Boyd]

M.B.

I whince whenever I hear an appraiser say, or post, that some appraiser gave some portion of real estate no value.... It's funny how some forget the image we are to be reflecting is not one of ourselves.

Perhaps the word arrogant is applied in the wrong sentence by mistake. It seems to me that signing certifications that would be misleading, just to propagate a continued pipe line of work, is where the word arrogant should be applied.

Do you give value to every blade of grass, every tree? I did not write..."give no value to ANY real estate" I wrote give no value to the 2nd kitchen....meaning the improvements that make it a kitchen. Sheesh, Webbed, you are persnickety today!

Furthermore, WHAT is misleading? The top of the page reads...."The purpose of this report is to provide the lender/client with an accurate update of an appraisal and/OR to report a certification of completion. The appraiser must identify the service(s) provided by selecting the report type."

Down in the meat of what they want you to report is is......." Have the improvements been completed in accordance with the requirements and conditions stated in the original appraisal?"

Right there in the following comment area I would write...." Appraiser did not require any conditions. The client/lender has required the owner to remove the 2nd kitchen and restore access."

Then, "At the request of client Appraiser re-inspected the property on 04/xx/xxxx and found that the improvements that make for a 2nd kitchen have been removed and the access door has been restored."

 

[Mike Boyd]

I repeat, you non Californians have no imagination!

 

[MN Mark]

I repeat, you non Californians have no imagination!

Imagination and creativity are not skills particulary sought after in the appraisal profession, and for damn good reason. It's the imaginative and creative appraisers who have gotten us into trouble as an industry, and caused the housing market to look something like this......:new_microwave: