UAD Definitions

[David Morgan]

I have been getting a lot of challenges from LOs, Agents and John Q about UAD condition and quality ratings. After reading what LIA says about the courts relying on UAD definitions as gospel I have added the following statement to my appraisals. Any comments?

"The appraiser is limited by the strict UAD definitions concerning condition and quality of the subject and comparables. UAD definitions typically do not adequately or fully describe these two components. For example UAD does not allow for condition or quality ratings where a property can be considered to have both C2 and C3 features nor does UAD allow for properties that have both Q3 or Q4 features etc. Therefore only one definition is shown on the grid and on the 1004 in order to comply with UAD limitations. Whenever necessary a more detailed description of these two components is included in the Summary of the Sales Comparison Approach and in the body of the URAR. '

 

[Mike Garrett RAA]

Especially ugly is the style requirement.

 

[The Nightfly]

I frequently make adjustments for comparables with the same UAD Q/C rating as the subject (and sometimes different adjustments within the same rating). I use verbiage similar to what you stated, but make sure to give specific detail about the rational for adjustments within the same rating. I've had no problems as long as I explain.

 

[Dale Smalley]

Should you add a SOW comment instead of saying it is a limitation? Your sounds like you are making errors by design.

 

[TxArmadillo]

Should you add a SOW comment instead of saying it is a limitation? Your sounds like you are making errors by design.

Dale, what error is the OP making? Please elaborate.

 

[residentialguy]

I agree with Dale. A form doesn't limit the appraiser, as they must make their report so it is not misleading. Therefore the appraiser is NOT limited by the strict UAD definitions.

 

[Meandering]

I agree with Dale. A form doesn't limit the appraiser, as they must make their report so it is not misleading. Therefore the appraiser is NOT limited by the strict UAD definitions.

So,

Write a narrative report and include the form as an addenda.

Yup, fixes all the form and UAD issues.

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[residentialguy]

IDENTICAL UAD RATINGS OR DESCRIPTIONS MAY NEED AN ADJUSTMENT
A comparable sale with the same Rating or Description does not mean they are identical and without adjustment. It means the overall quality,
condition, location, view, etc. of that property falls within the definition of the rating range, but still may need to be adjusted according to market
reaction to the variances on a property-specific basis. Fannie Mae's UAD FAQs #27 acknowledges that even though a comparable sale may have the
same rating as the subject, it still might be superior or inferior to the subject - therefore an adjustment must be made, if warranted. It states: "These
differences must be adjusted for in the sales comparison approach grid and an explanation must be provided in the sales comparison approach
comment field or in an addendum."

UAD REPORTING RATING VARIANCES BETWEEN MULTIPLE REPORTS
The property characteristics for a comparable property is described and rated as they existed at their time of sale and the appraiser stays consistent
as much as possible. However, often a property falls on the dividing line between the higher rating and the following lower rating, with each being
similarly applicable. Should that occur, the rating that gives the least confusion will be used in each report. Therefore, what may be the upper rating
in one report may show as the lower rating if used in another report. While this rating variance may show up when monitoring across multiple
appraisal reports, it is essential that appraisers develop and communicate their analyses, opinions, and conclusions in a manner that is the most
meaningful and not misleading within each report.

 

[residentialguy]

So,

Write a narrative report and include the form as an addenda.

Yup, fixes all the form and UAD issues.

.

That about sums it up. Well, you could decide not to do that and ignore USPAP, I guess. :laugh:

 

[Meandering]

For too long, too many let the form and the check boxes drive their reports. Now the form and the UAD will drive you over a cliff. It really is at the point where you come out faster and more understandable just writing the narrative and then checking boxes and including the form as an addenda to the report. Especially if courts are going to hold us responsible for borrowers understanding the report. No where else in the world is computer data expected to be a "readable, reliable" report to anyone who does not understand computer data, except appraisals.

Remember the day when everyone complained about boilerplate?

The UAD is the cause of far more boilerplate then ever there was in a skippy report. It's boilerplate for condition, boilerplate for quality, boilerplate for date of sale, boiler plate for concessions, boiler plate for mailing addresses, boiler plate for locations, boiler plate for view, on top of the standard boilerplate. I'm sure there are 5 page reports out there that are all boilerplate now, which essentially says the report filled in the boxes to meet the requirement of somebody's super computer, but really doesn't mean anything in the realm of human understanding other than here's your number.


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