Update form 442/1004D

[MNRural]

What procedures do you use to do an update? Do you research new comps and data and prepare a new adjustment grid?

Did a residential property with a URAR form report in April. Client now wants update on form 442/1004D (never used it before). I have always done an update on the original form with a new effective date (a new appraisal). It seems this is what they are asking for anyway (only for a cheap fee with a one page document).

The client only wants to pay $125 for this service!! Does this seem reasonable?

 

[CANative]

Tell them 5 months is too long for your comfort level for this type of appraisal assignment. Offer them a discount for a brand spanking new 1004. Better for you, better for them, better for the borrower.

 

[eld2310]

I believe the minimum requirement is to research the market and recent similar sales, street-inspect the subject to make sure nothing has changed that could majorly detract from the value, identify new comparables and make a determination as to whether the value of the subject has declined since the date of the original appraisal (you are not providing a new value, just stating whether the value has declined since April). Keep a work file of your research, check the appropriate box on the 1004D, make a few short comments about your methodology and send it.

For that, $125 seems about standard, if still a bit of a ripoff. If they want a new comp grid, photos, etc., then they need to pay more. JMHO.

 

[CANative]

(you are not providing a new value,

Yes you are. The new value is the same as the old value.

 

[eld2310]

Yes you are. The new value is the same as the old value.

Not so much. The form asks if the value has declined since the date of the appraisal. It does not ask for a specific new value. It could be higher than the last appraisal.

"Has the market value of the subject property declined since the effective date of prior appraisal? Yes/No

If Yes, a new appraisal is required."

That's it.

 

[CANative]

If you state that the value has not declined then that is a new value opinion.

 

[VolcanoLvr]

Seems we have a west coastie debate raging! That's good for a change.

Eld is correct.

Per Fannie, these can be used w/in 6 months, but FHA is 120 days, of the original Effective Date. The form asks a very simple question, answered either Yes/No. If the original client for the original appraisal requests an update (1004D), the prior report is incorporated by reference. If a different client is using the original report, then the report must be attached to the 1004D.

There is no requirement to include an extra grid page, add'l photos, and other documentation with the 1004D to back up your answer. If the answer is YES (has the value declined?), then it is up to the lender to request a new appraisal. If the answer is NO, then everything is peachy.

I have seen one lender's (or possibly an AMC) instructions to do the above when requesting a 1004D Update ... which they are doing to try to get a full blown appraisal on the cheap. Tell 'em fine, folks, I'll be happy to do all the extra work you want........it'll be on the 1004 form for $zzz, but not the $100 or so normally charged for a 1004D Update.

 

[MNRural]

After reading Advisory Opinion 3, it looks to be a new appraisal, new value. $125 is too cheap.

You form appraisers need to look behind the form and concentrate on USPAP, not some incompetent bailed out government agency. If Fanniemae stands behind it, I would not give it much credibility.