Using a 1004d for a refi of a recent sale

[fifteen]

Yes, it appears they're trying to slip in an "update" as a 442 in handling. I can see a 442 being a request and it not being completed for months, new construction, but no matter the time span the value still has to be there. If it's not, increased or decreased, the lender should be aware a new valuation is in order. Update logically sounds misrepresentative. Anybody think these forms they come out with are not appraiser friendly? I wonder who draws them up. Remember when the big thing was knowing everything about an unattached PUD? addendums etc.. What a waste that was. Now it's importance is relegated to a few boxes

 

[Tim Schneider]

Here is the part of FNMA guidelines that talks about the 1004d. Shows just how clueless that are:

Section 201: Age of Appraisal (or Property Inspection) (11/01/05)
The property must have been appraised (or inspected, if that is the level of property fieldwork recommended for a Desktop Underwriter-processed mortgage) within the 12 months that precede the date of the note and mortgage.

When an appraisal report will be more than four months old on the date of the note and mortgage—regardless of whether the property was appraised as proposed or existing construction—the appraiser must inspect the exterior of the property and review current market data to determine whether the property has declined in value since the date of the original appraisal.

· If the appraiser indicates that he or she believes that the property has declined in value, the lender must obtain a new appraisal for the property.

· If the appraiser indicates that he or she believes that the property has not declined in value, the lender should request the appraiser to provide an update to the appraisal, based on his or her exterior inspection of the property and knowledge of current market conditions. The inspection and the appraisal update must occur within the four months that precede the date of the note and mortgage.

These processes are an “update” of the original appraisal report, which means that they are an extension of the original appraisal report that changes the effective date of the opinion of value to reflect a current date. An update can be reported in different formats—such as on the Appraisal Update and/or Completion Report (Form 1004D), on an appraisal report form or in a letter. Regardless of how the appraisal update is reported, it is an appraisal that incorporates (usually by reference) information included in the original appraisal report. Generally, the original appraiser should complete the appraisal update; however, the lender may use a substitute appraiser. In such cases, the substitute appraiser must review the original appraisal and express an opinion about whether the original appraiser’s opinion of market value was reasonable on the date of the original appraisal report. The lender should note in its files why the original appraiser was not used.

When a property inspection report for a Desktop Underwriter-processed mortgage will be more than four months old on the date of the note and mortgage, the appraiser must re-inspect the property and prepare a new Desktop Underwriter Property Inspection Report (Form 2075).

 

[Webbed Feet]

T.S.

You are absolutely correct. That Fannie 201 Age of Appraisal section is not well written in that it contradicts USPAP manual statements in about half of what is being said in that message from Fannie. Very confusing, poorly written, incorrect, and correct all rolled into one. Every step of the way it ignores that the ASB has clearly said an "Update" is a "New Assignment," is a new real estate appraisal, and is not an extension of any prior real estate appraisal. Or maybe I can't read very well.... .. I'll get some glasses and try again...