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Using An Inspector - Not A Trainee - To View Subject And Comparables

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AMC guy

Freshman Member
Joined
May 29, 2015
Professional Status
Appraisal Management Company
State
Maine
Looking for help here. We have an appraiser who has submitted a 1004 where he checked "did not inspect subject property" and "did not inspect comparables" but he signed on the left. There is no supervisor signature. Buried in an addendum the appraiser states he used Joe Blow of XYZ Inspection Co. to perform the inspection of the subject, photograph, measure and sketch the improvements, and to view and photograph the comparables."

I wrote him and said I had never heard of such a thing, but it seemed contrary to the "Appraiser Certification" on the 1004 that states: "2. I performed a complete visual inspection of the interior and exterior areas of the subject property. I reported the condition of the improvements in factual, specific terms. I identified and reported the physical deficiencies that could affect the livability, soundness, or structural integrity of the property."

He wrote back and said that Fannie Mae has always allowed the appraiser to use unlicensed and uncertified people in the course of completing an assignment. He specifically mentioned Fannie Mae's Selling Guide 2017-01, which states: "We have clarified our existing policy that allows an unlicensed or uncertified appraiser, or an appraiser trainee to complete the property inspection. When the unlicensed or uncertified appraiser or appraiser trainee completes the property inspection, the supervisory appraiser is not required to also inspect the property."

Any help?
 

A K

Elite Member
Joined
Jul 31, 2013
Professional Status
Certified Residential Appraiser
State
Maryland
You are correct that it conflicts with the certification.

The wording in the selling guide is clumbsy and Fannie Mae should put out a clarification. My interpretation of "unlicensed or uncertified appraiser, or an appraiser trainee" is that a trainee may inspect the property. Not that the appraiser can use anybody to inspect the property.
 

A K

Elite Member
Joined
Jul 31, 2013
Professional Status
Certified Residential Appraiser
State
Maryland

Mark K

Elite Member
Joined
Jan 27, 2004
Professional Status
Certified Residential Appraiser
State
Indiana
You're correct.

I'd call the state licensing agency and/or send in the report for their interpretation.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
An AMC is required by regulations to report a material USPAP violation..seems to fit the bill here.
 

Mark K

Elite Member
Joined
Jan 27, 2004
Professional Status
Certified Residential Appraiser
State
Indiana
If the engagement letter states that using 'inspection services' is allowed and the appraiser certified that he personally inspected the subject and comps when he, in fact, did not, the results are a misleading report,a USPAP violation.

How many times has this appraiser run this scam on unsuspecting clients? How many reports slipped thru and could come back to bite the clients in their collective azzez?

Finally, someone read the report and caught the inconsistency. This deceptive practice should be stopped in its tracks ASAP.
 
Last edited:

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
On the 1004 form's pre-printed certification, there are two places to sign:
1. As the appraiser (which can include trainees or non-licensed appraisers)
2. As the supervisory appraiser

If you read the certifications of the appraiser (the one who signs on the left) you will see that the appraiser who signs on the left takes responsibility for the appraisal process and appraisal reporting.
If you read the certifications of the supervisory appraiser (the one who signs on the right) you will see that the supervisory appraiser takes full responsibility for supervising the appraisal process and reporting.
But what is clearly required (based on the certification) is that an appraiser (however that is defined) must sign on the left and the appraiser signing on the left was supervised by the appraiser who signs on the right. The level of supervision could vary with the level of competency of the left-signing appraiser (although whomever signs the certification on either side takes full responsibility for the report).

IMO, you have a report where the appraiser is ignoring what the certification says and trying to use as his/her defense the FNMA clarification.

For a FNMA appraisal, an appraiser (however defined) must sign on the left. A supervisory appraiser can sign on the right.
If you have only a signature on the right and no signature on the left, that is not consistent with the certification (IMO).

The appraiser of this report (IMO) is in a bind. He/she cannot sign on the left if he/she didn't personally inspect the property or the comps. He/she will have to inspect the property and the comps if he/she has signs on the left. Since, per the FNMA guidelines and stated in the form, the inspection date is also the effective date, the appraiser (to fix this issue) will have to re-inspect the property and the comparables and conclude a new opinion of value as-of their inspection date of the subject property.

IMO, either the appraiser seriously in error in their understanding of the certification (competency violation) or is willfully trying to circumvent the requirements (ethics violation). That, however, is up to the state regulator to decide.

Good luck!
 
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Tom4value

Senior Member
Joined
Dec 4, 2016
Professional Status
Certified Residential Appraiser
State
Massachusetts
The appraiser who signs on the left did the whole appraisal. The supervisor signing on the right supervised the appraisal.

Here, the appraiser got someone else to gather data and he did the appraisal based on that. This is a USPAP violation as that is not what the certification says.

If he had to have open heart surgery, would he be ok with the doctor performing the procedure without ever having examined him, relying on an intern to perform the tests and diagnosis?
 

DWiley

Elite Member
Joined
Apr 4, 2007
Professional Status
Certified Residential Appraiser
State
Tennessee
He wrote back and said that Fannie Mae has always allowed the appraiser to use unlicensed and uncertified people in the course of completing an assignment. He specifically mentioned Fannie Mae's Selling Guide 2017-01, which states: "We have clarified our existing policy that allows an unlicensed or uncertified appraiser, or an appraiser trainee to complete the property inspection. When the unlicensed or uncertified appraiser or appraiser trainee completes the property inspection, the supervisory appraiser is not required to also inspect the property."

Any help?
It is true that Fannie allows (and has allowed) an unlicensed person to complete the property inspection. However, if one reads that entire section, one will see that there are also related disclosure requirements. Signing on the left side is an indication that that person (the one who signed on the left) has personally inspected the property. Any report submitted as you described would be misleading.
 
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