USPAP Minimum requirement to Inspect

[Lauren]

I completed an appraisal 5-6 months and lender asked for a recertification...(PLEASE don't stop reading and refer me to AO-3). I explained that what he was requesting I could not do. Is there a USPAP minimum requirement that I must re-inspect. I think I need to re-inspect to CMA, but they are insisting that I disclose in report however I need to and make it a hypothetical assumption that property is still there and in the same condition as was previously appraised.

Question? Is there a USPAP minimum requirement to inspect a property? If yes could you help me identify that in USPAP. If, no, how do I handle this request?

Dialogue between ME and LENDER below.

ME:
Per our conversation, I have done some research regarding this subject.

Per USPAP Advisory Opinion 3
A recertification of value is performed to confirm whether or not the conditions of a prior appraisal have been met and does not change the original effective date of the appraisal. Since you are asking for an updated value as of a new date, it is a new assignment and I will have to re-inspect to cover my own liability.


Lender:
I am confused, yes as discussed earlier this is a new assignment with a new effective date which means that yes you must meet the minimum criteria set forth in USPAP for each assignment. I would expect you would have a new file for this assignment to keep the comps, communication, and other important documentation. I was not aware that it is a USPAP minimum requirement to inspect a property could you help me identify that in USPAP. That seems to be your basis.

USPAP in addition allows you to leverage any relevant work from the prior assignments and the scope of work is not required to be the same as you well know.

 

[Dan Umstead]

1004D? What does the certification state on the form you are signing?

 

[Randolph Kinney]

I believe your lender is asking for an appraisal update. There is no USPAP requirement to inspect on any appraisal. However, there are guidelines and requirements that Fannie Mae has for appraisals and appraisal updates.

Check efanniemae.com for their latest selling guide for the info you seek.

 

[Lee Lansford]

USPAP, itself, has no minimum standard for inspecting (or not) the subject property.

Is the loan headed to the secondary market or is the loan to be held by the client?

If I recall correctly, Fannie would require that this new assignment include your exterior viewing of the subject.

 

[mark hurlock]

I completed an appraisal 5-6 months and lender asked for a recertification...(PLEASE don't stop reading and refer me to AO-3). I explained that what he was requesting I could not do. Is there a USPAP minimum requirement that I must re-inspect. I think I need to re-inspect to CMA, but they are insisting that I disclose in report however I need to and make it a hypothetical assumption that property is still there and in the same condition as was previously appraised.

Question? Is there a USPAP minimum requirement to inspect a property? If yes could you help me identify that in USPAP. If, no, how do I handle this request?

Dialogue between ME and LENDER below.

ME:
Per our conversation, I have done some research regarding this subject.

Per USPAP Advisory Opinion 3
A recertification of value is performed to confirm whether or not the conditions of a prior appraisal have been met and does not change the original effective date of the appraisal. Since you are asking for an updated value as of a new date, it is a new assignment and I will have to re-inspect to cover my own liability.


Lender:
I am confused, yes as discussed earlier this is a new assignment with a new effective date which means that yes you must meet the minimum criteria set forth in USPAP for each assignment. I would expect you would have a new file for this assignment to keep the comps, communication, and other important documentation. I was not aware that it is a USPAP minimum requirement to inspect a property could you help me identify that in USPAP. That seems to be your basis.

USPAP in addition allows you to leverage any relevant work from the prior assignments and the scope of work is not required to be the same as you well know.

See AO-2 19-55 pages A4-A5

 

[Randolph Kinney]

B4-1.2-01, Age of Appraisal or Age of Property Inspection (07/26/2011)

Part B, Origination Through Closing
Subpart 4, Underwriting Property
Chapter 1, Appraisal Guidelines, Appraisal Document Standards,
Report, and Property Inspections

When … appraisal reports are 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,

Then … appraisers must perform an update which
includes:
• 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 the property value has
declined,

Then … the lender must obtain a new appraisal for the
property.

If … the appraiser indicates the property has not
declined in value,

Then … the lender should request the appraiser to
provide an update to the appraisal, based on the
appraiser’s 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.

Updates can be reported in the following formats:
• Appraisal Update and/or Completion Report (Form 1004D),
• Uniform Residential Appraisal Report (Form 1004), or
• in a letter.

 

[Randolph Kinney]

USPAP requirements:

869 I certify that, to the best of my knowledge and belief:

891 — I have (or have not) made a personal inspection of the property that is the subject of
892 this report.

ADVISORY OPINION 2 (AO-2)

5 SUBJECT: Inspection of Subject Property

8 For real property and personal property appraisal assignments, USPAP requires the report to contain a
9 certification indicating whether or not the subject property was personally inspected by the appraiser(s).

19 Minimum Level of Inspection

20 An inspection is not required by USPAP, but one is often conducted. While an inspection is not required,
21 appraisal reports for real and personal property must contain a signed certification which clearly states whether
22 the appraiser has or has not personally inspected the subject property. This is further discussed under the
23 Disclosure Requirements section which follows.

 

[Terrel L. Shields]

Classic example why there needs to be a USPAP standard and there needs to be a separate GSE standard which does not require USPAP compliance. Most residential appraisers appear to be unable to differentiate USPAP from GSE requirements.

 

[Michigan CG]

......Is there a USPAP minimum requirement to inspect a property? ....

m2:

As a residential appraiser you practice mainly deal with Standards 1 (Development) and Standard 2 (Reporting).

Try spending a few minutes reading Standard 1.

 

[Jo Ann Meyer Stratton]

What if the subject property was in perfect condition five months ago. If you do not observed the interior of the home today, how do you know if the subject is still in that same condition? So for your own protection and not create a situation that could cause you to lose your license; the best thing to do is to at least walk through the property making sure there hasn't been any thing major that took place during those five months.

Every report that is written or given orally, should be done in a manner so that you will be able to explain exactly how, why and what you did to your state board when a complaint is filed against you. The first time around with any assignment is to best time to prepare yourself for a hearing at your state board.

Always keep in mind--How am I going to explain this to the state board?