Contract Amendments… When?
Amendments to Sales Contract & Updates to the Appraisal…
Fannie Mae recently issued the following:
Currently, we require the lender to provide the appraiser with all amendments made to a sales contract, including amendments that are made after completion of the appraisal. With this update, we have clarified when the appraiser must be provided with updates to the sales contract and circumstances that warrant updates to the appraisal.
For example, if the contract is amended in a way that affects the description of the real property used by the appraiser, then the lender must provide the updated contract to the appraiser and the appraisal should be updated.
However, minor updates to the contract, such as changes to seller paid closing costs or changes to the contract price, do not require an updated appraisal.
In addition, we have updated the policy to require disclosure of changes to financing information (such as loan fees and charges, and subordinate financing provided by interested parties) to the appraiser only for purchase transactions.
Let’s be clear.
While a lender may not be required by Fannie Mae to share changes to the contract price with the appraiser; it would be a good idea for you to keep what is provided to you in your workfile.
Because AMCs are conduits for lenders who use them, this Fannie Mae requirement is for them as well.
We receive numerous complaints about appraisers who “missed the sale price”. Those complaints come from both consumers and lenders/AMCs. It would be to your advantage to be able to say, definitively, that the contract you relied upon was the last one provided by the AMC or lender.
For years the Board has been urging licensees to adopt good computer housekeeping habits. One of the enduring problems that we still see are complaints that include three, four, five or even nine versions of the same report.
The appraiser, when asked to produce each version for investigation, is unable to comply because the only report in existence was the last version they created. All of the others were overwritten using the same file number.
Your workfile needs to be complete.
This means all versions of the report that were tendered to the client. Get in the habit of assigning unique file extensions so as to distinguish between the first and fifth version. This will go a long way toward saving you and your E&O provider, major headaches.
Source Illinois Appraiser Newsletters – Volume 10, Issue 1 – January 2017