Tagged: 1004

Appraisal news for real estate appraisers and real estate professionals regarding Uniform Residential Appraisal Report, Fannie Mae Form 1004. News relating to the Appraisal Industry.

Highest and Best Use - Dead in the Water - Appraisers Blogs 4

Highest and Best Use

Appraisers, I had a recent discussion with a review appraiser, who discussed a ‘situation’ with me. It involved Highest and Best Use (H&BU), and the appraiser’s reluctance to re-do a report so that a loan could be made. The appraiser had checked the H&BU question box on page 1 of the 1004 form as “NO”, which immediately stops the lending process. This H&BU topic is sometimes difficult for appraisers due to many variables which need to be analyzed. The twisted part of this situation (which influenced the appraiser’s H&BU reporting) is the property is in an area where some, not all,...

Is a Model Home Considered Occupied or Vacant? 19

Is a Model Home Considered Occupied?

Two days later the underwriter emails you ordering you to change “vacant” to “occupied” since there is clearly furniture in the house… Here’s a situation you’ll run into once or twice in your career. There is a new subdivision. Now, new subdivisions sometimes have model homes. Model homes typically have furniture, fixtures, and equipment – usually upgraded. The subdivision has completed its sales program and the developer is now selling the model(s). Your job is to appraise one of the models, since the developer has it under contract to a retail buyer. You do your inspection thing, take pictures of...

Pandemics Do Not Give Us a Get Out of Jail Free Card - Convoluted Times 25

Not a Get Out of Jail Free Card

It is not misleading to use a 1004 form for a desktop or a drive-by because, during these convoluted times… In talking with Tim Andersen, a USPAP instructor and long-experienced appraiser, I was reminded that, even in the time of C-19, USPAP applies, and appraisals must still be credible. Reports must still not mislead. USPAP has never required the appraiser to inspect the property. That is a lender construct. So long as your scope of work is clear relative the level of inspection you provided, and why that was your scope of work, you should not have a problem. Note...

Sharestates Seeks to Overturn NY Appraiser-friendly Statute of Limitations 13

Lender Seeks to Overturn NY Appraiser-Friendly Statute of Limitations Law

Sharestates operates a crowdfunding platform that provides alternative mortgage lending secured by both residential and commercial real estate. Over the last 10 years, it has reported average annual returns for loan investors ranging from 9.24% to 11.02%. With returns like these, there is likely some loan risk – and Sharestates reports a current foreclosure rate of 2.44%. Following several of its foreclosures, Sharestates has filed professional negligence cases against about a dozen defendant appraisers, appraisal firms and appraisal management companies, blaming the loan losses on inflated appraisals. Last year, it lost one of those cases in a Nassau County, New...

Incorrect Comments in Multi-Family Appraisal Report 35

Incorrect Comments in Multi-Family Report

I have in my possession an appraisal for a DUPLEX (2 family residence) on a FNMA 1025/FrMac 72 form, commonly called the ‘1025 Form’ which was done by a Certified Residential Appraiser licensed for 8 yrs, 6 months. Items “observed” in the report: UAD rating numbers are used for Quality and Condition. 1025 forms are not UAD coded, so why are these used? Please don’t tell me “the client said so” because the client is incorrect, and may not be aware. Use the standard wording for those items, and provide a definition description of the standard wording you use. The Highest and...

Hybrids, Invitation to Fraud - The New Subprime Fiasco of This Decade 6

Hybrid Appraisals, Invitation to Fraud

Until FNMA released their version of a test format for hybrids (1004P) there was not one hybrid form appraisal process and online form reporting system found that was not egregiously misleading in the entire country. Not one. Not Clarocity’s, nor Clear Capital’s or Mueller Inc. A “typical hybrid” sample follows. http://appraisersblogs.com/clearval-value-hybrid-appraisal Not those crafted in Hyderabad, Pakistan for $8 Billion for just one year’s Wall Street Investments (as published by Cezary Podkul Wall Street Journal) where the preparers claimed to be able to produce 360+ per day by illegally using broker login credentials from state-licensed brokers in America. The entire...

Report Observation & Trigger Points - Don't Fall Into a Trap! 10

Report Observation & Trigger Points

Appraisers, this is another essay written about a report I have ‘observed.’ I’ve mentioned before that I “come in contact with” appraisal reports from a variety of sources. Those that I determine have significant issues I write about. Conclusions about the ‘real value’ will be disclosed below. Trigger points for having reports formally reviewed are discussed. I do this because a majority of appraisers do not participate and interact with their peers on a consistent basis, and therefore may not get exposed to items that clients and lenders see in reports, which they question. I believe it’s important to expose items in reports that...

AMROCK Valuations New Service Seems to Seek Circumvention of USPAP! 14

Can you say ‘L-A-W-S-U-I-T’ boys and girls?

Fellow appraisers I strongly discourage anyone from accepting AMROCK Valuations work generally due to their poor track record in dealing with appraisers across the country; and their apparent habit of making up their own appraisal rules as they go along without regard to C&R fees; Dodd Frank and most other common sense sound appraisal practices up to and including USPAP. Y’all remember USPAP don’t you? A series of uniform rules we’d all follow to promote, preserve and protect the American real estate appraisal profession and the American Public. That is until it became an inconvenient impediment to MISMO; FNMA and...

Appraisal Simulator, Evaluations, S2155 update, & Recap of Meetings 16

Appraisal Simulator

The industry is working of an appraisal simulator… The US House of Representatives Passed S 2155 today! Section 103 allows for waivers of appraisals by licensed appraisers in certain situations. See the bill here. Other News: Last week The National Association of Realtors held their Real Property Valuation Committee meeting. We have 2 VaCAP members on this committee. Here is a brief over view of the meeting from our representative in attendance. John Brenan with the Appraisal Qualifications Board (AQB) spoke at the meeting and gave an update on the roll back of licensing requirements that went into effect May 1st....

Fix What is Broken before Replacing the Product 34

Fix It Before Replacing It!

Fix what is broken before replacing the product. Appraisers are talented professionals that know how to take mass amounts of data, filter through it, analyze & make sense of it all. Utilize the talents of the 70,000 plus experienced, licensed professionals & don’t short change the consumer… Yesterday was the National Association of Realtors Real Property Valuation Forum: Rethinking Real Estate Valuations: Alternatives to Traditional Appraisals. First, VaCAP was well represented with 8 members present from all over the state.  There were many of our Network colleagues there as well from all over the country. Thank you for taking the...

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