Inappropriate Form Use

Inappropriate Use of GSE Forms for Private Appraisals - AppraisersBlogsWhy oh why do appraisers who should know better do private assignment appraisal reports using the mortgage lending GSE forms?

Here’s an “observation” from an actual report I just happened to see:

GSE forms for private work

Fannie Mae 1004

Do the appraisers who do this not read the parameters (Intended Use & User) of the form??

GSE forms intended use & intended user

INTENDED USE: The intended use of this appraisal report is for the lender/client to evaluate the property that is the subject of this appraisal for a mortgage finance transaction.

INTENDED USER: The intended user of this appraisal report is the lender/client.

Note the “Assignment Type” on the first screen shot. “Marital Dissolution.” The client for this report was one spouse.

Is it laziness? Is it an unwillingness to use an appropriate ‘General Purpose’ form that all software providers have in their library of forms? Maybe these appraisers think no one will notice?

I continue to be baffled by this behavior.

Do appraisers who use the GSE forms for these kinds of private assignments not know that their report is often presented as evidence in a court? Do they not know that a sharp attorney representing the other spouse (who has employed a skilled, competent appraiser for their own appraisal who knows this stuff!) can get that other inappropriate report thrown out, because the ‘form’ is not correct for the intended use?

Maybe the “GSE-Only” appraiser doesn’t care. “Don’t bother me… I’ve been doing appraisals for 25 years” is their attitude.

“Forms” exist for specific purposes. Use the correct one for the assignment. Or write a Narrative Report.

“Let’s be more professional out there.” (A tribute to the old Hill Street Blues TV show!)

Dave Towne
Image credit flickr - Marie T
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on

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5 Responses

  1. Avatar CJ says:

    Or use the old 1004 vers 6/93

  2. Avatar Dave says:

    Residential appraisers are use to using that form as 90%+ of their work is utilized on that form and is the form we are most comfortable using. I don’t do many appraisals for divorces, etc., but if I did and used the form mentioned, I would note in my engagement letter to the intended user of the report that I was using my appraisal software which is generally intended for my lender work. You are correct though, attorneys can be snakes and will find anything to help their clients cause. I definitely would not use a UAD form report as most people have no idea what Q3 and C3 mean.

  3. Avatar Ralph says:

    I find the form argument as another example of appraisers making a mountain out of a mole hill. During my 1st basics class almost 20 years ago the instructor, a well respected CG, told us you can do an appraisal on a napkin. While I do private work on the GPAR, when I was a new trainee it was all done on the FNMA 1004. While I don’t do that now I’ve yet to hear of any appraiser being sued for doing private work on a FNMA form.

    The problems facing our industry are far greater than what form to use. Like a guy off the street can inspect a home for bifurcation, but lenders in the secondary market will not let a licensed trainee inspect a home! Hello Mcfly!!! That makes ZERO sense!!!!

  4. Dave, the only requirement for using the loan form is to state which parts of the preprinted form do not apply-including certifications. Prohibitions against changes BY FNMA do not apply to private parties. You can make any change you want and for those embedded areas supersede them by specific reference.

    Admittedly it is easier to just use the GPAR form and not have to be bothered trying to identify every single inapplicable section, but it is not prohibited. You own or lease the software. As long as you are not representing the form to comply with FNMA guidelines or to be used in FNMA transactions you ‘are allowed’. FNMA doesn’t ‘own’ the 1004. (At a minimum it is shared with FHLMC -form 70)

    On rare occasions (2?, maybe 3?) I’ve had to use the FNMA form. Once when my alamdode was down (I LIKE their GPAR) and I had to use either ACI or Bradford (can’t recall which) and my templates for FNMA forms required less writing to supersede than to write new GPARs from scratch on my secondary software.

    Disclose and supersede as required and there is no court in the country that would or could throw the report out unless that court specifically directed another form or format to be used. I think Ralph is right on this one Dave.

  5. Avatar Dave says:

    We appraisers all have our pet peeves. As I always felt as long as the appraisal is not misleading our client and we give a credible analysis, does it really matter what form we use. Mr. Towne , you are correct, why don’t we just use the proper forms. I have AI forms in my software which are very good. But if we just disclose what we are doing, everyone should be on the same page. Ralph has an excellent point. We appraisers have a lot more to worry about than a form. The people who are really in charge are trying to end us.


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Inappropriate Form Use

by Dave Towne time to read: 1 min