Requests from Lenders with Specific Statements
- Federal Valuation Agency Impact on Appraisers & the Public - July 22, 2022
- Is Georgia Going Rogue? - June 13, 2022
- Bias in Automated Valuation Models - February 28, 2022
Lenders’ Requests, C&R Fees, Email Blasts, SOW, Unlicensed AMCs and more…
What is the best way to ensure you receive a customary and reasonable fee for an appraisal?
Answer: Only accept assignments with a customary and reasonable fee!
That being said, here is a reminder of a USPAP requirement to consider before you respond to that email or text blast….
Scope of Work Rule
- Identify the problem to be solved.
- Determine and perform the scope of work necessary to develop credible assignment results.
- Disclose the scope of work in the report.
Comment: Scope of work includes, but is not limited to:
- the extent to which the property is identified;
- the extent to which tangible property is inspected;
- the type and extent of data researched; and
- the type and extent of analyses applied to arrive at opinions or conclusions.
Before responding to the email or text blast, do you have enough information to comply with USPAP and determine the scope of work? Are there any unusual circumstances with the subject? Easements? Pending zoning change? Unique property? Illegal use? Does this AMC always kick back the report for revisions? Consider the following before accepting the fee offered as customary and reasonable from an email or text blast……
Are you receiving requests from lenders for specific statements regarding your FHA property observations? Underwriters are looking for statements in the appraisal certifying that all FHA property observation procedures were performed by the appraiser. Examples of this type of request are below:
FHA Appraisal Lenders requests:
Lender 1: Can you also please state that the power/water was on and functioning properly and that you tested all the appliances & mechanicals.
Lender 2: Message: Thank you for the report. Due to increased scrutiny by our investors, there are some additional items which need to be addressed. Could you please provide the following: Per Handbook 4000.1, a head and shoulders inspection of the attic is only permissible if there is scuttle access. Per page 1, you indicate that there is a drop stair attic. Please advise/confirm if you entered the attic to complete a full visual inspection. (Unfortunately, the photo alone cannot confirm this).
Lender 3: Please add comments to confirm that a full inspection of the attic area was conducted. The photo is included, but comments are also requested to confirm full inspection was completed.
Appliances take time to operate. Attic and crawl space inspections take time to complete. Please review the Appliance Observation Requirement in HUD Handbook 4000.1 pg. 486.
Are you demanding a customary and reasonable fee for your time?
As professional valuation experts, we all need to decide what a customary and reasonable fee is for the assignment. Be aware of FHA requirements. Be Professional. Provide a valuable service to the consumer, the lenders and FHA. Be proud of your work and get the fee you deserve!
“Online lenders are hitting the brakes”
Here is a link to an interesting article from the Small Business Finance Institute. Although this article is not about mortgage lending, it shows a growing concern for the economy, which does in fact impact mortgage lending and the appraisal profession.
News from the National Association of Realtors®
On Wednesday May 11, 2016 the 2016 Real Property Valuation Committee of the National Association of Realtors® will meet in Washington DC. All Realtor® members are invited to attend. See the details of the meeting here.
On March 18, 2016, NAR sent this letter to HUD concerning FHA appraisal requirements.
And a little closer to home…
VaCAP has learned within the past week 3 AMCs attempting to do business in Virginia without a license. Make sure you check DPOR’s site to confirm the AMC has a license. Neither you, nor the consumer has any protection from an unlicensed AMC. Find a list of licensed AMC’s here.
If the transaction is a purchase, YOU ARE OBLIGATED TO PROTECT THE CONSUMER. Notify the agents involved immediately that the AMC ordering the appraisal is not licensed. They are on your side and want the deal to go through. You also have an obligation to file a complaint against the AMC with DPOR. You can do this anonymously by clicking here. DPOR will attempt to bring the AMC in to compliance.
Comments about the Virginia Real Estate Appraisers Board Meeting posted on AppraisersBlogs!
As we have pointed out in prior communications, most of VaCAPs correspondence is reposted here on AppraisersBlogs. There is usually some lively banter as well. Last week, Susan, a commenter on AppraisersBlogs posted an excellent recap of the Virginia Real Estate Appraiser Board Meeting. VaCAP has no idea who Susan is, but wishes to thank them for an outstanding job! We can not do any better! Check out the comment here.
Thanks for reminding me of just how lucky I was to ESCAPE this whacko “profession”.
Happy 7th Anniversary (HVCC Day) appraisers! Someone has to do this crappy job, I’m glad it’s you and not me.
You have not left. You’re still here, participating. You’re simply not working in the field any more.
can you put this article in the classifieds. wanted appraiser, beware of fly paper. just to funny. i like “wacko profession” comment retired appraiser. how about this definition for appraising, “short cliff”.
Yesterday I received a call from “Pearl”, who is some kind of non appraiser ‘coordinator’ for LRES. The day before I had declined yet another Arizona originated LRES FHA Email Blast order that provided only an address and request for fee and turn around time. “Need a 1004 interior UAD with 1004MC appraisal.”
As I ALWAYS do with LRES orders, I responded that I was concerned they are more interested with turn around time (TAT) and the fee than they were with assuring USPAP compliance. I prefer not to accept orders from such firms for blast orders. Further I would add this particular email to my LRES file for submission to the appropriate federal agencies including HUD as soon as I feel I have enough samples.
This time I included my AGA OPEIU AFL-CIO Union business card rather than my own personal business card. Hence the call the following day.
“Miss Pearl” attempted to explain to me that the fact I am on the FHA approved appraiser list (gee, I could have sworn I dropped off that list!) is all the checking they need to do to determine competency for the specific assignment… even though no details of the specific assignment were known.
It was Pearly’s belief that an address coupled with online public records data is all that is required to determine the scope of work required, and to offer a bid for the job; coupled with the assumed competency indicated by the ‘fact’ that I am on the HUD approved FHA appraiser list.
We had some more discussion about my future plans for LRES orders as well as MY assumption that if I magically appear on LRES ineligible list (I’ve never done an appraisal for them yet) that it MUST be because of my union activism in trying to get them to comply with their obligations under Dodd Frank.
I’m please to report I received another blast bid request today for a non GSE URAR SFR appraisal with 1004MC; Environmental Report and Lead based Paint addendum for either an sfr or condominium 120 miles away. I’m assuming the fact that my license is good for the entire state assured her that I must also be geographically competent.(Coincidentally I AM competent in that area… but THEY don’t know that!)
Of course the purpose of the appraisal, intended use, and type of value being sought was undisclosed.
I bid $1,200 and two weeks turn time to assure I can cover all eventualities. I wonder if I’ll get the job?
Hope not. It would ruin my record with these folks.