The association had serious issues with the certifications on the new Fannie Mae 1004 forms and within the other forms developed at the same time concerning the intended use and intended users [PDF]. They drafted a resolution on October 10, 2005 to Fannie Mae:
“And whereas serious concerns were raised that the new Fannie Mae Form 1004 certification #23, and similar certifications in other recently revised forms, are potentially misleading and contradictory without supplemental clarification;
And whereas the Appraisal Standards Board (ASB) has provided guidance through its July 2005 Q&A and the ASB provided further confirming clarification at the AARO 2005 annual fall meeting;
And whereas State appraisal regulatory agencies are charged with enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP) that requires appraisers to clearly and accurately identify intended use and intended user(s);
And whereas the above referenced Fannie Mae forms, as currently written, can be viewed to identify persons that “may rely” on appraisal reports beyond those identified in the forms as intended users;
Now therefore let it be resolved that the member jurisdictions of AARO wish to reiterate that regardless of Fannie Mae’s position that “modifications or deletions to the certifications are not permitted,” it is the appraiser’s responsibility to comply with USPAP. Therefore, appraisers must provide supplemental clarification in their appraisal reports regarding specifically who the intended users are.
WE, THE UNDERSIGNED, by unanimous vote of the attached list of AARO member jurisdictions, call upon Fannie Mae to address this issue, recognize the potential problem the matter creates for the real property appraiser regulatory officials, and take immediate corrective action to resolve the item(s) listed.”
Tags: Soapbox Blog, Appraisal Process, Appraisal Forms
It’s nice to see someone take on Fannie Mae, as I believe their current revisions represent (to use a real estate term), the taking back of an “easement of implication”. For many years Fannie Mae willingly invited the appraisal industry and those who have come to rely on appraisal services, to utilize these forms for purposes other than financing. In exchange for Fannie Mae providing format (forms) and appraisal guidelines, the appraisal industry and those who have come to rely on appraisal services, saw the merit of a mutually beneficial arrangement, in which Fannie Mae was to have a more prominent roll. It would seem rather foolish that Fannie Mae would alienate or try to establish new ground rules for this relationship, at a time when the Fannie Mae is under fire from so many directions. And such a move would seem even worse yet, should the real market see a significant shift in market values. One can only hope that a compromise can reached, in which all parties agree that this marriage still has many more productive years in front of it, and that all parties are mutually enhanced by this union. A restoration of the “easement of implication” will put Fannie Mae back where they belong, front and center, and leading the way.