Wednesday, June 30, 2010

Warning - Chase Bank's 1004D requirements

From Dave Towne, some information about Chase's new (as of 6/16/2010) requirements:


This is a drive-by appraisal report for a (probable) 1004D fee, typically much lower in price than the drive-by fee would normally be.

Nowhere on the 1004D form Update does it indicate this level of reporting. The form says the appraiser must ‘summarize’ the info reported. There is no Fannie requirement (that I know of) that ‘new’ comps be driven and photo’d. But…you’d better damn well have a complete work file and data to justify how you answer the 1004D Update ‘Yes/No’ question. Fannie’s instructions to lenders say that if the question is answered ‘Yes’ then the lender must order a new appraisal.

This Chase requirement circumvents that process, and forces the appraiser to do a basically full blown appraisal prior to completing the 1004D.

What you do with this type of assignment is of course your own business decision. What you charge is your decision also. You do not have to accept the fee OFFERED by Quantrix (the senders of the Chase requirements). And you do not have to do the 1004D, even if you were the original appraiser.

This is just another recent example of escalating order and inspection requirements (probably) without properly compensating appraisers for what is being requested.

I hope you will make the correct decision for yourself and for appraisers nationwide when/if you get one of these new Chase 1004D requests.

(My BOLD below)

Dave Towne

Chase’s NEW Appraisal Requirements for the following 2 products: 1004D-Appraisal Update and 1004D-Final Inspection and Appraisal Update. The requirements apply to the “Summary Appraisal Update Report” section of the 1004D. These requirements are in effective as of (6/16/2010).

Chase Appraisal Requirements for a 1004D-Appraisal Update

Note: These requirements apply to the “Summary Appraisal Update Report” section of the 1004D form when either of the following products is ordered:

• 1004D-Appraisal Update
• 1004D-Final Inspection and Appraisal Update

The appraiser performing the Appraisal Update must, at a minimum:

• Perform an exterior inspection of the subject and new comparables from at least the street.

• Research, verify, and analyze current market data in order to determine if the property value has changed since the effective date of the original appraisal.

• Include an extraordinary assumption that the interior finish and condition are the same as the original inspection.

• Indicate on the 1004D form if the market value of the subject property has declined since the effective date of the original appraisal report.

• Provide a new sales grid with three new comparable sales that have closed since the effective date of the original appraisal to support your conclusion. Note: Listings may be included as a 4th, 5th comp, etc. if needed to support your conclusion. (We do recognize that the additional comparables being supplied with the Update may not be better, or more indicative of value, than the comparables used in the original report. Regardless, Chase underwriting needs to account for market activity occurring in the period since the original report date, so new comparables which closed after the effective date of the original appraisal must be provided.)

• Provide a new original front photo and a new original street scene photo of subject.

• Provide an original front photo of all new comparables provided on the grid.

• Provide a location map showing the subject property and all new comparables. Note: the neighborhood boundaries must be clearly visible on the location map.

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