Capital One, N.A. 7933 Preston Road Plano, TX 75024 This engagement letter serves as a contract between the vendor listed and Capital One Bank (USA), N.A. and can ONLY be completed by the appraiser listed. The fee and due date are not negotiable after the case terms have been accepted by the vendor. If the report is not completed per the instruction outlined in this letter on or before the above agreed upon due date, Capital One Bank (USA), N.A. reserves the right to reduce fees or cancel the assignment without payment any time thereafter. You must set your appointment no later than 24 hours after receiving this request and submit the inspection date through AppraisalPort. If there are any problems gaining access to the property or meeting the appraisal due date notify us immediately. You must perform this valuation service competently, and in a manner that is independent, impartial, and objective. If you are contacted by any individual and feel you are being pressured to change your value please contact the Capital One Bank (USA), N.A. Appraisal Department known as RETECHS immediately. A Certified Residential or Certified General Appraiser must complete this assignment and their license level should be appropriate for the assignment type. **********ON ALL ASSIGNMENTS********** Report must be submitted in AI Ready Format ONLY Your Appraisal License number must appear on the report as listed on ASC.gov. Uniform Appraisal Dataset (UAD) All reports uploaded must be completed in compliance with Fannie Mae/Freddie Mac UAD standard and submitted to Capital One in AI Ready Format. All assignments must include the Fannie Mae 1004MC form. - On all assignments, complete the Cost Approach, provide total days on market, list date, contract date, original list price for the subject and all comparable sales. - On all assignments, present and adjust a minimum of two current listings and/or under contract (Pending) sales on the market grid. (Include listing history and days on the market) - All assignments must include photos for any condition, feature or amenity for which adjustments have been made (e.g. view, pool, outbuildings, deferred maintenance or other positive or adverse factors). - All walkthrough appraisals require the room locations to be labeled on the floor sketch. (i.e. BR, BA, KIT, LR, DR, etc.)
- All walkthrough appraisals require interior photographs of the main living areas that include but are not limited to the living room, kitchen, bedroom(s), bathroom(s), and basement. Site Condominium: If initially revealed within instructions or through typical inspection/investigation that the subject property is qualified as a Site Condominium then the appraiser is to complete the assignment on the 1075 Exterior Only Individual Condominium Unit Appraisal Report or 1073 Individual Condominium Unit Appraisal Report. Outbuildings: All walkthrough appraisals require a photo of all OUTBUILDINGS and an estimated replacement cost for each structure. Comment whether the foundation of each outbuilding is permanent or the structure is portable. -If an OUTBUILDING is permanent / affixed, the appraisal is to report a separate Replacement Cost specific to each OUTBUILDING. The Replacement Cost breakdown should be located in the Comments Section within the Cost Approach Section of the form, or above the Cost Approach within the ADDITIONAL COMMENTS Section on the same page. -If an OUTBUILDING is permanently affixed to a foundation, and the OUTBUILDING is determined to be in a pronounced deteriorated condition, then the appraisal is to state the appraiser cannot determine a replacement cost due to the deteriorated condition of the outbuilding. -If the OUTBUILDING appears to be portable and/or not affixed, the appraisal must include a comment indicating the structure does not appear affixed to a permanent foundation. Accessory Units or Second Kitchens: An accessory unit is defined as a portion of a building that provides complete living facilities including those for cooking, sleeping and sanitation. If the property contains an accessory unit, a specific comment is required in the appraisal as to whether the accessory unit is allowed under local zoning codes and ordinances. If the accessory unit is found to be an illegal use, please contact this office for further instructions. Under Construction: -Appraisals for Under Construction dwellings should only be processed if the improvements are within 90 days of completion. Please confirm the subjects date of completion when setting the appraisal inspection. Cite the source that provided the date of completion on the Appraisal-Port Message Center when confirming the appraisal inspection appointment date. If the property is reported to be greater than 90 days out from completion, stop processing the assignment and update the Appraisal-Port Message Center with the percentage of completion, estimated completion date, and source providing the estimate.
-The subjects stage of completion will dictate what information is required to render a credible valuation. When a property is Under Construction, the appraisal may be based on plans and specifications, an existing model home, and/or other verifiable information such as a contract of sale that lists materials and finishes. Based upon the subjects percentage of completion, you may need to review and have available for future examination, plans, specifications, and/or other documentation sufficient to identify the extent and character of the improvements. -If the appraisal is submitted based upon plans and specifications, list the exhibits viewed and retained to comply with this Letter of Engagement and USPAP. Place this information on the Additional Comments Section of the Appraisal Report located above the Cost Approach. -All appraisals must include a sketch, floor plan or architectural drawing, with exterior dimensions, to verify the subjects gross living area and basement square footage if applicable. -In the event the improvements are not complete and the appraisal report is submitted subject to repair/alteration, the report must include a list of incomplete items and an estimated cost to complete. When the subject is located in a new construction subdivision or new construction condominium project, expand the scope of work to include the following items: * Detail the sales performance of the project/section and include; total number of units in project/section; date sales began in the project/section; total units sold to date in the project/section; total units occupied to date in project/section. * Provide a history of any price changes to the base model/unit as well as a history of builder/developer concessions. Comparable Sale Selection for Under Construction - Secondary Market Compliance The subject property must be compared to other properties in its general market area as well as to properties within the subject subdivision or project. - Provide one comparable sale from the subject subdivision or project. - Provide one comparable sale from outside the subject subdivision or project. - The third comparable sale can be from inside or outside of the subject subdivision or project. Note: Sales or re-sales from within the subject subdivision or project are preferable to sales from outside the subdivision or project provided the developer or builder of the subject property is not involved in the transactions. - A minimum of two current listings and/or under contract (pending) sales. If you are unable to meet any of the above, provide specific commentary within the report to disclose and address. Please note: creating a comparable sale by combining a land sale with the contract purchase price of a home that has been built or will be built is strictly prohibited. Appraisals are to be submitted "subject to completion"* or subject to repair/alteration*, unless the improvements are 100% complete at the time of inspection. This reflects the anticipated value when complete. We also request the appraisal include
an "as is" value to meet regulatory requirements in the Reconciliation section of the report. The appraisal will include a list of incomplete items and an estimated cost to complete. -Subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, or Subject to the following repairs or alterations on the basis of a hypothetical condition that the repairs or alterations have been completed. Upon completion of the improvements, a 1004D Appraisal Completion Certificate with photos, will be required to satisfy GSE and/or secondary market requirements for "subject to" appraisals. Photo Requirements for the 1004D Completion Certificate: * Front and rear exterior photos. * Interior photographs of the main living areas that include but are not limited to the living room, kitchen, bedroom(s), bathroom(s), and basement. REQUIRED DISASTER COMMENT ON ALL ASSIGNMENTS Secondary Market participants are requiring all appraisals to contain language specific to disaster related damage. It is, therefore, necessary for Capital One to require this language in all appraisals. If you want to reference a specific disaster you can refer to http://www.fema.gov/news/disasters.fema SPECIFIC LANGUAGE REQUIRED: For Exterior Only Inspections: If the home has no apparent damage: Based upon an exterior inspection, from the street, the subject property has no observable disaster related damage as of. The disaster has had no observable impact on the subjects value or marketability. Apparent or Suspected Damage: If there are apparent or suspected damages the appraiser is to provide a description and photos of the actual damages. An explanation for the determination that there are suspected damages is to be included when actual damages are not observed. E.g. The subjects neighborhood was reported to have experienced flooding in the subjects location as a result of the recent hurricane. An exterior inspection was insufficient to determine if the subject was directly affected. An interior inspection is recommended to confirm the affect on the subject property. For Interior Inspections: If the home has no apparent damage: Based upon an interior inspection the subject property has no observable disaster related damage as of. The disaster has had no observable impact on the subjects value or marketability. Apparent or Suspected Damage: If there are apparent or suspected damages the appraiser is to provide a description and photos of the actual damages. An explanation for the determination of unobserved yet suspected damage is to be included. Please include the above comment(s) in the appraisal at the bottom of page 1 in the section addressing physical deficiencies or adverse conditions.
*********************************** All REO orders require the SUPPLEMENTAL REO APPRAISAL ADDENDUM and all value fields MUST be completed. Furthermore, complete the appraisal AS IS and include an AS REPAIRED value with a list of repairs and estimated cost to cure. Note the AS REPAIRED value in the Reconciliation section under the Sales Comparison Approach. * If the subject property is any of the following Servicing Types: 60+, REO, Foreclosure, or Short Sale: * Determine whether the property is occupied or vacant. If vacant and accessible, convert the assignment to an interior report and notify us of the change. * Provide market area value range for both; arms-length transactions and institutionally involved non armslength/distressed transactions. * The value opinion is to be Market Value as defined in the certification. *********************************** DO NOT DISCUSS APPRAISAL FEES OR VALUE CONCLUSION with borrowers, realtors, or any parties other than the Capital One Bank Appraisal Department known as RETECHS. Any appraisal provided to Capital One Bank (USA), N.A. or its affiliates must conform to USPAP and the Interagency Appraisal Requirements. *********************************** Privacy & Data Security: You represent and warrant that you have, and covenant that for so long as you retain Personally Identifiable Information (Personally Identifiable Information has the meaning of nonpublic personal information under the Gramm-Leach-Bliley Act (Pub. L. 106-102 (1999) (GLBA)) you will continue to have, adequate administrative, technical, and physical safeguards to (A) ensure the security and confidentiality of such Personally Identifiable Information (as defined under the GLBA as implemented); (B) protect against any anticipated or reasonably likely threats or hazards to the security or integrity of such Personally Identifiable Information; (C) protect against unauthorized access to or use of such Personally Identifiable Information; (D) ensure the proper disposal of Personally Identifiable Information and (E) without limiting the generality of items (A) through (D) preceding, comply with the requirements contained in Section 501(b) of the GLB Act and the Interagency Guidelines Establishing Information Security Standards adopted by federal bank regulatory agencies, including the OCC and Board of Governors of the Federal Reserve System. In addition, you represent and warrant that the manner in which Personally Identifiable Information is maintained, transported and transmitted will comply with applicable state laws imposing data security requirements, including 201 CMR 17.00 et seq., Massachusetts Standard for the Protection of Personal Information of Residents of the Commonwealth. 1. In addition to the prior representations and warranties, you agree to: a. develop, implement and maintain, at your own expense, a proven system or methodology to audit for compliance with your administrative, technical, and physical safeguards. b. not share Capital One Information with any subcontractor or third party. c. If required by the terms of this Service Engagement Letter or Applicable Law to store Capital One Confidential
Information or any modification thereto and Supplier is the primary source for such data, you must ensure a back-up or alternate copy of such data exists. Back up copies shall be maintained in a physically secured environment. d. ensure documents created which contain Capital One Confidential Information are labeled in accordance with your data classification labeling. e. ship Capital One information in accordance with the following: - Use certified and tracked mailer for postal/courier transport and have an escalation process in place in the event materials are not received within anticipated timeframes - Confirm recipient fax number before faxing documentation and ensure the cover sheet contains explicit expectation for unintended recipients (to include but not be limited to prohibiting review, copy or redistribution of the materials and the expectation to notify sender of the error and delete the record.) - If shipments/faxes are not received within anticipated timeframes, Supplier shall execute against a predefined escalation process. f. maintain documents within a physically secure facility. You must employ commercially reasonable controls to prevent unauthorized access and establish tracking mechanism to establish physical access to the Information. When documentation is not in use it shall be locked away in a cabinet, ideally with fire resistant capability g. destroy paper documentation using a commercial shred product, into confetti-sized pieces. h. no electronic copies may be made or maintained of Capital One Information. You must immediately notify Capital One if you discover there has been a material breach of, or a serious attempt to breach, your security safeguards required by this Section [Internal cite to above requirements], or if the security of Personally Identifiable Information has been or may be compromised for any reason (including unauthorized access to and unauthorized attempts to access Personally Identifiable Information by colleagues, coworkers or any other internal or external individuals or entities (Personnel). Such notification, including follow up communications, must include the information reasonably requested by Capital One. Capital One may take all reasonable steps to protect Capital One Confidential Information, including, but not limited to, an assessment of your security safeguards, review of relevant physical access logs, and an assessment of your security and system log files from workstations and supporting servers containing or facilitating the flow of Capital One Confidential Information. You must provide reasonable cooperation with Capital One in order to permit it to expeditiously and remotely implement its data security breach response program. For the avoidance of doubt, the term breach as used herein shall have the same meaning as in the Interagency Guidance on Response Programs for Unauthorized Access to Customer Information and Customer Notice (see 70 Fed. Reg. 15736 (March 29, 2005) or the same meaning as any data security event triggering breach notice obligations under state data security law. When Capital One notification is necessary under this Exhibit, you must contact the Capital One Incident Command Center at (804) 968-3677. You must protect and keep confidential all Personally Identifiable Information provided by Capital One or Capital One consumers or otherwise obtained by you in the performance of duties under this Service Engagement Letter. You must only collect, use or share Personally Identifiable Information to the extent
necessary to perform the obligations under this Service Engagement Letter for which such Personally Identifiable Information was disclosed. You must ensure that Personnel cannot attempt to access, or allow access to, any Personally Identifiable Information that they are not permitted to access in connection with the provision of Services under this Service Engagement Letter. You must not retain Personally Identifiable Information unless you have a specific business purpose to retain it, which purpose is set forth in this Service Engagement Letter and the retention of such data is consistent with Applicable Laws. At Capital Ones discretion, you must destroy such Personally Identifiable Information or return it to Capital One, either of which must be performed pursuant to Capital Ones reasonable instructions: (i) during the Term promptly following the time at which such Personally Identifiable Information is no longer needed to provide the Services, or (ii) within sixty (60) days after termination or expiration of the Service Engagement Letter. For purposes of this Privacy & Data Security section, the term you refers to the appraiser as well as any legal entity for which the appraiser works or is affiliated with in connection with the contemplated appraisal. The obligations set forth in this section remain in place for the period of time during which you maintain Personally Identifiable Information through the provision of past or present service to Capital One or its actual or prospective customers. SPECIAL LENDER REQUIREMENTS: APPOINTMENT DATE AND TIME: We require written or verbal notification of the appointment date and time or any anticipated delays. CONDITION OF PROPERTY: Please contact this office regarding properties in below average (fair/poor) condition. REPORTS CONTAINING DIGITAL SIGNATURE: Reports containing digitized signatures require comments within report or addendum regarding security measures and authorization controls. FIELD REVIEWS: In addition to normal Field Review requirements and data verifications, the following is required on all Enhanced Field Review orders. Provide at least two comparables sales in addition to the ones in the original report. (If the comparable sales in the original report are the best available, please provide two supplemental sales that are considered next best available on the grid page of the Field Review form.) The location map must also include the additional comparable sales. Lender concerns provided with this request (noted above under comments or as an attachment) must be individually addressed line by line. FLOOR SKETCH: Walk-through appraisals require a building sketch of all improvement levels (including the basement) with exterior dimensions. A floor sketch that indicates interior rooms is required if the floor plan is atypical or functionally obsolete. For a condominium or cooperative unit, the sketch must indicate interior perimeter dimensions rather than exterior building dimensions. You may rely on the dimensions and estimated gross living area shown in the condominium documentation but only when a copy is provided with the appraisal report. All sketches must include calculations to show how you arrived at your square footage estimate for each level.
MANUFACTURED HOUSING: Contact this office for additional instructions prior to completing report. PHOTOS: All walkthrough appraisals require interior photographs of the main living areas that include but are not limited to the living room, kitchen, bedroom(s), bathroom(s), and basement. Include photos for any condition, feature, or amenity for which adjustments have been made (i.e. view, pool, outbuildings, deferred maintenance, etc.) STUCCO: Dwellings with exteriors comprised partially or totally of stucco finishes require comments describing whether the finish is traditional or synthetic (EIFS) and citing the source(s) of information.