The dissatisfaction with the HVCC ramifications have been loudly discussed on ActiveRain, now the other shoe drops with HUD's announcement yesterday that mortgage brokers will no longer be able to directly retain the appraiser for FHA transactions as of January 1, 2010.
"New Requirements
Prohibition of mortgage brokers and commission based lender staff from the appraisal process
Historically FHA prohibited mortgagees from accepting appraisal reports completed by an appraiser selected, retained or compensated, in any manner by real estate agents. To ensure appraiser independence, FHA-approved lenders are now prohibited from accepting appraisals prepared by FHA Roster appraisers who are selected, retained or compensated in any manner by a mortgage broker or any member of a lender's staff who is compensated on a commission basis tied to the successful completion of a loan. " Read the entire "Appraiser Independence" mortgagee letter here.
As a GA Certified Residential Appraiser (#6547) and Real Estate Broker, I am all for appraiser independence, however my relationship with my lender/mortgage broker clients has always been based on honesty and unbiased appraisals. It infuriates me that a few bad appraisers, loan officers, and lenders have created such a mess that all honest, ethical appraisers and mortgage brokers must be treated as dishonest and unprofessional.
Michelle, There are so many new regulations, in our industry, across the board. It appears like a shotgun approach to "fixing" the Mortgage/Real Estate Industry. I certainly feel for appraisers and the "fix" that is taking place in your side of the industry.
Brian - ironically my appraisal company's business has increased since the implementation of the HVCC also. Lender's who chose an inhouse rotation system are now sending us more business than ever. Those mortgage brokers who didn't do business with us before because we were "too conservative" are now stuck with us.
What bothers me is the implication that the mortgage mess is because of mortgage brokers and appraisers only and that the secondary lenders & GSEs' noses are clean.
Comming from a market that was ranked as #2 in mortgage fraud in the country, I see merit to the HVCC, but they didn't finish the job. The new FHA additions appear as if they may be a further benifit, but time will tell. We had a lot of loan agents who were constantly calling to fish for values. They would call and say hey I've got this house & we need $350k to get it refied, can you do it? Well shoot I don't know, I have not appraised it yet. If you told them anything but yes that was the last you heard of them. There were plenty of appraisers who apparently complied & were swamped with work. Pressure for a number was a huge issue here.
But on the flip side, I am with the poster here, I had some good clients who were honest & who did not push their numbers & their companies have now gone to AMCs & I have lost that significant part of my business, with no way to re-gain it, it appears. If it was easy to get on with good AMCs that actually had a volume of work it would be at least a partial consolation. So far I've signed up to maybe 2 dozen that appear good, but no orders yet. Anyone know of any good ones who are active in AZ?
I was just thinking back a few years today & remembered that the FHA used to use a roster like the VA does now. Appraisers who were on the roster were assigned appraisals on a rotation basis off the roster for their area. I think this could have some merit now, as it appears to me that some AMCs are not using a rotation system. It's not too hard to figure out where the assignments go, when they call you up and ask you to bid low on a job & then you don't get the assignment. The limbo kings must be hard at work.
This brings up another point about the FHA lifting the limit on the fees for an appraisal so the appraisers could "hopefully" get a more normal fee for the report & the AMC could still get their chunk. The loser?, the buyer or borrower who now will have to pay who knows how much for a FHA appraisal, $450 or $500? or more?
Somewhere the madness could stop. The FHA could even charge say $50 for each order, kind of like a AMC to fund their costs, if they went back to a Roster/rotation ordering sytem. I'm sure it would come out better for the appraisers & for the borrowers. Too bad AMC.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
As a GA Certified Residential Appraiser (#6547) and Real Estate Broker, I am all for appraiser independence, however my relationship with my lender/mortgage broker clients has always been based on honesty and unbiased appraisals. It infuriates me that a few bad appraisers, loan officers, and lenders have created such a mess that all honest, ethical appraisers and mortgage brokers must be treated as dishonest and unprofessional.
;)
;)
Michelle - Here, here! My sentiments exactly.