Effective February 7, 2008, FHA will no longer require the HUD examination on FHA reporting and examination to become eligible to do FHA appraisals. One must be licensed or certified to be placed on the roster. FHA feels that the testing required to become an appraiser is sufficient and that requiring an FHA exam is overkill. What this means is that Skippy doesn't have to bother looking up the answers online for the 10 question long "examination" required to become FHA approved anymore. Not only can Skippy do a sloppy report for the conventional market; he can mess up things in the FHA market too.
FHA already made it too easy to become FHA approved when they decided to drop the dreaded examination and replace it with the questionnaire you fill out online. I've heard horror stories about the old exam and how hard it was to pass if you didn't study and know your stuff. I studied for the exam. I lost sleep thinking about taking it. I finally mustered the courage to take it and FHA replaced it with the 10 question survey. I guess FHA dropped it all together because it was still too hard for Skippy to pass.
For those of you who don't know, Skippy is the poorly trained or unethical appraiser who does sloppy appraisal reports filled with errors, omissions, and/or lies. Skippy is the best friend of crooked loan officers, crooked real estate agents, and crooked property investors. He ALWAYS gets the value needed to make the deal work. He charges a lot LESS than than other appraisers. He is so FAST that the report is completed before he takes his lunch break. He NEVER mentions things that could kill the loan.
Now this doesn't mean that anyone who gets approved for FHA in the future is a Skippy. There are more ethical and honest appraisers out there than there are Skippies. They work hard day in and day out to keep the dirt off their names. I truly believe that in my heart. It's just that the bad appraisers fling mud in our eyes and give all appraisers a bad rap.
The real estate market is in such turmoil right now and everyone involved in it is pointing fingers at each other. It just doesn't seem prudent to relax your standards even more and allow anyone and everyone a spot on the roster without proving first that they belong there. The market is where it is now because of the relaxed standards that are in place. That's why the standards are increasing for many of us in the industry. It's too easy for greedy and fraudulent people to make a ton of money while destroying the lives of the people they are supposed to be helping.
For those of you out there who still care about the Real Estate Industry and are honest, hardworking individuals, I ask that you be careful when choosing a new appraiser. Please don't base your decision solely on how much he charges or how fast he gets you the report. When you decide on trying a new restaurant do you base your decision on how cheap the food costs or do you base it on how good the meal is? I firmly believe that you get what you pay for. Not all appraisers who are faster or cheaper than other appraisers are a Skippy. There are many great appraisers out there who have to be that way to stay competitive with Skippy.
Well that's my two cents worth.
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