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New FHA Appraisal Requirements
Many people are talking about repealing HVCC...the law stating that mortgage brokers cannot be involved in choosing the appraiser or ordering an appraisal on a conventional loan.
I truly hope they do repeal this, however the real news of the day is that FHA is now following in Fannie & Freddie's footsteps - As of Jan 1 2010 all FHA appraisals are required to be ordered through an independent third party with no loan officer involvement.
A couple notable points: FHA is saying that AMC's must pay appraisers normal market rates for their appraisals, which is good for appraisers, however the buyer will end up paying a higher price when the AMC adds in their fee. Appraisal reports will only be good for 4 months rather than 6 months. The only way another appraisal can be done if there is a value issue is the original report will have to be proven to be flawed in some way.
Many brokers were sending their loans FHA vs conventional because they could still choose the appraiser, so it was inevitable that FHA would also change over - They don't want any additional layers of risk than they already have.
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