Where Is The Balance

Yes, ordering appraisals and receiving appraisals has made a huge impact on the lending industry.

When it comes to ordering an appraisal for a conventional loan, aka Fannie or Freddie loan, Lenders are not allowed to communicate with the appraiser. The Lenders have to use a third neutral settelment company to be in the in between person. Lenders have no idea when the appraisal will come in. It has put delays in loan closings. How is a real estate agent suppose to write up a contract without any communication on dates? One Lender had an appraisal come in with a picture of the Appraiser's granddaughter as a cheerleader as the home picture! It took 2 weeks with the third neutral party to communicate that this needed to be fixed. Also, non local Appraisers are being selected for appraisals and they do not know the local market. As a result, appraisals are coming in with inaccurate data on value. The good news on a appraisal that is ordered on a conventional loan is it can not be reviewed unless there is suspicous data on there and you must have solid good evidence.

Now when it comes to ordering an appraisal for a government loan such as VA, FHA or Rural, Lenders can communicate with the appraiser. The downfall that many of us Lenders are seeing is the banks are allowed to question and review the appraisal. Therefore, a second appraiser is reviewing the information and being paid on it by the consumer or Lender. My opinion is that if the first appraiser was not good, then why do they hold a license? You should trust a licensed appraisers work the first time around.

You can see there is no balance. For conventional, you can not talk to an appraiser but it can not be reviewed. For government, you can talk to an appraiser but it can be reviewed. All of this is causing delays and ultimately hurting the consumer.

I do see where the government is coming from in trying to stop Lenders from pursuading an Appraiser to increase value. Why not have it where a Lender can communicate but can't influence? There should be tracking on this.