FHA Appraisal and Lender Eligibility Update

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Mortgage and Lending

FHA Appraisal and Lender Eligibility Update

Explained by Jeff Mifsud, this update contains the pertinent changes to Appraiser and Lender Eligibility guides as outlined in Mortgage Letters 2009-28, 29, 30 and 31.

Here are the 8 things you need to know about these changes:

Appraisers

  1. Changes are effective as of January 1st, 2010.
  2. Mortgage brokers and commission based lender staff are now PROHIBITED from selecting the FHA appraiser.
  3. Lenders are not required to use Appraisal Management Companies, but may do so.
  4. When a borrower switches to another lender, FHA prohibits the 2nd lender from ordering additional appraisals to obtain a higher value, unless: a. The DE Underwriter determines the 1st appraisal is deficient, b. The Appraiser of 1st appraisal is on 2nd lender's exclusionary list, or c. First lender delayed the appraisal transfer to the 2nd lender so as to cause a harm to the borrower, e.g. missing a closing date, or expiration of a rate lock.
  5. Appraisals are now valid for only 120 days for all existing and proposed or under construction properties.

Lender Eligibility

  1. Changes are effective as May 20th, 2009 in accordance with the Helping Families Save Their Homes Act of 2009.
  2. A Lender or Mortgagee applying for FHA approval may not currently employ anyone who is currently suspended, debarred, under indictment, under investigation by HUD, or was convicted or pled guilty to a felony related to the real estate or mortgage industries during the 7 year period prior to the date of the application or any time if felony involved fraud, dishonesty, breach of trust, or money laundering.
  3. FHA lenders must use their HUD registered name in all advertisements and promotional materials and keep copies of all materials for 2 years from date of use.

Previous FHA changes

Karl Peidl
Lincoln Mortgage Company
251 Bellevue Avenue, Suite 102
Hammonton, NJ 08037

Accredited Loan Consultant

609-878-7013

kpeidl@linc-mort.com

www.karlpeidl.com

 

Pennsylvania: Licensed by the PA Department of Banking as a First Mortgage Banker and licensed pursuant to the PA Secondary Mortgage Loan Act. New Jersey: Licensed by the N. J. Department of Banking and Insurance Maryland: Authorized Mortgage Lender by the State of Maryland Commissioner of Financial Regulation. Florida: Licensed Mortgage Lender by the Florida Office of Financial Regulation. Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.

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Rainer
62,295
Alix Pinzon
Open Mortgage, LLC NMLS # 2975 - Downey, CA
(562)743-6086

So much for having an appraiser in your back pocket (not that you did personally).  So much for acceptable appraisal fees too.  Now I can say it with confidence, "there goes the neighborhood."  We can all thank A. Cuomo for this mess.  Guess what the "A" stands for.

Sep 22, 2009 07:44 AM #1
Rainer
108,048
Karl Peidl
Moorestown, NJ
Accredited Loan Consultant

I know some loan officers that absolutely kept appraisers in their back pockets.  I was content just having reliable appraisers that I knew would contact the customer right away and do a good job.

Like most policy changes we have seen lately, the spirit behind the change was good; however the time was not taken to think through the results they would bring.  HVCC has given us poor service, higher costs, appraisals by appraisers that don't know the area and delayed closings.  Now tell me again how this is progress and in the consumers' best interest.

Sep 22, 2009 08:22 AM #2
Ambassador
3,694,579
Patricia Kennedy
Redfin - Washington, DC
Home in the Capital

Karl, this is great information.  Thanks for spelling it out so clearly.

Sep 22, 2009 03:00 PM #3
Rainer
108,048
Karl Peidl
Moorestown, NJ
Accredited Loan Consultant

You're welcome Patricia.  Thanks for stopping by.

Sep 23, 2009 02:16 AM #4
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Rainer
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Karl Peidl

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