New FHA Appraisal Rules

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Services for Real Estate Pros with Paul Warkow-D.G. Weber Law Associates

Starting January 1, FHA will have new rules regarding appraisals.  Although they will not be as bad as HVCC, it will still change things.

1.  FHA wants all appraisers to maintain their independence.  I believe that is a good thing.

2.  There are now limits on who can select an appraiser.  Anyone who receives a commission based upon the transaction closing cannot order or speak to the appraiser.  This means that realtors, loan officers or loan processors who get paid based on a deal closing cannot order the appraisal.  This means that a salaried employee in the office who has no stake in the closing can order the appraisal.  To me, this is silly.  Does not employee have a stake in making sure the business is successful?

3.  It is the lender's responsibility to make sure the appraiser is qualified.  This means state certified.

4.  The appraiser can no longer give an estimate of value.

5.  The appraiser must have geographic competency.  I believe this is a good thing.  An appraiser should know the area in which house is located.  Part of the problem with HVCC is that the appraisal management company would assign appraisers who did not know the area.

6. Providing desired or targeted values, in other words value shopping is prohbited.  I never thought this was a problem for FHA appraisals.  All FHA loans are assigned a case number which runs with the property, not the borrower.  The appraisal has the same FHA case number, so essentially, the appraisal is attached to the property until the case number expires, which is 6 months.  You do not have opportunity to  get a better appraisal on FHA deals.

Except for the ordering of the appraisal, I do not think these changes will make things harder.  Fortunately, FHA is not adopting HVCC.

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Rainer
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Jeremy De La Garza
Corpus Christi Realty Group - Corpus Christi, TX
Corpus Christi, TX

Thanks for the info, we had appraisers driving 150 miles to done them here. How silly is it that the secretary must order the appraisal for the L.O. Thanks again

Oct 21, 2009 03:48 AM #1
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Rainer
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Paul Warkow

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