This month National Mortgage Professional Magazine published an interview with David H. Stevens, Assistant Secretary for Housing at HUD and FHA Commissioner. Among many topics, he addressed FHA's new appraisal ordering process which closely mirrors the HVCC for conventional loans. FHA's goal was to implement a "blind ordering" protocol to eradicate any possibility of interested parties influencing the appraised value. He commented on the concern of many in the industry who feel that the new rule carries with it a complexity in appraisal portability and the subsequent possibility of the consumer being forced to pay for a new appraisal if the funding source needs to be changed. In response to the interviewer's question as to whether or not HUD would consider a "blind ordering" interface that would be accessible to "any originator, no matter what channel or origination." Below is Mr. Stevens' reply:
"I do think the blind ordering of appraisals is the one thing that was the strongest piece of the Home Valuation Code of Conduct (HVCC) that everyone universally understands and agrees with ... taking away the influence factor in the appraisal ordering is critical. We also believe that portability is important, so controlling the appraisal channel and having it directed is a concern to me because should that loan be turned down and the borrower wants to go somewhere else, do they need that appraisal at the next firm or do they need to pay a new appraisal fee? It continues to be an expensive way to complete the transaction." He concluded that the main issues are "... how to make the appraisal stay and take away that influence factor, keep it arms-length, but also not make this another setback to the consumer who needs that appraisal and may need an appraisal for a different institution."
We are hopeful that Mr. Stevens and HUD will continue to consider this matter and to amend their policies with only the best interest of the consumer in mind.
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