Monday Morning Mortgages ~ Appraisals
(National Procrastination Week, wait, maybe I should do this later...)
Monday Morning Mortgages is a brief week-opening report on mortgages in our area. This is a tool to assist my realty partners on loan trends, rates, program changes, and problem solutions.
Despite the sunset of the Home Value Code of Conduct (HVCC) there are still requirements and restrictions on appraisals. Appraisals must be ordered through a convoluted system beginning with the home buyer/owner supplying credit card payment information to the loan agent. Then the loan officer orders the appraisal through the lender specific Appraisal Management Company (AMC), who then assigns the appraisal out to a local appraiser and awaits confirmation that the appraiser has accepted the appraisal order. The loan agent is prohibited from contacting the appraiser directly and uses the AMC to communicate with the appraiser to request corrections, check status or submit additional comparables to support value. This is all done online. Some AMCs are better than others at managing this process. Streetlinks, the AMC used by our inhouse bank, First Priority Financial is the best AMC I have yet experienced.
Acceptable Time Periods
Conventional Lending 90 days old at time of loan closing
FHA 120 days old at time of loan closing
VA 6 months old at time of loan closing
All appraisal must be ordered through the lender by the AMC, independant of the home owner, loan agent or Realtor. Once the appraisal is ordered for a conventional loan and completed according to current regulatory requirements, it may be (but not always will be) transferred to another lender, if necessary, to be accepted. This depends on the new lender's requirements. I've been seeing previously done appraisals accepted by new lender about 50% of the time.
If it is not accepted, the home owner or buyer will have to pay for another appraisal.
FHA and VA appraisals are linked to the property and are transferable in all cases.
Each appraisal management company will have its own fee structure. So initial fee quotes from a loan agent will only be high estimates. Single family homes up to $500,000 sale price range from $375 to $450. Investment properties, high value properties, unique properties and reinspections will all require additional fees.
Getting the order in to the AMC and having it assigned to an appraiser, then having the appraiser schedule the inspection are the most time consuming aspects of the process. This could take 2-4 business days with some AMCs. Once the appraiser receives the order and schedules the inspection, turn around time for the report has been pretty quick; 2-3 days. Also any corrections required by lender to the report are generally done within 24 hours.
Once the lender receives the appraisal report from the appraisal, they reserve the right to accept the appraisal, adjust value, or ask for corrections or additional comparables. Until the appraisal is reviewed and accepted by the underwriting department, value is not confirmed. Appraisal review can take from a few hours to 3 business days.
Appraiser must provide 2 closed sale comparables that have closed within 90 days or the appraiser must address why this is not able to be provided. Geographic radius depends on density of the subject property neighborhood.
On the Market Properties
Properties listed for sale are not eligible for refinancing. For recently listed properties, the loan application must be dated after the listing cancellation date and a copy of the MLS cancellation will be required for a rate and term refinance. Appraiser must certify that the property is not listed for sale at the time of the appraisal. For a refinance with cash out, maximum loan-to-value (LTV) is limited to 70% if the property was listed for sale within the last 6 months.
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