After talking to several mortgage professionals within the past few weeks, I am convinced that the result of the new appraisal requirements for cash out refinance transactions means less overall appraisal orders.
How can a new underwriting guideline that requires more appraisals cause less appraisal orders? Well now mortgage originators must either consider the cost of paying for two appraisals when accepting a high loan to value ratio cash out mortgage application or bill the borrower for two appraisal reports. That is expensive and a gamble with alot of money in fees. FHA appraisal fees are typically higher than the conventional appraisals.
Some originators have stated two appraisal reports prices many borrowers right out of the market and this money might not pay off is the appraisal report has a lower than expected opinion of value or the home does not meet FHA property standards. The FHA appraisal is a gamble that might not pay off with the sought mortgage loan.