The new Appraiser Independence (ML 2009-28) requirements for Federal Housing Administration (FHA) loans officially took effect February 15, 2010. Originally planned for a January 1, 2010 implementation, the enactment was delayed to provide the FHA and lenders with additional time to adjust systems to accommodate the changes.Many of the new guidelines are similar to the Home Valuation Code of Conduct (HVCC), which has been in place since May 1, 2009 for Freddie Mac and Fannie Mae loans. Under FHA’s rules, appraisers are required to receive reasonable and customary compensation and cannot be affiliated with lending agencies. In addition, appraisers are required to have familiarity, experience, and knowledge in the geographic location of the properties being appraised, and higher standards have been adopted for the process of ordering appraisals.
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1 comment:
This sounds simple enough but when you get down to how it is affecting all of us in the real world the changes this has brought about is in the end going to cost the borrower more money. As a loan officer that is a broker this new change does two things that will hurt the consumer. All appraisals are now ordered through third party companies which means that the loan officer can no longer order the appraisal or select the appraiser. Does not sound like a big deal unless you understand how different appraisers interpret FHA guidelines differently. Where we used to be able to call around and explain the situation to different appraisers until we found one that worked now the borrower gets to pay for the appraisal upfront and then hope they get the right answer. If not then they either get to walk away from the purchase or change lenders and take another shot in the dark and pay for a whole new appraisal and hope they get one that will work.
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