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2010 HUD-FHA Advisory

HUD issued four letters at the end of September, including a letter pertaining to Appraiser Independence, that went into effect January 1, 2010.

With HUD-FHA moving in a direction to emulate AIR regulations with regard to appraisals, a number of changes will affect lender relationships with appraisers in the near future. Below is a summary of some of the most relevant changes.

Only non-commissioned staff may choose an appraiser. Staff of a loan production company are not allowed to have any communication with the chosen appraiser that could be considered to be substantial communication.

Both appraisers and mortgagees will ensure the quality, integrity and the thoroughness of an appraisal.

Lending companies may not use leverage or withhold payment from an appraiser, or put undue pressure on the appraiser to influence results. No anticipated value is to be communicated with the appraiser so that appraisal value is not determined on the basis of meeting the loan requirement.

No appraiser is to be put on an exclusionary list, by a lender, unless there is clear evidence of a violation and, even then, not without prior written notice.

Under no circumstances is a lender to contract for a re-appraisal, without clear evidence of a flawed first appraisal. This rule may be circumvented in cases where there is a request for a second appraisal for the purpose of pre or post closing controls to ensure quality of the property. Appraisals are now valid for a period of no more than 4 months.

Suffice it to say, that these, which are just a few of the changes, are substantial regulatory challenges to the status quo in the lending industry. The potential result for a mortgage brokerage is headaches, consumption of time, added expense, and ultimately exposure to regulatory compliance issues.

That's where we can help. Appraisal Unlimited will help keep you up to date on all new changes to appraisal policies or procedures. Appraisal Unlimited ensures a qualified appraiser. We separate you from fee collection, payments to an appraiser, as well as providing tracking and record archiving. We ensure that all requirements are met in a timely manner.

Contact us today to set up your account, or just order your first appraisal online using our secure ordering system - your account will be created automatically. You can even place your credit card on file for easy payment.

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