FHA Issues Appraisal Standards Reminder The Department of Housing and Urban Development recently issued Mortgagee Letter 2009-41 reminding appraisers what can happen when they do not comply with Federal Housing Administration appraisal reporting requirements or with the Uniform Standards of Professional Appraisal Practice. According to FHA, it may impose the following actions and/or sanctions on an appraiser whose report is found to be deficient upon review: Take administrative appraiser roster actions, which include sending a Notice of Deficiency if the failure of the appraiser is regarded as lacking professionalism, but not severe enough to require education or sanction, or the FHA can require the appraiser to take remedial education on appraisal-related topics. Take administrative appraiser roster sanctions, which include requiring remedial education and removing the appraiser from the FHA Appraiser Roster for up to 12 months; enacting a Limited Denial of Participation that prohibits the appraiser from performing appraisals used as collateral for FHA insured mortgages for generally no longer than 12 months; and – if violations are severe enough – disbarring the appraiser from the FHA Appraiser Roster for an indefinite period. Pursue civil sanctions, which are applicable on the basis that the appraiser is deemed liable for civil penalties related to his/her improper actions. Pursue criminal sanctions, which is applicable if an appraiser’s non-compliant action is so egregious as to violate criminal law. All FHA sanctions may be appealed by the appraiser, though appraiser roster actions are not officially sanctions and, therefore, cannot be appealed. Also in Mortgagee Letter 2009-41, HUD stated that if an appraiser has an expired state-issued appraisal credential, he or she is automatically removed from the FHA Appraiser Roster in that state until such time as the appraisal credentials are renewed by the issuing state. No appeal is made available. Furthermore, if an appraiser loses standing in any state due to disciplinary actions, he or she will be automatically removed from the FHA Appraiser Roster and will be prohibited from conducting FHA related appraisals in all states. In this instance, there is no right of appeal and the appraiser may not be reinstated on the Roster until such time as the state imposed sanction is lifted. To access a copy of Mortgagee Letter 2009-41, visit www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-41ml.doc .