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  #1  
Old 11-25-2009, 02:36 PM
Mike Kennedy's Avatar
Mike Kennedy Mike Kennedy is offline
 
Join Date: Sep 2003
Location: Southern Hudson Valley
State: New York
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Exclamation FHA issues Reminder/Warning on Appraisal Standards

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 .
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Last edited by Mike Kennedy : 11-25-2009 at 02:42 PM.
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Old 11-25-2009, 02:42 PM
Gajope Gajope is offline
 
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State: North Carolina
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Mike, do you have any documentation on whether or not FHA REQUIRES the appraisal done on a HUD REO be used for the subsequent financing of the new loan for the sale of the property?
  #3  
Old 11-25-2009, 02:44 PM
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Mike Kennedy Mike Kennedy is offline
 
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Sorry, No.
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  #4  
Old 11-25-2009, 05:24 PM
ghrousseau ghrousseau is offline
 
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Originally Posted by Gajope View Post
Mike, do you have any documentation on whether or not FHA REQUIRES the appraisal done on a HUD REO be used for the subsequent financing of the new loan for the sale of the property?
I have the mortgagee letter for that at work. And yes, the HUD REO appraisal is used for the new loan. I work for a lender and handle some of VA and FHA insurance/auditing.

Do a search in HUD Clips for HUD REO Appraisal and you should find the mortgagee letter.

The M&M Company appraisal is used to set the sales price, which is why HUD requires it to be used for the purchase transaction. There is also a home inspection done, and any repairs have to be escrowed to make sure they are completed.
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Old 11-25-2009, 06:54 PM
Gajope Gajope is offline
 
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I looked on HUDclips and see a very old letter from 2000. I cannot find any current documentation. I have one client who says that the appraisal CAN be used, but it is only an option, and I have another client that says it is REQUIRED to be used but has no documentation. The old letter from 2000 says it is REQUIRED but if over 6 months old a new one needs to be done. But I am sure with all the upheaval over the past 2 years there has to be more current documentation on this. I don't care either way, i just want to see it in writing so i can pass along and my clients and I are all are on the same, CORRECT, page.
  #6  
Old 11-25-2009, 10:37 PM
ghrousseau ghrousseau is offline
 
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Quote:
Originally Posted by Gajope View Post
I looked on HUDclips and see a very old letter from 2000. I cannot find any current documentation. I have one client who says that the appraisal CAN be used, but it is only an option, and I have another client that says it is REQUIRED to be used but has no documentation. The old letter from 2000 says it is REQUIRED but if over 6 months old a new one needs to be done. But I am sure with all the upheaval over the past 2 years there has to be more current documentation on this. I don't care either way, i just want to see it in writing so i can pass along and my clients and I are all are on the same, CORRECT, page.
That is the Mortgagee Letter I was referring to. The appraisal can be re-ordered if the original is over 6 months.


Here is a matrix from 2006 that references that same Mortgagee Letter for HUD REO

http://www.hud.gov/offices/hsg/sfh/c...n/denhcrnr.doc

Actually a pretty good matrix for a lot of items.
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