2nd lender wants appraisal in their name

[AirmontNY]

As stated in a previous thread, I just did an appraisal for one lender. A day after inspection, a second lender wants an appraisal on the same property. Homeowner verifies that she has decided to use the second lender, but first lender assured me that they intended to do a loan for the borrower too. I completed and delivered the appraisal to the first lender, as I knew of no reason not to follow through with completion of that assignment as requested.

According to my understanding of the FHA rules, the second lender is to get a copy of the appraisal from the first lender (failure to cooperate could jeopardize mortgagee's HUD approval status). I would call HUD on this, but last time I did it took about a week and a half to get an answer. I don't mind re-doing the assignment for the second lender, but it will save my time to avoid it and proper procedure is for lender 2 to do his own legwork and get a copy of the appraisal from lender 1.

Anyone else ever run into this before? Second lender even obtained the case# (same as that of lender 1) when he sought to get his own appraisal. Can I tell this guy he needs to get a copy of the appraisal from the other lender? Would I be breaking HUD rules if I did an appraisal for lender 2?

"I completed and delivered the appraisal to the first lender, as I knew of no reason not to follow through with completion of that assignment as requested". -from above

Keep a lender/client in one box and don't let a lender/client get mixed with another lender/client via "re-assignment". The lender client owns the appraisal. Since you sent the appraisal to the first lender/client-the appraisal is their property. Don't "reassign" it. From what I understand, this "reasignment" nonsense is one of the most frequent causes for appraiser's appearing before state boards-for appraisers getting in trouble.

If the 2nd lender needs an appraisal-you can do the whole appraisal over (go inspect, etc.) and charge the 2nd lender as you see fit. You can have ten lender/clients-as long as they are in 10 different boxes. However, a lender/client change means a new appraisal. Keep it simple. The lender/client owns the appraisal.

A new lender/client means a new appraisal. Don't back down.

 

[ZZGAMAZZ]

Air: According to your assessment above two different appraisals would exist with a single FHA Case#. Are you sure that this is feasable?

 

[RSW]

Air: According to your assessment above two different appraisals would exist with a single FHA Case#. Are you sure that this is feasable?

No 2nd appraisal within six months.

 

[Charley Horse]

... ok... I have to ask what some/many of you are going to consider a dumb question.

Given an FHA report can be transferred to another lender (I confirmed w/HOC Philly) and I can not update the report to reflect the new lender (I confirmed w/HOC Philly/Original Client), who updates the report to reflect the new lender... FHA? Certainly the new lender can't. Can a new lender use an existing FHA report w/another lender indicated? In order for a borrower to use another lender to do an FHA loan, does there need to be another FHA# issued... but that doesn't make sense given FHA told me that a given report/FHA case# stays w/the property for 6 months.

Obviously I need clarification...

 

[Webbed Feet]

<..... snip........> The lender/client owns the appraisal.

Really? .... So you have a court case backing that up? Because I can find court cases showing that intellectual property is the personal property of the creator of it. .. Last I checked, my opinions were my intellectual property .... and I own them.

Webbed.

 

[Michael Tipton]

... ok... I have to ask what some/many of you are going to consider a dumb question.

Given an FHA report can be transferred to another lender (I confirmed w/HOC Philly) and I can not update the report to reflect the new lender (I confirmed w/HOC Philly/Original Client), who updates the report to reflect the new lender... FHA? Certainly the new lender can't. Can a new lender use an existing FHA report w/another lender indicated? In order for a borrower to use another lender to do an FHA loan, does there need to be another FHA# issued... but that doesn't make sense given FHA told me that a given report/FHA case# stays w/the property for 6 months.

Obviously I need clarification...

The following are copied from Appendix D: Valuation Protocol. Additionally, banking regulations allow a financial institution to utilize an appraisal report prepared for another financial institution as long as an acceptable review procedure is in place.

• 20. Identified Lender/Client

I identified the lender/client in this appraisal report who is the individual, organization, or agent for the organization that ordered and will receive this appraisal report.

• 21. Lender/Client Disclosure and Distribution of Appraisal Report

The lender/client may disclose or distribute this appraisal report to: the borrower; another lender at the request of the borrower; the mortgagee or its successors and assigns; mortgage insurers; government sponsored enterprises; other secondary market participants; data collection or reporting services; professional appraisal organizations; any department, agency, or instrumentality of the United States; and any state, the District of Columbia, or other jurisdictions; without having to obtain the appraiser’s or supervisory appraiser’s (if applicable) consent. Such consent must be obtained before this appraisal report may be disclosed or distributed to any other party (including, but not limited to, the public through advertising, public relations, news, sales, or other media).

• 23. Who May Rely on Appraisal Report

The borrower, another lender at the request of the borrower, the mortgagee or its successors and assigns, mortgage insurers, government sponsored enterprises, and other secondary market participants may rely on this appraisal report as part of any mortgage finance transaction that involves any one or more of these parties.


http://search.HUD.gov/search?q=cache:M4zJGARxjtUJ:www.HUD.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/41502appdHSGH.doc+appendix+d+(site%3Awww.HUD.gov%2Foffices%2Fadm%2Fhudclips%2Fhandbooks%2Fhsgh+)&access=p&output=xml_no_dtd&ie=UTF-8&client=hudclips_handbooks_hsgh&site=default_collection&proxystylesheet=default_frontend&oe=UTF-8

 

[Webbed Feet]

... ok... I have to ask what some/many of you are going to consider a dumb question.

No question is dumb, when asked by lay persons. There are just a lot of harsh answers to stupid questions from licensed people that should know the answers already.

Given an FHA report can be transferred to another lender (I confirmed w/HOC Philly) and I can not update the report to reflect the new lender (I confirmed w/HOC Philly/Original Client), who updates the report to reflect the new lender... FHA?

Define exactly what you mean by "update" in the above sentence? Nobody changes the client name on a report already out the door.

Can a new lender use an existing FHA report w/another lender indicated?

Yes, a different lender does NOT need their name on an appraisal report as the appraiser's "client" in order to use it for an FHA loan.

In order for a borrower to use another lender to do an FHA loan, does there need to be another FHA# issued... but that doesn't make sense given FHA told me that a given report/FHA case# stays w/the property for 6 months.

No, there is no need for any new case number to be issued. You understand correctly. The same case number stays with that property for 6 months. Any new lender has to use that original appraisal. With the original client name on it, not the any "Client B's" name on it.

Obviously I need clarification...

Now you have it! .... .. Good questions by the way.

Webbed.

 

[ZZGAMAZZ]

Another way of putting it based upon my limited experience: There is nothing you CAN do or nothing you SHOULD or MUST do in this situation regardless of how much the client tries to brow beat you.

The FHA document entitled "Case Transfer Results" does what you are being asked to do.

Accoding to the FHA Resource Center (in writing, paraphrased): You should NOT change client name, borrower name, or dates in an appraisal completed for another lender...The new lender should . . . just explain the change in a cover letter.

The word "NOT" was in capital letters per HUD.

 

[Charley Horse]

The following are copied from Appendix D: Valuation Protocol. Additionally, banking regulations allow a financial institution to utilize an appraisal report prepared for another financial institution as long as an acceptable review procedure is in place.

• 20. Identified Lender/Client

I identified the lender/client in this appraisal report who is the individual, organization, or agent for the organization that ordered and will receive this appraisal report.

• 21. Lender/Client Disclosure and Distribution of Appraisal Report

The lender/client may disclose or distribute this appraisal report to: the borrower; another lender at the request of the borrower; the mortgagee or its successors and assigns; mortgage insurers; government sponsored enterprises; other secondary market participants; data collection or reporting services; professional appraisal organizations; any department, agency, or instrumentality of the United States; and any state, the District of Columbia, or other jurisdictions; without having to obtain the appraiser’s or supervisory appraiser’s (if applicable) consent. Such consent must be obtained before this appraisal report may be disclosed or distributed to any other party (including, but not limited to, the public through advertising, public relations, news, sales, or other media).

• 23. Who May Rely on Appraisal Report

The borrower, another lender at the request of the borrower, the mortgagee or its successors and assigns, mortgage insurers, government sponsored enterprises, and other secondary market participants may rely on this appraisal report as part of any mortgage finance transaction that involves any one or more of these parties.

Thank you Mr Tipton... your insights are greatly appreciated and now everything makes sense to me. Upon reviewing eariler posts on this thread, I was confused... I now know what to tell the 2nd lender in my specific scenario.

 

[Charley Horse]

Now you have it! .... .. Good questions by the way.

Webbed.

Thank you... you & Mr Tipton were the first to explain what two supposedly savvy FHA clients, FHA HOC, and several other FHA appraisers could not.

What I meant by "update" was what my previous mentor referred to as a "NCU" (new client update) whereby we would do a new assignment on a property that we had previously appraised for another lender by updating the photos, checking for new/more relevant comps and in essense validating the same/higher, or lower value. Usually,we would do this for a discounted fee depending on the length of time between reports. Generally any period over 90 days entailed a full fee. For obvious reasons, one cannot do this for an FHA report as it appeared some of the other posters thought and/or did.

Thanks again for your insights/explanations!