Basic HUD Questions

[timd354]

Seems to me, the certification you signed when you applied informed you of those supplemental standards.

And again, why is a "do not use" list more acceptable in your view?

Signing a certification does not prove competence....it only proves that one can sign his or her name on a line. It seems like half the appraisers out there don't even read or know what the certifications that they sign even say.

Neither a "do not use' list or a roster which has no meaningful criteria are acceptable to me. (just signing a certification is not a meaningful criterion in my opinion - since every appraisal report should contain a signed certification stating that the appraisal was prepared in compliance with USPAP - which under the supplmental standards rule, means that FHA rules were followed in the development and reporting of an FHA appraisal). It just seems if the only reason to maintain an approved appraisal roster is to be able to remove people from the list, it would just be more efficient to maintain a "do not use list".....but I could be wrong about that.

 

[CURT VAN HOOSER]

Though I like the idea, I doubt that a rigorous review and testing process is cost effective. Was there such a process in the past? It seems to me that allowing everyone to apply for a postion on the roster then weeding them out as they prove to be incompetent, serves the same purpose. Clearly, as Brad implied earlier, as an appraiser we live by USPAP. As such, we either have to have the necessary knowledge, understanding, and competence to complete an appraisal assignment or obtain that knowledge, understanding, and competence during the process.

 

[CURT VAN HOOSER]

Actually, the only thing that I would find acceptable is for the FHA to make the appraisers demonstrate competence to do FHA appraisals by taking a rigorous FHA class and passing a rigorous test. I think that a policy of field reviewing the first 5-10 assigments for a newly approved FHA appraiser would be good policy also, though possibly prohibitively expensive. Without requiring that, it is my contention that the FHA approved appraisers roster is essentially meaningless. The only reason for the approver appraisers roster that anyone can seem to point to, under the present circumstances, is that the FHA can remove people from the list for violations of FHA policies per the FHA appraiser sanctions matrix. The problem with this approach, in my view, is that, by the time an appraiser is given the required hearing and removed from the list, the damage already has been done since the offending appraiser has already completed at least one, if not many faulty appraisals. Would it not be better to try to weed out at least some of the incompetent appraisers before they do any damage? I think this is especially important now that so many subprime mortgage brokers and their "pet" appraisers are now focused on FHA insures loans.

I really don't see a reasonable argument against the proposition that appraisers should be required to prove that they are competent to perform FHA appraisals before they are approved and added to the FHA approved appraisers roster, especially in light of the recent meltdowns in our industry. If there is a reasonable argument, please let me know what it is.

I guess I was under the impression that FHA had strict review and underwriting procedures in place and that a bogus appraisal would be picked off immediately...

 

[timd354]

Though I like the idea, I doubt that a rigorous review and testing process is cost effective. Was there such a process in the past? It seems to me that allowing everyone to apply for a postion on the roster then weeding them out as they prove to be incompetent, serves the same purpose. Clearly, as Brad implied earlier, as an appraiser we live by USPAP. As such, we either have to have the necessary knowledge, understanding, and competence to complete an appraisal assignment or obtain that knowledge, understanding, and competence during the process.

Until about 8-9 months ago or so, an appraiser had to pass a 50 question test in order to added to the FHA approved appraiser's panel. Truthfully the test was very simple and all but the truly brain dead passed the test...but at least it weeded those people out.

There is no reason that a rigorous test could not be put together and there is no reason that the cost of such a test could not be borne out by the applicants. As far as reviewing the first 5-10 appraisals done by a new appraiser, that likely would be cost prohibitive, but perhaps a method could be figured out to pass the cost of such a review through the lenders whose loans that the FHA is guaranteeing.

Appraisers are supposed to live by USPAP....I guess I do not have as much faith as you and Brad do that most of our fellow appraisers actually do so.

 

[timd354]

I guess I was under the impression that FHA had strict review and underwriting procedures in place and that a bogus appraisal would be picked off immediately...

Many (if not most) underwriters who underwite FHA loans are DE underwriters and are employees of the lenders, not the FHA...need I say more?

If you have any time, search the FHA related threads on this website and you will have no problem finding numerous posts where appraisers are complaining that FHA DE underwriters are pressuring appraisers to alter appraisal reports by removing any mention of issues concerning property condition.

 

[CURT VAN HOOSER]

Appraisers are supposed to live by USPAP....I guess I do not have as much faith as you and Brad do that most of our fellow appraisers actually do so.

Not faith as much as hope. It's just that, until proven otherwise, I will always give the appraiser the benefit of the doubt.

 

[Couch Potato]

Until about 8-9 months ago or so, an appraiser had to pass a 50 question test in order to added to the FHA approved appraiser's panel. Truthfully the test was very simple and all but the truly brain dead passed the test...but at least it weeded those people out.

There is no reason that a rigorous test could not be put together and there is no reason that the cost of such a test could not be borne out by the applicants. As far as reviewing the first 5-10 appraisals done by a new appraiser, that likely would be cost prohibitive, but perhaps a method could be figured out to pass the cost of such a review through the lenders whose loans that the FHA is guaranteeing.

Appraisers are supposed to live by USPAP....I guess I do not have as much faith as you and Brad do that most of our fellow appraisers actually do so.

Even the brain dead passed it after enough attempts.

 

[john eickhoff]

Brad,
I agree the testing FHA did have was worthless. However, I believe a test could be devised that would measure an applicants knowledge of FHA but, it would have to be revised on a constant basis so the answers couldn't be posted and passed around. No, a test does not measure an appraiser's worth. It would at least assure they have read the material. I would also put limit on the number of times an appraiser could make application.

As for the review process, I'm not sure. I turned in an appraiser to FHA and cited numerous reports where the appraiser committed fraud and it took approximately year or better before they removed the appraiser. (I am aware others who alsoturned in the same appraiser ) Additionally, I have submitted 2 other appraisers where it was documented they used fictitious comparables and nothing has been done. Perhaps, your HOC has better contractors.

 

[timd354]

Brad,
I agree the testing FHA did have was worthless. However, I believe a test could be devised that would measure an applicants knowledge of FHA but, it would have to be revised on a constant basis so the answers couldn't be posted and passed around. No, a test does not measure an appraiser's worth. It would at least assure they have read the material. I would also put limit on the number of times an appraiser could make application.

Of course a good test could be put together....it would not be all that difficult or expensive to do so.

As for the review process, I'm not sure. I turned in an appraiser to FHA and cited numerous reports where the appraiser committed fraud and it took approximately year or better before they removed the appraiser. (I am aware others who alsoturned in the same appraiser ) Additionally, I have submitted 2 other appraisers where it was documented they used fictitious comparables and nothing has been done. Perhaps, your HOC has better contractors.
That is exactly why as many incompetent appraisers as possible should be weeded out before they are added to the FHA roster. By the time they are caught, if they are caught, by the FHA, the damage has been done and the damage can be quite substantial.

It is just baffling that the FHA would not, at the very least, require an appraiser to demonstrate real competence before being added to the panel. Doing so would likely save the the FHA untold millions of dollars that will be lost as a result of poor appraisals performed by incompetent appraisers who possibly could have been weeded out with a meaningful application and appraiser approval process.

 

[timd354]

Even the brain dead passed it after enough attempts.

Sad but true.......when I was at the testing center years ago taking the FHA test, another appraiser told me it was his 4th try at passing the test....I suppose even that moron probably passed the test sooner or later.