New Housing Bill/FHA Loans

[Doug Wegener]

Great. I wonder what it will be.

 

[timd354]

Don -

HUD HQ has drafted an interim response to those inquiring about this issue. I will post it here tomorrow. After HUD has issued its official/final response (via Mortgagee letter) I will convey my personal observations/opinions (as a private citizen/taxpayer/LICENSED APPRAISER) to those who tout their "certification" and or designation, as well as, the agenda of the appraisal organization's involved.

I am most definitely interested in what HUD has to say on the matter and eagerly await your posting...as far as the appraisal organzations involved, it is real obvious that many of them are not interested at all in doing what is best for the profession, but are just interested in protecting and expanding their own turf.

 

[Mike Seward]

The second part of those requirements is interesting, too:

"have demonstrated verifiable education in the appraisal requirements established by FHA under this subsection."

Does that eliminate those appraisers added to the FHA roster during the open book test phase and the most recent no test phase? (Assuming that they did not take any classes.)

 

[Couch Potato]

HR3221 does not stand alone.

It seems many miss the fact this new law is adding a 5th paragraph to the existing law:

(e) Appraisal standards

(1) The Secretary shall prescribe standards for the appraisal of all property to be insured by the Federal Housing Administration. Such appraisals shall be performed in accordance with uniform standards, by individuals who have demonstrated competence and whose professional conduct is subject to effective supervision. These standards shall require at a minimum—

(A) that the appraisals of properties to be insured by the Federal Housing Administration shall be performed in accordance with generally accepted appraisal standards, such as the appraisal standards promulgated by the Appraisal Foundation a not-for-profit corporation established on November 30, 1987 under the laws of Illinois; and
(B) that each appraisal be a written statement used in connection with a real estate transaction that is independently an [4] impartially prepared by a licensed or certified appraiser setting forth an opinion of defined value of an adequately described property as of a specific date, supported by presentation and analysis of relevant market information.​

(2) The Appraisal Subcommittee of the Federal Financial Institutions Examination Council shall include the Secretary or his designee.

(3) Direct Endorsement Program.—

(A) Any mortgagee that is authorized by the Secretary to process mortgages as a direct endorsement mortgagee (pursuant to the single-family home mortgage direct endorsement program established by the Secretary) may contract with an appraiser chosen at the discretion of the mortgagee for the performance of appraisals in connection with such mortgages. Such appraisers may include appraisal companies organized as corporations, partnerships, or sole proprietorships.
(B) Any appraisal conducted pursuant to subparagraph (A) shall be conducted by an individual who complies with the qualifications or standards for appraisers established by the Secretary pursuant to this subsection.
(C) In conducting an appraisal, such individual may utilize the assistance of others, who shall be under the direct supervision of the individual responsible for the appraisal. The individual responsible for the appraisal shall personally approve and sign any appraisal report.​

(4) Fee Panel Appraisers.—

(A) Any individual who is an employee of an appraisal company (including any company organized as a corporation, partnership, or sole proprietorship) and who meets the qualifications or standards for appraisers and inclusion on appraiser fee panels established by the Secretary, shall be eligible for assignment to conduct appraisals for mortgages under this subchapter in the same manner and on the same basis as other approved appraisers.
(B) With respect to any employee of an appraisal company described in subparagraph (A) who is offered an appraisal assignment in connection with a mortgage under this subchapter, the person utilizing the appraiser may contract directly with the appraisal company employing the appraiser for the furnishing of the appraisal services.​

HR3221 provides for "additional appraiser standards" to what already exists. Since Licensed and Certified are clearly distinct categories in paragraph 1(B), it would be illogical to interpret them as combined in the new section 5 that is being added to this existing law.

Obviously HUD will have to adapt their regulations to the new standards that increase the minimum requirements, but if you are a Licensed appraiser dependent on FHA work you would be well advised to get busy on certification ASAP.

 

[Greg Bell]

Great. I wonder what it will be.

Doug..I've have been on the FHA roster for 8 years and have done a few thousand field reviews under contracts with FHA.They still may toss us under the Bus.....Licensed appraisers unite!!!

 

[Greg Bell]

It seems many miss the fact this new law is adding a 5th paragraph to the existing law:HR3221 provides for "additional appraiser standards" to what already exists. Since Licensed and Certified are clearly distinct categories in paragraph 1(B), it would be illogical to interpret them as combined in the new section 5 that is being added to this existing law.

Obviously HUD will have to adapt their regulations to the new standards that increase the minimum requirements, but if you are a Licensed appraiser dependent on FHA work you would be well advised to get busy on certification ASAP.

You wish...You mean to say no FHA test is needed to perform an FHA appraisal , however , you must be state Certified to perform an FHA appraisal.Now that's government logic.The slight difference in the initial qualifications are moot after a couple of years of Licensing.A few more original hours of experience and a few more hours of education in the beginning does not elevate the Certified appraiser to a god like status , so please come down from the mountain and bless us all..........

 

[Couch Potato]

...please come down from the mountain and bless us all..........

Bless you my man.

If you look at the current AQB criteria, there is a substantial educational difference between the two levels. There is some logic to the requirement. We all know the average trainee with six months experience can do a faster, better job on a typical residential appraisal than an average Certified General appraiser who has not done a residential appraisal in 10 years, if at all. License level is not synonymous with competency level; they need to be used in conjunction with each other. This law attempts to do that by setting the license level at Certified and then requiring specific education for competency. The goal is not to enable all qualified people to perform FHA appraisals, but to reduce the probability that an unqualified person performs an FHA appraisal. From that perspective I believe the law is appropriate.

Right or wrong the trend toward requiring certification has been readily apparent for several years now. One can sit around complaining about it not being 'fair' or one can take care of getting certified. For a highly qualified Licensed appraiser, getting certified should be a simple task. Stop whining and jump through the hoops.

 

[George Ellerman]

Bless you my man.

If you look at the current AQB criteria, there is a substantial educational difference between the two levels. There is some logic to the requirement. We all know the average trainee with six months experience can do a faster, better job on a typical residential appraisal than an average Certified General appraiser who has not done a residential appraisal in 10 years, if at all. License level is not synonymous with competency level; they need to be used in conjunction with each other. This law attempts to do that by setting the license level at Certified and then requiring specific education for competency. The goal is not to enable all qualified people to perform FHA appraisals, but to reduce the probability that an unqualified person performs an FHA appraisal. From that perspective I believe the law is appropriate.

Right or wrong the trend toward requiring certification has been readily apparent for several years now. One can sit around complaining about it not being 'fair' or one can take care of getting certified. For a highly qualified Licensed appraiser, getting certified should be a simple task. Stop whining and jump through the hoops.

FWIW:

I called FHA in Atlanta yesterday and was told that it was unlikely that any approved appraisers would be removed from the FHA roster with the new bill. 1-800-call-FHA.

 

[Brad Pack]

Doug,

I wish I had the answer. Maybe Brad Pack can fill us in.

The official response:

We are currently working with our attorneys to interpret this provision and therefore do not have a definitive answer at this time as to whether or not licensed appraisers will continue to qualify for the Roster. FHA guidance will be issued in the near future.

 

[George Ellerman]

The official response:

We are currently working with our attorneys to interpret this provision and therefore do not have a definitive answer at this time as to whether or not licensed appraisers will continue to qualify for the Roster. FHA guidance will be issued in the near future.

Just curious Brad. are you an employee of FHA ?