FHA appraisal, change of client?

[RSW]

I will get the reference from FHA material later on today or maybe tomorrow. I am going to be busy for the next several hours. TM You are incorrect.

 

[tmcneeley]

FHA assigns a unique case number to every FHA loan. The Case Number must be entered in Loan Prospector or via LOS import for FHA loans so it will be printed on the Feedback Certificate, otherwise it won't be eligible for FHA documentation relief and credit policy revisions. Remember to enter the FHA Case Number prior to your final submission.

-Point Larusso!

-Direct from Freddie Mac. Notice is states "loan" and not property address or buyer name. It assigns them to a loan. If it is the same borrower, per HUD, FHA case numbers can be transferred, if the original bank releases them .

 

[tmcneeley]

Plus you are missing the point of the original post. Every way the OP is trying to do this appraisal in not compliant with USPAP. Any changes made to a contract need to be addressed with a new appraisal, with a new effective date. You can charge what you wish for that, but if it is a totally new contract, I think that falls under a change to the contract and equals a new appraisal.

 

[tmcneeley]

In cases where a borrower has switched lenders, the first lender must, at the borrower’s request, transfer the case to the second lender. FHA does not require that the client name on the appraisal be changed when it is transferred to another lender.

In accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), the lender is not permitted to request that the appraiser change the name of the client within the appraisal report unless it is a new appraisal assignment. To effect a client name change, the second lender and the original appraiser may engage in a new appraisal assignment wherein the scope of work is limited to the client name change. A new client name should include the name of the client (lender) and HUD.
</SPAN>

-This is what should be done. Along with this the first lender should submit a cancellation for the orignial case. The new lender should then submit a new request to FHA. The new lender might recieve the same cas number or may not. The appraiser can charge whetever fee they want for the new assignment, but they need to revisit the property as it is a new loan, contract, etc., and characteristics at the property could have changed since the last viewing. That is the USPAP and FHA compliant way to do it.

 

[CANative]

Slow down dude.

That is only the case when it is the same borrower/buyer. You should check up on your FHA guidelines. If it is the same buyer, then yes they can transer, but as you recall, the OP stated a new buyer/lender.

Incorrect. The protocol for new buyer/borrower is simply have new borrower pay the appraisal fee to the lender and the lender refunds the old borrower. The appraisal report does not change.

No you cannot do a 1004D,

That's only correct for another week and a half.

-This is what should be done. Along with this the first lender should submit a cancellation for the orignial case. The new lender should then submit a new request to FHA. The new lender might recieve the same cas number or may not. The appraiser can charge whetever fee they want for the new assignment, but they need to revisit the property as it is a new loan, contract, etc., and characteristics at the property could have changed since the last viewing. That is the USPAP and FHA compliant way to do it.

There are only a few circumstances which would allow a case number to get cancelled and a new one issued on the same property. Switching lenders is not one of them.

 

[tmcneeley]

Dude,

"Incorrect. The protocol for new buyer/borrower is simply have new borrower pay the appraisal fee to the lender and the lender refunds the old borrower. The appraisal report does not change."

So you wouldn't change the contract section? That's not very compliant is it?

"That's only correct for another week and a half."

I don't believe USPAP is changing its stance on that, but if it is please, if they are include a link or direct quote from a source.

"There are only a few circumstances which would allow a case number to get cancelled and a new one issued on the same property. Switching lenders is not one of them."

Actually Lender protocol is to cancel the case, especially in circumstances like this. That way there is no trouble with the original lender releasing the case number, which happens all the time in the real world. That way FHA has no problem either re-assigning or assigning that number to the borrower. I am pretty sure this doesn't apply to a new borrower though, but if you have a direct quote from HUD please insert it. :new_smile-l:

The above is all what i gathered directly from HUD, Fannie Mae, Freddie Mac etc. I may be wrong, but that is the interpetation I get from all 3 sources. I am open to being corrected, but please list a link or something. Thanks.

 

[CANative]

Dude...

So you wouldn't change the contract section? That's not very compliant is it?

No. I wouldn't change the contract section. Because I, as the appraiser, have nothing to do with transferring cases or appraisal reports. This is all done at the lender level.

I don't believe USPAP is changing its stance on that, but if it is please, if they are include a link or direct quote from a source.

If you want to do work for HUD/FHA you need to keep up with the mortgagee letters.

MORTGAGEE LETTER 2009-51
TO: ALL APPROVED MORTGAGEES
ALL FHA ROSTER APPRAISERS
SUBJECT: Adoption of the Appraisal Update and/or Completion Report (Fannie Mae Form 1004D/Freddie Mac Form 442/March 2005)
The Federal Housing Administration (FHA) is adopting the Appraisal Update and/or Completion Report, Fannie Mae Form 1004D/Freddie Mac Form 442/March 2005. This is a dual-purpose form. Part A, Summary Appraisal Update Report, provides for updates of existing appraisals when the appraiser concurs with the original appraisal report and updates the appraisal by incorporating the original appraisal report. Part B, Certification of Completion, provides for compliance repair and completion inspections for existing and new construction dwellings. This mortgagee letter is effective for all case number assignments on or after January 1, 2010.
When to Use the Appraisal Update and/or Completion Report:
Part A/Summary Appraisal Update Report
1. To extend the validity period of an existing appraisal that is due to expire and when lender does not want to order a new appraisal report.
2. To extend the validity period of an existing appraisal for new construction that is incomplete.

Actually Lender protocol is to cancel the case, especially in circumstances like this. That way there is no trouble with the original lender releasing the case number, which happens all the time in the real world. That way FHA has no problem either re-assigning or assigning that number to the borrower. I am pretty sure this doesn't apply to a new borrower though, but if you have a direct quote from HUD please insert it.

See HUD handbook 4000.2. For your convenience I have posted an image of Chapter 4.

The above is all what i gathered directly from HUD, Fannie Mae, Freddie Mac etc. I may be wrong

It's not a matter of "may" be wrong. It's a mattert of "being" wrong. And what does Fannie/Freddie have to do with an FHA discussion?

 

[Caterina Platt]

TM,

Greg is correct, but I do see your puzzlement (is that a word? TC?) about the contract.

Actually, Fannie Mae was the entity that decided it was imperative that the appraiser analyze the contract and discuss it in the report. Many of us fought, fumed, and fussed about it at the time. There are many of us of the mindset that we should appraise the subject property purely for the market value and really don't want to know the contract price.

It shouldn't matter that the builder is offering a $20,000 incentive, a BMW in the garage or what have you. Don't tell me a bit about that. Give me the address and pertinents and I'll tell you the value. You wiegh my market value estimation against the contract and make your own decision. I'm an appraiser, not a contract attorney.

Now...in the case of the sales comparables, the contract information is entirely a different story. The $20,000 incentive could indeed make a difference in the price negotiated in the contract, but that's not the issue with the subject.

Now, skip ahead to FHA's outlook on the case number and former contract mentioned in our currently recycled appraisal. Apparently, FHA would much rather simply use the appraisal report for what it should be: an estimate of value. They have the contract and so does the lender. They can see what's in it just as well or better than the appraiser.

If FHA is OK with using a recycled appraisal that discusses a now defunct and inapplicable contract, but has no effect on the market value, how does that affect you or me? It doesn't really. The value is what it is.

Now, all this being said, this Mortgagee Letter just opened a hole in the dam. As of January 1, we may have to do the 'new assignment' just to change the lender name. :new_2gunsfiring_v1:

http://www.HUD.gov/offices/adm/hudclips/letters/mortgagee/files/09-29ml.doc

 

[tmcneeley]

Dude...



No. I wouldn't change the contract section. Because I, as the appraiser, have nothing to do with transferring cases or appraisal reports. This is all done at the lender level.

So even if the contract price was above your appraised value, you would make no changes. Your appraisal would not be compliant if you submitted an appraisal with the wrong contract price, wrong borrower, and wrong purchase price, per the OP. Also, you would let the lender tamper with your appraisal and put a new contract price on there? Dude, not very good!

Nice try but wrong according to USPAP.


If you want to do work for HUD/FHA you need to keep up with the mortgagee letters.

Okay, and you need to read them correctly.




See HUD handbook 4000.2. For your convenience I have posted an image of Chapter 4.


Great post of the handbook, and I agree with everything it says, but is does not apply to this case. So you are using this quote in an improper manner. so you are wrong again dude. In this case the market is declining, so it would not be valid to extend the validity of the original appraisal. Read the original post before you come out and chastise somebody. Thanks.



It's not a matter of "may" be wrong. It's a mattert of "being" wrong. And what does Fannie/Freddie have to do with an FHA discussion?

Sir, are you putting your FHA appraisals on a Fannie Mae/Freddie Mac form? And you think you don't have to comply with their guidelines and rules? Okay dude! The problem here is you aren't even considering that you may be wrong. Nothing that is in that morgage letter applies to this situation. If you interpret that as validating using a 1004D to update a prior appraisal that has a different borrower, and a different contract, for a different lender, in a declining market, then I think "you may be wrong".

 

[Caterina Platt]

TM,

FHA adopted the Fannie forms for their purposes, but that does not make the FHA roster appraiser bound by Fannie/Freddy rules in FHA work.

They are different clients, different programs, different scope.