Basic HUD Questions

[Brad Pack]

Everytime I sign an FHA appraisal I am certifying (in Cert. #3) that I performed the appraisal in accordance with the requirements of USPAP. SInce USPAP requires me to comply with supplemental standards, the certification that I signed when I applied for my roster designation is superfluous.

Hey, I am all for standards, but since FHA apparently has decided that actual proof of competence is not needed in order to do FHA appraisals, then there is no need to waste everyone's time with the roster....a do not use list would accomplish the same thing.

Proof of competence? Competency Rule of USPAP. If someone believes it's a waste of time, then they don't need to complete FHA assignments - the Department will survive. But, thanks for your input...

 

[timd354]

Proof of competence? Competency Rule of USPAP. If someone believes it's a waste of time, then they don't need to complete FHA assignments - the Department will survive. But, thanks for your input...
Brad, maybe you can point out where I stated that the Competency Rule of USPAP is a waste of time.
The fact is that I never said that....what I did say is that, if the FHA is not going to bother making an appraiser prove that he is comptent to do FHA appraisals, then I believe that the FHA appraisal roster is a waste of time. That is very different from saying that the USPAP competency rule is a waste of time. You may disagree with my opinion, that is fine. However, do not misrepresent what I have said and make sound like I do not take USPAP seriously.

You obviously do not understand what I am saying. I understand the competency rule of USPAP and I think that the competency rule is a good rule and should be scrupulously followed. However, it would appear to me, that despite the competency rule of USPAP, there are a whole lot of appraisers out there who are not competent, including some of those who do FHA work. Despite laws in every state rerquiring that appraisers comply with USPAP, it is very clear that does not happen in many cases....or maybe the whole meltdown of the mortgage and real estate markets, driven in part by poorly done appraisals, is just a figment of my imagination.

Thus, the presence of USPAP does nothing whatsoever to assure the FHA that the appraisers performing FHA appraisals are competent to do so. I believe that the FHA should make all appraisers on the FHA panel prove their competence to do FHA appraisals through the succesful completion of rigorous coursework and by passing a rigorous test. Additionally, I believe that the first 10 FHA appraisals done by a newly approved FHA appraiser should be field reviewed by the FHA.

However, the FHA, for whatever reason, has apparently decided just to hand out FHA approvals to just about any appraiser with a license without that licensee having to prove any competence whatsoever to perform FHA appraisals. My point is, if the FHA is not going to test for competence, then I see absolutely no point in even maintaining a FHA approved appraiser panel. If the FHA just does this so they can remove certain appraisers from the approved appraiser panel, it just seems like it would be a whole lot more efficient for the FHA to instead go to a "Cannot Use" List.

By the way, I never implied that the Department will not survive....of course it will since the taxpayer will always be there to pay for its mistakes. I am just hoping that the mistakes are kept to a minimum so that the FHA mortgage insurance pool will remain self-sustaining in the future without the need for a major taxpayer funded bailout.

Again, if you disagree with my assesment, that is fine....people are entitled to different opinions. But, please
do not misrepresent what I have actually said in an effort to discredit my point of view....a point of view that many others substantially agree with in their posts.

It is very disturbing that a government official such as yourself, Brad, in response to some critical comments about the way your agency does business would respond to the criticism by completely mispresenting my statements and providing a comment that is sarcastic and dismissive of a legitimate point of view expressed by a tax paying citizen. That type of behavior from government officials has no place in our system.

 

[john eickhoff]

From all the information I have found, FHA would have liked to gotten rid of the panel and basically set up their approval process much the same as Fannie Mae. However, it is a Federal Regulation for FHA to have an approved list of appraisers. So, FHA has an approved list but, they did relax it as much as they could and still comply with the Federal Regulation.

I am from the "Old" school and would prefer the approval process be more restrictive and to require tougher reviews along with mandatory training by FHA but, all of that takes money and personnal that FHA doesn't have and tax payers will not give.

When you, as appraisers, sign the certification you are basically saying you will comply with FHA requirements for doing appraisals the way FHA wants them done. Does that mean everyone is qualified that does them? No, but it does give FHA the ability to remove them if and when they find they are not doing them correctly. I think this Forum is one of the best sources I have found for getting good, honest and direct information on how to, or not to, do FHA appraisals. There are many very experienced and knowledgable people who provide input here and help FHA to get their work done right. I'm sure FHA is greatful for this assistance as much as I am.

 

[Couch Potato]

Thanks for the entertainment.

You obviously do not understand what I am saying. I understand the competency rule of USPAP and I think that the competency rule is a good rule and should be scrupulously followed. However, it would appear to me, that despite the competency rule of USPAP, there are a whole lot of appraisers out there who are not competent, including some of those who do FHA work. Despite laws in every state rerquiring that appraisers comply with USPAP, it is very clear that does not happen in many cases....or maybe the whole meltdown of the mortgage and real estate markets, driven in part by poorly done appraisals, is just a figment of my imagination.

Thus, the presence of USPAP does nothing whatsoever to assure the FHA that the appraisers performing FHA appraisals are competent to do so. I believe that the FHA should make all appraisers on the FHA panel prove their competence to do FHA appraisals through the succesful completion of rigorous coursework and by passing a rigorous test. Additionally, I believe that the first 10 FHA appraisals done by a newly approved FHA appraiser should be field reviewed by the FHA.

However, the FHA, for whatever reason, has apparently decided just to hand out FHA approvals to just about any appraiser with a license without that licensee having to prove any competence whatsoever to perform FHA appraisals. My point is, if the FHA is not going to test for competence, then I see absolutely no point in even maintaining a FHA approved appraiser panel. If the FHA just does this so they can remove certain appraisers from the approved appraiser panel, it just seems like it would be a whole lot more efficient for the FHA to instead go to a "Cannot Use" List.

By the way, I never implied that the Department will not survive....of course it will since the taxpayer will always be there to pay for its mistakes. I am just hoping that the mistakes are kept to a minimum so that the FHA mortgage insurance pool will remain self-sustaining in the future without the need for a major taxpayer funded bailout.

Again, if you disagree with my assesment, that is fine....people are entitled to different opinions. But, please
do not misrepresent what I have actually said in an effort to discredit my point of view....a point of view that many others substantially agree with in their posts.

It is very disturbing that a government official such as yourself, Brad, in response to some critical comments about the way your agency does business would respond to the criticism by completely mispresenting my statements and providing a comment that is sarcastic and dismissive of a legitimate point of view expressed by a tax paying citizen. That type of behavior from government officials has no place in our system.

And some people wonder why appraisers are not held in high regard.
​

 

[Brad Pack]

From all the information I have found, FHA would have liked to gotten rid of the panel and basically set up their approval process much the same as Fannie Mae. However, it is a Federal Regulation for FHA to have an approved list of appraisers. So, FHA has an approved list but, they did relax it as much as they could and still comply with the Federal Regulation.

I am from the "Old" school and would prefer the approval process be more restrictive and to require tougher reviews along with mandatory training by FHA but, all of that takes money and personnal that FHA doesn't have and tax payers will not give.

When you, as appraisers, sign the certification you are basically saying you will comply with FHA requirements for doing appraisals the way FHA wants them done. Does that mean everyone is qualified that does them? No, but it does give FHA the ability to remove them if and when they find they are not doing them correctly. I think this Forum is one of the best sources I have found for getting good, honest and direct information on how to, or not to, do FHA appraisals. There are many very experienced and knowledgable people who provide input here and help FHA to get their work done right. I'm sure FHA is greatful for this assistance as much as I am.

John -

I disagree as far as mandatory FHA testing goes. The mandatory test implemented in 1999 did nothing to improve competence. Remember, the "old school" FHA fee panel never required a test. VA, FNMA, FHMC do not require a test. It is the responsibility of the appraiser to obtain competence prior to completing an FHA assignment.

FYI: The review process is probably much more stringent than most realize.

 

[Brad Pack]

You obviously do not understand what I am saying. I understand the competency rule of USPAP and I think that the competency rule is a good rule and should be scrupulously followed. However, it would appear to me, that despite the competency rule of USPAP, there are a whole lot of appraisers out there who are not competent, including some of those who do FHA work. Despite laws in every state rerquiring that appraisers comply with USPAP, it is very clear that does not happen in many cases....or maybe the whole meltdown of the mortgage and real estate markets, driven in part by poorly done appraisals, is just a figment of my imagination.

Thus, the presence of USPAP does nothing whatsoever to assure the FHA that the appraisers performing FHA appraisals are competent to do so. I believe that the FHA should make all appraisers on the FHA panel prove their competence to do FHA appraisals through the succesful completion of rigorous coursework and by passing a rigorous test. Additionally, I believe that the first 10 FHA appraisals done by a newly approved FHA appraiser should be field reviewed by the FHA.

However, the FHA, for whatever reason, has apparently decided just to hand out FHA approvals to just about any appraiser with a license without that licensee having to prove any competence whatsoever to perform FHA appraisals. My point is, if the FHA is not going to test for competence, then I see absolutely no point in even maintaining a FHA approved appraiser panel. If the FHA just does this so they can remove certain appraisers from the approved appraiser panel, it just seems like it would be a whole lot more efficient for the FHA to instead go to a "Cannot Use" List.

By the way, I never implied that the Department will not survive....of course it will since the taxpayer will always be there to pay for its mistakes. I am just hoping that the mistakes are kept to a minimum so that the FHA mortgage insurance pool will remain self-sustaining in the future without the need for a major taxpayer funded bailout.

Again, if you disagree with my assesment, that is fine....people are entitled to different opinions. But, please
do not misrepresent what I have actually said in an effort to discredit my point of view....a point of view that many others substantially agree with in their posts.

It is very disturbing that a government official such as yourself, Brad, in response to some critical comments about the way your agency does business would respond to the criticism by completely mispresenting my statements and providing a comment that is sarcastic and dismissive of a legitimate point of view expressed by a tax paying citizen. That type of behavior from government officials has no place in our system.

I don't respond in this forum as a "government official". I respond as an appraiser tired of reading individuals who hide behind an alias in order to ridicule something/someone/some agency they know nothing about.

 

[timd354]

I don't respond in this forum as a "government official". I respond as an appraiser tired of reading individuals who hide behind an alias in order to ridicule something/someone/some agency they know nothing about.

I may not know everything about the inner workings of the FHA, but I do know one thing for sure and that is I see many of the same characters, from questionable loan officers, mortgage brokers and lenders, and appraisers who were involved in the whole subprime fiasco now focusing on FHA business. I have heard more than one of these people refer to FHA as "the new subprime". At the same time, I see the FHA do away with any pretense of making appraisers demostrate competence to do FHA appraisals by doing away with the FHA appraisers' test requirement (which I will grant was a very simply test that likely only weeded out the dumbest of the dumb....but that is better than nothing). Additionally, maximum allowable FHA loan amounts have been increased substantially.

As an honest and ethical appraiser and U.S. taxpayer, this concerns me greatly as I can see that there is a definite possibility that this could present problems down the road for the FHA and ultimately the American taxpayer.

If pointing these issues and concerns out and expressing my disappointment that the FHA did away with what little that was being done to assure appraiser competence upsets you and you think that your agency is beyond criticism, so be it...I apologize if your feelings are hurt, but it is not personal. I have legitimate concerns and am just expressing these concerns.

If my criticisms are incorrect or unfair, I am sure that you can point out why they are wrong and/or how they are unfair.

 

[CURT VAN HOOSER]

The same can be accomplished with a "Do Not Use" list.

So...instead of having a list of who you can use, you have a list of who you can't use...? I fail to see the logic in that. Perhaps you will expand on your thoughts? It seems that having a roster of who you can use, and eliminating those that do not perform competently, then creates both lists, no?

 

[CURT VAN HOOSER]

Everytime I sign an FHA appraisal I am certifying (in Cert. #3) that I performed the appraisal in accordance with the requirements of USPAP. SInce USPAP requires me to comply with supplemental standards, the certification that I signed when I applied for my roster designation is superfluous.

Hey, I am all for standards, but since FHA apparently has decided that actual proof of competence is not needed in order to do FHA appraisals, then there is no need to waste everyone's time with the roster....a do not use list would accomplish the same thing.

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?

 

[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?

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.