Can a lender require an appraiser to be designated?

[TooMuchCoffeeGirl]

Coming to you all for an answer since I've lost touch with the mortgage world (working for a federal agency now). When I was last involved in residential mortgage appraising (pre-2016), HVCC & Interagency Appraisal and Evaluation Guidelines ruled the day, buyers and sellers couldn't order the appraisal, and FRFIs couldn't require appraisers to be designated MAIs, SRAs, IFAs, etc. . Has that changed in the last five years? I'm occasionally contacted by broker friends to answer appraisal questions, and this week's hot question is to comment on this statement: "If a property does not appraise, the seller can get an appraisal as well, but if it doesn't come in within 10% of the original appraisal, then the seller needs to get an MAI appraisal." True or false?

 

[glenn walker]

No its not true a Lender cannot require their appraisers to be designated but they can have designated appraisers on their fee panels and they could use them for specific type properties. As far as this non-sense about if value doesn't come in within 10% a seller needs to get a appraisal ( False -False- False) First of all most MAI don' t even do houses unless the property is very complex and thier fees are normally two to three times higher. So I have no idea where this person asking these questions is getting their information from - Certainly not the Lender or FRT world.

Coming to you all for an answer since I've lost touch with the mortgage world (working for a federal agency now). When I was last involved in residential mortgage appraising (pre-2016), HVCC & Interagency Appraisal and Evaluation Guidelines ruled the day, buyers and sellers couldn't order the appraisal, and FRFIs couldn't require appraisers to be designated MAIs, SRAs, IFAs, etc. . Has that changed in the last five years? I'm occasionally contacted by broker friends to answer appraisal questions, and this week's hot question is to comment on this statement: "If a property does not appraise, the seller can get an appraisal as well, but if it doesn't come in within 10% of the original appraisal, then the seller needs to get an MAI appraisal." True or false?

 

[TooMuchCoffeeGirl]

No its not true a Lender cannot require their appraisers to be designated but they can have designated appraisers on their fee panels and they could use them for specific type properties. As far as this non-sense about if value doesn't come in within 10% a seller needs to get a appraisal ( False -False- False) First of all most MAI don' t even do houses unless the property is very complex and thier fees are normally two to three times higher. So I have no idea where this person asking these questions is getting their information from - Certainly not the Lender or FRT world.

I should have added - the author of the statement is the regional real estate attorney for a very large brokerage. I'm glad to hear your 'false false false' because I try to keep a piece of a finger in mortgage appraisal regulations and I was thinking I really dropped the ball on this one. Yeah, I can't imagine an MAI accepting a residential mortgage assignment. I get a lot of MAIs doing residential appraisals for the agency that I work for, but those are Before/After acquisitons.

 

[Terrel L. Shields]

Attorneys often require MAIs. I have lost mineral appraisals because I am not an MAI. I queried one about what MAI is credentialed to value minerals and they had no answer. I saw one such report and basically he hired an engineer to give an engineering value to a well. He valued the well, but not the whole property and by doing so undervalued it by roughly 2 magnitudes.

 

[glenn walker]

I should have added - the author of the statement is the regional real estate attorney for a very large brokerage. I'm glad to hear your 'false false false' because I try to keep a piece of a finger in mortgage appraisal regulations and I was thinking I really dropped the ball on this one. Yeah, I can't imagine an MAI accepting a residential mortgage assignment. I get a lot of MAIs doing residential appraisals for the agency that I work for, but those are Before/After acquisitons.

Thats shocking that a Real Estate Attorney doesn't even know the basics of FRT-Inter-agency-- Dodd-Frank etc Now with that being said in private loan and brokerage scenarios he can contrive any kind of dribble he wants and so me thinks he is just designing a business model to either profit from or is simply incompetent. We have attorneys in my family and I know many over the years and its amazing how many goof balls pass the bar exam. My sister use to work for a division of AIG Insurance that all they did was sue attorneys for malpractice and they one a lot of their cases. My best guess would be he is just marketing some new twist to the Realtors-Brokers and mortgage brokers but who knows.

 

[George Hatch]

Banking regulations apply to what bankers do; not to what buyers and sellers agree to in a sales contract.

 

[alebrewer]

HVCC & Interagency Appraisal and Evaluation Guidelines ruled the day

haha. It's been a bit longer than 2016... HVCC went away in 2011. As to the question, almost every part of that is incorrect. The seller cannot obtain an appraisal that will ultimately be used for underwriting a loan sold to the agencies, or for loans that are insured by FHA, or for loans guaranteed by the VA. In addition, for loans being sold to the agencies, or being insured/guaranteed by FHA/VA, the lender cannot require the appraiser to have a designation - only that their credential be current and (generally) no disciplinary action. At the moment only certified appraisers can perform appraisal work for FHA insured loans, but that will probably change soon to include licensed appraisers. The lender may solicit a 2nd appraisal, but only when 2 appraisals are required for the particular loan program, or when the first appraisal is deemed materially deficient. In no case can the seller have any input into the selection of the appraiser.

 

[Lee Lansford]

Coming to you all for an answer since I've lost touch with the mortgage world (working for a federal agency now). When I was last involved in residential mortgage appraising (pre-2016), HVCC & Interagency Appraisal and Evaluation Guidelines ruled the day, buyers and sellers couldn't order the appraisal, and FRFIs couldn't require appraisers to be designated MAIs, SRAs, IFAs, etc. . Has that changed in the last five years? I'm occasionally contacted by broker friends to answer appraisal questions, and this week's hot question is to comment on this statement: "If a property does not appraise, the seller can get an appraisal as well, but if it doesn't come in within 10% of the original appraisal, then the seller needs to get an MAI appraisal." True or false?

Yes. Why not?

 

[George Hatch]

This line

"If a property does not appraise, the seller can get an appraisal as well, but if it doesn't come in within 10% of the original appraisal, then the seller needs to get an MAI appraisal."​

Looks like what you might find in a sales contract, written by someone who thinks MAIs have more expertise at appraising a house than a CR who does nothing but houses every week. It doesn't look like a line out of a lender's appraisal policy.

 

[jay trotta]

Use to do truckloads of ERC appraisals and in their world they would use a 5% difference between two appraisers. If the AV exceeded their 5% Rule, they would bring a third in to settle on a Value. When you think about that, it's a great concept, two different appraiser's with no knowledge of who the other is and see how well they do.