Customer ordering own Appraisal

[Jim Bartley]

Had an order on the fax with contract and FHA case number assignment. Then I got a "Cancel Order" fax with the following:

"please cancel appraisal request for _____________-customer getting own appraisal"

Isn't this illegal. Wasn't this one of the reforms to come out of FIRREA? That only the client can order the appraisal? I wonder if I should even call the lender to give them a heads up. I'm sure they don't even have a clue that this is wrong. Seems like more and more lenders are allowing this.
Since this is an FHA order, I wonder what their reaction would be.

 

[Pamela Crowley (Florida)]

They will have one hel* of a time trying to change the FHA assignment last I heard. This order will probably come back to you.

Then again.... I could be wrong.

 

[Dave Doering]

I would suggest that you call your appropriate HUD office and advise them of this. HUD loans are regulated subject to FIRREA as are all other government regulated transactions. I would think that they would be interested in HUD/FHA loan originators who choose to violate its (FIRREA's) provisions on appraiser engagement.

 

[bradellis]

Dave,

HUD insured loans are almost never Federally related transactions. HUD is not named in the agencies covered by FIRREA.

The bank making the loan may be, but since HUD lending limits fall under the threshold of $250,000- I think always, but there may be an area where the limits are high enough-these are not federally related.

Any smart underwriter will catch this- they cannot use a homeowner ordered appraisal- but I doubt HUD will take any interest in mistakes made by lenders until it gets to them- IF it gets to them.

Brad

 

[Joe Birrell (NY)]

Hate to picky, but HUD does come under umbrella of FIRREA since the lender they are insuring does (covered indirectly), same for VA.