FHA and completing the assignment

[frozone]

When completing an assignment for FHA, must the assignment always be completed. Particularly in the case of an assignment having FHA repair issues, can the lender request for you to not complete the assignment? Especially since a case number has been already assigned. I was under the impression that once assigned the FHA appraisal must be completed and we are not to contact the lender with repair issues.

I am currently in such a situation where I completed an assignment and am now in process of defending myself. Lender says they dont take "subject to repairs" appraisals. It is their policy to accept ontl "as is" appraisals.

Referencing: 4150.2 1–2C Communication with Appraisers

HUD/FHA mortgage insurance is initiated when a lender selects an appraiser from the FHA Register. Once the appraiser agrees to perform the appraisal, the appraiser is in a contractual relationship with the lender. The appraiser will send the completed appraisal directly to the lender.

HUD advises the appraiser to discuss the appraisal only with the underwriter. No other individual should contact the appraiser before the appraisal has been completed. Real estate brokers and agents should consider the lender their sole source of information on the appraisal and all matters related to the appraisal.

Thanks in advance.

 

[TJSum]

I am sure HUD would be very interested in hearing that a lender is doing FHA loans, but at the same time has a company policy of only accepting "as is" appraisal reports.

 

[frozone]

Here is an email I received......
Hey Sebastian--
Why was the appraisal for XXXXXXXX completed "Subject To"??!! It specifically states our our order form, that we do not accept reports completed "Subject To". Especially FHA reports. Is there any way for you to make some adjustments that would make this report "AS-IS"?? There isn't anything we can do with a "Subject To" FHA report. Please let me know ASAP!!!!! Thanks!!

The order didn not say "we do not accept reports completed "Subject To". " I checked again and made sure. They have since ordered another job and it actually does have that comment.

 

[TJSum]

They actually put that in writing. I am sure HUD would love to see that...

 

[frozone]

I am sure HUD would be very interested in hearing that a lender is doing FHA loans, but at the same time has a company policy of only accepting "as is" appraisal reports.

TJ, so how do you interpret this. Do you always complete FHA assignments or does the lender have the right/justification/whatever to have you stop an assigment if it will be "subject to repairs?"

 

[CANative]

There have been so many inexperienced and unapproved by FHA brokers trying to get into the FHA bonanza lately. They are co-brokering or trying to co-broker which is illegal. Any approved FHA shop would know better than this. Something is wrong. Call your HOC and discuss this.

 

[TJSum]

I know they can switch appraisers on properties that already have case numbers assigned, sometimes they will send a FHA assignment to my company with my name on it, in an area I do not cover myself. I call the client and tell them that is an area my partner covers, and they never have problems going in and changing the assignment to her name instead of mine. So I know it can be done.

But that is completely different from what you are describing. Based on your description they will just keep re-assigning the case number to different appraisers until they find one that will "play ball". First, I would try to educate them to the ways of FHA/HUD, if they are new to this type of business. Many subprime lenders are now entering the FHA/HUD field because that is all that is left for them. But they don't have a clue on how it should be done, and for the most part, they are used to cutting corners to put it mildly. If your education efforts fail, alert HUD, they would be more than happy to eductate this lender

 

[Greg Bell]

It must be submitted subject to.Tell the lender to pound sand and bill them..

 

[TC]

My guess is your client just hired a LO who was doing subprime work.


TC

 

[frozone]

So basically everyone here so far says that if the only issue is "as is" vs "subject to" then it is the responsibility of the appraiser to complete the assignment no matter what. Even if the lender states they only accept "as is" assignments and want you to stop 1/2 way through and not complete "subject to" assignments? That is what Im mainly trying to get at.