FHA CODs

[GEORGE RILEY]

We always collect COD except for our established clients, however, I was recently informed by a lender that FHA borrowers could not pay by credit card. Can anyone confirm this?

 

[Marcia Langley]

George,

I have never heard that and doubt that it is true. Or at least not true in general, maybe in certain cases.

But it is actually a sub-topic to the overall topic of this thread. That is the fact that FHA's instruction to lenders is that the lender is responsible for collecting the fee from the borrower and for paying the appraiser. If the lender were to adhere to this instruction, the appraiser would never get paid by the borrower at all, credit card or not.

But in practice, when the assignment is received from a MB, the appraiser (if they are smart) will collect cash in advance from anyone (including the borrower) who is handing it to them.

FHA's guideline on this is to the lender, not to the appraiser. If FHA decides to enforce it, they will enforce it with the lenders directly.

It's really not the appraiser's problem.

It is less likely to be enforced as long as MBs are allowed to originate FHA loans.

 

[Offshore]

With FHA appearing to be the new subprime I question if COD/CAD is enough. When I accepted MB work years ago I can recall having no shows, cancellations the day after the inspection and other nonsense which made collecting anything a nightmare. If some LO you’ve never heard of wants to order an FHA appraisal what is wrong with requiring payment in advance before starting a work file? It puts the burden squarely on them and you’ll probably get a case number to boot.

 

[David S. Roberson]

If it's not a real bank, it's COD only. FHA used to help years ago, but now they really don't do anything except tell you it's a business problem on your part, not a HUD problem. Do not expect any help from FHA in collecting unpaid invoices.

 

[BaamBaam]

I have recieved several new request lately from MB (which appear out state) all with the same line, "I'm looking of a good FHA appraiser, and have several deals" but when it came time to get a order they all seem to want me to invoice them, and in most cases the case # even comes over with the request. So fare not a one of the these deals have paned out. Mostly because I tell them its COD or for some weird reason they just ever call me back when I tell them I need the case # before I'll even inspect the property. It does appear the FHA is the new subprime and all the old MB from a couple of years ago are coming back out of the wood work.

 

[RSW]

When ever I get these type of calls they always say, "We're out of state and we are not familiar with values in your area". Then you know what is coming next, Right? I ask them to put their request in writing and I tell them to fax it to me. Some do and some don't. Idiots!

 

[Marcia Langley]

Every client, regardless of who they are will give me an order and the case # before I touch a thing. No exceptions.

If you start work before getting the case number there is a better than 50% chance (much better) you will be working for free.

If it's an MB or a small time AMC, the fee is folding cash in advance (whether from the client or the borrower).

If it's the borrower and he is a no show then all I'm out is the trip. If it's the client, he can overnight a cashier's check prior to me turning a page.

No exceptions.

I cannot afford to work for free, ever.