FHA Lender shopping appraisal

[Gary Schinagel]

My question is 2 part.
Part (1) what is the FHA guideline for Lenders requesting the appraisal? The Borrower is shopping the loan now. My understanding (but I can only find it here) is that the appraisal stays in the original Lenders name and that the case number follows the file and appraisal report for 6 months. DO I DENY ANY APPRAISAL REQUESTS SUBMITTED for any potential FHA how do we dare say it "transfers"?
Part (2)or if it moves to Conventional it is typically a reinspection required with effective date change including additional data research with a new written formal appraisal request required by the new lender and now no need for Lender approval/release? The AO opinion stated that an appraisal can be used by another Lending institution if it was ordered By another lending institution(WITH APPROVED FORMAT) as long as not ordered by the Borrower but the question remains the same. How are we handling FHA? and How Conventional what we used to call transfers!There is just so much to this LENDER/client relationship yet it cannot be at the expense of the Lender holding the appraisal hostage to secure a loan through ONLY THEIR financial institution. I am just looking for a simple understanding of protocol. The resaling of a car example is not a reasonable conclusion)Furthermore when does the Client relationship end(another part to same question)?What about listing appraisals do the Lenders need to order them for the same or other Lender to use them. And reading the AO opinion states dont pick up a check? Its darn confusing and nobody has replied. Reading the Advisory opinion does not clear it up completley at all.

 

[Gary Schinagel]

Wow all those brainiacs out there and this is the urgent section. It just appears that some questions are beat to death and then commented beat to death wheres the quality guys now? At this level I can put much more in than I get. And dont tell me there is hundred posts out there regarding this and if there is there are 20 different answers. What could be more important than the fudiciary duty established between the client and us and the process for professionaly and POLITELY applying the rules. What I really get out of HUD readings is Transfers are still taking place via HUD files with no client name change? And that its called new appraisal for conventional. Both with greater supposed scrutiny addressed in review and underwriting especially with regard to Financial institution as your original client verifying buyers directly are not original client. Well thats apparent with FHA but now you bring in sales with Seller paying at the door. HMM. Then what about the name change. Reinspection/effective date. All trumped with a nobody knows what the heck the time limit is for Client relationship. What about the Borrower/ Are they penalized. Sometimes you got to be able to back the talk! STILL WAITING.:new_multi:

My question is 2 part.
Part (1) what is the FHA guideline for Lenders requesting the appraisal? The Borrower is shopping the loan now. My understanding (but I can only find it here) is that the appraisal stays in the original Lenders name and that the case number follows the file and appraisal report for 6 months. DO I DENY ANY APPRAISAL REQUESTS SUBMITTED for any potential FHA how do we dare say it "transfers"?
Part (2)or if it moves to Conventional it is typically a reinspection required with effective date change including additional data research with a new written formal appraisal request required by the new lender and now no need for Lender approval/release? The AO opinion stated that an appraisal can be used by another Lending institution if it was ordered By another lending institution(WITH APPROVED FORMAT) as long as not ordered by the Borrower but the question remains the same. How are we handling FHA? and How Conventional what we used to call transfers!There is just so much to this LENDER/client relationship yet it cannot be at the expense of the Lender holding the appraisal hostage to secure a loan through ONLY THEIR financial institution. I am just looking for a simple understanding of protocol. The resaling of a car example is not a reasonable conclusion)Furthermore when does the Client relationship end(another part to same question)?What about listing appraisals do the Lenders need to order them for the same or other Lender to use them. And reading the AO opinion states dont pick up a check? Its darn confusing and nobody has replied. Reading the Advisory opinion does not clear it up completley at all.

 

[Greg Bell]

Once you have completed and FHA appraisal on a certain property you are out of the game.Transfers are made up to six months after the initial appraisal are no concern of the appraiser.They will be handled through FHA connect.No change in lender client and
do not send appraisal to any other client.Your duty was to the original client..

 

[Bama Bayou]

Once you have completed and FHA appraisal on a certain property you are out of the game.Transfers are made up to six months after the initial appraisal are no concern of the appraiser.They will be handled through FHA connect.No change in lender client and
do not send appraisal to any other client.Your duty was to the original client..

This is true unless the new lender wants additional comps and a cost approach. I have one now that was transferred to a new lender. They have called and emailed about 50 times demanding I make these changes.

I demanded that they have the original lender send me a signed letter that I had permission to divulge the contents of the report to them.

The original lender just sent the release letter.

Now I will demand a new engagement letter for the additional charges for the comps and cost approach.

 

[xmusienb]

This is true unless the new lender wants additional comps and a cost approach. I have one now that was transferred to a new lender. They have called and emailed about 50 times demanding I make these changes.

I demanded that they have the original lender send me a signed letter that I had permission to divulge the contents of the report to them.

The original lender just sent the release letter.

Now I will demand a new engagement letter for the additional charges for the comps and cost approach.

You are in violation of USPAP. You might want to brush-up on it starting with AO26.

Good luck.

 

[Gary Schinagel]

First I have not done anything. I am still waiting on HUDs reply. I have read AO 26 Advisory Opinions more than once before posting and they are not at all clear. As the MAI in our office states they are advisory. Do you know the answer to these Client lender relationship questions; When is the Lender/Client relationship over? USPAP and AO 26 do not state that. I have always been told that it is after the completion of the intended use is completed(but that does not cover transactions in process). What if its a trust which can be somewhat more perpetual? What about FHA changed over to Conventional requests(are you trying to tell me that the borrower has no options to move their loan for any reason and the lenew lender cannot order an appraisal)? Does not address that either. It also does not tell you what Mr Bell did in this forum which I thanked him for,which is leave the appraisal alone and let FHA connection do all the transition if its FHA to FHA. Most important is that we all try to do the same the same thing. THANKS for your input!

 

[Gary Schinagel]

Once you have completed and FHA appraisal on a certain property you are out of the game.Transfers are made up to six months after the initial appraisal are no concern of the appraiser.They will be handled through FHA connect.No change in lender client and
do not send appraisal to any other client.Your duty was to the original client..

Thanks Greg that makes sense! Via FHA and its sooo easy too! Thanks again!:new_smile-l:

 

[Gary Schinagel]

This is true unless the new lender wants additional comps and a cost approach. I have one now that was transferred to a new lender. They have called and emailed about 50 times demanding I make these changes.

I demanded that they have the original lender send me a signed letter that I had permission to divulge the contents of the report to them.

The original lender just sent the release letter.

Now I will demand a new engagement letter for the additional charges for the comps and cost approach.

I thought we did away with transfer and releases? As some of the Lenders were holding the consumer hostage based on the ownership of the report. Anyway we are all still up in the air on this VERY LARGE gray area. I understand the principals involved To protect the integrity of the report as a nuetral third party,but there has really been no clear cut protocol to follow. And the Borrower has rights too. Just trying to make sense of it all and be on the same page. Getting it piece by piece. THANKS FOR YOUR INPUT.

 

[Tucson Appraisals]

Yes new

My question is 2 part.
Part (1) what is the FHA guideline for Lenders requesting the appraisal? The Borrower is shopping the loan now. My understanding (but I can only find it here) is that the appraisal stays in the original Lenders name and that the case number follows the file and appraisal report for 6 months. DO I DENY ANY APPRAISAL REQUESTS SUBMITTED for any potential FHA how do we dare say it "transfers"?
Part (2)or if it moves to Conventional it is typically a reinspection required with effective date change including additional data research with a new written formal appraisal request required by the new lender and now no need for Lender approval/release? The AO opinion stated that an appraisal can be used by another Lending institution if it was ordered By another lending institution(WITH APPROVED FORMAT) as long as not ordered by the Borrower but the question remains the same. How are we handling FHA? and How Conventional what we used to call transfers!There is just so much to this LENDER/client relationship yet it cannot be at the expense of the Lender holding the appraisal hostage to secure a loan through ONLY THEIR financial institution. I am just looking for a simple understanding of protocol. The resaling of a car example is not a reasonable conclusion)Furthermore when does the Client relationship end(another part to same question)?What about listing appraisals do the Lenders need to order them for the same or other Lender to use them. And reading the AO opinion states dont pick up a check? Its darn confusing and nobody has replied. Reading the Advisory opinion does not clear it up completley at all.

Forget about releases from old lenders, you touched on a very good point here that I just want to share my thoughts on:

I think you touched on a very important issue (and sorry I did not see your posts until just now, otherwise I would have answered earlier) and thats about the same lender wanting to change from FHA to conventional. The intended users are different. The intended users of an FHA appraisal is for "client" and HUD and the intended use is for mortage financing and insurance purposes. If you take out the insurance and the HUD part, it would be for different intended users, this can change things dramatically. If your home was built before 1978 and you have a little bit of pealing paint, that report would have also been "subject to" the cure of that pealing paint. And you are required by HUD to do so. If it is conventional, it's not "required".

What I am getting at is these are obviously two different assignments and should be treated as such. New order form, new inspection and new intened users and use. It might even change the assignment results if there were any "subject to"'s.

-Aaron

 

[Greg Bell]

Lenders can pass the FHA Appraisal around like popcorn for six months.If a new lender is going conventional then it's a new order and a new appraisal.The original appraisal should have stated (Indended users ) FHA/HUD only , or something to that effect..