FHA Reconsideration of Value

[Doug Meyer]

Just finished an FHA appraisal for an AMC (now I remember why I do not like to work for them) that the lender wants me to reconsider the value for the home. The values in that area had declined but now appear to have stabilized and the subject neighborhood is probably on the low end of value for the area.

The lender wants me to reconsider the value, which translates into new sales (for free of course). I will notify the lender that the value could go up, down or stay the same. By the way I will be charging a fee!

The question is this allowable under FHA Guidelines(reconsideration of value) and would you all consider this to be possible appraiser pressure?

I have not had a chance to contact the HUD Center at this early time.


This thread has been made a sticky. See post 28 for the official answer, summarized in post 38.

 

[CJ1234]

See Section 4-9 of the HUD Manual 4150.2

It must come from the UNDERWRITER if data exists that was NOT in the appraisal.
You can charge for your time, if the comps provided by the UNDERWRITER are not truely comparable.

4-9 RECONSIDERATION OF APPRAISED VALUE
The underwriter may request reconsideration of the appraised
value when new market data exists that may not have been reflected in the appraisal. The lender can select new comparables and request a reappraisal. This request from the lender must be in writing and maintained in the appraiser's work file. The appraiser must decide whether to use the new comparables and perform the reappraisal. If the comparables were available when the initial appraisal was performed, the lender may not offer pay for the reconsideration.
4-15
​

 

[residentialguy]

Pretty clear. Unless you screwed up, charge them for a new appraisal, less the work on page 1 and subj inspection.

 

[Mike Kennedy]

4-9 RECONSIDERATION OF APPRAISED VALUE​

The underwriter may request reconsideration of the appraised value when new market data exists that
4-14​

4150.2​

may not have been reflected in the appraisal. The lender can select new comparables and request a reappraisal. This request from the lender must be in writing and maintained in the appraiser's work file.
The appraiser must decide whether to use the new comparables and perform the reappraisal. If the comparables were available when the initial appraisal was performed, the lender may not offer pay for the reconsideration.​

4-15

 

[Doug Meyer]

2 comps and 2 active listings from subject neighborhood and 2 sales from competing subdivisions (to bracket square footage). All within 7 months so I do not believe that I missed anything.

 

[Michael Tipton]

Just finished an FHA appraisal for an AMC (now I remember why I do not like to work for them) that the lender wants me to reconsider the value for the home. The values in that area had declined but now appear to have stabilized and the subject neighborhood is probably on the low end of value for the area.

The lender wants me to reconsider the value, which translates into new sales (for free of course). I will notify the lender that the value could go up, down or stay the same. By the way I will be charging a fee!

The question is this allowable under FHA Guidelines(reconsideration of value) and would you all consider this to be possible appraiser pressure?

I have not had a chance to contact the HUD Center at this early time.

I haven't check to see if the attached ROV info has been updated with the release of the current handbooks. Use the attached pdf file as a starting point.

 

[CJ1234]

2 comps and 2 active listings from subject neighborhood and 2 sales from competing subdivisions (to bracket square footage). All within 7 months so I do not believe that I missed anything.

Charge them for your time.

Pretty clear. Unless you screwed up, charge them for a new appraisal, less the work on page 1 and subj inspection.

You don't do a New Appraisal. You add comments to the addendum, No?

 

[Aprazr]

To the OP....I got the same request last week and low & behold their comps for re-consideration were.....#1 was a Listing, #2 was already in my report and #3 was sold after the efective date of my appraisal by 2 weeks.

I simple explained all this and attached the MLS sheets for their review.(Public copies)

Never heard another word. It is STRANGE that the (the lender-AMC) does not verify the re-consideration comparables BEFORE sending them to the appraiser to create extra work-not paid for. But it still happens. Just CYA and explain, explain, explain.....MAYBE they will READ the entire report, then (lol)

I was astonished, to say the least, that they provided a comp. already in my report......???????

Blessing to all !
Gregg White

 

[Doug Meyer]

Thank you all for your comments. The reconsideration of value did not come from the underwriter or HUD, so I am just going to let them chew on this for a while.

 

[residentialguy]

2 comps and 2 active listings from subject neighborhood and 2 sales from competing subdivisions (to bracket square footage). All within 7 months so I do not believe that I missed anything.

Tell them how YOUR comps were the best. Take a look at the sales they pulled explain briefly why you didn't use them. (don't rule out the possibility that their comps might have been better)

If they want you to use sales that have closed after your appraisal, then that's a new assignment.