Is Converting FHA Appraisal To Conv Appraisal Really Necessary By The Lender?

[RSW]

You cannot “switch” an appraisal from FHA to conventional. The clients changed. It is a new assignment. This means a new appraisal file. USPAP does not have a problem with keeping the effective date the same but the client may. Also, you will have to disclose that you performed an appraisal on the property within 3 years so if they want to get rid of FHA verbiage to not let anyone know that this not the original appraisal they are mistaken.

The client did not change. The intended user changed. Either way it's a new assignment.

 

[Tom4value]

The client did not change. The intended user changed. Either way it's a new assignment.

Right. I read the OP wrong. Thought the AMC said the lender changed.

 

[glenn walker]

I have just received a request to convert an FHA appraisal that was done 6 weeks ago to a Conventional appraisal, because the AMC said the Lender has switched the Borrower from an FHA loan to a conventional loan, and requests all FHA verbage to be removed and keep the original effective date.

i can understand when Lenders request upgrading a conventional appraisal toan FHA appraisal since FHA requires a higher level of inspection such as testing major appliances, checking attic space, checking foundation crawl space, etc.

Is it necessary for a Lender to ask the appraiser to downgrade an FHA appraisal by removing related FHA verbiage from the report when there were no adverse conditions noted? Doesn't the Lender understand that an FHA appraisal that meets FHA's minimum property requirements is more credible than a conventional appraisal where the same property may not meet FHA appraisal standars?

Are there anyone here with some underwriting knowledge who explain whether such conversion request is necessary or needed? I feel like asking them why do they need to convert the FHA appraisal to one that has a lower quality inspection?[/QUOTE

A lender cannot originate or Fund a conventional loan based on a FHA or VA appraisal because when a borrower decides to not go FHA he/she will be sighing new disclosures which will have different fee's and costs. Also the lender underwrites a Conventional loan based on different guidelines and when the borrower signs their new or amended escrow instructions and loan documents it's all reworked to conform to the loan product being obtained. Next let's talk about a potential legal nightmare - Most borrowers today request and obtain a copy of the appraisal and the borrower would believe his loan was based on FHA guidelines. Anyway there are twenty more reasons but my advice is get to know some local Underwriters that you can ask questions. NOT: No need to make this difficult -It's a new assignment but you have already done 95% of the hard work so decide on what your fee is - If a good customer I normally charge $150.00 and it's about 30-45 minutes of work to remove FHA case numbers and 4000.1 verbiage-Also remember to change your purchase contract section to reflect a conventional loan being obtained and not FHA - I also recommend you have the lender give you an-updated or amended contract or escrow instructions showing the borrower is obtaining a conventional loan and not FHA. Anyway thank god your lender cannot use your FHA report on a conventional -you would be carrying the extra inspection liability for free LOL

 

[glenn walker]

I have just received a request to convert an FHA appraisal that was done 6 weeks ago to a Conventional appraisal, because the AMC said the Lender has switched the Borrower from an FHA loan to a conventional loan, and requests all FHA verbage to be removed and keep the original effective date.

i can understand when Lenders request upgrading a conventional appraisal toan FHA appraisal since FHA requires a higher level of inspection such as testing major appliances, checking attic space, checking foundation crawl space, etc.

Is it necessary for a Lender to ask the appraiser to downgrade an FHA appraisal by removing related FHA verbiage from the report when there were no adverse conditions noted? Doesn't the Lender understand that an FHA appraisal that meets FHA's minimum property requirements is more credible than a conventional appraisal where the same property may not meet FHA appraisal standars?

Are there anyone here with some underwriting knowledge who explain whether such conversion request is necessary or needed? I feel like asking them why do they need to convert the FHA appraisal to one that has a lower quality inspection?[/QUOTE

A lender cannot originate or Fund a conventional loan based on a FHA or VA appraisal because when a borrower decides to not go FHA he/she will be sighing new disclosures which will have different fee's and costs. Also the lender underwrites a Conventional loan based on different guidelines and when the borrower signs their new or amended escrow instructions and loan documents it's all reworked to conform to the loan product being obtained. Next let's talk about a potential legal nightmare - Most borrowers today request and obtain a copy of the appraisal and the borrower would believe his loan was based on FHA guidelines. Anyway there are twenty more reasons but my advice is get to know some local Underwriters that you can ask questions. NOT: No need to make this difficult -It's a new assignment but you have already done 95% of the hard work so decide on what your fee is - If a good customer I normally charge $150.00 and it's about 30-45 minutes of work to remove FHA case numbers and 4000.1 verbiage-Also remember to change your purchase contract section to reflect a conventional loan being obtained and not FHA - I also recommend you have the lender give you an-updated or amended contract or escrow instructions showing the borrower is obtaining a conventional loan and not FHA. Anyway thank god your lender cannot use your FHA report on a conventional -you would be carrying the extra inspection liability for free LOL

 

[PushinValue]

I have the lender and FHA as the client.
Use FHA insurance and mortgage transaction..

One user and one use removed, the other two are the same....

Am I doing something wrong?

 

[bnmappraisal]

I have the lender and FHA as the client.
Use FHA insurance and mortgage transaction..

One user and one use removed, the other two are the same....

Am I doing something wrong?

I'm guessing you have a similar situation? Conversion from FHA to CONV ???

If so, I'd add mentioning the "prior 3 year" comment in the new report

 

[RSW]

I have the lender and FHA as the client.
Use FHA insurance and mortgage transaction..

One user and one use removed, the other two are the same....

Am I doing something wrong?

Why would you have the FHA as the client? You need to study the 4000.1 before you do any more FHA appraisals.

 

[PushinValue]

Why would you have the FHA as the client? You need to study the 4000.1 before you do any more FHA

Thanks for the help!! I had confused intended user with the client

 

[andrew81]

USPAP FAQ 162