Is It Shady That The Client

[VolcanoLvr]

Let me see if I fully understand this comment:

"I would have like to have known before I accepted the assignment that I'm contributing to this 'lukewarm' deal the homeowner is getting. That's all."

It appears to me that you have a bias toward a certain lending program, and thus indirectly a bias toward the borrower.

I would encourage you to re-read the Certification on the appraisal form.

Then you will have to make a 'business decision' about accepting the assignment, if your bias does not change.

 

[JTip]

It appears to me that you have a bias toward a certain lending program, and thus indirectly a bias toward the borrower.

I tend to turn down appraisal assignments from the mob, bookies and payday loan places too.

All I wanted was an opportunity to accurately assess the assignment. If I don't like ______ , then tell me they are ______ and I can disclose bias and decline like professionals do.

 

[Mr Rex]

Late night infomercials. "Broke? Retired? Well a reverse mortgage is for you! Keep you house and get paid every month!"

I would have like to have known before I accepted the assignment that I'm contributing to this 'lukewarm' deal the homeowner is getting. That's all.

Thanks for the comments.

FWIW, they are required to undergo some training/counseling to insure they understand what they are getting into. I used to have a bad taste for reverse mortgages until I met some folks that really needed it and deserved the ability to cash out the largest thing of value they had so they could be a little more comfortable in their last years. Would I recommend it for a family member? If they needed it and there were no other options, then yes, definitely so. For many elderly with only social security as income, it is the only option.

 

[residentialguy]

The FHA reverse is completed the same way a regular FHA appraisal is done. The reverse part has nothing to do with the way you complete it. You simply mark the refinance box because its not a purchase. So calm down there is no shady.

Why is it bad when we don't do what we are required to do, but lenders get off with not so much as a wrist slap?

SELLING GUIDE
B4-1.1-05:

Disclosure of Information
Any and all information about the subject property that the lender is aware of must be disclosed to the appraiser. The appraiser must determine if the information could affect either the marketability of the property or the opinion of the market value of the property.

 

[Mark K]

For many elderly with only social security as income, it is the only option.

After Dad died, Mom lost his pension $ and had only SS to live on. After fixed expenses, she had $200/month for gas, groceries, etc. She owed nothing on the house but needed cash to live on.

To avoid paperwork and hassle (confusion for her), not to mention the expenses, I made her a rev. mtg. instead of having her go to the bank. Every month $zzz transfers from my acct to hers. When she dies there will be a mtg balance on the house paid to me, done with the blessing of my brother and sister. A reverse mtg is great for her.

As to the OP's complaint, why should an appraiser care whether or not its a standard or a rev. mtg if the appraisal is the same?

Nobody is withholding information about the subject property. The financing is not part of the property. Other than ensuring the proper appraisal format is used, the terms and type of mtg are really none of the appraiser's business. Nothing shady; do your job and move along.

 

[J Grant]

Appraisers waste all kinds of time on nonsense .Meanwhile some do terrible valuations and truly hurt people by (usually) over valuing and getting buyers/owners into negative equity situations.

A reverse mortgage as Mark K said above can and usually does benefit the HO. We only hear about the bad ones as the rest are boring not news .

 

[Terrel L. Shields]

not all reverse mortgages are "shady"

Reverse mortgages are poor deals 9 of 10 times and used when a spendthrift or someone disabled has to make a choice between selling out or doing RM to stay put. Die tomorrow and your heirs may have to let it go. Friend let her parents home go back. Too many sibling squabbling to make what little equity there worthwhile. Necessary it may be, but selling out and moving to low income or assisted living can be a better option.

 

[CANative]

Late night infomercials. "Broke? Retired? Well a reverse mortgage is for you! Keep you house and get paid every month!"

I would have like to have known before I accepted the assignment that I'm contributing to this 'lukewarm' deal the homeowner is getting. That's all.

Thanks for the comments.

HECM's are no different from the appraisers perspective.

But what grinds my gears in the advertising is their pushing the benefits of this product by stating it is "government insured." Most older people trust the government but this insurance doesn't benefit them (except that it makes the loan possible.) It's misleading.

 

[hastalavista]

It's the owner's decision, and not all reverse mortgages are "shady"...they really can help a HO get extra income out of their house....

I agree.
It has been a while since I've completed a reverse-mortgage. When I used to do a lot of FHA work, I certainly did a number of reverse mortgage appraisals.
Many of the elderly homeowners like to talk. I like to listen to what they have to say. What I recall is all of them thought it was a great plan so they could stay in their homes. Many had long ties to the community; the relationship with their friends/neighbors, churches, volunteer work, doctors, etc., had taken years to develop. All were happy to be able to stay where they were comfortable. Moving can be traumatic for anyone; how much more so than for a senior citizen with all the natural challenges that come along with normal aging?
Most touching (for me) was when I heard the borrower tell me that she or he had lived in the house for X amount of years and their spouse recently died; the home was a living memory for them. I heard this story more than once.

Abuse of the program is real but not universal nor, would I argue, prevalent. Borrowers are required to get independent counseling (http://reverse.org/counseling/) before they can get a loan.

We are supposed to be independent, impartial, and unbiased. That doesn't mean we don't have feelings or concerns or likes/disliked about a client or particular loan program; what it does mean is that those feelings/concerns cannot impact our professional judgment and work product. I have no doubt that JTip can have serious reservations about the loan program while completing the appraisal to the correct standards. I wouldn't blame him or any other appraiser who refuses to do a certain type of assignment due their concerns. Since the collateral (its condition and value) is the overwhelmingly significant component for eligibility to access this loan program, skepticism about the program with a critical (but impartial and unbiased) eye to detail by the appraiser is not a bad thing; in the end, that very much protects the senior citizen as well as the system.