New Housing Bill/FHA Loans

[CURT VAN HOOSER]

It certainly is more than just having a state issued appraiser's license or certification and promising to floow USPAP. See my prior post.

Perhaps... And I believe we are close in agreement on this issue. I would welcome in depth education followed by testing and review.

Here's my beef, and it applies to nearly every thread generated on this, and other, forum(s), we tend to attack each other over differences of opinion, perception, and/or interpretation, no matter what the issue. This is not at all productive...not that you need me to tell you that. I think this is largely due to the fact that none of us is really certain about the future of our chosen profession. We hate the fact that there are those that commit fraud without an ounce of remorse and that they are stealing our business away from us at alarming rates. They are largely responsible for the "proposed changes" our government is pushing. And let's be real, these changes may only be a dog and pony show put on to convince we Americans that our government is concerned and is taking up the slack so that we may all live the American dream...yada yada yada...

I like to think that there are representatives from all areas of this business that frequent this site. I believe they would all much rather read our recommendations on solutions to the problem (rather than our gripes about them and our attacks upon each other). In your last post, you finally did that and for that, I thank you.

Be well!

Curt

 

[Marcia Langley]

Answer, more damage than you could possibly know. I have seen the reports that were made to the congress prior to the FHA publication of the 4150.2 handbook and creation of the REAC center in 1999. There were volumes of reports sent to the House Sub Committee and to former Congressman lazlio(sp) of New York along with photos. It was not a pretty sight.

Truth is that FHA recently lowered the standards for becoming an FHA roster appraiser possibly because the FHA business was down over 47% in 2006-2007. But the real decline started when the FHA did away with their Fee Panel in the early 1990's.

I started with FHA after they had already done away with the panel and the training but still had the big proctored exam. The handbook had some pretty scary language about all the sanctions and roster removals of appraisers who did not rigorously follow the rules.

Then, leading up to the effective date of the new 2005 forms, they started saying that appraisers were being overly and unnecessarily strict in their adherence to the rules. They needed to loosen up a bit to get more LOs to choose FHA over conventional.

First they scared the bejesus out of us and then the strictness was all our fault.

None of the three (GSEs and FHA) do a very good job of describing the details of minimum property standards. They leave a lot of the detail up to the appraiser to decide (safe, sound, secure, saleability, etc).

 

[Brad Pack]

For the record, VA requires a lot more years of experience than FHA, plus 5 letters of referrence, and samples of your work. We also receive annual training from VA as well as constant review of a portion of our work, and regular communication about changes. Does FHA do that?

I would not mind if there was a requirement such as training, etc prior to doing Conventional appraisals.

You seem to have a good bit of hostility. I for one have tended to be supportive of what you have posted. Guess that counts for very little.

For the record, I have never said that a CR or a CG was any better at doing FHA appraisals than anyone else. But, one who knows the 4150.2 handbook and the changes that have occured since 2005, in my opinion, would certainly be more COMPETENT to do an FHA appraisal.

For the record, I did FHA Field Reviews for over 6 months after 1999. I did about 127 reviews in that time. What I found made me sick. I ran the numbers on every review I did. I found that none of the appraisals ever came in below the sales price. I also found one appraisal where the appraiser opined a value that was 100% above the sales price, ignored small 1 story properties similar to the subject in the subjects market within a mile of the subject, and used 2 story comps almost twice as large as the subject. The average appraised value of all 127 was over 17% above market value, not sales price. At least 4 were 35% above MV, 1 was 50% above MV, and many were 25% or more above MV. Almost all had repair issues that were never mentioned in the report. One roof was sagging so bad I thought it might collapse before I left the scene. 1 had noted no hazards, and had carefully taken the photos so it did not show the huge metal high voltage electric line transmission tower within the fall line of the property. All of this was reported to the REAC center and the contractor. No action was ever taken against any of the appraisers. I quit in disgust. Now, what was that about competence?

I simply asked for your input, because over the years, I have always enjoyed your input.

 

[Mr Rex]

Brad, pot and kettle. Don't join the other Brads in taking criticism too personally. The only way to truly grow is with critique of ones work or thought processes. Sometimes self examination is enough, some times there are forests and trees.

 

[Brad Pack]

For the record, VA requires a lot more years of experience than FHA, plus 5 letters of referrence, and samples of your work. We also receive annual training from VA as well as constant review of a portion of our work, and regular communication about changes. Does FHA do that?

Don -

I'm going to take Mr. Rex's advice and not take your comments personally. You and I go way back on various forums and I sincerely appreciate and respect your input. Its just that this forum does have more than its share of HENRY C. (40 YEARS OF FHA Experience). And you know the effect that can have on someone. <I knew that would get a chuckle out of you>

Anyways, thanks for the info regarding the VA. I do like the annual mandatory update course idea. "Guideline update" and "common deficiencies" could be very helpful. Someone else suggested HUD staff put on the course, which is also an interesting thought. I'm thinking webinar. With over 47,000 FHA Roster appraisers there would be no other way to do it. But, first we will have to read the Department's interpretation of the new "law".

Regards,

Brad

 

[Don Clark]

Don -

I'm going to take Mr. Rex's advice and not take your comments personally. You and I go way back on various forums and I sincerely appreciate and respect your input. Its just that this forum does have more than its share of HENRY C. (40 YEARS OF FHA Experience). And you know the effect that can have on someone. <I knew that would get a chuckle out of you>

Anyways, thanks for the info regarding the VA. I do like the annual mandatory update course idea. "Guideline update" and "common deficiencies" could be very helpful. Someone else suggested HUD staff put on the course, which is also an interesting thought. I'm thinking webinar. With over 47,000 FHA Roster appraisers there would be no other way to do it. But, first we will have to read the Department's interpretation of the new "law".

Regards,

Brad

Ahhhhhhhhhhhhhh! Henry C. God rest his soul. The one man who claimed he always measured every comp he used, and likely did

Brad, your comments as noted above prove to me once again why you are in the position you are in. You are willing to listen(read), think about it, and if it is constructive, make a judgement on it. However, you and I know that is is probably not likely that FHA would have gthe staff to put on some type of annual update or training. I do not know if that is true about a webinar. But, you could certainly approve state licensed schools and instructors around the country to do so. We would even work with you(FHA) on how to do that. The school I work with locally could certainly do so. It is owned by the local Realtor Association, managed by an affiliate organization, and teaches a variety of courses. Also, we have really been hurting this year since the 2008 Criteria kicked in. From what I hear from other instructors and schools nationwide, that is pretty much the same. If that is a viable idea, I would be delighted to discuss it further with you. Also, I am the new man on staff of a nationwide CE provider. I would think they might be interested to. I would share that information with you. If you(FHA) would entertain the idea, you can contact me at any time @ CDonClark@cavtel.net If you do, I will then provide you with a toll free number so we could discuss it.

Now, that being said, the webinar sounds like a feasible idea. VA does something similar when they cannot physically get everyone together. The key, to me, would be verification that one has taken the update/course. But, that could be controlled by having some sort of sign in, just like you have to for an online course.

And, I believe this would allow FHA to keep Licensed appraisers (maybe) on the roster.

It certainly would satisfy item B. And, if FHA could be designated..."A nationally recognized appraisal organization", which I doubt it could be, then the Licensed category could be retained.

U.S.C. 1708(e)) is amended by adding at the end the fol- 9
lowing: 10
‘‘(5) ADDITIONAL APPRAISER STANDARDS.— 11
Beginning on the date of enactment of the Federal 12
Housing Finance Regulatory Reform Act of 2008, 13
any appraiser chosen or approved to conduct ap- 14
praisals for mortgages under this title shall— 15
‘‘(A) be certified— 16
‘‘(i) by the State in which the prop- 17
erty to be appraised is located; or 18
‘‘(ii) by a nationally recognized profes- 19
sional appraisal organization; and 20
‘‘(B) have demonstrated verifiable edu- 21
cation in the appraisal requirements established 22
by the Federal Housing Administration under 23
this subsection.’’.

 

[Doug Wegener]

New standards

It seems many miss the fact this new law is adding a 5th paragraph to the existing law:HR3221 provides for "additional appraiser standards" to what already exists. Since Licensed and Certified are clearly distinct categories in paragraph 1(B), it would be illogical to interpret them as combined in the new section 5 that is being added to this existing law.

Obviously HUD will have to adapt their regulations to the new standards that increase the minimum requirements, but if you are a Licensed appraiser dependent on FHA work you would be well advised to get busy on certification ASAP.

Another thing the law does not make clear is if those currently "approved" will be allowed to continue doing FHA appraisals. . It doesnt specifically repeal the previous sections allowing for licensed appraisers to do FHA work nor does it say those currently approved will lose their approval.

It merely says that after October anyone approved must meet the new standard.

A very good case could be made that licensed appraisers currently on the FHA panel will be grandfathered.

 

[CANative]

There used to be the theory that FHA and VA risked taxpayer money while the GSEs did not. That theory no longer is true.

I thought it was the combination of less focus on credit scores and much lower down payments for what amounts to a mortgage insurance program requiring more diligence in property analysis as a means of mitigating losses from claims.

So what's changed?

 

[Couch Potato]

Agreed

Another thing the law does not make clear is if those currently "approved" will be allowed to continue doing FHA appraisals. . It doesnt specifically repeal the previous sections allowing for licensed appraisers to do FHA work nor does it say those currently approved will lose their approval.

It merely says that after October anyone approved must meet the new standard.

A very good case could be made that licensed appraisers currently on the FHA panel will be grandfathered.

I agree a case can be made. Given my current experience with the FHA renewal process, staying on the roster without getting a new approval may be difficult. I'm about ready to take a road trip to DC to sort it out.

 

[Doug Wegener]

Another thing

Another thing the law does not make clear is if those currently "approved" will be allowed to continue doing FHA appraisals. . It doesnt specifically repeal the previous sections allowing for licensed appraisers to do FHA work nor does it say those currently approved will lose their approval.

It merely says that after October anyone approved must meet the new standard.

A very good case could be made that licensed appraisers currently on the FHA panel will be grandfathered.

Another thing the new law illustrates is that the Appraisal Institute and Naifa do not have the best interest of appraisers in general at heart. They are well aware that their are plenty of competent Licensed appraisers doing FHA work. Maybe Congress wasnt but they were.


I think the law shows their interest is only for their membership.