New Housing Bill/FHA Loans

[timd354]

In this case HUD is not the one setting the standard. The law was created by congress and their lobbyists. HUD does not have a choice (only interpretation) in the matter.

What license level do you all believe has been found to put the Department most at risk? More on that in the future. You are all in for an awakening...

Brad, I have no idea which license level has been found to put the Depeartment most at risk, but from your comment, it is obvious that you are going to assert that it is the either the certified residential or certified general level. I also agree with you that the new law is idiotic and will do nothing to actually address the problem that it purports to fix.

That being said, if the FHA had been doing its job of assuring that only competent and qualified appraisers were added to the FHA roster, then maybe Congress would not have felt compelled to add this provision to the law.

 

[timd354]

Doug,

I taught an FHA appraisal class for Mckissock in 1999 nationwide. It was 2 full days and could have been longer. That was with the new(at that time) 4150.2 handbook. Now with all the changes, i believe that anyone who does not take such a class, having never taken a class in FHA appraisal before, does a disservice to their clients as well as the buyers and sellers.

I would like to see FHA require such a course(2 days), and a test, and then "Certify" anyone who has taken the course and successfully passed the test. Of course that will likely not happen as they are not a nationally recognized appraisal organization.

Don,

This is an excellent idea!!! But it makes far too much sense, and, thus will likely never happen.

 

[moh malekpour]

Moh -

Of course I remember you. Are you still in HB?

Yes Brad, I am still living in the same place in HB

 

[Hamlet]

I agree that Don's idea is excellent and would go a long way to ensure competency in FHA appraisals.

I believe that if the results Brad posts show that certified level is the biggest culprit in bad FHA loans, then perhaps that is a result of the mass rush to get "certified" before the criteria changed. This would prove that "licensing" levels are not really the best criteria to ensure quality/competency.

 

[Brad Pack]

Doug,

I taught an FHA appraisal class for Mckissock in 1999 nationwide. It was 2 full days and could have been longer. That was with the new(at that time) 4150.2 handbook. Now with all the changes, i believe that anyone who does not take such a class, having never taken a class in FHA appraisal before, does a disservice to their clients as well as the buyers and sellers.

I would like to see FHA require such a course(2 days), and a test, and then "Certify" anyone who has taken the course and successfully passed the test. Of course that will likely not happen as they are not a nationally recognized appraisal organization.

Don -

Should there be a required 2-day course for those who appraiser conventional (FNMA/FHLMC) transactions? How about VA? If not, why not? What's the difference? Isn't competency is covered under USPAP? Just curious.

 

[Ken B]

VA requires annual training of its fee appraiser panel. So that horse won't fly.

 

[ZZGAMAZZ]

Perhaps if HUD offered the training, the courses would be an additional source of revenue and also provide a venue for issues to be addressed definitively. Five thousand appraisers in SoCal at $150 would support the annual salary of 5 - 10 additional FHA reviewers.

 

[Green Hornet]

In this case HUD is not the one setting the standard. The law was created by congress and their lobbyists. HUD does not have a choice (only interpretation) in the matter.

What license level do you all believe has been found to put the Department most at risk? More on that in the future. You are all in for an awakening...

Brad,

Please expand on the "awakening" comment

It is intersting to me why posters, not just you, allude to knowing something that the rest of us do not. Usually it is about something that goes bump in the night and that we all need to be very afraid.

Then that is the last we hear about it until the OP comes back to the forum and says "I Told You So."

 

[timd354]

Don -

Should there be a required 2-day course for those who appraiser conventional (FNMA/FHLMC) transactions? How about VA? If not, why not? What's the difference? Isn't competency is covered under USPAP? Just curious.

Brad, the difference is that HUD/FHA is required by statute to make sure the appraisers who do FHA appraisals are qualified to do so. The FHA has failed miserably in this regard. Here is relevant the text from the statute ( 12 U.S.C. 1708(e)(1) (emphais added)):

(e) Appraisal standards

(1) The Secretary shall prescribe standards for the appraisal of

all property to be insured by the Federal Housing Administration.

Such appraisals shall be performed in accordance with uniform

standards, by individuals who have demonstrated competence and

whose professional conduct is subject to effective supervision.


Brad, just how has the FHA made appraisers demonstrate competence in order to get unto the FHA approved appraisers roster? What has the FHA done to to "effectively supervise" the professional conduct of those appraisers who are on the roster?

 

[Don Clark]

Don -

Should there be a required 2-day course for those who appraiser conventional (FNMA/FHLMC) transactions? How about VA? If not, why not? What's the difference? Isn't competency is covered under USPAP? Just curious.

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?