Non-permitted 2nd unit?

[J Grant]

99% of mortgages is a too high number. Roughly half of all mortgage appraisals are for secondary market (conforming conventional loans.) The other half are either non-conforming conventional loans - in house loans - or, are private non-bank home and commercial loans.

Many small banks are backed by the money of the owners who are lending their own money. Some, like Walmart-fame Walton family Arvest bank reportedly fund the best loans and short-term loans with their own funds and send the rest into secondary market via their mortgage arm. They are requiring all their residential loans to comply with FNMA. But almost all commercial loans and agri loans are "mortgages" and as such are not going to comply with secondary market rules not meant for them. If an SBA loan or FmHA loan it is still a mortgage and the report must comply with their standards, not FNMA. Yes almost all 30-year loans are via VA, FHA, or FNMA et al. But not every loan is for 30 years or even 15. A high percentage of them are shorter terms.

So, it is very important to know WHAT loan program you are supposed to comply with. Don't ask and you might end up using the 1004 inappropriately or might get a beautiful 100-page narrative rejected. Know what protocols apply to your report. I have seen way too many engagement letters say you must comply with USPAP without mentioning that part of USPAP is to know the scope of the report and that implies you are using the right rules of the game.

I was referencing loans that res license appraisers get as assignments - not all loans.

You speak of an alleged half of all mortgage appraisals are nof non non-secondary market - then how come almost nobody with a res license gets assigned this mystery lending work ? We covered this before, and you said a good portion of non-URAR lending is commercial, - which has nothing to do with lending work for a res license.
The vast majority of res loans the res license appraisers get as assignments are for URAR form work. I have used GP forms for private work but not for lending. If I had a hard money or other private work client that lends, they would let me know which form to use or I would ask them.

Obviously, anybody who posts here should know enough to check with their own client and I frequently recommend that they do.

 

[Terrel L. Shields]

then how come almost nobody with a res license gets assigned this mystery lending work ?

Because the appraiser has to know the bank involved. These small banks do not depend upon an AMC. A few might use a something like ExactBid or similar. Some banks also use evaluations in lieu of appraisers because most of their lending is smaller loans. They loan those mobile homes that FHA won't because the unit was moved. They might even loan to the owner of the MH park (something I am working on this morning). My biggest client 15 years ago sold out to a consortium of Walmart executives and hired an outfit to do compliance documentation (ex-examiners) who also handled the appraisal ordering. So they charge the same fee using evaluators instead of appraisers. If you want a real appraiser, then add $300 to the fee they charge. They managed to drive off quite a few of their larger customers. I just finished one last week. The property was above deminimus so they wanted something like $9000 for the appraisal that I did for $1,200. The borrower told them where to stick it since the loan was something under 30% of the value. He was furious about it. He had banked there for years but the loan officer was helpless to get a better deal as the bank board told him what he had to charge.

Most of these smaller institutions have a handful of appraisers they use. And in many cases, they have only 1 or 2 CGs to call upon. Again, much residential mortgage loans are just 5 years or so long. Many might be what some call Home equity loans. But they are mortgage backed loans and these banks have to have an appraisal or evaluation in file. Most many, it is just easier to deal with an appraiser. And they want to know that appraiser on a personal basis, not just someone randomly pulled from the state roster.

 

[sputnam]

Terrel is correct. It's even true for the smaller lenders that do use AMCs. Most of them won't mind at all if the appraiser produces a GSE compliant appraisal report... they also won't care if it isn't 100% Fannie friendly.

 

[J Grant]

AI Overview


No, a Government-Sponsored Enterprise (GSE) loan (Fannie Mae or Freddie Mac) will
not accept a non-compliant appraisal.
GSEs have strict appraisal guidelines and require all appraisals for loans they purchase to be fully compliant with their selling guides, the Uniform Standards of Professional Appraisal Practice (USPAP), and the Uniform Appraisal Dataset (UAD).
Key reasons a non-compliant appraisal is rejected:

• Loan Eligibility: A loan with a non-compliant appraisal is a non-conforming mortgage and is not eligible for purchase by Fannie Mae or Freddie Mac in the secondary market.
• Lender Responsibility:Lenders (sellers/servicers) must represent and warrant that the appraisal conforms to all GSE requirements before selling the loan to a GSE.
  • Quality Control: The GSEs use the Uniform Collateral Data Portal (UCDP) to electronically check appraisals for compliance issues (e.g., UAD Compliance Check Failure or Hard Stop 401). If anomalies or deficiencies are found, the selling lender is notified.

My comment -even from a small bank or small AMC, the appraisal is submitted to the GSE s who will reject it for non compliance, ( esp for not being on a URAR form ).

Non GSE loans - use whatever form or narrative you want that they accept.

 

[sputnam]

No, a Government-Sponsored Enterprise (GSE) loan (Fannie Mae or Freddie Mac) will not accept a non-compliant appraisal.

Sometimes I wonder if posters actually read all the words before they respond to someone else's post. AS CLEARLY STATED.... NOT EVERY APPRAISAL IS INTENDED FOR USE IN A GSE LOAN.

 

[TerryRohrer]

Because 99% of res mortgage appraisals are for a GSE loan.

Even though FHA and VA have been accounting for over 30% of the mortgage market in recent months? Good mathing...putting all that vast "experience" to work again.

 

[J Grant]

Even though FHA and VA have been accounting for over 30% of the mortgage market in recent months? Good mathing...putting all that vast "experience" to work again.

FHA and VA are only a percentage of all the GSE loans, which include conventional loans. I referenced the residential loan market, not the entire loan market.

 

[alebrewer]

FHA and VA are only a percentage of all the GSE loans, which include conventional loans.

Please stop, J. The Fern might believe you.

 

[DWiley]

FHA and VA are only a percentage of all the GSE loans, which include conventional loans. I referenced the residential loan market, not the entire loan market.

FHA and VA loans are not GSE loans

 

[J Grant]

F

FHA and VA loans are not GSE loans

Are they processed by Fannie and Freddie? They use GSE-approved URAR forms. I should have commented as such.

The topic was using URAR forms vs a GP forms- in part at least.