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Reassigned FHA Report: New Lender Wants Corrections

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Davy

Sophomore Member
Joined
Oct 3, 2016
Professional Status
Certified Residential Appraiser
State
North Carolina
Sorry if this was posted before, so please bare with me as I am relatively new to doing these FHA reports:

I completed an FHA report for a lender. The report and case # were reassigned to a new lender. The new lender found some minor errors and is asking me to correct them. I did not complete the report for the new lender, so as far as I can tell, they are stuck with the report as is. Also, this seems to be in violation of USPAP in client confidentiality, or am I hallucinating? Something doesn't sit right with this since the new lender was not my original client. Opinions?

To make this more interesting, the new lender was the one who sent me a $500 check to "pay" for the appraisal (as I stated in another thread). I never cashed the check and still need to send it back. The original lender, my client, has yet to pay for the appraisal. More opinions?
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
I would go ahead and cash the check. It is the 2nd Lender's responsibility to make sure the appraisal is paid. Tell, the 2nd Lender to have the 1st lender request the changes. Do not make any changes for the 2nd Lender. You can send the report to the 1st Lender and they can send it to the 2nd Lender.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
When a case number is transferred with a complete appraisal, may a new appraisal be requested?
In cases where a borrower has switched Mortgagees, the first Mortgagee must, at the borrower’s request, transfer the appraisal to the second Mortgagee within five business days. The appraiser is not required to provide the appraisal to the new Mortgagee. The client name on the appraisal does not need to reflect the new Mortgagee.

If the original Mortgagee has not been reimbursed for the cost of the appraisal, the Mortgagee is not required to transfer the appraisal until it is reimbursed. The second Mortgagee may not request the appraiser to re-address the appraisal. If the second Mortgagee finds deficiencies in the appraisal, the Mortgagee must order a new appraisal.

The new Mortgagee must enter the borrower’s information in FHA Connection. The new Mortgagee must collect an appraisal fee from the borrower, and send the fee to the original Mortgagee, who, in turn, must refund the fee to the original borrower.

A second appraisal may only be ordered by the second Mortgagee under the following limited circumstances:
• the first appraisal contains material deficiencies as determined by the underwriter for the second Mortgagee;
• the Appraiser performing the first appraisal is prohibited from performing appraisals for the second Mortgagee; or
• the first Mortgagee fails to provide a copy of the appraisal to the second Mortgagee in a timely manner, and the failure would cause a delay in closing and harm to the Borrower, including loss of interest rate lock, violation of purchase contract deadline, occurrence of foreclosure proceedings and imposition of late fees.

For additional information see Handbook 4000.1 II.A.1.a.iii.(B).(8)-(9) available at https://portal.HUD.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh


All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.
 

Davy

Sophomore Member
Joined
Oct 3, 2016
Professional Status
Certified Residential Appraiser
State
North Carolina
EDIT: I reread all the messages to my other thread and it answered the question, sorry for the post above. The other lender is the client and this new lender isn't my client.

'nuff said
 

Davy

Sophomore Member
Joined
Oct 3, 2016
Professional Status
Certified Residential Appraiser
State
North Carolina
Dang, you guys beat me to it all, thanks for the replies :) You're the best!
 

Tom D

Senior Member
Gold Supporting Member
Joined
May 22, 2015
Professional Status
Certified Residential Appraiser
State
Pennsylvania
The new lender found some minor errors and is asking me to correct them. I did not complete the report for the new lender, so as far as I can tell, they are stuck with the report as is. Also, this seems to be in violation of USPAP in client confidentiality, or am I hallucinating? Something doesn't sit right with this since the new lender was not my original client. Opinions? More opinions?

there is no violation of client confidentiality, they have the appraisal. FHA & the borrower are the intended users of the report. you say minor errors. you realize that a HUD staff reviewer may not like your 'minor errors' when they review it a year later out of pure luck. just how minor are the errors? i say minor errors can & should be corrected, maybe for your protection.
 

timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
there is no violation of client confidentiality, they have the appraisal. FHA & the borrower are the intended users of the report. you say minor errors. you realize that a HUD staff reviewer may not like your 'minor errors' when they review it a year later out of pure luck. just how minor are the errors? i say minor errors can & should be corrected, maybe for your protection.
Why do you think that the borrower is an intended user?
 

Davy

Sophomore Member
Joined
Oct 3, 2016
Professional Status
Certified Residential Appraiser
State
North Carolina
Excellent information, guys, thank you very much for your replies. (y)
 

Tom D

Senior Member
Gold Supporting Member
Joined
May 22, 2015
Professional Status
Certified Residential Appraiser
State
Pennsylvania
Why do you think that the borrower is an intended user?

when the new improved FHA 4000.1 handbook came out the wordings had been changed ' The intended use of the appraisal is solely to assist FHA in assessing the risk of the Property securing the FHA-insured Mortgage (24 CFR § 200.145(b)). FHA and the Mortgagee are the intended users of the appraisal report.' easy enough to have missed, but it changed our liability.
 
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